Lobbying by BVI Bundesverband Investment und Asset Management e.V.

BVI Bundesverband Investment und Asset Management e.V.

BVI

BVI represents Germany's fund industry, advocating for sensible regulation and fair competition for members managing EUR 4.5 trillion in assets.

Focus Areas

2024-2025

2022-2023

2018-2021

2015-2017

Links

Website Transparency Register Profile

ID: 96816064173-47

Lobbying Activity

Meeting with Angelika Winzig (Member of the European Parliament)

15 Jan 2026 · Meeting with representative of BVI

Meeting with Helene Bussieres (Head of Unit Financial Stability, Financial Services and Capital Markets Union)

6 Jan 2026 · RIIPS Regulation and AIFMD

German fund industry urges EU to reward building renovations

5 Dec 2025

Topic — The initiative reviews technical screening criteria to update and simplify the EU taxonomy environmental act.

Message — The association calls for lowering the high alignment bar to include more renovations. They recommend recognizing energy savings based on pathways and treating renovated properties as sustainable.1 2 3

Why — This would allow more properties to qualify as sustainable and reduce administrative costs.4 5

Impact — Developers of high-efficiency buildings lose their exclusive market privilege as capital shifts to renovations.6

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Meeting with Philippe Thill (Cabinet of Commissioner Maria Luís Albuquerque)

5 Nov 2025 · Exchange on the Retail Investment Strategy and the Financial Markets Integration Package

Meeting with Markus Ferber (Member of the European Parliament)

5 Nov 2025 · SIU

Meeting with Helene Bussieres (Head of Unit Financial Stability, Financial Services and Capital Markets Union)

13 Oct 2025 · Supervision and cross-border distribution of investment funds

Meeting with Patricia Reilly (Cabinet of President Ursula von der Leyen)

24 Sept 2025 · to follow

Meeting with Patricia Reilly (Cabinet of President Ursula von der Leyen)

24 Sept 2025 · Savings and Investments Union/Attracting investment to ensure a competitive EU

Meeting with Alexandra Hild (Cabinet of Commissioner Ekaterina Zaharieva), Elena Martines (Cabinet of Commissioner Ekaterina Zaharieva)

23 Sept 2025 · Exchange on access to capital for startups in the EU

German fund industry urges simple tax rules and flexible investment accounts

8 Jul 2025

Topic — The initiative aims to create a European blueprint for retail savings and investment products.

Message — BVI advocates for simple tax administration by banks and reduced taxation of capital gains. They request a unified, flexible depot that avoids legal minimum holding periods and restrictions. Easy access is essential to minimize potential barriers so that savers are not deterred.1 2 3

Why — Lowering administrative burdens and taxes would likely increase investment volumes for fund managers.4

Impact — National treasuries would lose tax revenue due to the proposed lower capital gains rates.5

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Meeting with Maria Luís Albuquerque (Commissioner) and

26 Jun 2025 · • SIU • Asset management market

Meeting with Alexandra Hild (Cabinet of Commissioner Ekaterina Zaharieva)

24 Jun 2025 · Investment and asset management industry in Germany; EU VC market

Meeting with Tatyana Panova (Head of Unit Financial Stability, Financial Services and Capital Markets Union) and BlackRock and

2 Jun 2025 · Exchange with asset managers on the integration of EU capital market

German Fund Industry Urges Voluntary Sustainable Product Labels

28 May 2025

Topic — Revision of EU sustainable finance disclosure rules to simplify frameworks and prevent greenwashing.

Message — BVI proposes a voluntary three-tier system for categorising sustainable products to improve clarity for retail investors. They also call for streamlining disclosures to focus on key investment features and removing burdensome entity-level reporting.1 2

Why — These proposals would significantly reduce operational expenses and administrative burdens for asset managers.3

Impact — Commercial ESG data vendors would lose revenue as mandatory reporting requirements are abolished.4

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Meeting with Helene Bussieres (Head of Unit Financial Stability, Financial Services and Capital Markets Union)

22 May 2025 · Exchange of views on the review of the SFDR

Meeting with Christophe Gomart (Member of the European Parliament) and Allianz SE

22 May 2025 · Financement de la défense

Meeting with Benjamin Hartmann (Cabinet of Commissioner Andrius Kubilius)

22 May 2025 · Keynote speaker at the BVI Insights event. As BVI, they have been proactive in support and involvement in the recent European Commission initiatives, such as the EU Defence Industrial Investment Forum, shaping the future of European defence.

Meeting with Elena Arveras (Cabinet of Commissioner Maria Luís Albuquerque)

15 Apr 2025 · Sustainability Omnibus

German fund industry urges broader mandatory EU Taxonomy reporting

26 Mar 2025

Topic — Updating EU Taxonomy rules to make sustainability reporting simpler and cheaper for companies.

Message — The BVI advocates for radical simplification of reporting rather than reducing the number of companies covered. They want mandatory reporting for more firms and insist asset managers should not have to buy replacement data.1 2 3

Why — This ensures access to reliable data and prevents the need to purchase expensive third-party information.4 5

Impact — Investors and environmental goals suffer if the Taxonomy loses its status as a reliable sustainability anchor.6 7

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Meeting with Didier Millerot (Head of Unit Financial Stability, Financial Services and Capital Markets Union)

26 Mar 2025 · Participation in a panel on the SF Omnibus

Meeting with Helene Bussieres (Head of Unit Financial Stability, Financial Services and Capital Markets Union)

26 Mar 2025 · Exchange of views on the Savings and Investments Union Communication

Meeting with Tatyana Panova (Head of Unit Financial Stability, Financial Services and Capital Markets Union) and European Fund and Asset Management Association

5 Mar 2025 · Discussion on the ESMA’s final report regarding transparency requirements for bonds

Response to Savings and Investments Union

3 Mar 2025

BVIs position on the European Commissions Call for Evidence on the Savings and Investments Union: The Call for Evidence rightfully identifies three key areas of action: empowering citizens to participate in capital markets; making investment opportunities attractive and visible to investors; and fostering market integration and efficiency in capital markets. We support these objectives for two reasons: firstly, savers are missing out on opportunities for at-tractive returns because they keep their savings in low-interest current accounts, and secondly, be-cause the capital markets could do more to help financing the economy. High-yielding investments help to close the retirement provision gap. A thriving capital market is advantageous for companies, allowing them to finance themselves through the market in addition to bank loans. Greater investor participation will also have positive macroeconomic effects, supporting companies and economic growth. Starting with the Capital Markets Union Action Plan, the European Commission has made several at-tempts to improve the situation over the last 10 years with limited success, as the various reports mentioned in the CfE clearly point out. Ever-growing bureaucracy is causing high costs for the Euro-pean economy, specifically for the European fund industry. This money is not available for digitalisa-tion or the development of new markets and is putting the industry further and further behind the global competition. The SIU can only be a success if the mistakes of the past are not repeated. A recent example for well-intended, but misguided regulation is the Retail Investment Strategy with its counter-productive fixation on costs. Launched as an initiative to enhance investor protection, increase transparency, and promote greater participation of retail investors in the capital markets, the project is likely to fail on each and every of these objectives, while burdening the industry, investors and supervisors with heaps of new red tape: another bureaucratic monster in the making. The SIU is a unique opportunity to turn the tide and root out excessive and onerous measures, like the proposed Value for Money framework or a new Best Interest Test, before they become applicable law. It is easier to prevent new bureaucracy than to reduce existing bureaucracy. The CfE raises the idea of an EU savings product, implying that such an instrument might currently be missing on the market. We do not see this need in the market neither from the perspective of retail investors, institutional investors, nor Member States. UCITS already are a successful, globally acknowledged brand. They are simple and transparent and offer broadly diversified, low-threshold access to a wide range of investment opportunities. The introduction of a new product could erode confidence in the UCITS brand. The Pan-European Pension Product (PEPP) is a proof for the unattrac-tiveness of new products which were designed in a too complicated fashion. Furthermore, we doubt that the suggested fiscal or other incentives can realistically be achieved since they would rely on voluntary granting of state aids by Member States, which is highly unlikely to happen. Therefore, we do not see the need for or benefits deriving from a new product sui generis at EU level. Beyond the ideas raised in the CfE, we suggest creating a European index family the European All Shares Index Family (EUASIF) that would improve the visibility, comparability and transparency of all listed companies in the EU and thus strengthen market integrity. Unlike the existing index families, it should cover all listed shares in the EU and allow for sub-indices for individual countries, regions and sectors in order to meet the different needs of investors, issuers and their stock exchanges. The de-velopment and administration of the indices and their use by market participants should be cost-efficient in order to minimise the burden on market participants

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Meeting with Tatyana Panova (Head of Unit Financial Stability, Financial Services and Capital Markets Union)

18 Feb 2025 · Development of an EU all-shares index family

German fund industry backs standardized green bond reporting templates

28 Jan 2025

Topic — Consultation on voluntary reporting templates for green and sustainability-linked bond issuers.

Message — BVI supports standardised templates to help investors identify and compare taxonomy-aligned activities. They welcome the inclusion of a statement on whether bonds exclude activities under climate benchmarks. The association also expects consistency between pre-issuance and post-issuance disclosure requirements.1 2 3

Why — Standardisation helps investment funds compare bond data more efficiently and accurately.4

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Meeting with Martin Merlin (Director Financial Stability, Financial Services and Capital Markets Union)

21 Jan 2025 · Financial and securities markets

Meeting with Alexandra Jour-Schroeder (Deputy Director-General Financial Stability, Financial Services and Capital Markets Union)

21 Jan 2025 · Savings and Investments Union

Meeting with Jana Nagyová (Member of the European Parliament)

8 Jan 2025 · Leveraging private financing in the context of the green transition and competitiveness

Response to Applying a unique identifier for public transparency of OTC derivatives

10 Jul 2024

BVI generally welcomes the Delegated Act (DA) proposal by the EU Commission to use the OTC ISIN as an ISO-identifier for the purpose of the MiFIR transparency requirements. Since 2002, the BVI has advocated for automation in the financial market based on ISO standards, in particular the use of ISO identification numbers. BVI was instrumental in the EU's regulatory decision on the production of the OTC ISIN through the (newly) created ANNA-DSB in 2016 and for ensuring that use of the identifier in reporting is offered in as cost effective a manner as possible. Please find attached our specific comments to CDS and IRS.

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Meeting with Anna Cavazzini (Member of the European Parliament, Committee chair) and Apple Inc. and

23 Feb 2024 · Aktuelle Themen in der Europapolitik und Sachsen

Response to Review of the scope and third-country regime of the Benchmark Regulation

17 Jan 2024

BVI generally support the proposal of the EU Commission to further streamline the EU framework for indices and critical and (non) significant benchmarks. The BMR helps to strengthen the confidence in the financial markets and helps to prevent manipulation of financial indices. Investment funds are highly regulated and transparent financial products under the UCITS/AIFM regime. Investment funds have not contributed to the manipulation of (systemically important) financial indices (e.g. Libor, Euribor). Fund management companies do not provide input data for the calculating of (systemically important) benchmarks. Asset Managers are mainly users of benchmarks/market indices. Fund management companies do not have access or the ability to influence the process of creating (systemically important) benchmarks (BM) or financial indices provided by index providers. Asset Managers are not able to manipulate these benchmarks, even if they can be used to measure the performance of an investment fund. The German investment fund management companies use both public and customized indices and benchmarks provided by index providers which follow their own methodology in respect of use of real transactions, tradable prices, quotes and offered rates. Panel submissions and estimates are only used if no real transaction data are available. We consider the BMR review as a vital opportunity to modernise the benchmark framework in view of strengthening the global competitiveness of the EU financial service industry based on a more balanced approach in respect to the compliance rules for supervised entities (e.g. German fund management companies) and benchmark administrators. Please find our detailed proposals in the attached document.

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Response to Reporting reduction package - amendments to the ESA, ESRB and InvestEU Regulations

28 Dec 2023

We strongly support the proposed Reporting Reduction Package, which will contribute to a reduction in the reporting burden through both better data sharing and the removal of duplications in reporting requirements. We strongly encourage the Commission and the Co-legislators to ensure that no (new) reporting obligations are introduced in (new) policy initiative or during on-going legislative reviews. We also recommend that the Commission and Co-legislators promote a more systematic form of data exchange between public authorities supervising the financial sector, guaranteeing that fund management companies report regulatory data only once. Funds are among the most strictly regulated and transparent financial products. Asset managers are required to report extensive and complex data packages for each fund or share class to various authorities and central banks at regular intervals. This is the legacy of the financial market crisis when regulators and central banks around the world significantly expanded the reporting requirements for investment funds in order to improve transparency in the global fund market. There is now sustainability reporting under SFDR and CSDR, regulatory fund reporting (e.g. UCITS/AIFM, money market fund reporting as well as, in our case, reporting to the Bundesbank), transaction reporting (e.g. EMIR, SFTR), reporting to institutional investors (e.g. Solvency II, CRR), the annual tax return as well as quite a few special reports and responses to ad hoc queries by regulators on risks. The plethora of different data standards and formats in reporting is an enormous burden for both the fund industry and the responsible authorities, both operationally and financially. It also hinders efficient supervision in analysing systemic risks in financial markets. There is therefore an urgent need to streamline the current reporting requirements and administrative burden on fund companies and so reduce them to a reasonable level. In this regard, we would like to submit the following considerations on funds and transaction reporting: The applicable requirements for transaction-level reporting under EMIR, MiFID II/MiFIR and SFT Regulation display considerable differences in terms of reporting details, reporting channels, data repositories and applicable IT standards. The same pertains to the regulatory reporting on portfolio positions and risks required under AIFMD and UCITS Directive. While AIFMD reporting is at least harmonised at EU level, there is no single reporting standard for UCITS funds in the EU (yet). There is a lack of a common European standard such as what kind of portfolio and risk data, in which frequency and in which format should be reported, and there is apparently no regular exchange of the information collected by the national competent authorities (NCAs) and other authorities in the Union, with ESMA and with the ESRB. We see the need for improvements in information and data sharing between all financial stability bodies such as ESMA, ESRB, ECB, national central banks, and national competent authorities. This requires a single regulatory reporting mechanism which will reduce operational effort and burden for asset managers as well as supervisory authorities. A general overhaul of fund reporting towards mere raw data delivery can meet the demands of super-visors for more granular data to monitor systemic risks in the long run. However, this requires a fundamental overhaul of all fund reporting. For a short-term solution, this demand can be ensured through a new, yet to be defined data exchange between NCAs that already have granular data (e.g. via central banks or EMIR/MiFIR transaction reporting) and maintaining the aggregated and consolidated data collection approach. We therefore propose only minimal changes in the short run to improve AIFMD reporting. Therefore, we strongly recommend that the ESAs should regularly review the regulatory reporting obligations that apply to funds.

