Pan-European Asset Management

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The asset management industry encompasses a broad range of businesses, in terms both of size as well as regulatory regimes. In terms of volume, the importance of the industry differs remarkably across jurisdictions, and is influenced by the wealth and savings behaviour of citizens, the existence and maturity of funded occupational pension schemes and the domestic regulatory environment. No less than five different legislative regimes govern asset management in the EU: banking, investment services, insurance, pension funds and investment funds.

The purpose of this Task Force was to assess the adequacy of the current regulatory framework and the consistency of rules across sectors, most importantly from a capital adequacy and asset allocation perspective, to determine whether further regulatory action was necessary to advance market integration.

The findings of the Task Force are as follows:

  • There is no need for a horizontal asset management directive to supersede the current directives.
  • The recent agreement on two new investment fund directives – UCITS (undertakings for collective investment in transferable securities) II & III – and the pension funds directive (provisional) are important steps towards a more integrated European market for asset management, with a truly single passport.
  • The choice of asset management regime has been extended to include discretionary asset management as an option for UCITS management companies (in the UCITS III) and for the application of the prudent man rule of the pension funds directive to the pension fund business of life insurance companies.
  • The key issue, in the spirit of the Lamfalussy report, is to focus on level 2 and 3 issues to ensure adequate cooperation between European supervisory authorities so as to guarantee consistent implementation and a harmonised approach in secondary legislation and in supervisory practices. Both the UCITS and pension funds directives require a Lamfalussy-style approach for implementation of legislation at levels 2 and 3, which is not yet in place.
  • The UCITS Committee has only limited implementing powers and is not formally part of the Securities Committee/Committee of European Securities Regulators structure, which should ensure harmonised implementation.
  • The Insurance Committee will need to be upgraded to cover the secondary legislation of the pension funds directive, and will need a second level to review harmonised implementation.
  • The amended investment services directive may become the most open of the asset management directives, with harmonised conduct-of-business rules.
  • The new UCITS directive is probably the easiest one, with a low capital requirement, and the option of discretionary asset management.
  • Much also depends, however, on the extent of the application of the operational risk charge in the context of the New Basel Capital Accord, which may apply to both regimes. Compared to other lines of business, losses resulting from operational risk in the asset management industry have been limited so far, and these can be covered by private insurance. It should also be remembered that US investment fund companies are not subject to capital requirements and that US broker-dealers will not be subject to the Basel Accord.  

Members of the Task Force

Chair: Patrick Zurstrassen, Managing Director & President of the Management Committee, Crédit Agricole Indosuez Luxembourg

Rapporteurs: Karel Lannoo, CEPS CEO

Mattias Levin, former CEPS Fellow

Members and observers 

Björn C. Andersson, Executive Vice President, Handelsbanken

Arianna Arzeni, Marketing Manager, Crédit Agricole Indosuez Luxembourg

Rym Ayadi, Research Fellow, CEPS

Alan Barry, Senior Product Developer, ABN Amro Bank N.V.

Tim Blackwell, Executive Director, UBS Global Asset Management

Joanna Cound, Merrill Lynch Investment Managers

Marc Dassesse, Professor, ULB (Free University of Brussels)

Bernard Delbecque, Senior Economic Advisor, European Federation of Investment Funds & Companies (FEFSI)

Terry Donovan, Deputy Head, Central Bank of Ireland

Kerry Duffain, Director, Citigroup

Joanna Elson, Director, British Bankers’ Association

Soren Gade, Head of Department, Danish Bankers Association (Finansradet)

Kyriakos Gialoglou, Research Fellow, CEPS

Charles Goldfinger, Managing Director, Global Electronic Finance

Linda Gray, Central Bank of Ireland

Tim Herrington, Partner & Head, Clifford Chance

Staffan Jerneck, Deputy Director & Director of Corporate Relations, CEPS

Matthew Judd, Clifford Chance

Steffen Kern, Senior Economist, Deutsche Bank AG

Helmuth Martin, Senior Vice President, Commerzbank EU-Liaison Office Brussels

Steffen Matthias, Secretary General, European Federation of Investment Funds & Companies (FEFSI)

José Navarro de Pablo, Economist, UBS

Richard Parlour, Partner, Richards Butler

Reinhard Petschnigg, Representative, National Bank of Austria

Jane C. Platt, Managing Director, Reuters

Dirk M. Popielas, Head Pension Services Group Germany, Goldman, Sachs & Co OHG

Christopher Preston, Associate-Conduct of Business Standards, The Financial Services Authority

James Ranaivoson, Head of Portfolio Management, European Investment Bank

Derek Reed, Administrator, European Parliament

Wendy Reed, Senior Manager, PriceWaterhouseCoopers

Jean-François Schock, Managing Director, State Street Global Advisors

Axel Schultz, White & Case

Sally Scutt, Deputy CEO, British Bankers’ Association

John J. Stewart, Senior Vice President, State Street Corporation

John K. Thompson, Financial Counsellor, OECD

Mireille Tissot, Member of Senior Management, Swiss Bankers’ Association

Stéphane Tourette, Deputy General Counsel, Credit Suisse Asset Management

Dominique Valschaerts, CCLux,

Michael Von Kessel, ADIG – Allgemeine Deutsche Investment Gesellschaft mbH

Philip Warland, Senior Advisor, Regulatory Advisory Services, PriceWaterhouseCoopers

Miles Webber, Head of Public Affairs, Merrill Lynch Europe

Ian Williams, European Affairs Manager, Prudential PLC

Michael John Wilson, Executive Director, State Street Bank Europe Ltd.

Georges Zavvos, Member of the Legal Service, European Commission  

Meetings of the Task Force

1st meeting: 29 Nov 2001

2nd meeting: 26 Feb 2002

3rd meeting: 11 Jun 2002

4th meeting: 17 Sept 2002  

Final Report of the Task Force, April 2003

'Pan-European Asset Management: Achievements and Regulatory Impediments'

Disclaimer: Affiliations are provided for identification purposes only. Task Force members participated as individuals; the report reflects their own views and not those of organisations with which they are affiliated. The report is approved and supported by all Group members. However, members may not necessarily agree on all the detailed issues.