Union Investment critical of upcoming regulation

Thumbs_down_410Germany's Union Investment has criticised several pieces of new and forthcoming legislation in the European finance sector.

The views were expressed at the asset manager’s recent press conference about its business during the first half of 2011.

Hans Joachim Reinke, chairman of the board of managing directors at Union Investment, was particularly critical of the EU Commission’s plan to introduce a tax on financial transactions that would affect investment funds. Funds, he said, were not to blame for the financial crisis and had not needed taxpayer bailouts.

He also claimed that taxing investment funds would amount to a hidden tax rise on savers, commenting: “This makes people less willing to invest in a personal pension and it penalises active asset management. On the other hand, passive structures like swap-based ETFs would benefit, even though the Financial Stability Board classes them as systemic risk. The two things do not add up.”

The Key Investor Information Document (KIID), recently launched as part of Ucits IV, came under fire for only focusing on past performance and not on future opportunities and risk, while Reinke also said that imprecise details regarding the implementation of certain aspects of Basel III and Solvency II were causing institutional clients such as banks and insurers to hold back on investment.

On a separate note, Reinke called for a transformation of the asset management industry from a supplier of products to a supplier of solutions, in the face of reluctance from retail customers to invest in traditional fund business.

Union Investment saw net inflows of €498m during the first half of 2011 and registered a 5.7% year-on-year rise in assets under management to €177.2bn.

©2011 funds europe