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German fund industry demands ESG raw data regulation expansion

31 Aug 2023

Topic — New EU rules targeting the transparency and reliability of ESG rating activities.

Message — BVI requests extending the regulation to cover ESG raw data products. They advocate refining exemptions for internal ratings and requiring providers to publish price lists.1 2

Why — This expansion would provide fund managers with more comparable data for regulatory compliance.3 4

Impact — Large rating agencies and US-based providers would face higher compliance costs and oversight.5 6

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German Fund Industry Warns EU Retail Rules Risk Market Damage

28 Aug 2023

Topic — EU legislative proposals aiming to increase retail investor participation in capital markets.

Message — BVI urges the Commission to enforce existing financial rules rather than introducing new requirements. They want to scrap proposed cost benchmarks and maintain the current system of commissions.1 2

Why — Avoiding these rules prevents price caps on funds and protects existing revenue from commissions.3

Impact — Investors continue to face high costs that the Commission's value for money benchmarks intended to lower.4

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Response to Banking Union: Review of the bank crisis management and deposit insurance framework (DGSD review)

25 Aug 2023

We, the BVI as the German Investment Funds Association and the German Banking Industry Commit-tee (GBIC), take the opportunity to present our views on the CMDI package proposed by the Europe-an Commission in relation to the proposal for a Directive amending Directive 2014/49/EU (Deposit Guarantee Schemes Directive, DGSD) as regards the scope of deposit protection. GBIS`s member associations operate the mandatory deposit guarantee schemes respectively institutional protection schemes of the three german banking pillars. BVIs members are asset managers managing collective investment undertakings (CIUs ) that neither offer deposit services nor are entitled as institutional inves-tors to assert legal claims against a deposit guarantee scheme (DGS). With a share of 28%, Germany represents the largest fund market in the EU. However, the business models of CIUs and their deposits could be affected by the new proposals to extend the scope in relation to client funds deposits. We limit our remarks on the new proposal to supplement the definitions in Article 2(1)(20) of the DGSD (client fund deposits).

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German fund industry demands mandatory corporate sustainability disclosures

7 Jul 2023

Topic — The consultation defines new European standards for corporate reporting on environmental and social sustainability.

Message — BVI demands mandatory reporting on core indicators to ensure investors receive necessary sustainability data. They want climate disclosures and explanations for any omitted reporting topics.1 2 3

Why — This would reduce asset managers' reliance on expensive commercial vendors for environmental data.4 5

Impact — Commercial data vendors lose revenue as investors access standardized information directly from companies.6 7

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Meeting with Alfred Sant (Member of the European Parliament, Rapporteur)

13 Apr 2023 · Listing Act

Meeting with Axel Voss (Member of the European Parliament, Shadow rapporteur) and BUSINESSEUROPE and

8 Mar 2023 · Corporate Sustainability Due Diligence

Meeting with Agnieszka Drzewoska (Cabinet of Commissioner Mairead Mcguinness) and Bundesverband deutscher Banken e.V. and

18 Jan 2023 · Retail Investment Strategy

Meeting with Andrea Beltramello (Cabinet of Executive Vice-President Valdis Dombrovskis) and Bundesverband deutscher Banken e.V. and

18 Jan 2023 · Retail investment strategy. ETFs.

Meeting with Paul Tang (Member of the European Parliament)

29 Nov 2022 · What's next? Taxonomy, Art. 8 minimum standards, ESG ratings

Meeting with Axel Voss (Member of the European Parliament, Shadow rapporteur) and EUROPEAN TRADE UNION CONFEDERATION and

7 Nov 2022 · Corporate Sustainability Due Diligence

Meeting with Pedro Silva Pereira (Member of the European Parliament, Rapporteur)

28 Jun 2022 · ESAP

German Fund Industry Urges EU to Keep Commission-Based Advice

31 May 2022

Topic — This consultation explores measures to increase retail client participation in European capital markets.

Message — Both advisory models must continue to coexist to ensure retail investor access. Existing suitability and appropriateness assessments are well-designed and should not change. The Commission must align PRIIPs cost figures with MiFID II for consistent disclosure.1 2 3

Why — Avoiding regulatory changes prevents massive impacts on fund industry processes and IT systems.4

Impact — Less wealthy retail investors would lose affordable access to professional financial advice.5

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Response to Central securities depositories – review of EU rules

26 May 2022

We embrace the EU Commission aim to review the CSDR. We welcome the Commission proposal to improve the mandatory buy-in (MBI) regime as it takes generally into consideration the market feedback provided by the relevant stakeholders (e.g. Asset Manager). The proposal supports our demand that in a first step the cash penalties regime for late settlement of securities transactions should be successfully implemented, before market participants (e.g. Asset Managers) could be obliged to initiate a buy-in. German investment fund managers acting on behalf of regulated investment funds (UCITS/AIFs) are important users of the securities markets in the EU. We support the aim to achieve an efficient, integrated and safe market for securities clearing and settlement in the EU, particularly for cross-border transactions. Efficient and safe securities settlement systems with an EU wide harmonized settlement discipline regime will benefit all investors and further promote a pan-European securities market. The improvements of the MBI regime should contribute to decrease costs for issuers and investors (e.g. UCITS/AIFs), preserves market liquidity and does not place EU capital markets at a competitive disadvantage. German investment fund management companies are not directly involved in the value chain of clearing and settlement of securities transactions. They instruct the custodians of the relevant investment funds to match and settle securities (e.g. equity, bonds, fund units) belonging to such investment portfolios. The custodians have a direct access with the CSDs. Investment fund management companies have to rely on the information obtained by the custodians in order to react in cases of settlement fails or buy-ins. The custodians have to ensure that all relevant settlement and cash penalty information needs to be sent as fast as possible to the fund management companies. This will enable the investment fund management companies to solve all discrepancies for unsettled, failing trades and cash penalty related transactions where a decision is required by the custodians from the investment managers. Our members have already started in cooperation with their respective fund custodian to implement the cash penalty regime. As mentioned above, we welcome the proposal by the EU Commission to apply as a first step the cash penalty regime combined with an impact assessment in order to evaluate if a mandatory buy-in needs to be implemented within the market. However, a mandatory obligation to appoint a buy-in agent within the MBI regime should be removed. Due to the long discussion within the financial market to implement a mandatory buy-in regime, the only possible operator to provide buy-in agent services has removed his offering. There is currently no valid offering within the market to provide buy-in services. Therefore, we are of the opinion that the obligation to appoint buy-in agent should be made optional. An optional buy-in mechanism offers the purchasing party (e.g. the Asset Manager) the flexibility to initiate a buy-in on a failed transaction incorporated into a harmonised market practice framework for such a process.

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Meeting with Billy Kelleher (Member of the European Parliament, Shadow rapporteur)

25 May 2022 · AIFMD

German fund managers demand streamlined EU sustainability due diligence

19 May 2022

Topic — Proposed directive requiring large companies to identify and mitigate environmental and social risks.

Message — BVI requests that investment activities remain governed only by existing finance regulations rather than the new directive. They also advocate for clear exceptions when switching suppliers is difficult due to market concentration.1 2 3

Why — This would reduce administrative costs by preventing overlapping reporting requirements for asset managers.4

Impact — Environmental groups lose protections if firms are allowed exceptions for problematic suppliers.5

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Response to Fighting the use of shell entities and arrangements for tax purposes

1 Apr 2022

Please find our comments on "Tax avoidance – fighting the use of shell entities and arrangements for tax purposes" in the attached file.

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Response to Minimum level of taxation for large multinational groups

1 Apr 2022

Please find our comments to "Minimum level of taxation for large multinational groups" in the attached file.

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Response to Amendments to certain Directives regulating public financial and non-financial disclosure in order to establish the ESAP

25 Mar 2022

1. General Comments We strongly support the EU Commission’s proposals published on 25 November 2021 to establish a European Single Access Point (ESAP). From the investor and fund manager point of view, the ESAP is very much welcomed, as it would considerably improve the accessibility and availability of company data and products throughout the EU and at the same time enable member companies to implement in a comparable and cost-efficient manner the various reporting requirements stemming from diverse EU sustainability regulations. In this way the ESAP would also give a visible face to the CMU project – all EU capital markets and company info in one place. Digital businesses, like open finance, can be leveraged. Non-listed companies could improve their access to capital and therefore enhance their visibility to (cross border) investors. On scope, we consider that among all regulatory mandated financial company information, ESG data is of utmost importance to be included within the ESAP as a first step. Fund managers and other financial market participants are in desperate need of reliable and comparable high-quality ESG data in order to measure their ESG commitments towards investors, but importantly also for reporting purposes under different EU frameworks. The ESAP should thus contain all reports to be published under the Taxonomy Regulation and the future CSRD as well as SFDR in relation to financial market participants and financial products. In this context, we would like to stress that timely adoption of the CSRD regime and introduction of harmonised and comprehensive sustainability reporting obligations for companies is of utmost importance for the financial market’s ability to implement investment strategies that select investments based on ESG-relevant criteria and thus, to steer capital flows into sustainable investments. We see no reason to limit the ability of groups or companies to disclose data in the ESAP on a voluntary basis. Indeed, we hope that the establishment of the ESAP as a central access point for company-related data will provide an incentive for companies not subject to regulatory reporting obligations to provide voluntary disclosures, especially on ESG matters. This also pertains to companies headquartered outside the EU that could use the ESAP as a tool to attract EU investors or because they from part of the global supply chain of EU companies need to provide them with relevant information. In any case, a precondition of any information to be disclosed on a voluntary basis should be compliance with the relevant EU requirements and standards. Any disclosures on ESG matters, mandatory and voluntary alike, should be in full conformity with the future CSRD (NFRD) requirements including specific reporting standards to be potentially developed at EU level. Obviously, the quality of the voluntary information provided via the ESAP must conform with the general requirements for data supply. It is not practicable for data users to differentiate between information disclosed on a mandatory or voluntary basis when referring to the ESAP as a data base.

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Response to Alternative Investment Fund Managers – review of EU rules

24 Mar 2022

In the EU, a total of €12.8 trillion is invested in investment funds by private and institutional investors. With assets of €3.4 trillion in UCITS and AIFs, Germany is the largest market with a share of 27 per-cent. In terms of funds launched in the EU, the German AIF market accounts for EUR 2,218 billion out of EUR 6,878 billion in the EU, which corresponds to a share of 32.2 percent. Most German AIFs are so-called special funds, which are exclusively open to professional and semi-professional investors. These are primarily regulated companies such as insurance companies, banks or pension schemes that invest in low-leverage investment funds. Both the UCITS and AIFM Directives already provide extensive coverage of the activities of management companies and include effective and proportionate rules on their authorisation, capital requirements, conduct of business and organisational and transparency requirements, delegation of functions and reporting obligations to the supervisory authorities. We support the EU Commission's proposal to make only specific changes in order to further strengthen investor protection and to reduce any inefficiencies and resulting inconsistent supervisory practices. For this reason, we propose further improvements which you can find in the attached file.

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Response to Review of the regulatory framework for investment firms and market operators (MiFIR 2.1)

22 Mar 2022

General remarks BVI sees great value in the creation of four asset class based consolidated tapes (equities, ETFs, bonds, derivatives) to support Europe’s capital markets. However, we qualify that statement with a reminder that the framework for a successful consolidated tape should i) address the known market failure around market data costs, ii) manage the costs of the tape by limiting compensation for data contributors to the cost of production, iii) simplify transparency requirements without harming the balance between transparency and liquidity, and iv) support rather than limit competition between execution venues as introduced with MiFID I and MiFID/MiFIR. Furthermore, the four tapes will also support the investment decisions of the investors. For instance, the tape can help to inform more retail investors about the best trade prices and quotes which occurred in the market and create competitive pressures so that they cannot be disadvantaged. Currently, retail investors have only very limited visibility into prices, quotes and volumes. A consolidated tape could further strengthen the ability of both institutional investors and retail investors who trade via brokers to improve their trading process and best execution by providing them with immediate access to trading activity, liquidity and price. The visibility of pre- and post-trade information means that investors would get to see prices and liquidity before they make decisions, ensuring that they can invest efficiently and cost-effectively and enabling them to achieve best execution. Finally, the consolidated tapes will help issuers to raise capital in the EU. A recent study on the US TRACE bond CT provides new evidence that the economic consequences of increased transparency in secondary markets for corporate bonds extends to primary markets and the reduction of cost of raising debt capital.

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Meeting with Valeria Miceli (Cabinet of President Ursula von der Leyen)

22 Feb 2022 · Competitiveness of the EU asset management industry. How to ensure that regulation fosters financial stability and protects consumers while at the same time not hampering EU industry competitiveness. Need of a global perspective.

