Establishing an EU internal market for depositaries
Journal of Financial Regulation and Compliance
ISSN: 1358-1988
Article publication date: 7 May 2020
Issue publication date: 16 September 2020
Abstract
Purpose
This paper aims to examine the rationale for the establishment of a depositary passport as the next logical step in building an internal market for investment funds in the European Union (EU). It makes the point that the de facto prohibition of depositary passporting poses risks to financial stability and has an adverse impact on investor protection in EU member states, which do not have a fully developed funds industry.
Design/methodology/approach
This paper analyses both the arguments in favour and against the adoption of a depositary passport. Moreover, it examines this proposal in the context of different approaches to fostering the internal market such as mutual recognition, harmonisation of regulation, reflexive governance of financial supervision and centralised supervision.
Findings
Based on the review of the current EU legal framework, this paper, subsequently, puts forward possible solutions for the establishment of an internal market for depositary business, which solutions have been discussed with various experts in the field to assess their feasibility in practice.
Originality/value
The paper contributes to the debate on the EU internal market in the field of asset management, which is topical in view of the upcoming review of the EU’s Alternative Investment Fund Managers Directive.
Keywords
Citation
Buttigieg, C., Agius, J. and Saliba, S. (2020), "Establishing an EU internal market for depositaries", Journal of Financial Regulation and Compliance, Vol. 28 No. 4, pp. 587-603. https://doi.org/10.1108/JFRC-10-2019-0130
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited