Dear Industry’ – Kremer letter outlines EFAMA goals
Claude Kremer, president of EFAMA, has written a letter to the industry outlining his organisation’s goals. We reprint the letter here.
I would like to present to you EFAMA’s strategy and action plan, providing a roadmap for the European fund and asset management industry. This will be the focus of the new presidency to which we will be measured upon, while complementing EFAMA’s aim to be a transparent association with clearly defined goals.
EFAMA is the representative association for the European fund and asset management industry and our overall mission is to support a high level of investor protection, to promote the completion of an effective single market for investment management and to strengthen the competitiveness of the industry.
Currently, at EFAMA, we are working on close to 30 pieces of regulation, targeting the European asset management industry, financial institutions, and other industries that have spill-over effects as well as foreign regulatory proposals and European national initiatives.
The message that politicians and regulators are sending the financial sector is that they believe that self-regulation does not work and that better regulation is necessary to avoid or contain a new crisis. Their goal is to implement efficient monitoring of systemic risks and better investor protection.
At this current time of heightened concern for financial markets and, ultimately investors, the only way for EFAMA to tackle change with authority and consistency is to act with the investor at heart. If not, regulation could harm the vitality of investment management and in the end citizens may lose out.
Without investor trust, the European fund and asset management industry cannot hope to attract investors’ savings and increase assets under management nor convince politicians and regulators to support the industry. By focusing more attention on the investor, EFAMA will pave the way for sustainable growth.
As a result, EFAMA has a defined a strategy with the investor at heart and it is built around five priorities:
– Promoting long-term savings
– Encouraging investor information and education
– Supporting beneficial regulatory measures
– Expanding the UCITS brand in Europe and beyond
– And demonstrating the importance of industry professionals to the economy
The main focus to promote long-term savings will be on pensions. With demographic pressures and the effects of the crisis, there is an immediate opportunity for the industry to offer new retirement solutions. We support the creation of a harmonized European retirement plan, which we call OCERP (Officially Certified European Retirement Plan) and we believe UCITS is the ideal building block for this plan. To assist in meeting this goal, EFAMA has activated its Long-Term Savings and Pension Steering Committee. This will be a knowledge centre and policy resource focusing on market developments, product trends, regulatory policy and EFAMA positions culminating in the EFAMA Pensions Day, to which we will invite all experts of this topic from within and outside the industry.
The second priority is to encourage investor information and education with the aim of developing responsible investor behaviour. To achieve this, we will seek partnerships with investor associations, consumer protection organisations and other financial sector representatives including bankers and insurers. We also wish to identify and encourage initiatives taken by our members. Next year, when the KIID (Key Investor Information Document) implementation will be well advanced, we will stage an Investor Education event to showcase what the industry has achieved in this area and commit to further action.
The third priority is to support beneficial regulatory measures. By beneficial we mean useful to the end investor and our approach will be a win-win situation. Regulation should benefit the investor, the industry and the economy at large. It should always address and balance the investor’s needs for innovation, cost-efficiency and protection because, as in any other markets, our clients want our products to reflect these features.
Furthermore, we will pursue our ongoing, proactive dialogue with the European Commission and European Parliament to shape beneficial regulation. We will require and contribute to cost benefit analysis for new proposed regulations and our own analysis will be based on the interests of investors, as well as other economic and social benefits.
The fourth priority is to expand and protect the UCITS brand in Europe and beyond. The cross-border industry is a growth driver as it now represents over 40% of assets under management in European funds. To support this growth, informing regulators and distributors in Asia, the Middle East and Latin America is key. We will initiate international seminars to explain UCITS developments, as well as AIFMD and other new European regulation. We will engage in a dialogue with non-European regulators and policy-makers who wish to better understand European standards and invite the European Commission to help us develop UCITS as a “made in Europe” success story.
The fifth priority is to demonstrate the importance of European fund and asset management industry professionals to the economy. This requires showing that we are knowledgeable about the interests of investors and can contribute to European broader economic and social goals. We will organise a campaign to raise awareness of our industry’s contribution to the real economy on capital markets and we will support professional education and training initiatives. We will also review the governance and financing of our associations to ensure the European voice of the industry continues to be strong, consistent and relevant.
In conclusion, we are the buy-side players of the financial industry, so we can demonstrate that demand shapes our practices. We can also show that we serve the interests of the economy and society. As a consequence, we can hope to build long-term trust among our customers, to encourage policy-makers to support the development of long-term investment, so that our stakeholders will continue to listen to our advice.
President of EFAMA