Wolf Klinz (ALDE), rapporteur. – (DE) Mr President, ladies and gentlemen, after years of examining the asset management sector, the Commission, in August 2005, presented a Green Paper and asked for comments on it. It has received something like 121 replies in total, which clearly indicates just how significant a sector this is, for in it, business is booming. Today, collective investment undertakings (UCITS) are a brand name, and not just in Europe; they are being traded in Singapore, Taiwan and Hong Kong as well, and very soon will be in South America too.

In the European Union alone, the total value of the sector’s investment assets last year amounted to over EUR 4 600 billion, which is something like EUR 900 billion more than in 2004. This House’s Committee on Economic and Monetary Affairs has decided to respond to the Commission's Green Paper by producing an own-initiative report. As the rapporteur, there were certain goals of which I never lost sight: a functioning internal market in UCITS; an attractive and safe range of products for investors, particularly for small investors; and an efficient asset management industry that would have no need to fear increasingly global competition. Although the alternative market now exists, it is not yet working properly, and so the consumer does not have the best possible access to comparable products, and the industry cannot benefit from the economies of scale that a large single market offers.

There is a need for revision in three areas: firstly, in the choice of investments, which the national supervisory authorities interpret in differing ways, the consequence of which can be that a fund is approved in one country but not in another. There are costs involved in developing a product, and if it cannot be marketed throughout Europe, but only in individual countries, there is a considerable cost disadvantage. One aim, then, must be to find a precise definition of the investments on offer that will apply right across Europe. I agree with CESR, the Committee of European Securities Regulators, that it ought to be possible, to a certain degree, to add quoted real-estate funds, the so-called REITS (Real Estate Investment Trusts), private equity funds and certificates to the mix. I also think it is worth considering the possibility of including funds of hedge funds.

Secondly, there is what is termed the notification procedure. The point about this is that the process of applying for permission in a Member State is described as a registration procedure but has in practice degenerated into a licensing procedure. The supervisory authorities are not applying uniform standards and there is insufficient communication between them, resulting in uncertainty, wasted time and needless additional expense for the industry, whereas a ‘regulator to regulator’ procedure would be the proper solution in a genuine internal market.

Thirdly, there is the matter of the simplification of prospectuses. The Commission’s recommendation on this has been implemented in different ways from one country to another, so that, today, depending on the Member State in question, simplified prospectuses are either slim brochures or weighty tomes with different information in them, most of which is completely beyond the consumer’s comprehension. What is needed is for a simple and harmonised prospectus, of between two and three pages, to be developed as quickly as possible and made uniformly mandatory right across Europe, and the industry itself will benefit by being required to supply the same information in every country – in, of course, in each country’s language.

Fourthly, one has to consider cross-border mergers and pooling, an area in which the considerable fiscal obstacles that still remain need to be removed.

The fifth issue is that of fund processing, in respect of which the industry is making promising efforts, and so we should place our trust in it and take it as read that it will sort out the problems on its own initiative. The Commission appears to concur with this view.

I am firmly convinced that corrective measures in these five areas will, relatively quickly, help to make the internal market work. What will also have a positive effect will be the industry’s own initiative and improved interaction on the part of the interested parties, particularly of the supervisory authorities. The Lamfalussy principle should apply to those areas of the directive that are amended in order to achieve flexibility and facilitate adaptation to rapidly-changing markets.

The Commission has, for some considerable time, been considering whether the directive is capable of being adapted to market changes by means of individual measures or whether it is necessary to adopt a fundamentally new directive. The conclusion I have come to as rapporteur is that producing a completely new version of a horizontal asset management directive with full Lamfalussy applicability would be a major project demanding many years of work, and that such a waste of time is something we cannot afford and should not embark on.

This is something that the Committee on Economic and Monetary Affairs discussed on three occasions, one of them, indeed, being in the context of an extended exchange of views. The numerous amendments – amounting to some 150 – have been reduced by means of a series of compromise amendments, and the Committee on Economic and Monetary Affairs adopted the whole report with only one vote expressing dissent.

The Socialist Group in the European Parliament, by tabling its Amendment 6, is now jeopardising the compromise we have achieved; doing such a thing would, I believe, make a nonsense of our own-initiative report and show this House as incapable of making a constructive contribution even after long debate. We are not, today, starting from the ground up. UCITS are brand products – with room for improvement in them, it has to be conceded – but the industry is strong, with some 450 million potential consumers and unnumbered thousands of people working in it. These people are citizens, and we in this House have an obligation to them. I therefore propose voting against the Socialist Group’s amendments, particularly against Amendment 6. If – contrary to expectations – a majority is found to support it, then we would advise the plenary to throw out the report.