Creating an EU framework for loan originating funds

Author: | Published: 2 Jun 2016

Hogan Lovells lawyers assess Esma’s proposal for a harmonised regime, which is limited in scope and sends mixed signals to the market

In an opinion published last month, the European Securities and Markets Association (Esma) proposed a new regulatory regime for loan originating funds and their managers. While the introduction of a harmonised regime would benefit managers facing a myriad of contrasting legislation, many of the proposals would, if introduced, impose significant additional restrictions and obligations on managers and their funds. This is unwelcome coming so shortly after managers of the very same funds have faced a swathe of new regulation, principally in the form of the Alternative Investment Fund Managers Directive (AIFMD).

As the availability of traditional bank finance has declined in the EU following the financial crisis, new non-bank debt providers such as funds, insurance companies and institutional investors have taken their place. This shift away from...