Meeting with Mairead McGuinness (Commissioner) and

22 Feb 2022 · AIFMD, Sustainable Finance, EU Funds Industry Competitiveness.

Meeting with Michiel Hoogeveen (Member of the European Parliament, Rapporteur) and Invest Europe

9 Feb 2022 · ELTIF

Meeting with Florian Denis (Cabinet of Commissioner Mairead Mcguinness), Nicolo Brignoli (Cabinet of Commissioner Mairead Mcguinness) and

12 Jan 2022 · Retail Investments Strategy

Response to Quick Fix to the UCITS Directive

9 Sept 2021

BVI welcomes the quick-fix initiatives and the Commission’s endeavour to facilitate a smooth implementation of the PRIIPs KIDs. In order to succeed in this regard, it is necessary to account for the following two key requests: 1. Fund companies need at least 12 months for the practical implementation of the technical amendments The Commission has been well informed that the working assumption for the industry is a twelve-months period for implementation. Nonetheless, contrary to the initial planning, the revised regulatory technical standards to amend provisions on the content and presentation of the KID in the Commission Delegated Regulation (EU) 2017/653 have only been published a few days ago. Without these technical specifications becoming available as the final text in all national languages, it has not been possible to commence the implementation process in practice. As of today, market participants are thus left with less than 10 instead of the originally planned 12 months for practical implementation. Against this backdrop, we maintain our request that the expiry date of the fund exemption under Article 32 PRIIPs Regulation must allow for an implementation period of at least twelve months following publication of the final revised RTS. In order to provide for all contingences in terms of the further process, an extension of the fund exemptions until 31 December 2022 should be reasonable for facilitating a smooth practical implementation by all parties involved. In this regard, it is also necessary to adapt the proposed Delegated Regulation from 7. September 2021 amending the PRIIPs RTS in order to ensure that the new PRIIPs standards become applicable across the market at the same time. 2. Obligation to provide PRIIPs KIDs should apply to retail investors only Our understanding of the Commission’s proposal under the new Art. 82a UCITS Directive is that a PRIIPs KID will be deemed equivalent to the UCITS KIID and will be able to replace it in any circumstances. The underlying scope of application, however, would remain unchanged and would still be governed by the UCITS framework. In this context, our understanding is that while UCITS managers will be allowed to use the PRIIPs KID for information of both retail and professional investors, the obligation to provide also professional investors with the KID in excess of the PRIIPs Regulation will still apply. This result disadvantages UCITS against other types of PRIIPs, i.e. retail AIFs, structured products and insurance-based PRIIPs. More important, however, it maintains the obligation to provide professional investors with a three-pages key information document which they neither need nor request. Therefore, we urge the Commission to tackle this obvious misalignment between the UCITS and the PRIIPs framework. In our view, the proposed modification of the UCITS key information regime provides for a unique opportunity to align the scope of application with the PRIIPs approach and avoid discrimination of UCITS. Should this suggestion be for any reason not realisable as part of the current quick-fix process, we insist that the Commission tackles the issue of the unequal treatment of UCITS compared with other PRIIPs as regards key information requirements at the next occasion of orderly reopening of the UCITS Directive. According to our understanding, such occasion should arise in the context of the AIFMD review that is meant to entail several adaptations of the UCITS framework. For further details and arguments, please refer to our attached position paper.

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Response to Quick fix to the PRIIPs Regulation

9 Sept 2021

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Response to Requirements for Artificial Intelligence

6 Aug 2021

BVI welcomes the opportunity to provide its views on the European Commission’s proposal laying down harmonised rules on artificial intelligence. The use of artificial intelligence (AI) and machine learning (ML) in asset management bears great potential. An increasing degree of automation of processes and interfaces has been common practice in the asset management industry for decades and is described with the keywords ‘business process automation’ (BPA) or ‘robotic process automation’ (RPA). RPA aims to automate even more complex process steps along the value chain in the asset management industry. An example of this would be a standardised online client check and initial advice in the securities business, possibly using language programmes. The use of AI is a major issue in the financial sector, as these technologies will bring about a profound change in society and the economy. AI goes beyond BPA and RPA by combining the use of large or increasingly available, but often unstructured and internal and/or external data sets with the improved possibilities for using these data. Through a combination of analytics and mass available data, new insights are to be gained that would not be possible with traditional research methods. The German supervisory authority BaFin was one of the first supervisors to analyse the challenges and implications for supervision and regulation of financial services in its report ‘Big Data meets artificial intelligence’. BaFin concludes that big data and AI bring about a profound change and enable innovation, successful implementations can spread rapidly, and supervision and regulation must address innovative developments early. Thus, we welcome the European Commission’s proposal on harmonised rules on artificial intelligence to establish a principal-based regulatory framework in the EU. Asset management will be significantly influenced by improved availability of data, algorithms, digitalisation of assets, new processes in custody and settlement, and reporting. Quality data is a prerequisite for the provision of any service along the entire value chain in asset management, from research, portfolio and risk management, trading to clearing and settlement. Secure access to and availability of high-quality financial market data at all times is also indispensable in fund distribution or in regulatory and reporting. In the future, more and more non-traditional data sources ("big data") will be integrated into the asset managers' business operations. Financial market data are often offered by natural monopolies and oligopolies such as stock exchanges and companies with a dominant market position. These have great market power and can set one-sided conditions, since the users on the asset manager side rely on such data and any disruption would jeopardise their business. The use of financial market data has therefore for years been associated with regular, sometimes massive price increases and the conclusion of increasingly complex data licences for the asset managers. With increasing cost pressure and the change of business models to more quantitative or passive investment, data costs are becoming more and more a success factor for many asset managers. The BVI advocates a revision of the existing EU regulations for the provision and use of financial market data on appropriate commercial terms, e.g. in MiFID/MiFIR, Credit Rating Agencies Regulation (CRAR), and an implementation of data user effectively protective regulations, e.g. in the Benchmark Regulation and the various EU regulations on regulatory reporting. Data charges should be determined on the basis of the marginal cost of producing and disseminating the data. Please see the attached position paper for more detail.

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Response to Revision of Non-Financial Reporting Directive

14 Jul 2021

BVI position on the European Commission's proposal for the "Corporate Sustainability Reporting Directive" (CSRD) The revision of the EU framework for non-financial reporting is key to achieving the objectives of the EU Action Plan on Financing Sustainable Growth. As institutional investors with €3.95 trillion in assets under management, BVI members need comparable and reliable ESG information on target companies in which they invest to incorporate ESG factors into their investment decisions and to properly assess the sustainability risks and opportunities of their investments. Against this background, we fully support the Proposal for a Corporate Sustainability Reporting Directive (CSRD). We consider the following elements of the EU proposal to be essential in order to sufficiently and effectively meet the information needs of investors with regard to sustainability issues: 1. Broadening the scope of sustainability reporting: in order to enable fund management companies and other investors to meet the upcoming requirements to consider sustainability risks and material negative impacts without having to rely on commercial data providers, it is important to extend sustainability reporting to the following categories of companies, as proposed by the EU: - Large companies that finance themselves on the capital markets by issuing listed shares or bonds; - Large companies with headquarters outside the EU but listed on a regulated market in the EU 2. Expanding the scope of reported information: the new EU rules for investors lead to a significantly increased need for information, especially in the following three subject areas: - Information on sustainability risks and opportunities (internal risk perspective), - Data on negative impacts of a company's activities on sustainability factors (external risk perspective), - Data on revenues from and investments or expenditures related to economic activities that are considered environmentally sustainable according to the EU Taxonomy. 3. Introduction of a mandatory ESG reporting standard in line with the following considerations: - The development of reporting standards for sustainability risks and opportunities should be done in dialogue with globally active ESG standard setting bodies. The initiative of the IFRS and IOSCO to align the different international ESG reporting standards should be supported and driven by EFRAG's active participation in order to reflect its results as widely as possible in the standard-setting work at EU level. - For the remaining elements of sustainability reporting (disclosure of negative impacts and taxonomy-compliant activities), it makes sense to work on European reporting standards, as the details of reporting largely depend on EU regulation (in particular SFDR and the Taxonomy Regulation as well as the detailed rules at Level 2). 4. Introduction of a uniform electronic reporting format as a prerequisite for central access to company reports: non-discriminatory access to reliable ESG information via a central database would create a level playing field and facilitate the use and processing of high-quality ESG data. We therefore welcome the EU initiative to create a European Single Access Point (ESAP). With regard to the provision of ESG data within the framework of ESAP, it is important to: - Provide raw ESG data as reported by companies, - Include data published on a voluntary basis, e.g. by third country issuers that will not fall within the scope of the CSRD - Ensure that the information is integrated into IT systems via efficient and secure interfaces to enable simple, reliable and accurate processing of large amounts of data by investors and other users of sustainability information. Please see the attached position paper for more detail.

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Response to Commission Delegated Regulation on taxonomy-alignment of undertakings reporting non-financial information

2 Jun 2021

In order to effectively contribute to the objectives of the EU Action Plan for financing sustainable growth, the fund industry needs a clear and coherent regulatory framework for sustainable investments and reliable timelines for implementation. However, the current multitude of relevant regulatory initiatives significantly increases the complexity of the regulatory environment and has the potential of impeding, instead of facilitating, sustainable investments. This pertains also to the draft delegated Regulation to specify reporting requirements under Article 8 of the EU Taxonomy that entails several inconsistencies as compared to other EU measures. In order to enable the Taxonomy framework to exploit its full potential in terms of channelling investments towards green economic activities and guiding companies and investors in their transitioning efforts, we see the need for the following changes in the proposed approach. 1. The timing of first reports by non-financial and financial undertakings needs to be sequenced: From the perspective of asset managers, problems with assessing the Taxonomy alignment of their investments will be only postponed to 2023, but not resolved, by the current draft. Due to different accounting periods relevant for investee companies, asset managers and other financial market participants will only be able to build up the necessary data basis for assessing their holdings against the EU Taxonomy during 2023 and to report on the share of their green investments in 2024. This sequencing of reporting events should be reflected in Article 11 of the draft by specifying that financial undertakings shall report the key performance indicators pursuant to this Regulation from 1 January 2024 and by prolonging the intermediate solution in paragraph 2 to 2023 accordingly. 2. The scope of Taxonomy-aligned investments that can be included in the numerator has to be widened: In view of the relevance of real estate activities under the EU Taxonomy, it is strictly necessary to allow for consideration of investments in real estate when calculating Taxonomy-aligned KPIs. This is also in line with the approach proposed by the ESAs for the purpose of calculating the share of green investments at the product level under Articles 5 and 6 of Taxonomy Regulation. Consideration of investments in undertakings that are not subject to reporting obligations under NFRD, but for which reliable data on environmentally sustainable activities is available, should be admitted. The exclusion of non-EU and private equity undertakings from the numerator of KPI calculations as proposed in Article 8 (3) of the current draft should thus be deleted. Exposure to any undertaking that performs Taxonomy-eligible economic activities should be able to be assessed against the Taxonomy criteria, provided that data on Taxonomy-related KPIs has been made available by that undertaking either bilaterally to the asset manager or via an ESG data provider. This is also consistent with the approach proposed by the ESAs for product-level disclosures under Articles 5 and 6 of Taxonomy Regulation where exposures to investee companies not subject to reporting obligations under NFRD shall be taken into account “on the basis of equivalent information”. 3. The calculation approach for financial undertakings under Article 8 must be comprehensible and fully consistent with the calculation method applied at the product level under Articles 5 and 6 Taxonomy Regulation: It is mandatory to base the calculations on Taxonomy quota on a consistent treatment of assets that are not Taxonomy-eligible regarding their representation in the denominator. Furthermore, the divergences with the concept for Taxonomy-related disclosures at the product level, as consulted by the ESAs in March 2021, in calculation approaches are inacceptable. The underlying logic to calculating GAR should be fully consistent at both entity and product levels. Please find our full response attached.

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Meeting with Katherine Power (Cabinet of Commissioner Mairead Mcguinness)

17 May 2021 · Sustainable Finance

Meeting with Katherine Power (Cabinet of Commissioner Mairead Mcguinness)

12 May 2021 · BVI provided a short introduction of their work and association. They commented on the difficulties of timings in relation to data provision and the scope of the NFRD and reporting under the SFDR and its upcoming RTSs. They further commented on the

Response to Central securities depositories – review of EU rules

1 Apr 2021

BVI welcomes the initiative by the EU Commission to review the regulatory regime of CSDR. German investment fund managers acting on behalf of regulated investment funds (UCITS/AIFs) are important users of the securities markets in the EU. German investment fund management companies are not directly involved in the value chain of clearing and settlement of securities transactions. They instruct the custodians of the relevant investment funds to match and settle securities (e.g. equity, bonds, fund units) belonging to such investment portfolios. The custodians have a direct access with the CSDs. Investment fund management companies have to rely on the information obtained by the custodians to react in cases of settlement fails or buy-ins. There have been considerable discussions among our members, fund custodian and the Buy-In-Agent on the implementation of the legal and operational penalty- and buy-in regime. It is of utmost importance, that all relevant market actors within the settlement chain such as CSDs, settlement agents and fund custodians have regulatory to ensure that they deliver all relevant settlement, penalty and buy-in information as soon as possible and a standardised format to the Asset Managers thereby enabling them to adhere the CSDR settlement discipline regime. We are strongly of the view that the buy-ins should be made optional. An optional buy-in mechanism offers the Asset Manager the flexibility to initiate a buy-in on a failed transaction incorporated into a harmonised regulatory framework for such a process. Most settlement fails are generally caused by brokers/dealers and not by UCITS/AIFs as they are typically on the long only side. Based on the current CSDR buy-in framework, UCITS/AIFs could have more legal and operational burden to implement then in existing settlement practise and will also need more liquidity to cover all buy-in agent requirements (e.g. provision of collateral or fully pre funded buy-in transactions). This is disproportionate to the benefit of more settlement efficiency. German Asset Manager have to appoint a buy-in agent who will be carrying out the mandatory buy-in in case of delayed settlement. The costs for connecting to and appointing a buy-in agent are rather prohibitive. The only major buy-in agent can design their terms and conditions as they want which means that the Asset Managers have to adhere to such agreements. The services of a buy-in-agent are not available free of charge: the buy-in agents have to keep the whole system up and running, even if no one ever uses it. The costs associated with these services are for the German fund manager prohibitive – some start even considering changing their business model to avoid the requirement to connect to a buy-in agent. CSDR will result in limited liquidity (especially for fixed-income products). The only Buy-In Agent requires a prefunding ahead for the execution of an buy-in. Asset Manager have to provide the Buy-In Agent with sufficient liquidity. In terms of the additional liquidity for buy-in transactions, German law (KAGB § 93) do not permit to provide collateral for buy-in transactions out of the funds. Therefore, the fund management company needs to provide sufficient liquidity in terms of buy-ins, although the funds itself is deemed as the trading counterparty. Investment funds (UCITS/AIFs) do not normally hold a high portion of liquidity within the fund which could be used very swiftly to require the prefunding for the only Buy-In agent. If the EU Commission keeps the mandatory buy-in, we suggest that the entire efforts for the handling of the buy-ins is covered exclusively by the broker/dealer or the trading venues. This includes the provisions to provide the relevant prefunding resource to the only Buy-In agent. Over the couple of years, fund management companies have already established well-functioning onboarding- and order routing processes with the broker/dealers and trading venues.

