On 20 March 2023, Regulation (EU) 2023/606 of the European Parliament and of the Council of 15 March 2023 amending Regulation (EU) 2015/760 as regards the requirements of pertaining to the investment policies and operating conditions of European long-term investment funds and the scope of eligible investment assets, the portfolio composition and diversification requirements and the borrowing of cash and other fund rules (“ELTIF 2.0”) was published in the Official Journal of the European Union (the “OJ”). ELTIF 2.0 enters into force on the twentieth day following its publication in the OJ and will apply across the EU from 10 January 2024. With improvements that are especially advantageous for retail investors, the revised regime now has the potential to establish itself as an attractive “go-to” fund structure for long-term investments.

A number of significant legislative changes have been introduced in ELTIF 2.0, making the ELTIF fund structure more appealing to asset managers and investors alike. Such changes include:

  • A broader scope of eligible investment assets, including the possibility of investing in FinTechs, STS securitisations and green bonds, as well as a simplified definition of “real assets”, and an increased market capitalisation threshold;
  • Flexible fund rules that allow for higher percentage of liquid investments, more flexible risk diversification requirements, the use of increased leverage, and the possibility of investing in fund-of-funds and master-feeder structures; and
  • Better accessibility and safer conditions for retail investors, including the elimination of the minimum net worth criterion and the prior €10,000 entry ticket, as well as the harmonisation of the distribution regime through the alignment of the ELTIF suitability test with MiFID II.

Upon the entry into application of ELTIF 2.0, existing ELTIFs launched under the current regime will continue to be considered compliant for a period of five years until 11 January 2029. Having said this, any such ELTIFs wishing to benefit from the new regime may still be able to do so by simply notifying the relevant national competent authority. Moreover, ELTIFs authorised before 10 January 2024 and which do not raise additional capital, shall also be considered as compliant with ELTIF 2.0.

At a time when traditional sources of financing are becoming more difficult for businesses to obtain, it is anticipated that the reform of the ELTIF framework will result in a significant increase of investment into the EU economy.

'Credit & Financial Institutions' Related News Articles

01
NATURE TRUST AND BANK OF VALLETTA UNVEIL ‘WHAT IS THAT ANIMAL?’ – MALTA’S FIRST LOCAL FAUNA FIELD GUIDE
Bank of Valletta

by Bank of Valletta

2nd June 2024

The European Union Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups Regulations 2024
CSB Group

by CSB Group

5th April 2024

Bank of Valletta has supported this year’s opera by Gioachino Rossini – ‘Armida’
Bank of Valletta

by Bank of Valletta

18th March 2024

Changing the terms of a credit agreement and forbearance policies and measures: new obligations on lenders in consumer and residential property credit agreements
Ganado Advocates

by Ganado Advocates

23rd February 2024

The HSBC Malta Foundation supports Three-Year UM Research Project through RIDT
HSBC Bank Malta p.l.c.

by HSBC Bank Malta p.l.c.

19th February 2024

BOV RETROSPECTIVE EXHIBITION FEATURING WORKS BY NOEL GALEA BASON OFFICIALLY INAUGURATED
Bank of Valletta

by Bank of Valletta

17th January 2024

Goal-line Defenders: Scoring Victory Against Financial Crime with the Three Lines of AML/CFT Defence
CSB Group

by CSB Group

12th January 2024

Agreement reached on the establishment of the Anti-Money Laundering Authority (“AMLA”)
Ganado Advocates

by Ganado Advocates

3rd January 2024

FIAU Thematic Review on Company Service Providers when providing Company Formation Services
Ganado Advocates

by Ganado Advocates

3rd January 2024

Directive 93/13/EEC and mandatory statutory or regulatory provisions in consumer contracts
Ganado Advocates

by Ganado Advocates

3rd January 2024

MiCA Update: Consultation Process on the Proposed Updates to Chapter 3 of the VFA Rulebook
Ganado Advocates

by Ganado Advocates

1st November 2023

Continuing to disclose the topic EU funding for Startups ¦ Startup Definition
Griffiths + Associates Ltd

by Griffiths + Associates Ltd

31st October 2023