Managed Funds Association (MFA) has advised the Financial Stability Board (FSB) to eliminate duplicative securitization requirements that negatively impact the EU and UK markets and investors. This recommendation was made in response to the FSB’s request for input on the “Evaluation on Effects of G20 Reforms on Securitization.” MFA’s main concern is the adverse consequences of duplicative due diligence requirements for alternative asset managers on EU and UK investors and markets. These requirements place EU and UK-based managers at a disadvantage when investing in securitizations issued in other jurisdictions, such as the U.S., even when they already adhere to stringent regulations. As a result, EU and UK managers face obstacles in accessing well-established securitization markets in the U.S. and elsewhere.
In the letter, MFA stressed that eliminating these duplicative requirements in EU and UK securitization regulations would promote increased investment without compromising investor protections. This would enable alternative asset managers to access global investment opportunities, enhance risk management, and deliver better returns for beneficiaries, including pensioners in the EU and UK.
MFA’s recommendations also underline the need to acknowledge the global nature of securitization markets and the cross-border operations of alternative asset managers. MFA suggest enabling managers to purchase securitizations that comply with the rules of the jurisdiction where they are issued to promote the growth and competitiveness of EU and UK capital markets and expand access to capital for businesses in those regions.