12 Nov 2020

The Investment Association (IA) published their first European Policy Update which may be of interest to AREF members.

These policy updates will be issued on a quarterly basis, providing members with crucial insight into the policy priorities of the European Union and its associated institutions, as well as identifying the likely direction of travel on key files under review in the Investment Management sector post-Brexit.

Click to view the first edition


Welcome to this first edition of the IA’s new quarterly ‘European Update’. Drawing on analysis from our Brussels based team and our policy experts in the UK, we hope this will prove essential reading for those following major EU regulatory initiatives impacting our industry. The IA’s EU update will provide members with crucial insights into the policy priorities of the European Union and its associated institutions, as well as identifying the likely direction of travel on key files under review in our sector post-Brexit. 

As we leave the EU, we believe it is critical for the IA to continue advocating in Europe in the best interests of savers and investors, wherever they are located. As part of our new International and European Engagement Strategy which will guide our interactions over the next 3 years with European officials, this will mean identifying opportunities to place the investor at the center of all policy debates, encouraging innovation and the greater use of technology, developing the tools to help investors compare sustainable products, and of course ensuring that the outcome of the Brexit negotiations ensures firm’s can continue to access our largest international market. 

In this edition, we cover the appointment of the EU’s new Commissioner for Financial Services, Ms Mairead McGuinness and the priorities for her newly appointed Cabinet. Top of the Commissioner’s inbox will be delivery of the EU’s Capital Markets Union Action plan at a time of increased economic uncertainty as a consequence of COVID-19. As part of our engagement with the Commissioner’s new team, the IA will be focusing on sharing our experience in pension provision and auto-enrolment, as well as how better to integrate ESG considerations into decision-making and risk management processes. We will also be looking to ensure meaningful and transparent disclosures support investors. Only by placing the investor at the center of the policy debate can we increase participation in the market, and in turn raise capital to help fund Europe’s post-pandemic recovery.

We also discuss the recently published Commission and ESMA work programmes for 2021, and how lessons learned from the COVID-19 pandemic may shape their approach towards our industry. We expect to see both the Commission and ESMA to continue to foster convergence in the areas of liquidity risks in funds and the use of liquidity management tools by funds, following the work done in this area in 2020 in the context of COVID-19. We understand that this work will in part be informed by the experience in Money Market Funds, and calls by the FSB and others to extend prudential regulatory frameworks into the non-bank sector. We will continue to closely monitor these developments, whilst also working with our European counterparts to educate policymakers about how the industry has so far responded to the challenges of COVID-19, and highlight the important role we can play in supporting Europe’s recovery.

While the UK is leaving the political establishments of the European Union later this year, we are not leaving Europe. We are committed to supporting the role our members can play in Europe’s transition to a greener, more sustainable future, and its long-term economic prosperity. This approach is not only in the best interests of the millions of savers our members support every day across Europe, but also reflects the diverse and varied nature of our industry. In this edition, we also touch on a number of key policy developments being considered by EU institutions. This includes the MiFID ‘Quick Fix’ package currently under debate in the European Parliament. We also provide members with an outline of the essential milestones on the EU calendar members should be aware of in the coming months. 

We hope these updates prove useful in navigating the final legal and political implications of Brexit, whilst also helping members stay informed as to how regulatory developments in the EU might influence decisions in the UK. We always value member feedback and encourage you to contact us at europe@theia.org if you have any questions on topics covered in this update.

Click to view the first edition