17 Amendments of Ondřej KOVAŘÍK related to 2021/0377(COD)
Amendment 76 #
Proposal for a regulation
Recital 3
Recital 3
(3) Certain characteristics of the ELTIF market, including the low number of funds, the small net asset size, the low number of jurisdictions in which ELTIFs are domiciled, and a portfolio composition that is skewed towards certain eligible investment categories, demonstrate the concentrated nature of that market, both geographically and in terms of investment type. It is therefore necessary to review the functioning of the ELTIF legal framework to ensure that more investments are channelled to businesses in need of capital and to long-term investment projects. In addition, further action is needed to remove existing tax barriers and introduce tax incentives, in order to ensure an adequate level playing field across Europe that would pave the way for a truly cross-border market for this type of funds.
Amendment 96 #
Proposal for a regulation
Recital 10
Recital 10
(10) It is necessary to extend the scope of eligible assets and promote the investments of ELTIFs in securitised assets. It should therefore be clarified that, where the underlying assets consist of long-term exposures, eligible investment assets should also include simple, transparent and standardised (STS) securitisations as referred to in Article 182(1) of Regulation (EU) 2017/2402 of the European Parliament and of the Council14 . Those long-term exposures comprise securitisations of residential loans that are secured by one or more mortgages on residential immovable property (residential mortgage backed securities (RMBS)), commercial loans that are secured by one or more mortgages on commercial immovable property, corporate loans, including loans which are granted to small and medium enterprises (SMEs), and trade receivables or other underlying exposures that the originator considers to form a distinct asset type, provided that the proceeds from securitising those trade receivables or other underlying exposures are used for financing or refinancing long- term investments. _________________ 14 Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 (OJ L 347, 28.12.2017, p. 35).
Amendment 108 #
Proposal for a regulation
Recital 15
Recital 15
(15) The diversification requirements laid down in the current version of Regulation (EU) 2015/760 were introduced to ensure that ELTIFs can withstand adverse market circumstances. Those diversification thresholds imply, however, that ELTIFs are, on average, required to make ten distinct investments. In relation to investment in projects or infrastructures of large scale, the requirement to make ten investments per ELTIF may be difficult to achieve, and costly in terms of transactional costs and capital allocation. To reduce transaction and administrative costs for ELTIFs and ultimately their investors, ELTIFs should therefore be able to pursue more concentrated investment strategies and thus to be exposed to fewer eligible assets. It is therefore necessary to adjust the diversification requirements for ELTIFs’ exposures to single qualifying portfolio undertakings, single real assets, collective investment undertakings and certain other eligible investment assets, contracts and financial instruments. That additional flexibility in the portfolio composition of ELTIFs and the reduction in the diversification requirements should not materially affect the capacity of ELTIFs to withstand market volatility, since ELTIFs typically invest in assets that often do not have a readily available market quotation, may be highly illiquid, and frequently have long-term maturity or time horizon. Those diversification thresholds should not be applicable, in any case, to funds that are marketed as fund-of-fund structures.
Amendment 126 #
Proposal for a regulation
Recital 24
Recital 24
(24) Article 13(1) of Regulation (EU) 2015/760 currently requires that ELTIFs invest at least 70 % of their capital in eligible investment assets. This high threshold for the composition of eligible investment assets in ELTIFs’ portfolios was initially established in view of the focus of ELTIFs on long-term investments and the contribution such investments would make to the financing of a sustainable growth of the Union’s economy. Given the illiquid and idiosyncratic nature of certain eligible investment assets within ELTIFs’ portfolios, however, it may prove difficult and costly for ELTIF managers to manage the liquidity of ELTIFs, honour redemption requests, enter into borrowing arrangements, and execute other elements of ELTIFs’ investment strategies pertaining to the transfer, valuation and pledging of such eligible investment assets. Lowering the eligible investment assets threshold down to 50 % would enable ELTIF managers to better manage the liquidity of ELTIFs.