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Response to Digital Operational Resilience of Financial Services (DORFS) Act

24 Mar 2021

BVI fully supports this important initiative. The entire financial market will be significantly influenced by the increased availability of data, algorithms, the digitalisation of assets, new processes in custody and settlement, and reporting. The proposal for a Regulation on the digital operational resilience of the financial sector (DORA) accompanied by a Directive is an essential core element to deal with ICT related risks across sectors on EU level. The German supervisory authority BaFin has already provided guidance on this topic, in particular, in the area of cyber security in the internal governance processes. We therefore very welcome the aim of mitigation risks of digital transformation by strict and common rules on digital operational resilience to ensure a safe financial system across sectors in the EU. However, we see the need for further improvements regarding the scope of application, the proposed requirements on contractual arrangements in the context of scope and the interrelationship between the sector-specific delegation rules and the new DORA proposals to cover activities provided by ITC third-party providers, exit strategies, reporting and the specific supervisory rules for critical ICT service providers. Please find attached our preliminary position on these issues.

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Response to EU single access point for financial and non-financial information publicly disclosed by companies

15 Jan 2021

We fully support the EU initiative for establishing a single EU access point for company information. Such centralised point of access would be very helpful for asset managers in order to be able to easily obtain important information on their investee companies, in particular on ESG topics. It should be linked to the reform of the EU Non-Financial Reporting Directive and involve the following main features: (a) work as one single access point that provides access to reports being published on both a legally mandatory as well as on a voluntary basis by issuers not covered by NFRD (such as small companies or companies located outside the EU), (b) allow direct access to raw ESG data (as reported by companies) and (c) use processing standard that allows information to be machine-readable and downloadable in order to serve as valuable information source for investors. We deem the European Securities and Markets Authority (ESMA) as a suitable and qualified authority to manage the ESAP given its experience in establishing databases and registers in the area of benchmarks and market infrastructures for instance. Please find attached our full response.

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Response to Directive/regulation establishing a European framework for markets in crypto assets

11 Jan 2021

BVI would like to take this opportunity to provide its views on the proposed framework for the pilot regime for market infrastructure based on distributed ledger technology (DLT). An EU regulatory framework should provide a level playing field between crypto and traditional investments in terms of transparency / disclosure obligations as well as risk management for the benefit of investor protection. The fraudulent activities and market abuse currently perceived as linked to crypto-assets should be limited to an adequate level commensurate with existing operational risk in the capital markets. While to some extent the same risks exist when handling traditional as with crypto-assets, there are also specific differences due to the underlying technology (DLT), which require a different risk assessment and tailored regulation, for example, regarding the proper functioning of ‘smart contracts’ (programs that run on DLT and automatically process legally binding transactions, such as transfer of ownership in digital assets without a third party). At the same time, DLT has an enormous potential for innovation in the financial markets infrastructure, e.g. mitigating counter party risk through transactions settled by the method of delivery vs. payment. This ultimately requires that a digital Euro / Euro denominated stablecoin is made available for transactions on a blockchain (cash on ledger). Against this background, we welcome that the European Commission has come forward with proposals on crypto-assets and DLT. The proposed pilot regime breaks new technical ground and even deviates in part from the existing rules of financial market regulation. In principle, we understand that the pilot has more the character of a sandbox and that the market caps, as stipulated in Article 3 of the Commission’s Proposal, are intended to keep the risk to financial market stability as low as possible. At the same time, we would like to point out that the purpose of the pilot is also to gain valuable experience which requires a critical number of users of the DLT market infrastructure. However, the market capitalization and issuance volume restrictions for DLT-transferable securities could mean that the relevant offers will not be met with enough demand from the buy-side. Small-volume and non-liquid financial instruments are not on the radar of most professional market participants. Therefore, we have doubts as to whether professional investors, such as investment fund companies, would want to provide the necessary investment costs to connect to the new DLT market infrastructure if there is no commercially viable business attached to it. Furthermore, we believe it would make sense to consider exchange-traded funds (ETF) in the form of DLT-ETFs that only invest in DLT-transferable securities. There are three supporting arguments for this suggestion: First, by including fund shares, experience could be gained that goes beyond shares and bonds, thereby placing the evaluation of the pilot regime on a broader basis. Secondly, DLT-ETFs would be the natural demanders for DLT-transferable securities, meaning that supply and demand would be meaningfully combined on the new DLT market infrastructure, resulting in better economic viability for the operators. Thirdly, regarding market stability concerns, DLT-ETFs do not create additional risks because the DLT-ETFs are only investors in DLT-transferable securities, and therefore the issuer risks posed by the DLT-transferable securities do not change or expand. If the market value of the DLT-transferable securities and the DLT-ETFs share values are added, merely the nominal volume increases. Hence, DLT-ETFs should not be bound by additional market caps or included in the operators’ caps (as opposed to shares and bonds, cf. Article 3 (1) and (3) of the Commission’s Proposal). Please find our full response attached.

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Response to Directive/regulation establishing a European framework for markets in crypto assets

11 Jan 2021

BVI would like to take this opportunity to provide its views on the proposed framework for markets in crypto-assets (MiCA). An EU regulatory framework should provide a level playing field between crypto and traditional investments in terms of transparency / disclosure obligations as well as risk management for the benefit of investor protection. The fraudulent activities and market abuse currently perceived as linked to crypto-assets should be limited to an adequate level commensurate with existing operational risk in the capital markets. While to some extent the same risks exist when handling traditional as with crypto-assets, there are also specific differences due to the underlying technology (DLT), which require a different risk assessment and tailored regulation, for example, regarding the proper functioning of ‘smart contracts’ (programs that run on DLT and automatically process legally binding transactions, such as transfer of ownership in digital assets without a third party). At the same time, DLT has an enormous potential for innovation in the financial markets infrastructure, e.g. mitigating counter party risk through transactions settled by the method of delivery vs. payment. This ultimately requires that a digital Euro / Euro denominated stablecoin is made available for transactions on a blockchain (cash on ledger). Against this background, we welcome that the European Commission has come forward with proposals on crypto-assets and DLT. The scope of the proposal on MiCA covers those crypto-assets that are outside the scope of existing EU financial market regulation. With regard to MiCA Chapter 1 on asset-referenced tokens, Article 34 ("Investment of the reserve assets") should take into account that such an activity is comparable to that of an asset manager. The requirements for the management of the reserve assets should therefore be based on the corresponding rules of fund regulation (AIFM/UCITS Directives and Money Market Funds (MMF) Regulation), to provide a level playing field ensuring investor protection. In particular, the issuer of asset-referenced tokens should be able to demonstrate sufficient expertise in the area of risk and liquidity management, e.g. reflecting the operational requirements of the MMF Regulation (EU) 2017/1131, or entrust a management company with the management and investment of the reserve assets. The fact that the provision of services in connection with crypto-assets, including investment advice on crypto-assets to clients, will be subject to authorisation is certainly in the interest of investor protection. In this context, the MiCA framework should also contain provisions on the management of a portfolio of crypto-assets for clients as this service is not yet specifically regulated as opposed to crypto-assets advisory services. We therefore suggest including this service in the MiCA regulatory framework. The provisions on portfolio management in the Markets in Financial Instruments Directive (MiFID II) could serve as a suitable template. Please find our full response attached.

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Response to Alternative Investment Fund Managers – review of EU rules

7 Jan 2021

With assets of EUR 3,000 billion, Germany is the largest market in the EU (according to the ECB as of 30 June, 2020) with a market share of 27 percent. In a context of continued inflows and growth of the asset management sector, financial stability bodies such as the European Systemic Risk Board (ESRB) and the European Central Bank (ECB) have called for an impact assessment of the resilience of the current framework applying for asset managers. The Policy Recommendations of January 2017 published by the Financial Stability Board (FSB) address potential structural weaknesses in the existing fund regulation in a targeted manner. Accompanied by additional discussions between the roles and tasks of supervisory authorities, the current work is focused on understanding potential implications from asset management activities such as liquidity mismatch of open-ended investment funds and leverage within funds. In this general debate, a distinction will need to be made between the impact on investors to protect their interests and the impact on the financial market to protect the financial stability. We highlight in our response the following issues: - Alternative funds are more than just hedge funds. They support financial market functioning and the provision of market based finance to the real economy. - Existing European sector-specific rules for asset managers provide a robust framework to address investor protection and entity-specific vulnerabilities. - The strict UCITS requirements, comprising portfolio diversification and eligibility criteria to certain types of assets, have made the product successful on European and global markets. - Management of inherent financial risks is an integral part of the internal risk control system. - Liquidity management tools should be made available to all jurisdictions. - There is a need for a common understanding on how to calculate leverage in investment funds. - Financial stability supervisors have to operationalise their macro-prudential toolkit. - There is a need for a single regulatory reporting mechanism which would reduce operational effort and burden for asset managers as well as supervisory authorities. - Managing investment funds differs fundamentally from business models of banks or other types of financial entities such as insurance companies. In particular, the current own capital requirements of asset managers are appropriate to cover potential risks. Please find our full response attached.

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Meeting with Florian Denis (Cabinet of Commissioner Mairead Mcguinness)

17 Dec 2020 · CMU/digital finance/non-financial reporting

Response to Climate change mitigation and adaptation taxonomy

27 Nov 2020

BVI welcomes the endeavours to create an EU-wide harmonised Taxonomy for sustainable investments. The Taxonomy is a very important and powerful tool for facilitating investments in sustainable economic activities. However, to reach this purpose and to come close to “shifting the trillions” needed for achieving the environmental goals of the EU, the level of ambition of the Taxonomy must be carefully balanced against practicability and viability for market participants. In this regard, we see the need for the following adjustments and clarifications of the technical criteria in Annex I relating to real estate activities (section 7): 7.2 Renovation of existing buildings The consideration of economic principles is indispensable in order to jointly formulate realistic targets. The aim must be to counter high energy consumption of these buildings with a sensible economic approach. In other words: Better incentives must be created to increase energy efficiency in existing buildings. In the case of existing buildings, a stronger focus on cost-effective partial renovations and other small-scale measures is desirable. Although these measures result in - relatively speaking - lower energy savings compared to full renovations, they can make a considerable contribution to climate protection in the short and long term due to the high absolute savings. Buildings renovated in line with the Taxonomy criteria under 7.2 should qualify as Taxonomy-compliant during the entire period of an investment. At least, the qualification as Taxonomy-compliant should apply temporarily, e.g. for a period of 3 years. 7.7 Acquisition and ownership of buildings The now envisaged metric should at least account for different types of property use in terms of energy demand, since there are different approaches to determining Energy Performance Certificate (EPC) rating in the EU. The EC should make further recommendations and allow the exchange of "best practice" examples towards functional EPC databases (i.e. methods for data collection and analysis). There is still a need for more legislation and guidelines for the implementation of EPCs at national level. It is imperative to take into account the different asset classes and user profiles as well as the age, location etc. of the properties. It would be desirable for the future to have a uniform basis and requirement guidelines for issuing the EPCs. There is a great need to identify deficiencies of ECP systems in order to achieve credibility and significance in the market and to assess the future impact of EPCs on the market. We therefore suggest that an evaluation of the effectiveness of this criterion should be provided for in the near future.

