Regulation on key information documents for packaged retail and insurance-based investment products (PRIIPs) Measures on cross-border distribution of funds To protect investors, the EU has adopted a regulation introducing a key information document (KID), a simple document giving investors key facts in a clear and understandable manner. Investment products are complex and it can be difficult to compare them or fully grasp the risks they involve. They are an important source of short-term financing for financial institutions, corporates and governments. In order to preserve the integrity and stability of the internal market, the EU adopted a regulation on MMFs that will make them more resilient to a future financial crisis. Money market funds (MMFs) are investment vehicles where households, corporate treasurers or insurance companies can obtain a relatively safe and short-term investment for surplus cash. The European long-term investment funds (ELTIF) regulation covers funds that focus on investing in various types of alternative asset classes such as infrastructure, small and medium sized enterprises and real assets. While these enterprises often receive public support, private investment via funds still remains vital to their growth. These are companies that are set up with the explicit aim to have a positive social impact and address social objectives, rather than only maximising profit. ![]() The European social entrepreneurship funds (EuSEF) regulation covers alternative investment schemes that focus on social enterprises. Venture capital investment is an important source of long-term financing to young and innovative companies. ![]() The European venture capital funds (EuVECA) regulation covers a subcategory of alternative investment schemes that focus on start-ups and early stage companies. A reviewed framework will directly contribute to the three key objectives of the CMU, as set out in the CMU communication. As part of the capital markets union (CMU) package of 25 of November 2021, the Commission adopted a legislative proposal that recommends amending the AIFMD framework to make the AIF market even more efficient, improve investor protection and enable better monitoring and managing of risks to financial stability by. Since its adoption in 2011, the AIFMD has supported the creation of an efficient single market for alternative investment funds (AIFs) and built a strong regulatory and supervisory framework for AIFMs in the EU. They include hedge funds, private equity funds, real estate funds and a wide range of other types of institutional funds. Alternative investment funds are funds that are not regulated at EU level by the UCITS directive. The alternative investment fund managers directive (AIFMD) covers managers of alternative investment schemes designed for professional investors. This category of investment funds accounts for around 75% of all collective investments by small investors in Europe. The directive on undertakings for collective investment in transferable securities (UCITS) is the main European framework covering collective investment schemes. Undertakings for collective investment in transferable securities Collective investment fundsĪs part of its effort to create a barrier-free market for collective investment funds, the EU enacted the following legislation. They are also important because they make institutional and personal savings available as loans to companies and projects which contribute to growth and jobs. ![]() Investment funds play a crucial role in facilitating the accumulation of personal savings, whether for major investments or for retirement. Investment funds are investment products created with the sole purpose of gathering investors' capital, and investing that capital collectively through a portfolio of financial instruments such as stocks, bonds and other securities.
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