Pan-European Asset Management. Achievements and regulatory impediments. Report of the CEPS Task Force on Pan-European asset management. CEPS Task Force Reports No. 44, 1 April 2003

After the adoption of the EU pension funds directive, the regulatory framework for asset management in the EU is complete. The single licence and home country control will now be applicable across the board for the different lines of asset management business. However, considering that asset management can be governed by 5 different regulatory regimes in the EU: banking, investment services, insurance, pension funds and investment funds, some parties have started to argue for a horizontal asset management directive as a single regime for all asset management business. This new CEPS report analyses the asset management industry in the EU and the consistency of the different regulatory regimes governing it. It concludes there is no need for a horizontal asset management directive to supersede the current directives, but that priority should be given to focus on “level 2 and 3” issues, this is to ensure uniform implementation and a harmonised approach in secondary legislation and in supervisory practices in the member states. The key outstanding issue on which policy makers should focus is taxation. The wide difference in tax regimes increases the cost of asset management and reduces returns to investors. Further convergence is therefore needed in the way member states tax fund management and a consensus should be reached on how to tax non-residents’ savings income.