Efama gives strong support to latest EC Green Paper
The European fund industry through its regional trade assoication Efama has lent strong support to proposals in the latest European Commission Green Paper on retail financial services.
In a statement Efama president Alexander Schindler said the paper would continue to remove barriers for consumers and businesses to help facilitate the emergence of a true single market in retail financial products and services.
Efama has seen this type of development previously at the product level, through the Ucits market, and data suggesting that cross-border funds went from some 29% of the total European investment fund assets in 2004, to some 42% by 2014, Schindler said.
However, both Schindler and Efama director general Peter de Proft (pictured) pointed out that there are some additional requirements that the Green Paper should address in order to have full effect on the single market.
In particular, they point out that lack of a commonly agreed regulatory framework in certain areas, lack of goldplating of EU legislation, and fragmented marketing rules and discriminatory withholding tax in certain jurisdictions are combining to maintain barriers to cross-border trade.
“This should be addressed to further reinforce the merits of Ucits as a true cross-border financial product. In this sense, Efama is strongly in favour of building on the Ucits success factors and replicate these in other sectors, most notably in the area of personal pensions,” the association noted in its response to the Green Paper.
De Proft added: “We feel very strongly about the need to address the current fragmentation of the market for retirement savings. This has to be done in order to foster portability, economies of scale to lower costs and generate better returns to consumers, and also to enhance transparency, competition and innovation. The creation of a standardised Pan-European Personal Pension product (Pepp) would allow progressing in that direction.”
Another development that is noted is the digitalisation of products and services, which the Green Paper states “can help bring down prices and improve the comparability of products, empowering consumers in their financial choices. In the long run, digitalisation should allow firms to make their products available anywhere in the Union, bringing a single European market closer to reality.”
The Green Paper further notes that the propsals on financial products and servcies put forward have been done so in mind of the EU’s Digital Single Market (DSM) proposal.
“The DSM Strategy intends to ensure, among other points, better access for consumers and businesses to online goods and services across Europe by tackling the problem of unjustified ‘geo-blocking’ (supplier-imposed restrictions on purchases). It also addresses the issue of the ‘level-playing field’ between various service providers and envisages a comprehensive assessment of online platforms, with a particular focus on handling of data. Moreover, the DSM Strategy aims to improve technological interoperability through supporting standardisation, These are all relevant to the digitalisation of the financial sector, though not specific to it.”
Efama said it “welcomes the broader debate about digitalisation and its impact on the retail markets launched by the Green Paper.”