Creation Of Two Investment Fund Advisory Groups: European Commission Calls On European Trade Associations To Nominate Candidates

The European Commission has adopted decisions which pave the way for the creation of two advisory groups in the field of investment funds. The first group will provide commercial insights on ways in which the functioning of the single market for investment funds might be improved. The second will bring together industry experts to examine the development of alternative investment business in Europe (private equity, hedge funds). The creation of these groups was foreseen by the Commission Green Paper on enhancing the EU framework for investment funds. Interested European trade associations are invited to propose candidates by 30^th December 2005. The Commission will decide on the final composition of the advisory groups in January 2006.

Commission work on investment funds aims to help investors and market participants to get the most from a single market.

Internal Market and Services Commissioner Charlie McCreevy said: “We want to maximize the benefits of the Single Market for the investment fund industry. Responses to the Green Paper demonstrate a widespread desire for improvements. Now we must try to find cost effective solutions and signal the way forward in a White Paper in autumn ‘06. I want people who have had practical, front-line, profit generating responsibility for investment funds to participate in the advisory groups, and to help us deliver cost effective solutions. Once finalised the advisory groups’ reports will be exposed to scrutiny by all stakeholders.”

The Expert Group on Market Efficiency will advise the Commission on cost-effective ways to support a more efficient organisation of different stages in the European investment fund value-chain. The Group will seek to determine whether EU-level steps would deliver meaningful benefits; it will explore different options for realising these and contribute to discussions on cost-effectiveness of actions.

The Expert Group on Alternative Investment Funds will report on the current state, structure and trends relating to the EU market for these funds. It will also identify whether there exist Single Market failures that are having a material detrimental impact on their efficient cross-border development.

The Decisions establish the mandate and lay down the procedures for constituting the two groups. Trade associations representing the interests of all or part of the investment fund industry are invited to propose candidates in writing by 30^th December 2005.

Group members should be market practitioners with direct commercial experience in the areas covered by the mandate. Observers from investors/consumers associations will participate, and help to articulate relevant issues for follow-up discussions with relevant stakeholders.

On the basis of proposals, the Commission will decide on the final composition of the group having regard to the qualifications and skills of the individuals, and the need to promote geographical and gender balance. Membership lists will be published once finalised.
The expert groups' reports are due to be published in mid-2006. The terms of reference and procedures for the group’s constitution are at:

http://europa.eu.int/comm/internal_market/securities/ucits/index_en.htm#expert