On November 25, 2021, the European Commission put forward a long-awaited proposal to amend the Regulation on European Long-term Investment Funds (ELTIFR – Regulation (EU) 2015/760).
Introduced in 2015, the ELTIF framework has never met the intended success, driven by restrictive features making it difficult for retail investors to access ELTIFs.
Under the current framework, distribution is available to retail investors who either (i) have a portfolio of financial instruments in excess of EUR 500,000 or (ii) have a portfolio of financial instruments below EUR 500,000 but in excess of EUR 100,000 with a minimum investment EUR 10,000 and a maximum of 10% of such investor’s financial instruments investors in ELTIFs.
A provisional agreement on the reform of the ELTIFR was reached on 19 October 2022, which notably removes the above-mentioned requirements of minimum EUR 10,000 and 10% of the investor’s financial instruments, hence considerably broadening the scope of eligible investors under the ELTIFR.
This modernisation of the ELTIF framework may boost the effectiveness and attractiveness of ELTIFs, as the proposed amendments may well have the potential to revive ELTIFs and make them the new sought-after investment vehicle.