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Response to Long Term Investment Funds – Review of EU rules

14 Oct 2020

The BVI gladly takes the opportunity to contribute to the inception impact assessment by sharing its views on the current ELTIF regime considering the upcoming review of the Regulation. Please find our full response attached. The raison d'être of the ELTIF Regulation should be to address specific areas for which there are not yet sufficiently specialised fund products in the EU to achieve the desired objectives. We see the review of the ELTIF regime as an opportunity to develop the Regulation in a sensible way, that serves both the intention of the legislator as well as market demands. In this regard, we support a revision of the rules for the distribution of ELTIF shares to retail investors. In contrast, we have reservations against suggestions that would puff up the ELTIF regime, e.g. introducing generous leverage financing, an expansion of the investment universe partially mirroring UCITS and demands for tax incentives, neglecting the tax sovereignty of EU member states. Such proposals would overstretch the intention of the ELTIF regime and instead blur the essence of the ELTIF brand. Instead, we have developed the following ideas which are in line with the original goals of the ELTIFRegulation, i.e., long-term infrastructure financing by the private sector and financing of SMEs. Those goals are also, inter alia, reflected in the CMU New Action Plan of the European Commission: - Investments in EU project bonds: The possibility of participating in infrastructure projects is very limited at present, partly because of the favourable conditions of state financing via sovereign bonds. We suggest that in the future part of the EU infrastructure funds (e.g. from the Cohesion or Covid-19 Recovery Funds) should be reserved for projects to be co-financed by project bonds eligible inter alia for ELTIFs. As far as those projects qualify as sustainable, such project bonds might also meet the requirements currently developed as “green bonds standards”. Bonds financing sustainable projects, such as European infrastructure, would be interesting assets not only for ELTIFs, but also as ESG investments for UCITS. This proposal thus serves the sustainable finance strategy as well as the capital markets union. - New ways of micro-financing: In order to overcome the financing crunch of SMEs, ELTIFs could serve as an alternative form of financing by broadening the understanding of micro-financing to include typical small-volume lending to EU SMEs. Banks which are not able to provide SME loans (e.g. for regulatory reasons such as shrinking their balance sheets) could still act as fronting banks and pass on the SME loans to ELTIFs dedicated as "EU SME finance funds". - The development of a new financial market infrastructure based on distributed-ledger-technology (DLT), which has just been proposed by the European Commission, should be incorporated in the considerations of the ELTIF review. An SME DLT market segment could represent a funding level between traditional stock exchange listing and small-scale crowdfunding. The proposed DLT-multi trading facilities (DLT-MTF) could be the access point for SME equity financing and would be eligible for ELTIFs. - Impact-oriented debt funds: ELTIFs could be structed as debt funds designed to have a sustainable impact. Unlike banks, those ELTIFswould be fully equity-financed.

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Response to Sustainable corporate governance

8 Oct 2020

BVI welcomes the opportunity to submit initial views on the envisaged measures to promote sustainable corporate governance in EU companies and to ensure that sustainability is further embedded into the corporate governance framework. Please find our comments in the document attached.

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Meeting with John Berrigan (Director-General Financial Stability, Financial Services and Capital Markets Union)

7 Oct 2020 · European asset management and Capital Markets Union

Response to Review of the Benchmark Regulation

6 Oct 2020

We support the goal of the EU Commission to further streamline the EU framework for indices and (“critical”) benchmarks. The BMR helps to strengthen the confidence in the financial markets and helps to prevent manipulation of financial indices. Investment funds are highly regulated and transparent financial products under the UCITS/AIFM regime. Investment funds have not contributed to the manipulation of (systemically important) financial indices (e.g. Libor, Euribor). Fund management companies do not provide input data for the calculating of (systemically important) benchmarks. Asset Managers are mainly users of benchmarks/market indices. Fund management companies do not have access or the ability to influence the process of creating (systemically important) benchmarks (BM) or financial indices provided by index providers. Asset Managers are not able to manipulate these benchmarks, even if they can be used to measure the performance of an investment fund. We support the EU Commission`s reform proposal to ensure the seamless continuation of existing contracts referencing critical benchmarks, such as the London Interbank Offered Rate (LIBOR), if, and when their continuity is at risk. More importantly, we fully support as short term measure that supervised entities can continue using certain third country (TC) spot FX-rates as benchmarks for hedging foreign currency risks where no onshore EU alternative is available after the expiry of the end of the deadline for non-EU based benchmark administrators to register their products in the EU. In the longer term, however, the setup of supervised entity benchmark user obligations under BMR need to be revisited. The aim of the BMR is to protect the European investors from the risk and the disruption created by poorly governance or failing indices. However, since the introduction of the BMR in 2018 supervised entities such as German fund management companies have been put at a competitive disadvantage due to the higher compliance burden associated with benchmark cessation plans, describing the use of benchmarks in the prospectus and the difficulties to find all index information in the ESMA register. More importantly, supervised entities (e.g. UCITS/AIF fund managers (FM)) are required to only use benchmarks which have qualified under the BMR framework which limits their ability to use Third Country (TC) benchmarks going forward, as the FX spot rate issue clearly demonstrates. We therefore support a clear separation of obligations of the benchmark users and the benchmark administrators. The obligations of supervised entity benchmark users should primarily -if not exclusively- regulated in the laws and regulations applying to such users, i.e. the AIFM and UCITS directives and implementing ESMA Guidelines for ETFs and other UCITS issues for financial indices of 2012 in case of funds. Overlapping or conflicting user regulation can be avoided going forward. The BMR registered product usage obligation for supervised entities therefore should be abolished. BVI therefore, proposes to allow going forward the unlimited use of both BMR compliant and non-compliant products by all EU based financial services firms subject to proper disclosure (Article 29 (2)). In this context we need and continue to support the BMR rule to maintain a benchmark register system for EU and Third Country benchmark administrator and their products. Following a delineation between users and administrator obligations, it would be clear that on the one hand only the ESMA supervised BM administrator is responsible for the entries in the ESMA BM register on which the AIF/UCITS FM may rely and does not need to verify these entries again. On the other hand, it would be clear that the AIF/UCITS FM compliance obligation under said ESMA guidelines is limited to aspects not covered by BMR, e.g. the aspects of sufficient diversification and market representation of a BM.

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Response to Capital markets – research on small and mid-sized companies and fixed income (updated rules in light of the COVID-19 pandemic)

11 Sept 2020

BVI welcomes the opportunity to respond to the proposal amending delegated directive (EU) 2017/593 as regards the regime for research on small and mid-cap issuers (SME) and on fixed-income instruments to help the recovery from the COVID-19 pandemic. The easing of the unbundling requirements with respect to research on SME is one of several measures envisaged to improve the visibility and financing opportunities of SME during the recovery. Therefore, we are, in principle, supportive of the proposed Commission Delegated Directive. However, the planned limit for the market capitalisation of SME is too low at EUR 1 billion. In Germany this would only apply to around half of the 70 companies in the SDAX. In the MDAX, all companies have a market capitalization of more than EUR 1 billion. According to industry standards, small and mid caps are typically defined as having a market capitalization of less than EUR 10bn. Moreover, for the determination of the market capitalization threshold we suggest an operationally more feasible approach with less monitoring effort by referencing to the valuation on a specific recurring date, e.g. the last business day of the calendar year. In any case, we understand that the proposed exemptions from the unbundling rules are optional, so that (MiFID subjected or voluntarily applying) asset managers with minor SME engagement are not obliged to make expensive IT changes to their order and accounting systems but could still apply the general unbundling rule also for SME research going forward. In this regard, we strongly advice that the proposed changes are not only temporary but enduring in nature. Otherwise, the benefits envisaged by the exemptions would be outweighed by the administrative burden faced by all asset managers wanting to use the option in case of only a temporary relief. Further, we support the derogation for fixed income (FI) instruments, for which research is only a fraction of the volume of equity research, and where the application of the unbundling rules has mainly led to make additional payments beyond the spread. However, the definition of FI research (“research is exclusively provided in relation to fixed income instruments”) is too narrow. Firstly, FI research typically relates to issuers rather than to instruments. Secondly, it is market practice that FI research is sold only in conjunction with research on currencies and commodities (“FICC”). We would hence suggest to use the broader term “research not related to equity instruments”. As an additional measure to support SME research, we suggest that the Commission takes into account the promotion of issuer sponsored research and exchanges sponsored research. With regard to sponsored research minor interpretation issues should be clarified. We believe that issuer-sponsored research, as defined in Art. 12 of the Delegated Directive (EU) 2017/593, ensures the accessibility and the transparency on the "sponsored" character of this research to investors and falls within the definition of an acceptable minor non-monetary benefit. One condition is that the relationship between the third party firm and the issuer is clearly disclosed (cf. Art. 36 of Delegated Regulation (EU) 2017/565) and that the information is made available at the same time to any investment firm wishing to receive it or to the general public. We consider that qualifying issuer-sponsored research as a minor non-monetary benefit will support the development of issuer-sponsored research for the SME market. We also consider that the framework arising out of Art. 36 of Delegated Regulation (EU) 2017/565 (i.e., the existing guidance relating to conflicts of interest management, clarity in communications, and rules relating to marketing communications) is clear and does not need further amendment.

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Meeting with Andrea Beltramello (Cabinet of Executive Vice-President Valdis Dombrovskis)

26 Aug 2020 · Sustainable finance, review of the Alternative Investment Fund Managers Directive, Regulation on Packaged Retail and Insurance-based investment products

Response to Integration of sustainability risks and factors for undertakings for collective investment in transferable securities

3 Jul 2020

In order to create an enabling environment, it is essential to keep the right balance in terms of regulation and to achieve consistency in terms of both outcomes and timing. Against this background, we have the following requests with regard to the proposed Level 2 measures for UCITS and AIFM: 1. The timelines for implementing substantive requirements for investment funds for integrating sustainability risks and principal adverse impact must be aligned with the disclosure requirements under SFDR: The proposed requirements for integrating sustainability risks in the internal organisation of UCITS managers and AIFM must not be seen in isolation. They will form the substantive foundation for the disclosure duties applicable to UCITS and AIF under SFDR. In particular, information about the processes for integrating sustainability risk into investment decisions and the results of the relevant assessment can only be reasonably required after the application of the relevant material standards for UCITS and AIF. The same applies to the consideration of principal adverse impact that shall be taken into account the investment process for UCITS and AIF, but also needs to be disclosed under SFDR. We are thus strongly in favour of extending the date of application of the SFDR regime to 1. January 2022 in order to allow for an orderly implementation of all new ESG-related rules for investment funds. Such postponement would warrant that adaptations of internal processes and organisational measures are in place before the application of SFDR and form a tangible basis for fund-related ESG disclosures. 2. Sustainability risk must not be considered a fully separate risk type. It should be clarified that sustainability risk is not a separate risks type, but understood as the risk inherent in a portfolio due to sustainability factors. Therefore, as it stands, sustainability risk in investment funds is in general not identified and measured separately from other risks. Rather, it is included into the exposure to other relevant risks or considered part of the price valuation of portfolio assets. Sustainability risks may have a material impact on all the existing financial risk types (such as market, liquidity, counterparty and other relevant risks) as a factor that contributes to their materiality. In order to anchor this approach in the context of Level 2 measures, it would be appropriate to clarify the understanding of sustainability risk as a subset of other financial risks in the draft Delegated Acts. 3. Integration of sustainability risk and principal adverse impact should be commensurate to the availability of relevant ESG data. At the current stage, approaches in the market for the measurement of sustainability risk are not fully standardised and the quality of available data still needs improvement with respect to comparability and reliability. Furthermore, data on long-term risk aspects is still scarce. Identification of a specific exposure of a fund portfolio to sustainability risk will thus be a challenging exercise. This is also acknowledged by the ECB who highlights the current situation as an impediment to the consistent use of ESG data by financial institutions and market participants and stresses that unreliable ESG data and ratings limit users in their capacity to conduct granular financial risk analyses. Therefore, we request to acknowledge within the Level 2 requirements that the capability of UCITS and AIF management companies to account for sustainability risk depends to a great extent upon the availability of public, transparent, relevant and reliable data related to ESG considerations.

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Response to Integration of sustainability risks and factors related to alternative investment fund managers

3 Jul 2020

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Response to Integration of sustainability risks and factors in relation to insurance undertakings and insurance distributors

30 Jun 2020

BVI is fully supportive of creating an enabling framework for sustainable investments that will facilitate the transition to a more sustainable European economy. However, in order to create an enabling regulatory environment, we request the Commission to fully align the understanding of “sustainability preferences” of clients under MiFID II and IDD with the scope of “sustainable products” under SFDR. ESG strategy products under Article 8 SFDR must be clearly distinguishable from sustainable investments under Article 9 SFDR and not be required to follow sustainability objectives. Consideration of principal adverse impact, if retained as a standard for sustainable products, must be allowed before 30 December 2022. 1. Alignment of the concept of “sustainability preferences” under MiFID II and IDD with the scope of “sustainable products” under SFDR: The SFDR framework will provide for dedicated rules for products promoting environmental and social characteristics (Article 8 products) and those pursuing sustainability objectives (Article 9 products). Both categories of sustainable products are to be introduced under SFDR as fully-fledged alternative solutions for sustainable investments suiting different preferences of investors. It is therefore entirely unreasonable to restrict investors’ choice by proposing additional requirements for Article 8 products that need to be observed at the point of sale. The understanding of products to be offered as sustainable must be consistent alongside all relevant pieces of EU law. A situation whereby a product is entitled to be marketed as promoting environmental or social characteristics under Article 8 SFDR, but cannot be offered to clients with sustainability preferences in the first place, must be avoided by any means. 2. The concepts of sustainable products under Article 8 and 9 SFDR must not be mixed up: ESG strategy products under Article 8 SFDR should be recognised as a fully-fledged legitimate alternative to sustainable investments under Article 9. They offer material added value to investors that are interested in achieving financial returns in the first place, but also wish to ensure that their investments adhere to certain standards in sustainability terms. Moreover, it is important to recognise that impact investing that qualifies as sustainable investment under Article 9 is a relatively new and immature market segment. Practicability of sustainable investments cannot be taken for granted for all asset classes and investment styles. Requiring elements of sustainable investments in Article 8 products would very likely limit the choice of investment solutions for clients with sustainability preferences . Moreover, a clear delineation between the two categories of sustainable products is key for distributors in order to be able to explain the underlying concepts, but also for the ultimate understanding especially by retail clients. Introducing elements of sustainable investments into Article 8 products would blur this relevant distinction. 3. Consideration of principal adverse impact, if retained as a standard for sustainable products, must be allowed before 30 December 2022: It must be assumed that the requirement to consider principal adverse impact according to Article 7 (1) (a) SFRD will anyway apply to all investment funds promoting environmental or social characteristics. In our view it would be consistent to provide more clarity in this regard in the final RTS to SFDR instead of specifying respective standards in the MiFID II and IDD frameworks. Nonetheless, should this provision be retained, it is important to clarify that consideration of principal adverse impact at the product level shall be possible on a voluntary basis before 30 December 2022. Product launched in conformity with Article 8 SFDR must be able to be offered to clients with sustainability preferences from the outset if if they comply with the requirements of Article 7 (1) SFDR before that date.

