AIMA and ACC Comment on the Publication of the European Commission’s Action Plan for a Capital Market Union

The Alternative Investment Management Association (AIMA) and Alternative Credit Council (ACC) welcome the publication by the European Commission of the Capital Markets Union for people and businesses-new action plan (the ‘CMU Action Plan’).  AIMA and ACC members stand ready to support the European Commission and would highlight the following in response to the CMU Action Plan:

• Policymakers need to demonstrate leadership to deliver on this ambitious reform agenda and press ahead with implementation.  Europe faces the biggest economic shock in living memory and the economic disruption from COVID-19 is still prevalent.  The EU needs an urgent response and further integrating EU capital markets has now become a necessity.
• We support the step-by-step approach recommended by the CMU Action Plan.  General regulatory stability is a necessary precondition for asset managers to be part of the solution.  We therefore urge policymakers to focus on the Action Plan and avoid substantial overhaul of the UCITS and AIFMD frameworks.
• It is essential that the Action Plan allows both EU and non-EU investors to play their part in the CMU.  Attracting sources of outside capital into the EU is necessary to support the economic recovery and maintain Europe’s future competitiveness.  Openness to global investors should be at the heart of the CMU Action Plan.
• Developing market-based lending sources will be crucial to Europe’s economic recovery.  Non-bank lenders currently provide EUR200bn of finance to more than 4,000 EU SMEs.  The proposed reforms to the securitisation framework and ELTIF regulation can help unlock greater funding from the capital markets.  This will allow non-bank lenders to play a vital role financing the real economy and support a more resilient financial system. 
• The fragmentation of withholding tax claim processes and insolvency laws are key impediments to a single and truly integrated EU capital market.  We commend the ambition shown by the European Commission and the initiatives proposed to address these challenges.  The asset management industry is ready to support policymakers as they tackle these twin barriers.
• Centralisation of reporting requirements and data collection at the EU level is necessary to support better supervision.  This should be prioritised ahead of other supervisory reforms which may affect investor confidence in the stability of the EU regulatory regime and undermine the CMU Action Plan.  

Jiri Krol, Deputy CEO of AIMA, commented: “The European Commission’s new Capital Markets Union Action Plan offers a roadmap to ensure capital markets play their part in supporting Europe’s economy.  The true test will be the ability of policymakers to implement these initiatives and allow European capital markets to achieve their full potential. We believe there is a tremendous opportunity here for the EU to develop its capital markets and boost the EU’s competitiveness.”

ENDS

Notes to editors

For media information:

Laura Morrissey, Hume Brophy, e: [email protected], t: +44 (0)20 7862 6383

Tom Kehoe, Global Head of Research & Communications, AIMA, e: [email protected]  

About AIMA

The Alternative Investment Management Association (AIMA) is the global representative of the alternative investment industry, with more than 2,000 corporate members in over 60 countries. AIMA’s fund manager members collectively manage more than $2 trillion in hedge fund or private credit assets. AIMA draws upon the expertise and diversity of its membership to provide leadership in industry initiatives such as advocacy, policy and regulatory engagement, educational programmes and sound practice guides. AIMA works to raise media and public awareness of the value of the industry. AIMA set up the Alternative Credit Council (ACC) to help firms focused in the private credit and direct lending space. AIMA is committed to developing skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the first and only specialised educational standard for alternative investment specialists. AIMA is governed by its Council (Board of Directors). For further information, please visit AIMA’s website, www.aima.org.

About the ACC

The Alternative Credit Council (ACC) is the global body representing asset management firms in the private credit and direct lending space. It currently represents over 170 members that manage $400bn of private credit assets. The ACC is an affiliate of AIMA (the Alternative Investment Management Association). It is governed by its own board which ultimately reports to the AIMA Council. ACC members provide an important source of funding to the economy. They finance mid-market corporates, SMEs, commercial and residential real estate developments, infrastructure and the trade and receivables business. The ACC provides guidance on policy and regulatory matters, supports wider advocacy and educational efforts and produces industry research to strengthen the sector's sustainability and economic and financial benefits. Alternative credit, private debt or direct lending funds have grown substantially in recent years and are becoming a key segment of the asset management industry. The ACC seeks to explain the value of private credit by highlighting the sector's wider economic and financial stability benefits.

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