Passeport pour la gestion des fonds : McCreevy sous pression[en] 

The legislation currently in place stipulates that an investment fund can only be managed from the country in which it is based. The introduction of the passport would instead allow managers to work freely throughout Europe, regardless of their place of establishment.

The current system favours countries such as Luxembourg and Ireland because they offer the industry better fiscal conditions and higher qualified expertise. This results in a disproportionate percentage of funds based on the territories of both countries in comparison to their populations. 

Figures from the European Fund and Asset Management Association (EFAMA) show that in 2007 France, Germany, the UK and Italy topped the league in terms of size of their national investment fund markets, reflecting the importance of their respective domestic savings markets. Luxembourg leads the way in terms of place of establishment, with 24.4% of the European market share, ahead of France (19.8%), Germany (13.5%), the UK (10%) and Italy (5.1%). Ireland has 9.6% of total European assets established in its territory.

The idea of a passport for investment fund managers is supported by the industry and by the majority of EU member states, but has been so far fiercely opposed by the usually pro-free market Irish Commissioner McCreevy and by the two states which profit the most from the current system: Ireland and Luxembourg (see background).

In what many considered a dilatory tactic, the Commission avoided including the managers' passport in its recent proposals for to reform the main EU funds market, the UCITS (Undertakings for Collective Investment in Transferable Securities). Instead, McCreevy asked for detailed advice from the European group of national regulators in charge of the issue, the Committe of European Securities Regulators (CESR) (EurActiv 16/07/08).

In spite of the relatively short notice (three months including the summer break), the CESR was able to present its opinion by the 1 November deadline. As expected, the regulators recommended  going ahead with the passport and proposed a series of measures to overcome the main legal hurdles highlighted by the Commission, notably the supervision of companies based abroad.

The European Parliament has already pushed for the introduction of the passport. In the Council, apart from Luxembourg and Ireland, the other states with a lukewarm approach are Poland, Slovakia and Slovenia, which is not enough to build a blocking minority. The Commission is therefore the last stumbling block.

McCreevy has to negotiate possible amendments to the proposals with the Parliament. But there has not yet been any Commission contact with Wolf Klinz, the liberal MEP in charge of the dossier, his secretariat confirmed.

However, McCreevy's spokesperson admitted that "the CESR's advice was a prerequisite, and now that it has been presented an important hurdle has been removed". In a press release presenting the advice, the CESR underlined: "The Commission has stated that, following receipt of the CESR's advice, it aims to come forward with an appropriate legislative proposal in time for its adoption during the current legislature." 

Technically, this means that an agreement between Commission and Parliament should be reached by the end of the year. 

The CESR's advice "sets out clearly the procedure to be followed when a UCITS is authorized under the framework of the management company passport. This includes provisions on the conditions under which the competent authority of the UCITS home member state should approve the choice of the management company".

Liberal MEP Wolf Klinz, rapporteur in the Parliament on the review of the rules governing UCITS, criticised the proposal made by the Commission in July: "I regret the delay with regard to the Management Company Passport," he states in his draft report .

The European Fund and Asset Management Association (EFAMA) "strongly welcomed" the work undertaken by the CESR with regard to the management company passport. "The inclusion of the management company passport will significantly increase the efficiency of UCITS regulation by allowing cross-border management of investments funds whilst centralizing administrative and portfolio management functions. We call on the Commission to act upon CESR's advice and enable its inclusion in the UCITS IV package," reads a statement .