COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2015/760 as regards the scope of eligible assets and investments, the portfolio composition and diversification requirements, the borrowing of cash and other fund rules and as regards requirements pertaining to the authorisation, investment policies and operating conditions of European long-term investment funds
Date: 2021-11-25
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: European Investment Fund, investment company, investment project, investment promotion, investment protection, long-term financing, regulation of investments

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  EN 

   EUROPEAN COMMISSION  Brussels, 25.11.2021  SWD(2021) 343 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the  Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2015/760 as regards the scope of eligible assets and investments, the portfolio composition and diversification requirements, the borrowing of cash and other fund rules and as regards requirements pertaining to the authorisation, investment policies and operating conditions of European long-term investment funds {COM(2021) 722 final} - {SEC(2021) 571 final} - {SWD(2021) 342 final}  
 
 
Executive Summary Sheet 

Impact  assessment  on  a  Proposal  for  a  Regulation  amending  Regulation  2015/760  on  European  long-term 
investment funds 

A. Need for action 

Why? What is the problem being addressed?  
The problem facing the ELTIF regulatory framework is low uptake. The ELTIF industry is relatively small and is 
concentrated  in only four  Member States. There  is an untapped potential to establish  an  additional channel  to 
mobilise  capital  for  the  financing  of  long-term  projects.  This  adversely  affects  project  owners,  businesses  and 
SMEs, investors and ELTIF managers and impairs pursuit of the goals of the Capital Markets Union to establish 
more diverse sources of long-term finance in Europe.  

What is this initiative expected to achieve?  
This initiative’s main objective is to help the ELTIF market reach sufficient scale in order to deliver the intended 
benefits for the EU economy and for the European investors of the original proposal.  

What is the value added of action at the EU level?  
The  ELTIF  Regulation’s  objectives  cannot  be  sufficiently  achieved  by  Member  States  alone.  Due  to  the  scale 
and effects of the objectives, they can be better achieved at Union level. In line with the principles of subsidiarity 
and proportionality, the ELTIF Regulation does not go beyond what is necessary to achieve those objectives. 

B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not?  
The ELTIF regulatory framework sets out detailed fund rules on eligible assets and investments, diversification 
and portfolio composition, leverage limits and marketing. This initiative explores and identifies preferred options 
in the following areas: adopting lighter fund rules for professional only ELTIFs; removing restrictions for investors 
to  access  ELTIFs;  establishing  an  optional  liquidity  window  mechanism;  and  targeting  overly  restrictive  fund 
rules that disproportionately limit the available investment universe, fund structures and investment strategies. 

Who supports which option?  
Stakeholders  are  critical  of  the  overly  restrictive  ELTIF  fund  rules  and  support  the  broader  scope  of  eligible 
assets and investments, the easing of rules around fund structuring and  the pursuit of more diverse investment 
strategies. Market participants also advocate reducing the barriers to entry for retail investors  while setting  out 
sufficient safeguards to protect investors. 

C. Impacts of the preferred option 

What are the benefits of the preferred option?  
The proposal is designed to make ELTIFs more appealing to managers and investors. Managers will be able to 
tailor  ELTIF  structures  to  the  investment  strategies  that  meet  investors’  needs,  and  achieve  cost  efficiencies. 
Investors will be able to meet their long-term saving and investment needs. The increased number of investors 
would  allow  funds  to  scale  up  in  size  and  realise  economies  of  scale.  Removing  duplicate  procedures  and 
inflexible  fund  rules  will  reduce  costs  for  ELTIF  managers.  The  proposed  changes  will  make  ELTIFs  better 
positioned to achieve the original objectives of establishing a new source of long-term finance in Europe. 

What are the costs of the preferred option?  
No significant negative economic, social or environmental impacts or costs are expected. Potential cost impacts 
on investors, on ELTIFs and their managers and on NCAs should be negligible. 

How will businesses, SMEs and micro-enterprises be affected?  
The review is expected to have positive indirect impacts for the financing of SMEs and enterprises, social and 
transport infrastructure, and long-term projects contributing to environmental or social objectives such as clean 
energy.   

Will there be significant impacts on national budgets and administrations?  
No significant impacts are expected. 

Will there be other significant impacts?  
Increasing  the  number  and  size  of  ELTIFs  could  also  channel  capital  towards  long-term  projects  focused  on 
environmental or social goals, such as clean energy, housing infrastructure or facilities.   

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When will the policy be reviewed?   
In 5 years following the entry into application of the amendments to the legal framework.  

D. Follow up 

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