On 16 September 2020, the European Commission issued an inception impact assessment concerning proposed amendments to the Regulation on European long-term investment funds (ELTIFs).

The impact assessment notes that the current challenge with the ELTIF regime is that, to date, the initial take-up of ELTIFs by the market has been slow, with only a limited number of ELTIFs launched. While some delay can be expected in the case of a new product/fund label, there may also be other reasons as to why the ELTIF market has not developed to a larger scale. The overall objective of the initiative is therefore to evaluate the effectiveness of the ELTIF framework and to identify the reasons for the market failing to develop in line with expectations.

The Commission feels that the ELTIF review should contribute to the further development of the market by examining the following issues raised by stakeholders:

  • Removing limitations on the supply side by improving the fund structuring and eligible assets related aspects of the ELTIF framework.
  • Reducing the demand side barriers to investment (with a focus on retail investors but also including the institutional investor base).
  • The introduction of incentives by Member States to promote ELTIF investment.