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Response to Strengthening the consideration of sustainability risks and factors for financial products (Regulation (EU) 2017/565)

30 Jun 2020

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Response to New competition tool

30 Jun 2020

BVI represents the interests of the German fund industry at national and international level. The association promotes sensible regulation of the fund business as well as fair competition vis-à-vis policy makers and regulators. Asset Managers act as trustees in the sole interest of the investor and are subject to strict regulation. Funds match funding investors and the capital demands of companies and governments, thus fulfilling an important macro-economic function. BVI’s 114 members manage assets of more than 3 trillion euros for private investors, insurance companies, pension and retirement schemes, banks, churches and foundations. With a share of 22%, Germany represents the largest fund market in the EU. BVI’s ID number in the EU Transparency Register is 96816064173-47. For more information, please visit www.bvi.de/en. BVI supports the EU Commission inception impact assessment as well as the public consultation inviting comments on the need for a possible New Competition Tool that would allow addressing structural competition problems in a timely and effective manner. The rapid digitalisation of society and the economy is creating new risks to fair competition in both digital and non-digital markets, by making it easier for market power to become concentrated in the hands of those companies best able to monitor their customers and competitors’ behaviour. This initiative is also of relevance to the financial services sector and the buy-side companies represented by our association. The buyside associations AFG, Assogestioni and BVI as well as EFAMA previously communicated to the Commission the risks to competition in the financial services area created by digital platforms, financial market data sources and the market data distributors. We therefore support a New Competition Tool which should not solely apply to the digital sector, but should have a broader application to other sectors, including the financial services sector. We especially support the idea behind the new competition law tool to enable the Commission to intervene before the „tipping“ of a market to occur, i.e. the intervention point where a company in a network or platform market takes almost the entire market share due to its network and access to data and customers (Option 3). Under today's tool kid, that the Commission can only intervene after a company became market dominant, and then its powers are restricted to the classical competition law tools, which are too limited to deal effectively with single- and double-sided digital data platforms. Digital markets develop very quickly, and network effects can easily lead to monopolies or almost-monopolies where the company with the network advantage can dictate how the entire market works. The most common example is Google which became the common search engine and later started to monopolise downstream and neighboring markets, such as shopping tools and internet advertising. Another example is Amazon which uses its dealers’ data to boost its own brands and sales. But also the proposed merger of an exchange and benchmark provider, LSE/FTSE with the second largest market data distributor globally, Refinitiv, raises concerns for the digital economy. The EU Commission has issued statements both on Amazon and LSE/Refinitiv recently. The new tool will limit the risks that the competition authorities step in too late going forward.

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Response to Climate change mitigation and adaptation taxonomy

20 Apr 2020

BVI welcomes the endeavours to create an EU-wide harmonised Taxonomy for sustainable investments. However, in order to come close to “shifting the trillions” needed for achieving the environmental goals of the EU, we see the need for the following adjustments and clarifications at Level 2 (cf. our attached reply for a full list of suggestions and arguments): 1. Proper rules for the phasing-in period: Appropriate solutions must be found in order to facilitate the phasing-in period of the Taxonomy and to align as closely as possible the disclosure timelines for companies and investors. In particular, it must be prevented that most financial products report zero percent compliance with the Taxonomy criteria in the first year(s) just due to the lack of relevant information. 2. Availability of data and central repositories: o The scope of reporting obligations in line with the Taxonomy should be extended to cover at least (1) large non-listed undertakings that seek to raise capital on capital markets and (2) non-EU undertakings that are also listed on a regulated market in the EU. o The revision of NFRD should be pushed forward as one of the priority files in relation to sustainable finance. o The EU should create a central database for filing of company reports in relation to the Taxonomy. o A central repository is also badly needed for data relating to energy and carbon emissions of properties, since reference data for assessing the energy performance of local properties is currently not available in many markets. 3. Revenues and CapEx/OpEx as the basis for reference: Our suggestion is to specify for each economic activity whether it can be counted as environmentally sustainable in terms of its revenues or CapEx/OpEx, or in some cases with reference to either metric. 4. Scope of estimations based on due diligence: In the phasing-in period, use of estimations will become elementary in order to establish compliance of investments with the Taxonomy. The following aspects need further specification: o Can due diligence be used in order to assess compliance with the technical criteria for significant contribution? Or is due diligence as means for bridging the data gap only meant to be allowed with regard to the DNSH criteria? o Can asset managers rely on due diligence assessment performed by a third-party, i.e. an ESG rating agency? 5. Reasonable disclosures to investors: Disclosures at the level of financial products shall be subject to further specification by way of regulatory technical standards to be developed by the ESAs under the Disclosure Regulation. Our suggestion for the upcoming RTS would be: o Not to require separate disclosures for each environmental objective as a standard case. o To waive the differentiation between “fully” and “potentially aligned activities, since such differentiation is meaningless to investors not familiar with details of the Taxonomy and has the potential to confuse them. 6. Sustainability criteria for real estate activities: The criteria for significant contribution to climate change mitigation proposed by the TEG for real estate activities are not feasible for commercial properties. Key challenges are the following: o Construction and acquisition/ownership of new buildings: The requirement to undercut the relevant NZEB thresholds for Primary Energy Demand by at least 20% is too ambitious. Our suggestion is to link the sustainability criteria for newly constructed buildings to the national NZEB thresholds while evaluating the potential for further lowering the thresholds in the coming years. o Acquisition and ownership of existing buildings: It needs to be clarified whether energy performance of the reference pool of buildings required for establishing the 15% threshold will need to be calculated by by the industry, i.e. each product provider, or by an EU agency. The same applies to determinaton of the appropriate reference area (a city, a region or a country).

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Response to Review of the Benchmark Regulation

15 Apr 2020

We highly appreciate the work started by the EU Commission to review the BMR. We are supportive to further modernise the regulatory framework of the IBORs and the Third Country Benchmarks. However, during the past years our members have observed significant increase of costs related to the use of indices, especially the access to the underlying data. Over the couple of years our members have witnessed double digit price increases directly by benchmark administrators and through the making available of the data by market data distributors (MDD). Major parts of benchmark data are originated and provided by EU regulated benchmark administra-tors (or affiliated group companies) such as prices, values, composition, weightings and traded data. Benchmark data are often procured not directly from data providers but from MDDs who collect, catalogue and distribute them. One point to note is that MDDs – such as Bloomberg, Refinitiv, Rimes, or Six Financial – are not regulated as financial services providers under the BMR. In practice, the use of benchmark data have considerably changed and increased over the past decades largely driven by regulation and automation along the whole value chain of asset management industry. There is now more benchmark data to consume and the use of them has changed with the drive towards technical process improvement compared to the nineties when users largely consumed financial market data on screen (“display”) and downloaded “locally” into individual user’s applications. However, the screen based “pair of eyes” use of data is receding due to the massive growth of data sources to process and the speed of data delivered to the fund management companies has drasti-cally increased as it now mainly used in programmatic (Non Display Usage) processes in the IT sys-tems throughout the value chain of asset management. Data sources, benchmark administrators and market data distributors have reacted to the growth in data usage by developing since 2006 new data strategies. In this context our members have experienced the following trends: • A significant increase in prices: Index providers have introduced a significant price increase for their products which are clearly above the inflation rate without any additional value for Asset Managers. • A general increase of the administration of license agreements: Due to the growth of data usage index providers have refined their licensing models and cover now each step along the whole value chain of an Asset Manager. The data license practice ranges from internal applications support to external regulatory reporting as well as ETF production and brand licenses. Bench-mark administrators also do not hesitate to charge market participants (e.g. Buy-Side) for separate “created works”, “manipulated data” or “derived data” licenses based on use of trading ven-ue, ratings or index data to create (e.g., through mathematical or other manipulations or pro-cesses) new data points. For example, benchmarks providers also called historically “index sponsors” today impose in ex-cess of 50 different licenses to “nickel and dime” the Buy Side community. Index providers do not have a transparent price and cost policy for the different and complex license models. Fur-ther adding to the licenses complexity, there is no standardization of how license concepts are defined (Taxonomy). There is also an intentional purpose to increase the complexity in the diver-sification of the type and variety of data policies and price policies to allow for each index spon-sor unique selling point (USP) and make it harder for investors to compare the cost of different index services in the index license manager (ILM) contract management tool. Due to a lack of standardization for license concepts fund management companies do not have the possibility to compare the license models across different index providers. For further Explanation, please consider our Position to the BMR Review.

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Meeting with Michele Piergiovanni (Cabinet of Executive Vice-President Margrethe Vestager), Yizhou Ren (Cabinet of Executive Vice-President Margrethe Vestager)

25 Mar 2020 · To discuss the cost of market data

Response to Revision of Non-Financial Reporting Directive

25 Feb 2020

As representatives of the German fund industry, we consider it essential to obtain reliable, standardised and comprehensive information from companies on sustainability-relevant matters. Asset managers and institutional investors will only be able to pay due consideration to sustainability aspects when taking investment decisions if such information is readily available and comparable across different companies and sectors. This pertains in particular to information on material sustainability-related risks for business activities run by a company, but also on potential material adverse impact posed by a company's activities. These data points will also be needed by fund managers and other financial product providers to comply with their own reporting obligations under EU Disclosure Regulation, e.g. in relation to principal adverse impact of their investments. To avoid data quality issues, we deem it important to obtain this information directly from companies rather than sourcing it from commercial data vendors that necessarily involves additional, potentially high costs and creates dependencies from external providers. Therefore, we cleary favour Option 3 that would define a common standard for non-financial reporting, but also specify in more detail the reporting requirements, including what information is needed, as well as how and where the reporting should take place.

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Meeting with Markus Schulte (Cabinet of Vice-President Günther Oettinger)

22 Jan 2019 · MFF

Meeting with David Boublil (Cabinet of Commissioner Pierre Moscovici)

23 Oct 2018 · Meeting on VAT rules to investment funds and for the financial sector.

Response to Institutional investors' and asset managers' duties regarding sustainability

23 Aug 2018

Encouraging investments in sustainable products is a core element in the strive towards a more sustainable environment. Therefore, BVI is supportive of the European Commission’s Action Plan and the legislative proposals on Financing Sustainable Growth. A coherent disclosure how market participants integrate sustainability risks in their investment decisions and what strategies they apply to sustainable products will foster a more sustainable environment. Key messages - Meaningful accessible disclosure covering all strategies will foster Sustainable Finance (“SF”). We support a disclosure regime that provides both investors and financial advisors with meaningful information regarding asset managers’ approach towards sustainability. Hence, we appreciate the distinction between disclosure requirements for all asset managers and disclosure requirements for products “targeting sustainable investments”. However, the proposal should take into account all different strategies which are applied to sustainable products. In order to do so, the disclosure requirements should comprise all products that are marketed as sustainable. This would also solve the duplication of disclosure requirements for sustainable products as it is unfortunately proposed with the disclosure for “marketing products as sustainable” in the Regulation on establishing a framework to facilitate sustainable investments (“Taxonomy Regulation”) and the disclosure for products “targeting sustainable investments” in the Regulation on disclosures relating to sustainable investments and risks (“Disclosure Regulation”). Moreover, we question whether the disclosure requirements relevant also for all asset managers will provide investors and financial advisors with the relevant information in an easily accessible manner. - Disclosure requirements need to be coherent throughout the investment chain and should not only cover a selection of market participants. Only a framework requiring all market participants including corporates and governments or other public entities seeking financing from the capital markets to disclose relevant information will allow investors to fully understand their investment and provide comparability and a level-playing-field also on a cross-border basis. As the proposal stands, we are concerned about the consistency and the scope in this respect. Furthermore, the content, place and timing of information to be disclosed needs to be consistent with the overall objective of facilitating SF. Fragmented disclosure requirements will at best not achieve the full potential of SF. In the worst case scenario it will be to the detriment of sustainable growth. - Content of disclosure should be built on the Taxonomy and aligned to market dynamics. The content of the disclosure regarding sustainable products should be clearly linked to the Taxonomy. Furthermore, disclosure regarding impact of investments should at the most be on a best effort basis since metrics measuring such impact are not yet well-developed. The Commission‘s understanding of sustainable products seems to give a preference to impact and thematic investing, thereby bearing the risk of creating more confusion for investors and raising barriers to the already low growth of sustainable products. - Fragmentation of regulation leads to inefficiencies and additional costs. The approach to use a Regulation for specific disclosure, e.g. regarding sustainability, might be understandable from a legislator’s point of view since it allows for a focussed political negotiation process. However, the number of regulatory measures regarding disclosure for asset managers has increased significantly. These rules often overlap or are inconsistent, which leads to less targeted and more confusing disclosure to the detriment of the investor. Disclosure requirements should be integrated in existing regulation.

