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EU regulators to be asked to investigate investment fund fees and transparency

EU regulators should be looking into the fees charged on investment and pension funds with a view to potential new regulation, Valdis Dombrovskis, commissioner for financial stability, financial services and the capital market union (CMU) has said.05 Oct 2016

The Commission will ask the European supervisory authorities to look at "the transparency of long term retail investment and pension products, and to perform an analysis of their actual net performance and fees", Dombrovskis said.

"Returns on retail investment products and pensions can be heavily influenced by the fees levied by asset managers and intermediaries. The right data on the net performance and fees of the most commonly sold products is important. We need it to ensure more competition and better service for consumers," he said.

A year has passed since the Commission published the CMU Action Plan, Dombrovskis said. There is still a need for change in the pension industry, including a single market on personal pensions and similar developments in both investment and insurance funds, he said.  

The Commission began consulting on its CMU project in January 2015, and the contents of the Action Plan are based on the conclusions of that work. The Action Plan includes three immediate  steps: legislative proposals to establish a framework for simple, transparent and standardised securitisation; an adjustment to the Solvency II legislation to make it easier for insurers to invest in infrastructure and the new European Long-Term Investment Funds (ELTIFs); and a consultation on how to build a pan-EU covered bond framework.

The package also includes the call for evidence on the impact of financial regulation, and a further consultation on how to boost venture capital through targeted changes to the regulations governing this type of investment.

Dombrovskis took up his role in July, after Lord Jonathan Hill resigned in the wake of the Brexit vote.