The Swiss Finance Council (SFC) counts among its members large global asset and wealth management firms, many of which have substantial operations and investments in the EU. Our members act as manufacturers, distributors, and advisers of investment products, serving EU clients both from within the EU and on a cross-border basis, as well as non-EU clients investing in the EU. As such, deepening the Single Market is a priority we share with the European Commission. To succeed, the Market Integration and Supervision package (MISP) must be targeted - cutting through existing obstacles rather than creating new ones. Our members believe that minimizing complexity is the key to delivering efficiency for investors and growth for Europe.
The SFC applauds the Commission’s intention to avoid imposing disproportionate demands on delegation frameworks. Delegation is a cornerstone of international finance and a vital driver of efficiency within the EU’s AIF and broader fund markets (UCITS). This model provides savers in the EU and beyond with global expertise and diverse investment options, all while upholding stringent EU standards of investor protection. Through it, our members offer diverse range of products in the EU, mobilising and providing long-term capital, which helps fund EU companies and projects, creating jobs and promoting sustainable economic growth.
Consequently, we strongly advise against implementing the Commission’s proposal of an intra EU group derogation framework as is. Unless it is extended to intra-group arrangements with entities outside the EU, the proposed derogation framework would unlevel the playing field by not considering the international nature of asset management business models and operational setups across the industry.
The treatment of asset managers delegating activities must not differ according to whether they are headquartered inside or outside the EU. Maintaining the current principles-based framework while providing greater supervisory clarity would better support regulatory consistency, supervisory convergence, and the long-term competitiveness of the European asset management industry:
- The objectives of simplification and operational efficiency can be achieved through clarification via a recital and/or Level 2 and Level 3 guidance, enabling National Competent Authorities (NCAs) to apply a proportionate and risk-based supervisory approach, including for intra-group operating models. In this context, factors such as group integration, shared systems and infrastructure, governance standards, regulatory environment, and proven supervisory track record should be explicitly recognised as relevant elements in the assessment of delegation arrangements.
- Ensure that other regulatory frameworks, such as the EBA guidelines on outsourcing and DORA, do not negate the benefits stemming from the UCITS/AIFMD risk-based approach.
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