On a global scale investment funds have become an alternative source of financing as opposed to bank financing, Angelos Gregoriades, President of the Cyprus Investment Funds Association (CIFA) has said.
In his address at the 2nd Cyprus Fiduciary Association Forum, held on November 6 at the GrandResort Hotel in Limassol, he noted that funds through capital raised from private and institutional investors can contribute to long term projects, including infrastructure, health care, education, large construction projects and renewable energy.
“Cyprus,” he said, “is now ready to accommodate the current European initiatives which aim to create the right conditions for more funding to flow from Europe’s savers to Europe’s businesses and to encourage investors to make longer term investment as opposed to short term gains.”
This concept, the CIFA President continued, has become known as the Capital Markets Union.
What is the Capital Market Union?
The CMU is a central part of the European Commission’s (EC) overall effort to encourage jobs and growth.
On 30th September 2015 the EC published its Action plan for a CMU, one which aims to unlock savings and put them to work to support growth.
“The aim of the CMU,” Gregoriades said, “is not to replace bank lending but rather to create the right regulatory environment for alternative funding sources to complement existing ones.”
This Union has been established so as to promote the development of a new cross-border fund vehicle, the ELTIF which shall apply from December 2015, for long term projects such as energy, transport and communication infrastructures.
ELTIFs, the Association’s President clarified, combine the advantages of cross-border passport with a wider investor base (insurance companies, pension funds, retail investors).
Modernising the Prospectus Directive was also a main objective which the establishment of a CMU sought to address, by providing clear information to investors and thus making it easier and cheaper for companies and in particular SMEs to access capital markets.
In addition, Gregoriades noted, the Union aims to support venture capital and equity financing across Europe by amending the current Regulation on Venture Capital Funds and European Social Entrepreneurship to make it easier for more funds to participate and be active in more investments.
In his address at the 2nd Cyprus Fiduciary Association Forum, held on November 6 at the GrandResort Hotel in Limassol, he noted that funds through capital raised from private and institutional investors can contribute to long term projects, including infrastructure, health care, education, large construction projects and renewable energy.
“Cyprus,” he said, “is now ready to accommodate the current European initiatives which aim to create the right conditions for more funding to flow from Europe’s savers to Europe’s businesses and to encourage investors to make longer term investment as opposed to short term gains.”
This concept, the CIFA President continued, has become known as the Capital Markets Union.
What is the Capital Market Union?
The CMU is a central part of the European Commission’s (EC) overall effort to encourage jobs and growth.
On 30th September 2015 the EC published its Action plan for a CMU, one which aims to unlock savings and put them to work to support growth.
“The aim of the CMU,” Gregoriades said, “is not to replace bank lending but rather to create the right regulatory environment for alternative funding sources to complement existing ones.”
This Union has been established so as to promote the development of a new cross-border fund vehicle, the ELTIF which shall apply from December 2015, for long term projects such as energy, transport and communication infrastructures.
ELTIFs, the Association’s President clarified, combine the advantages of cross-border passport with a wider investor base (insurance companies, pension funds, retail investors).
Modernising the Prospectus Directive was also a main objective which the establishment of a CMU sought to address, by providing clear information to investors and thus making it easier and cheaper for companies and in particular SMEs to access capital markets.
In addition, Gregoriades noted, the Union aims to support venture capital and equity financing across Europe by amending the current Regulation on Venture Capital Funds and European Social Entrepreneurship to make it easier for more funds to participate and be active in more investments.