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Response to Institutional investors' and asset managers' duties regarding sustainability

23 Aug 2018

Encouraging investments in sustainable products is a core element in the strive towards a more sustainable environment. BVI therefore welcomes the European Commission’s Action Plan and in particular the aim to build a classification for sustainability (“Taxonomy”). A common language and disclosure building on such common language have the potential to facilitate a shift towards a more sustainable environment. Only a comprehensive concept on sustainability will solve the problems we are facing. We urge the Commission to provide for a holistic approach which builds on transparency and unleashes sustainable investments. Key messages - Purpose of Taxonomy should be clearly defined. The Taxonomy should be the reference for standards and labels for sustainable products, green bonds and for reporting throughout the investment chain. In order to unleash sustainable investments, it should also serve as orientation for (i) selecting investments where material extra-financial considerations are taken into account and (ii) systematically taking environmental, social and governance (“ESG”) risks into account as investor and investee. Only a Taxonomy that can be used for these purposes and will in particular be used for reporting, will allow integration of sustainability into mainstream and a proper shift to a more sustainable environment. It is hence important that the Taxonomy is built in a modular, dynamic, forward-looking way. - A holistic approach is decisive. Only a holistic approach regarding sustainability and Sustainable Finance (“SF”) will provide for the broader economic effect and avoid redirection of capital with unintended consequences: - SF needs to cover all aspects of ESG considerations. A focus on environmental – in particular climate – aspects as a first step should not be to the detriment of other aspects. - All asset classes and strategies need to be covered. While the economic activity is the right approach for financing dedicated green projects, it is not practical for general equity investments, fixed income investments, investments in real assets. Further, a focus solely on economic activities will provide a basis for impact and thematic investments only, thereby limiting the scope of SF to niche investments. - The Taxonomy needs to be flexible and compatible with international standards. Investments are made worldwide and information on investments follows different standards outside the EU. The Taxonomy therefore needs to be compatible with international standards. - SF can only be part of a broader strategy on sustainability; a consistent approach towards e.g. energy policy, climate protection, waste prevention and a healthy ecosystem is required. - Fragmentation of Regulation hinders innovation. We believe that all disclosure requirements should be linked to the Taxonomy, once established, in order to achieve a consistent approach throughout the investment chain. Disclosure requirements prior to the establishment of the Taxonomy should not be too detailed in order to avoid further fragmentation. We object to duplications of disclosure requirements as it is currently proposed within both the Regulation regarding the Taxonomy and the Regulation on disclosure. Inconsistent regulation and duplicated disclosure will confuse investors. - Investment decision must remain with end investor. Once established, the Taxonomy can be used to set the right incentives for investing. However, it is very important that the Taxonomy is not used to restrict the investment options beyond an investment due diligence including assessment of ESG risks. The investment decision must remain with the end investor for several reasons including for the avoidance of misallocations of investments. We welcome that neither green supporting nor brown penalising factors are part of the Commission’s proposals. Both factors would interfere with general regulatory concepts, in particular systemic stability.

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Response to Institutional investors' and asset managers' duties regarding sustainability

22 Aug 2018

Encouraging investments in sustainable products is a core element in the strive towards a more sustainable environment. BVI (BVI represents the interests of the German fund industry at national and international level. The association promotes sensible regulation of the fund business as well as fair competition vis-à-vis policy makers and regulators. Fund companies act as trustees in the sole interest of the investor and are subject to strict regulation. Funds match funding investors and the capital demands of companies and governments, thus fulfilling an important macro-economic function. BVI’s over 100 members manage assets of more than 3 trillion euros for private investors, insurance companies, pension and retirement schemes, banks, churches and foundations.) in general welcomes the European Commission’s Action Plan and the legislative proposals on Low Carbon (“LC”) and Positive Carbon Impact (“PCI”) Benchmarks (“BM”), besides a common language (Taxonomy) and disclosure. Being part of a broader initiative, the LC/PCI-BM proposal has the potential to provide a valuable tool for Sustainable Finance, if sufficiently improved. Generally, directing capital into de-carbonised sustainable investments with inter alia the help of LC/PCI-BMs bears the risk of creating crowding of investments out of both brown industries as well as non carbon-related sustainable investments and may increase investment risk due to less diversification. The regulatory interference must therefore be based on a thorough assessment of potential outcomes. A too simple approach can also be easily used to exclude certain activities with potentially detrimental effects. Too descriptive regulation and regulation needs to be avoided as it may trigger potential liability issues which in turn lead to a tick-the-box compliance exercise and are therefore detrimental to a move towards a more sustainable environment. We suggest a forward-looking approach that focuses on climate transition risk and opportunities across industry sectors to truly facilitate the move to a more sustainable, low-carbon economy. In any case, the carbon benchmark regulation should set the ground for stimulation of innovation, wide adoption and commercial success without limiting other sustainable investments Key messages - Regulation should cover all sustainable BMs. We would question the limited focus of the proposal. Interaction of all elements of sustainability (environmental, social, governance) as well as within the elements (climate, waste prevention, ecosystem, etc.) needs to be taken into account. The same is true for different types of activities, industries, asset classes etc. Sustainability considerations should be reflected in all BMs with a sustainability objective or according to investor preferences. - Focus should be on adequate disclosure. A harmonised approach should not limit flexibility or discriminate different approaches in the field of sustainable investments. In particular, the index regulation should not be used to restrict the investment options. Furthermore, like sustainable investment strategies, BMs today reflect different approaches and are used depending on market participants’ needs. Measures need to allow for continued product innovation both for the BM provider as well as the BM user. Therefore, the focus should be on ensuring adequate disclosure by benchmark administrators rather than prescribing in law the methodologies to be used in benchmark construction. - Approach should be globally harmonised. We would see a merit in pursuing a global harmonised approach to establish a framework to facilitate sustainable investment including setting minimum standards for sustainability indices.

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Response to EU Company law upgraded Package:digital solutions and providing efficient rules for cross border operations of companies

9 Jul 2018

The BVI (German Investment Funds Association) gladly takes the opportunity to present its views on the European Commission’s proposal for a Directive amending Directive (EU) 2017/1132 as regards the use of digital tools and process in company law. With regard to the disclosure of company information in the registers as stipulated in Article 19 of the proposed Directive, we would suggest to include the Legal Entity Identifier (LEI) as a relevant piece of publicly available information. Please see our comments in the attached file.

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Response to Institutional investors' and asset managers' duties regarding sustainability

21 Jun 2018

Encouraging investments in sustainable products is a core element to move towards a more sustaina-ble environment. BVI (BVI represents the interests of the German fund industry at national and international level. The association promotes sensible regulation of the fund business as well as fair competition vis-à-vis policy makers and regulators. Fund companies act as trustees in the sole interest of the investor and are subject to strict regulation. Funds match funding investors and the capital demands of companies and governments, thus fulfilling an important macro-economic function. BVI’s 104 members manage assets of nearly 3 trillion euros for private investors, insurance companies, pension and retirement schemes, banks, churches and foundations. BVI’s ID number in the EU Transparency Register is 96816064173-47. For more information, please visit www.bvi.de/en) is therefore supportive and welcomes the European Commission’s Action Plan and the legislative proposals on Financing Sustainable Growth. Responsible and long-term considera-tions play an increasingly important role in investment decisions. Many institutional investors and asset managers feel the need to act responsibly and to therefore use methods of selecting investments taking also material extra-financial considerations into account (Responsible Investing). Such considerations comprise environmental, social and governance (“ESG”) issues. Hence it is of utmost importance that any legislative and non-legislative measures find the right balance between fostering the urgently needed action while facilitating the existing trend without imposing requirements on market participants that may potentially have the reverse effect. In particular, the proper timing of different sustainability actions is key in this regard. We doubt that the sequence of mandatory incorporation of sustainability into investment advice and building the taxonomy is chosen correctly and that it will jeopardise the objective. Clearly, investment advisors are well positioned to encourage investments in sustainable products. While many institutional investors today request and are already offered advice on ESG considerations, this is often not the case for retail investors. This is also based on the fact that a common understanding of sustainability is still missing. Specialised banks do offer sustainable products to investors, however, their specific investors are always interested or even educated in the matter of sustainability and have an understanding of what they consider sustainable. The broad majority of investors, on the other hand, is not. Consequently, a common understanding of sustainability is in our view a pre-condition for incorporating ESG considerations mandatorily into the suitability test. On the one hand, the taxonomy will be established step-by-step starting with climate change mitigation which is envisaged to be completed by mid-2020. A common understanding regarding circular economy and pollution prevention is supposed to enter into force by the end of 2021 and regarding water protection and protection of the healthy ecosystem by the end of 2022. Detailed social or governance dimensions are not yet reflected in the legislative proposal. On the other hand, the MiFID II requirements shall enter into force by mid-2020, i.e. at the time only the first step of the taxonomy will be completed – if all goes according to plan. Depending on the investor, however, sustainability preferences might not be covered by the then existing taxonomy. This is also the case for distribution of financial instruments on a cross-border basis where the understanding of sustainability considerably differs. It lays a significant burden on investors and investment advisors to find a common understanding on sustainability within the advice process.

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Meeting with Andrea Beltramello (Cabinet of Vice-President Valdis Dombrovskis)

12 Jun 2018 · PRIIPs, Cross-border Fund Distribution, Sustainable Finance

Meeting with Elina Melngaile (Cabinet of Vice-President Valdis Dombrovskis)

15 May 2018 · Sustainable Finance

Response to Reducing barriers to cross-border distribution of investment funds

9 May 2018

We very much welcome and support the European Commission’s intention to remove regulatory barriers for the cross-border distribution of investment funds. While some of the proposed changes will indeed facilitate cross-border distribution, the proposal also contains significant elements which will not only raise barriers in a cross-border context but also have the potential to alter the marketing practices on a domestic basis to the detriment of investors. Our concerns relate in particular to the following: - Marketing/Pre-Marketing . The provision on Pre-Marketing is too restrictive to the detriment of professional investors. In particular, it is important for investors to get a proper understanding of the investment ideas or strategies proposed by the manager. This cannot be achieved if the investor has no possibility to review draft documents. Therefore, in particular the restriction should be deleted that the AIFM may not present to the investor documents which allow the investor to take an investment decision. Furthermore, the project of the CMU calls for a proper private placement regime for funds. In this respect, the proposal does not live up to its full potential to broaden financing options for small and medium-sized enterprises while at the same time mobilising capital and providing investment opportunities for investors. From a regulatory point of view, the offering of securities other than fund unites or shares only falls under the Prospectus Regulation which allows a private placement to an unlimited number of professional investors and up to 150 private investors without any information requirements, let alone a marketing notification. Private placements are generally a high priority of the Capital Market Union (CMU), however, the Commission’s proposal seems to be heading towards the requirement to notify every placement of every fund unit. We see the urgent need to put the private placement regime for funds on an equal footing with that for comparable to securities. - De-Notification. According to the proposal for harmonising the de-notification procedure, the management company shall no longer be free to decide on withdrawing from a market . There is no ob-jective reason for introducing a threshold to allow de-registration, in particular since investors in a fund shall continue to receive the legally required information. This part of the proposal in fact introduces a new barrier instead of eliminating it, since management companies will likely decide not to enter a market in the first place if they are no longer free to decide to de-notify. - National marketing requirements. Competent authorities may still impose national marketing requirements . While this is generally understandable e.g. due to national tax rules, it contradicts the aim to reduce or remove barriers for the cross-border distribution. In this respect, the EU legislator should also explore possible ways of harmonisation. This could for instance comprise a rule allowing the use of marketing material compliant with the detailed rules on marketing material enshrined in MiFID II without any need to submit such material to the competent authority. Besides the aforementioned concerns, we very much welcome the following parts of the proposal: - Abolishment of physical presences. The abolishment of physical presences for both UCITS and AIF managers is an important step to remove barriers for the cross-border distribution . - Increased transparency on fees and national marketing requirements. The rules increasing trans-parency on fees and national marketing rules will facilitate cross-border distribution . Furthermore, we appreciate the Commission’s initiative to address legal implications of the use of Distributed Ledger Technology and facilitate innovations as provided for in the FinTech Action Plan. Fragmentations of the investment operational chain in pa

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Response to Public consultation on minimum requirements in the transmission of information for the exercise of shareholders rights

9 May 2018

BVI’s position on Commission‘s proposal regarding implementing measures of the revised Shareholders’ Rights Directive. Since shareholder engagement is a cornerstone of sustainable finance, the fund management industry has a strong interest in improving the communication between shareholders and companies. As of today, this still proves to be a challenge in practice. While technical solutions are increasingly available, market participants involved have to be prepared to make use of such technical solutions. BVI therefore welcomes the new chapter in the revised Shareholders’ Rights Directive regarding shareholder identification, transmission of information and facilitation of the exercise of shareholder rights. We applaud the Commission for and are very supportive of the Draft Implementing Regulation. We believe this could be an important step for clarifying the rather complex voting chain and to addressing the barriers to cross-border voting. We would like to add the following thoughts and remarks: - It is our understanding that, according to the draft, the issuer will be required to both confirm the receipt of votes and the recording and counting of votes. It is of utmost importance that the share-holder receives a confirmation regarding the recording and counting of votes and that this cannot be substituted by a simple confirmation of the receipt of the votes. - In particular in cross-border situations, shareholders often do not receive the information regarding corporate events in time. It is therefore important that the deadline foreseen in Art. 9 (4) takes this into account. The possibility for the last intermediary to set a deadline earlier than three business days prior to the record date might still lead to very short time frames in which the shareholder can react – if any. We therefore would strongly support to only refer to the issuers’ deadline in case of corporate events other than shareholder meetings. Clearly, for shareholder meetings, the record date has to be the relevant point in time for the deadline. - According to the Draft, the issuer shall provide the recording and calculation of votes in the general meeting in a timely manner but no later than 15 days after the general meeting (Art. 9 (5)). The shareholder, however, might have an interest in receiving such confirmation earlier, for instance in case of a possible action for an annulment of the resolution where the national law also provides for statutory time limits or since their clients would like to receive a confirmation themselves. We therefore would strongly support introducing a shorter deadline (e.g. 3 calendar days). As a more technical remark, the term “days” should be clarified, since otherwise this will lead to discussions whether business or calendar days are meant. We suggest using calendar days since business days always lead to fractions due to different holidays in each jurisdiction. - With respect to the table in the Annex, we notice that sometimes the term “responding intermediary” is used. We see the risk that if it is not clear which intermediary is required to respond, that none in a chain of intermediaries feels responsible for providing the information. Consequently, we would suggest clarifying the ultimate responsibility. In practice, further problems may arise since the definition of intermediaries in Art. 2(d) SRD II does not include voting service providers which often are an integral part of the information flow between issuers and investors but do not provide services of safekeeping. While we think that the Draft Implementing Regulation cannot solve this problem, we hope that it will nevertheless have an impact on such service providers.

