he Depository Trust & Clearing Corporation
, an independent, Paris-based think tank, have released the first comprehensive study of the major issues affecting the growth investment funds in Europe.
Titled "Bridging the Funds Divide," the study identifies some of the key issues impeding expansion of the European investment fund business and preventing investors from gaining the full benefits of a unified capital market. These include a lack of connectivity and standardization to streamline processing, as well as the absence of legal, regulatory and tax harmonization.
The study is based on research and interviews conducted by Promethee with a cross-section of European leaders, including investment managers, banks, fund distributors and various EU institutions, such as the European Commission and European securities regulators.
"We've sponsored this research because it's essential to find ways to help our customers who are increasingly global players in the investment fund business," said Jill M. Considine
, chairman and ceo of DTCC. "We're already processing a significant volume of cross-border fund transactions, with more than half of it directed toward investment funds domiciled in Europe. However, our customers are telling us that a lack of connectivity, along with high operational costs and risk, are major barriers to further growth."
As a potential model, the study points to the highly successful co-operative mobile-telephone framework pioneered in Europe for which allows users to seamlessly connect from more than 170 countries. The Promethee study recommends industry-wide co-operation around common principles and "open architecture" to enhance investors' freedom of choice and improve distribution networks, while preserving competition in the European investment fund market.
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