This whitepaper provides an insightful overview of the evolving landscape of European Long-Term Investment Funds (ELTIFs), focusing on the significant regulatory changes under the ELTIF 2.0 regime, effective from January 10, 2024.
Context: ELTIFs, introduced in 2015, aimed to foster long-term investments, especially in the green economy. However, limited success under ELTIF 1.0 led to regulatory reforms, culminating in the ELTIF 2.0 regime.
ELTIF Fund Overview: ELTIFs, part of the EU’s alternative investment fund landscape, are accessible to both professional and retail investors. Key changes in ELTIF 2.0 include removal of minimum investment requirements for retail investors, alignment of suitability tests with MiFID II standards, and introduction of master-feeder structures.
Timeline for Implementation: Key dates include the enactment of ELTIF 2.0 and subsequent implementation of Regulatory Technical Standards (RTS). Existing ELTIFs have a ‘grandfathering clause,’ allowing compliance alignment until January 11, 2029.
Investments and Limits: ELTIFs have specific rules on asset eligibility and diversification. ELTIF 2.0 introduces changes in investment caps and broadens eligible asset categories.
Redemption Policy and Liquidity Management Tools (LMT): ELTIFs must adhere to structured redemption policies and LMTs. Transparency towards both investors and NCAs is emphasized, including detailed disclosures in the prospectus.
Transparency/Reporting: ELTIFs must disclose costs, liquidity management tools, and matching mechanisms in the prospectus. Annual reports extend beyond AIFM requirements, providing detailed financial and asset information.
Want to know more about the significant amendments proposed in the ELTIF 2.0 regime effective January 10, 2024? Download the below Whitepaper by filling the form.
