European Fund and Asset Management Association renews opposition to EU centralised supervision for asset managers and defends passporting

The European Fund and Asset Management Association (EFAMA) has published a report arguing that the existing supervisory framework for asset managers, based on UCITS and AIFMD passporting, should be preserved and that EU-level centralised supervision would not improve outcomes. The intervention responds to the European Commission’s Savings & Investments Union Action Plan, which signalled it would explore centralised supervision for capital market participants with significant cross-border activity. EFAMA challenges three models floated for large cross-border asset managers, namely supervisory colleges, joint supervisory teams, and direct ESMA supervision. It argues centralisation would not remove remaining cross-border barriers because these arise from national rules and market differences rather than supervisory divergence, and it highlights risks including ESMA resource and expertise constraints, a potential double layer of supervision if management company supervision shifts to the EU level while product supervision stays national, and slower decision-making in supervisory colleges due to diverging member views. As an alternative, EFAMA calls for simplified reporting and stronger EU-wide data-sharing, including a single modular reporting template for UCITS and AIFs, alongside greater use of ESMA’s existing supervisory convergence tools to support cross-border fund distribution. EFAMA frames its recommendations ahead of a European Commission legislative package expected by the end of 2025 to further integrate capital markets, urging policymakers to prioritise measures that improve market efficiency and competitiveness rather than introducing new supervisory structures.