Amendment 127 #
Proposal for a regulation
Recital 25
Recital 25
(25) Leverage is frequently used to enable the day-to-day operation of an ELTIF and to carry out a specific investment strategy. Moderate amounts of leverage can amplify returns, and, where controlled adequately, without incurring or exacerbating excessive risks. In addition, leverage can frequently be used by a variety of collective investment undertakings to gain additional efficiencies or operational results. Since the borrowing of cash threshold is currently limited to 30% of the capital of the ELTIF, ELTIF managers may be unable to successfully pursue certain investment strategies, including in the case of investments in real assets, where using higher levels of leverage is an industry norm or is otherwise required to achieve attractive risk-adjusted returns. It is therefore appropriate to increase the flexibility of managers of ELTIFs to raise further capital during the life of the ELTIF. In view of the possibleorder to allow ELTIF managers to raise capital more efficiently (while keeping an eye on the potential risks that leverage canould entail), ELTIFs marketed to retail investors should be permitted to borrow cash amounting to up to 5100 % of the value of the capital of the ELTIF. The 50 % threshold is appropriate given the overall borrowing of cash limits common for funds investing in real assets with a similar liquidity and redemption profile. As for ELTIFs marketed to professional investors, however, a higher leverage threshold should be permitted, because professional investors have a higher risk-tolerance than retail investors. TNet Asset Value (NAV). As a consequence of this, the borrowing of cash threshold for ELTIFs that are marketed to professional investors only should thereforeequally be extended to 100 % of the ELTIF capitalnet asset value (NAV).
Amendment 138 #
Proposal for a regulation
Recital 27
Recital 27
(27) ELTIFs should be able to encumber their assets to implement their borrowing strategy. To address concerns about shadow banking activities, however, cash borrowed by ELTIFs should not be used to grant loans to qualifying portfolio undertakings. However, to increase the flexibility of ELTIFs in executing their borrowing strategy, the borrowing arrangements should not count as borrowing where that borrowing is fully covered by investors’ capital commitments.
Amendment 143 #
Proposal for a regulation
Recital 29
Recital 29
(29) Article 18(4) of Regulation (EU) 2015/760 currently requires that investors in an ELTIF may request the winding down of that ELTIF where their redemption requests, made in accordance with the ELTIF’s redemption policy, have not been satisfied within one year from the date on which those requests were made. Given the long-term orientation of ELTIFs and the often idiosyncratic and illiquid asset profile of ELTIFs’ portfolios, the entitlement of any investor or a group of investors to request the winding down of an ELTIF can be disproportionate and detrimental to both the successful execution of the ELTIF investment strategy and the interests of other investors or groups of investors. It is therefore appropriate to delete the possibility for investors to require the winding down of an ELTIF where that ELTIF is unable to satisfy redemption requests. ELTIF managers should, in any case, be entitled to determine the redemption frequencies.
Amendment 199 #
Proposal for a regulation
Article 1 – paragraph 1 – point 6 a (new)
Article 1 – paragraph 1 – point 6 a (new)
Regulation (EU) 2015/760
Article 11 – paragraph 3 (new)
Article 11 – paragraph 3 (new)
(6 a) in Article 11, the following paragraph is added: "3. Paragraph 1, point (a), of this Article shall not apply to technology-based financial companies providing financial services that qualify as “financial undertakings” when the company falls into the category of micro, small and medium-sized enterprises (SMEs) as defined in Article 2(1) of the Annex to the Commission Recommendation 2003/361/EC of 6 May 2003.";
Amendment 204 #
Proposal for a regulation
Article 1 – paragraph 1 – point 8 – point a
Article 1 – paragraph 1 – point 8 – point a
Regulation (EU) 2015/760
Article 13 – paragraph 1
Article 13 – paragraph 1
1. An ELTIF shall invest at least 650 % of its capital in eligible investment assets.
Amendment 226 #
Proposal for a regulation
Article 1 – paragraph 1 – point 8 – point a
Article 1 – paragraph 1 – point 8 – point a
Regulation (EU) 2015/760
Article 13 – paragraph 3
Article 13 – paragraph 3
3. The aggregate value of units or shares of ELTIFs, EuvECAs, EuSEFs, UCITS and of EU AIFs managed by EU AIFM in an ELTIF portfolio shall not exceed 40 % of the value of the capital of the ELTIF.;net asset value (NAV).
