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Money Management

Managers in EU can sell cross-border collective investment funds under new deal

European Parliament buidling in Brussels

Money managers operating in the European Union will be able to sell cross-border collective investment funds following an agreement Tuesday between the European Parliament and the Council of the European Union to ease distribution rules.

Aimed at increasing manager competition and investor protections, the European Commission's proposal to remove requirements on money managers to sell country-specific funds will be included in amendments to Undertakings for Collective Investment in Transferable Securities and Alternative Investment Fund Managers directives.

The EC said Tuesday it wants to help managers test demand in new markets without imposing on them additional costs of maintaining a physical presence in all markets.

The commission said in a news release: "This should help managers who want to increase their cross-border activities to save the cost of legal advice on national rules."

Currently, some 70% of the total European assets under management, which are estimated to amount to €14.3 trillion ($16.4 trillion), are held by investment funds registered for distribution only in their domestic market.

"This step removes a stumbling block to cross-border investments in the EU, a significant step in completing the Capital Markets Union," said Jyrki Katainen, vice president for jobs, growth, investment and competitiveness of the European Commission, in the news release. "Funding has to flow freely across the EU so it can best benefit companies to get them the financing they need to grow."