Today's agreement gives us another tool in our fight to boost investment and growth in Europe. European long term investment funds (ELTIFs) will help to match long term projects and companies which want to grow with the investment they need. As an element of the Capital Markets Union, they will also support the EU's Investment Plan launched earlier today.
The new European Long Term Investment Fund (ELTIF) Regulation will bring together all types of investors who are willing to give their money to projects and companies that need long term finance and watch their investments grow over the coming years.
ELTIF will channel investors' money into projects and companies that are not able to raise money on stock markets and often find it difficult to get loans from banks. In addition, ELTIF will be able to invest in all types of small and medium sized companies.
Funds that want to use the ELTIF label have to meet a range of requirements designed to ensure investors understand the risks they are taking on and the amount of time they must wait before they can get their money back. In addition, retail investors must be given a Key Information Document detailing all of the risks involved before they can decide whether or not to invest in an ELTIF.
In return managers of ELTIF, who must also comply with all the rules of the Alternative Investment Fund Managers Directive, can market their funds to investors in all EU Member States.
The European Parliament and Council agreement on the Commission's proposal paves the way for finalizing a common text that the European Parliament and Council would vote on in the next step of the legislative process.