Provisional agreement is reached on proposed amendments to ELTIF Regulation

On 19 October 2022, the Council of the EU announced that it has reached a provisional agreement with the European Parliament on the proposed Regulation containing amendments to the Regulation on European long-term investment funds (ELTIFs) to make these investment funds more attractive and easier to invest in.

One of the key priorities for the Council is now reflected in the text, that is, a redesign of the ELTIF framework which will allow the EU to channel more financing to SMEs and long-term projects to help achieve the digital transition.

In their agreement, the Council and Parliament seek to overcome a number of supply-side and demand-side limitations. In particular, they clarified the scope of eligible assets and investments, the portfolio composition and diversification requirements, the conditions for borrowing and lending of cash and other fund rules, including sustainability aspects. The amendments also include rules to make it easier for retail investors to invest in ELTIFs while ensuring strong investor protection.

Next steps

The European Parliament is scheduled to consider the proposed Regulation during its plenary session to be held from 1 to 2 February 2023.  Following technical and legal revisions, the final text will be submitted for adoption by the Council and the European Parliament, and the new rules should apply nine months after their publication in the EU Official journal.

The Council of the EU press release is available here.

The European Parliament press release is available here.

The Commission presented its ELTIF proposal in November 2021 as part of the Capital Markets Union package. Visit our ELTIF webpage for more information.