Directive 2013/14 - Amendment of Directive 2003/41/EC on the activities and supervision of institutions for occupational retirement provision, Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) and Directive 2011/61/EU on Alternative Investment Funds Managers in respect of over-reliance on credit ratings - Main contents

EN

Official Journal of the European Union

L 145/1

Directive 2003/41/EC of the European Parliament and of the Council (4) provides for regulation at Union level of institutions for occupational retirement provision (IORPs). Directive 2009/65/EC of the European Parliament and of the Council (5) provides for regulation at Union level of undertakings for collective investment in transferable securities (UCITS). Similarly, Directive 2011/61/EU of the European Parliament and of the Council (6) provides for regulation at Union level of managers of alternative investment funds (AIFMs). All three Directives establish prudential requirements as regards risk management by IORPs, by management and investment companies with regard to UCITS, and by AIFMs, respectively.

An effect of the financial crisis has been that there is over-reliance by investors, including IORPs, UCITS, and alternative investment funds (AIFs), on credit ratings to carry out their investments in debt instruments, without necessarily conducting their own assessments of the creditworthiness of issuers of such debt instruments. In order to improve the quality of the investments made by IORPs, UCITS and AIFs and, therefore, to protect investors in those funds, it is appropriate to require IORPs, management and investment companies with regard to UCITS, and AIFMs to avoid relying solely or mechanistically on credit ratings or using them as the only parameter when assessing the risk involved in the investments made by IORPs, UCITS and AIFs. The general principle against over-reliance on credit ratings should therefore be integrated into the risk-management processes and systems of IORPs, management and investment companies with regard to UCITS, and AIFMs, and adapted to their specificities.

In order to specify further the general principle against over-reliance on credit ratings, which should be introduced into Directives 2009/65/EC and 2011/61/EU, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission to ensure that management and investment companies with regard to UCITS, and AIFMs are effectively prevented from over-reliance on credit ratings for assessing the creditworthiness of the assets held. It is appropriate in this regard to amend the powers of the Commission in those Directives to adopt delegated acts in respect of the general provisions regarding risk-management processes and systems employed by management and investment companies with regard to UCITS, and AIFMs. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that it publish the results of such consultations. The Commission, when preparing and drawing up...