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Europe Seeks to Harmonise Market For Real Estate Funds

by Ulrika Lomas, for, Brussels

03 April 2007

The European Commission has decided to establish an 'expert group' on open-ended real estate funds, which provide consumers with access to professionally managed investments in commercial and other types of property.

The group will advise the Commission on how to improve the European market for these funds and on whether EU-level action in this area would deliver benefits for industry and investors. It will also explore cost-effective ways to achieve those benefits.

The EC has announced that real estate fund specialists interested in becoming members of the group should apply by 27 April 2007. The Commission will publish the final composition of the group before 30 May 2007.

The creation of this group is a follow-up action to the Commission White Paper on enhancing the EU framework for investment funds.

Commenting, Internal Market and Services Commissioner Charlie McCreevy said: "Open-ended real estate funds are widely available to retail investors in several Member States. But they are locked up in their national markets – they cannot be sold across borders.

"I am creating this expert group to look at this situation and to advise on whether there is any clear-cut case for EU action in this area. I have an open mind on this issue. The group's work will feed into our broader review of the state of integration for non-harmonised funds, where are scheduled to issue a report in mid-2008."

The expert group will produce a report at the start of 2008 that will serve as a starting point for debate and discussion with member state authorities and other stakeholders. The group's task will be to advise the Commission on the risk and performance characteristics of open-ended real estate funds, and to: describe the European market for real estate funds, including open-ended funds; analyse the existing or likely future demand for providing open-ended real estate funds across borders; examine the barriers to cross-border development of open-ended real estate funds; and evaluate existing national regulatory (including tax) approaches to open-ended real estate funds.

The Commission said that group members should be market practitioners, or investors/consumers with a demonstrable interest in the real estate fund markets. The group will comprise real estate fund experts with skills in: investment, management, distribution, valuation, administration and taxation. Observers from EU consumer associations and representatives from regulators will be invited to participate.

TAGS: Italy

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