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Meeting with Olivier Guersent (Director-General Financial Stability, Financial Services and Capital Markets Union)

26 Apr 2018 · PEPP, PRIIPS, ESAs, Brexit

Response to Review of the appropriate prudential treatment for investment firms

8 Mar 2018

BVI supports the Commission’s proposal to introduce a separate new framework in the form of a European Directive (IFD) and a directly applicable Regulation (IFR) on the prudential requirements of non-systemic investment firms outside the banking sector. However, the new framework has a significant impact on German investment firms. Germany represents about 700 MiFID investment firms, accounting for nearly one quarter of all firms affected by the new initiative. The vast majority of these firms (about 600) is currently exempt from the CRR definition of “investment firm” because they are only authorised to provide MiFID services such as portfolio management, investment advice, reception and transmission of orders in relation to one or more financial instruments or execution of orders on behalf of clients without a licence to hold client money or securities belonging to clients or to deal on own account. Germany, therefore, is the biggest market in this field. It is of utmost importance to carefully analyse whether the new framework applicable to firms with such a limited licence is workable, effective and proportionate. We are therefore calling for a very simple approach for limited licence firms. This could involve the need for significant changes to the proposed text of the IFD and IFR. In any case there is a need to require that limited licence firms are placed on an equal footing with small and interconnected investment firms (“Class 3” investment firms). In any case there is a need for achieving a level playing field in prudential requirements for asset managers. In particular, many of the proposed new rules would lead to much stricter requirements and disproportionate burden for portfolio managers or advisors authorised as investment firms under the MiFID as compared to asset managers licenced as management companies under the Directive 2009/65/EC (“UCITS Directive”) or the Directive 2011/61/EC (“AIFMD”). Moreover, it is of utmost importance that any new requirements for investment firms are not much stricter than those that currently apply under the CRD/CRR. Please find attached our summary of our position paper that highlights the impact on the German market and our main concerns. Please note that we have some more detailed proposals for amendments which are not included in this paper but will be presented at a later stage.

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Response to Review of the appropriate prudential treatment for investment firms

8 Mar 2018

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Meeting with Andrea Beltramello (Cabinet of Vice-President Valdis Dombrovskis)

21 Feb 2018 · ESAs review - CMU - PEPP

Response to Institutional investors' and asset managers' duties regarding sustainability

11 Dec 2017

BVI’s view on responsible investment Responsible and long-term considerations play an increasingly important role in investment decisions. Many investors feel a responsibility to address environmental, social and governance (ESG) issues by being more selective in their investments. The asset management industry plays a crucial role in facili-tating this trend. BVI therefore gladly takes the opportunity to present its views on responsible invest-ment (RI). - The existing EU regulation properly reflects assets managers’ role as intermediaries. Existing risk management requirements entail taking into account ESG risks. The duty to act in investors’ best interest requires the asset manager to follow investors’ specific ESG demands. It is crucial that the decision on ESG considerations remains with the investor. - A taxonomy will facilitate Responsible Investments by improving comparability and reliability of data. It will further allow assessing the Responsible Investment market properly. It should not be combined with investors’ duties in a way that bans specific investments (exclusion). Depending on the specific circumstances the investor and/or the asset manager is in the best situation to make the adequate investment decision also with respect to ESG considerations. - Regulatory initiatives with respect to standardisation can facilitate Responsible Investment. Other options should be selected cautiously. Education of regulators, supervisors, market participants and investors should form an essential part of a comprehensive political approach.

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Response to Review of the European Supervisory Authorities

30 Nov 2017

BVI’s position on the Commission’s proposal for reforming the European System of Financial Supervision Against the backdrop of advancing financial integration in the EU, itself facilitated further by the ongoing CMU initiative, effective supervisory coordination is needed. By promoting supervisory convergence and providing solutions to cross-border issues, the ESAs are at the heart of further endeavours to deepen integration of the financial markets. BVI is thus glad to contribute to the current EU debate on the future evolution of the European System of Financial Supervision and the role and responsibilities of the ESAs. Key issues of concern: • Direct supervision of investment funds by ESMA would bring no benefits to the Single Market: Providing ESMA with direct supervisory powers for EuSEFs, EuVECAs, ELTIFs and for any other type of investment funds would entail additional complexity due to the interaction with national legislation and duplication of supervisory scrutiny leading to inefficiencies and higher costs for in-vestors. Authorisation and supervision of investment funds and any other investment products should remain with the NCAs which can take due regard of the specificities of the local investment markets. • Intervention in delegation arrangements by the ESAs would be disproportionate: We see no justification for direct involvement of the ESAs in the authorisation or registration processes of market participants. Further coherence of supervisory approaches relating to delegation of functions can be achieved by means of opinions and other Level 3 measures which are already broadly used for these purposes. • Fixed proportion of the EU contribution to the ESAs’ budgets needed: We advocate retaining an annual contribution from the EU budget to the ESAs’ financing which should be fixed at a minimum of 40% of the estimated revenues of each authority. This share appears commensurate to cover financing needs in terms of the regulatory activities of ESAs and the tasks related to identification and mitigation of systemic risk. • Control of guidelines and recommendations should be less burdensome: Stakeholder Groups of the ESAs should be able to adopt a reasoned opinion by a simple majority of votes in cases where ESAs exceed their level of competence. In order to enhance more practical use of the guid-ance provided in opinions and Q&As, the NCAs should be entitled to consult with national stake-holders before adoption of such Level 3 measures by the ESAs. • NCAs should have direct access to data about local markets: Regulatory reporting by market participants should be directed to the NCAs. Remaining inefficiencies could be addressed by further standardisation of data formats. There is no reason to give further data collection and storage powers for the ESAs. • Product intervention powers for UCITS and AIFs already provided for in the fund frameworks: There is no regulatory gap and no need to extend product intervention powers under MiFIR to managers of UCITS or AIFs. The rules already in place under the EU fund frameworks should be used in order to avoid regulatory duplication. • No need for substantial overhaul of the ESAs’ governance: The introduction of an Executive Committee as a new managerial body of the ESAs does not appear justified. In any event, the Ex-ecutive Committee should not have the power to adopt strategic supervisory plans for the NCAs without proper involvement of the relevant Board of Supervisors. Excessive red tape in the imple-mentation of the strategic supervisory plan involving higher cost for market participants must be avoided by any means.

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Response to Fitness Check of supervisory reporting requirements

14 Nov 2017

BVI strongly supports the EU Commission "Fitness check of supervisory reporting requirements". BVI represents the interests of the German fund industry at national and international level. The association promotes sensible regulation of the fund business as well as fair competition vis-à-vis policy makers and regulators. Fund companies act as trustees in the sole interest of the investor and are subject to strict regulation. Funds match funding investors and the capital demands of companies and governments, thus fulfilling an important macro-economic function. BVI’s over 100 members manage assets of nearly 3 trillion euros for private investors, insurance companies, pension and retirement schemes, banks, churches and foundations. BVI’s ID number in the EU Transparency Register is 96816064173-47. For more information, please visit www.bvi.de/en. Please find our detailed comments in the attached document.

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Response to Proposal for a Regulation - Financial Stability, Financial Services and Capital Markets Union

25 Sept 2017

BVI sees the EU Commission’s Regulation for the introduction of a PEPP as an important step to strengthen private retirement provisions throughout the EU. The retirement planning of EU citizens is one of the central issues the EU has to address in light of demographic trends. With its PEPP regime the EU Commission has presented a convincing concept in a lot of respects. It is of great importance to encourage EU citizens to save more for their retirement and to stimulate cross-border distribution as well as portability. Here, it is crucial to increase capital market-based and long term investments. This will ensure an adequate income in retirement. Furthermore, accumulating more capital and directing it towards long-term investments in the real economy will foster growth and jobs in the EU. We share the EU Commission’s view that PEPP is an important milestone towards completing the Capital Markets Union. An overcoming of the fragmentation between national markets as well as a functioning competition between different categories of providers will be decisive for the success of PEPP. Today, one main type of personal pension providers – insurers – dominates the market. The regulation aims to open the market to many types of providers. In addition to insurers, also asset managers, banks, institutions for occupational retirement provision and some investment firms may apply for authorization of a PEPP. We very much welcome this legal recognition of funds for the purpose of private retirement planning. The PEPP framework comprises a complementary voluntary scheme, supporting existing Member State and occupational pensions as well as not replacing national personal pension products. We strongly support this approach. The decision for a 2nd regime by adoption of a regulation ensures a maximum harmonisation whilst at once the different national social systems and solutions remain unchanged. In light of this, we consider the following issues as crucial in order to make PEPP a success: 1. Recommendation on the tax treatment of PEPP 2. Portability Service (Article 13): 3. Distribution regime (Article 18ff) 4. Default investment option (Article 37) 5. Choice of pay-out options (Article 52) For more information: see attachment

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Meeting with Marlene Madsen (Cabinet of Vice-President Jyrki Katainen)

14 Sept 2017 · MiFID

Response to DA on conduct of business rules for the distribution of insurance-based investment products

17 Aug 2017

BVI’s comments on the draft Delegated Regulation on conduct of business rules for the distribution of insurance-based investment products As the representatives of the German fund and asset management industry, BVI has been following the IDD negotiations from the onset for reasons of level playing field and therefore, welcomes the opportunity to comment on the Commission’s draft Delegated Regulation. In this context, however, we struggle to understand the conclusion provided in the explanatory memorandum to the draft Delegated Regulation where the Commission already anticipates “a broad consensus on the main content of this Delegated Regulation”. We very much hope that this pre-emption will not prevent the Commission to take due account of the comments received from stakeholders in the course of the consultation process at hand. As regards the draft rules on conduct of business for the distribution of insurance-based investment products, we fully agree with the general regulatory approach that alignment with the MiFID II regime should be sought in every area in which there is no fundamental difference in the wording of the provisions in the IDD and MiFID II respectively. As explained by the Commission, such alignment helps to avoid regulatory arbitrage across sectors and in addition contributes to effective investor protection at the point of sale. However, judged against this principle and after having considered the differences between the Level 1 rules of MiFID II and IDD, we still see room for further convergence in the following areas: 1. Disclosure of conflicts of interest (Art. 6 of the draft Delegated Regulation): The current draft does not include specific rules on the disclosure of inducements to clients, even though such rules are foreseen under MiFID II (Cf. Art. 11(5) of the Commission Delegated Directive (EU) 2017/593 (MiFID II Delegated Directive)). However, receipt of inducements in relation to a distribution service is generally recognised as a potential source of conflicts of interest. Therefore, it could be derived from the provisions governing conflict of interest disclosure in Article 28(2) IDD that insurance intermediaries and insurance undertakings are under the obligation to specifically inform clients about inducements. We suggest adding a new paragraph 3 to Art. 6 of the draft Delegated Regulation in order to transpose the disclosure obligations under Art. 11(5) of the MiFID II Delegated Directive to the distribution of insurance-based investment products 2. Suitability assessment (Art. 9 of the draft Delegated Regulation): Under MiFID II, standards for investment advice have been enhanced i.e. by requiring financial intermediaries to assess on the basis of internal processes and procedures whether equivalent financial instruments can meet their client’s profile with regard to costs and complexity (Cf. Art. 54(9) of the Commission Delegated Regulation (EU) 2017/565 (MiFID II Delegated Regulation)). This means that the criteria “costs” and “complexity” have been assigned with particular importance when it comes to recommending suitable investment products or other financial instruments to investors. Neither the technical advice provided by EIOPA nor the current text of the draft Delegated Regulation seek to implement equivalent requirements under the IDD regime, even though costs and complexity are certainly of similar relevance for the distribution of insurance-based investment products. This deficit in investor protection is surprising, since the Level 1 wording in terms of suitability assessment is nearly identical under MiFID II and IDD as is the scope of the corresponding Commission’s mandate for Level 2 measures. Our suggestion is to supplement Art. 9 of the draft Delegated Regulation by a new paragraph transposing the requirements under Art. 54(9) of MiFID II Delegated Regulation to the distribution of insurance-based investment products.

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Meeting with Marlene Madsen (Cabinet of Vice-President Jyrki Katainen)

12 Jul 2017 · Review of the ESAs

Meeting with Tatyana Panova (Cabinet of Vice-President Valdis Dombrovskis)

30 May 2017 · ESA review; PEPP; Systemic risk of asset managers; AIFMD review

Meeting with Paulina Dejmek Hack (Cabinet of President Jean-Claude Juncker)

24 Apr 2017 · Financial services agenda

Response to Review of the appropriate prudential treatment for investment firms

19 Apr 2017

We refer to our attached file.

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Meeting with Marlene Madsen (Cabinet of Vice-President Jyrki Katainen)

15 Mar 2017 · ESA Review, AIFMD Review and systemic risks of asset managers

Meeting with Tatyana Panova (Cabinet of Vice-President Valdis Dombrovskis)

2 Feb 2017 · CMU, Call for Evidence, AIFMD, ESAs

Meeting with Jan Ceyssens (Cabinet of Vice-President Valdis Dombrovskis)

2 Feb 2017 · ESAs review; Macroprudential review

Meeting with Jonathan Hill (Commissioner)

5 Nov 2015 · CMU; AIF; Recovery and resolution of funds and asset managers;

Meeting with Jonathan Hill (Commissioner)

5 Nov 2015 · Call for Evidence/Capital Markets Union

Meeting with Jonathan Hill (Commissioner)

18 Feb 2015 · Markets in Financial Instruments Directive (MiFID)/Capital Markets Union (CMU)