Posted on 28 September 2021
Funds Europe: Luxembourg Talking Heads – Regulatory Responsibilities
While aligning fund regimes could standardize regulatory requirements and risk calculations, leading experts warn of harmonizing Europe’s UCITS and AIFM frameworks. Speaking with Funds Europe, Alain Delobbe explains that merging the two established fund regimes would make unnecessary changes to both frameworks that would ultimately weaken their effectiveness.
Arguing that the two European regimes should only be harmonized in a few select areas, Alain points out that proposed changes to the AIFMD would give foreign financial authorities supervisory powers over AIFs established in other countries. In Luxembourg, for example, this would have foreign regulators, instead of the CSSF, supervising Luxembourg-based funds. Alain argues against this, stating that under the current AIFMD, competent regulatory authorities are already in place and that such a change could lead to regulators' risk-divergent treatment of certain AIFs.