Amendment 228 #
Proposal for a regulation
Article 1 – paragraph 1 – point 8 – point b
Article 1 – paragraph 1 – point 8 – point b
Regulation (EU) 2015/760
Article 13 – paragraph 3a
Article 13 – paragraph 3a
3a. The aggregate value of simple, transparent and standardised securitisations in an ELTIF portfolio shall not exceed 2030 % of the value of the capital of the ELTIF.;net asset value (NAV).
Amendment 234 #
Proposal for a regulation
Article 1 – paragraph 1 – point 8 – point c
Article 1 – paragraph 1 – point 8 – point c
Regulation (EU) 2015/760
Article 13 – paragraph 4
Article 13 – paragraph 4
4. The aggregate risk exposure to a counterparty of the ELTIF stemming from OTC derivative transactions, repurchase agreements, or reverse repurchase agreements shall not exceed 10 % of the value of the capital of the ELTIF.;Net Asset Value (NAV).
Amendment 238 #
Proposal for a regulation
Article 1 – paragraph 1 – point 8 – point f a (new)
Article 1 – paragraph 1 – point 8 – point f a (new)
Regulation (EU) 2015/760
Article 13 – paragraph 8a (new)
Article 13 – paragraph 8a (new)
(f a) The following paragraph is added: '8a. The requirements included in paragraph 2 of the present article should not apply to those funds which are marketed as fund-of-fund structures.';
Amendment 242 #
Proposal for a regulation
Article 1 – paragraph 1 – point 10 – point a – point i
Article 1 – paragraph 1 – point 10 – point a – point i
Regulation (EU) 2015/760
Article 16 – paragraph 1 – point a
Article 16 – paragraph 1 – point a
(a) it represents no more than 5100 % of the value of the capital of the ELTIF, and no more than 100 % of the value of the capital of the ELTIF for ELTIFs marketed solely to professional investorsnet asset value (NAV);
Amendment 248 #
Proposal for a regulation
Article 1 – paragraph 1 – point 10 – point a – point i
Article 1 – paragraph 1 – point 10 – point a – point i
Regulation (EU) 2015/760
Article 16 – paragraph 1 – point b
Article 16 – paragraph 1 – point b
(b) it serves the purpose of making investments or providing liquidity, including to pay costs and expenses, except for loans as referred to in Article 10, point (c), provided that the holdings in cash or cash equivalents of the ELTIF are not sufficient to make the investment concerned;
Amendment 256 #
Proposal for a regulation
Article 1 – paragraph 1 – point 12
Article 1 – paragraph 1 – point 12
Regulation (EU) 2015/760
Article 18 – paragraph 7
Article 18 – paragraph 7
7. ESMA shall develop draft regulatory technical standards specifying the minimum information to be provided to competent authorities under Article 18(2), point (b), and the criteria to assess the percentage referred to in Article 18(2), point (d), taking into account the ELTIF’s expected cash flows and liabilities. The draft regulatory technical standards must ensure that ELTIF managers are entitled to define the redemption frequency, which not be shorter than a month;
Amendment 276 #
Proposal for a regulation
Article 1 – paragraph 1 – point 21
Article 1 – paragraph 1 – point 21
Regulation (EU) 2015/760
Article 37 – paragraph 1
Article 37 – paragraph 1
1. No later than [date of the entry into force + 5 years], the Commission shall start a reviewubmit to the European Parliament and to the Council a report ofn the application and enforcement of this Regulation. Theat reviewport shall analyse, in particular: t least analyse the following elements: