Fund managers urge EU to step up on tokenized assets
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Eliminating Obstacles in the Blockchain Proof-of-Concept by Efama
In an unexpectedly candid move, heavyweights of the asset management industry have pleaded with European rule-makers to act swiftly to nurture the emergent market for tokenized assets. Delegates at a conference hosted by the European Fund and Asset Management Association (Efama) in Brussels have agreed on several key matters, as announced in a recent Efama communication.
With little concrete detail available from the European association's latest statements, some points of consensus among fund managers can be deduced within the broader regulatory context for tokenized assets in the EU.
The fund managers' agenda
EU regulators should prioritize regulatory clarity and standardization around tokenized assets, advocating for clear definitions and the application of existing financial regulations to token products.
Fund managers seek to ensure that new tokenization frameworks are in harmony with established European financial regulations, fostering innovation while safeguarding investor protection and market integrity.
Emphasis should be placed on operational and compliance requirements, such as recordkeeping, custody, transferability, AML, and market abuse, and clarity should be provided on fund managers' obligations.
Innovative pilot and sandbox projects should be supported, enabling the testing of tokenized fund models in a controlled environment. This ensures that innovative spirit is not dampened while risks are properly managed.
Robust investor protections, encompassing transparency, secure custody, and clear token holder rights, should be implemented to bolster confidence in the tokenized assets market.
Although Efama has yet to issue a public list of specific actions requested from EU authorities, these themes are essential to the ongoing discourse surrounding the regulation of tokenized assets across Europe. The primary focus of the association remains on the role of fund managers in the European economy and the evolution of the investment product landscape.
- Fund managers in Europe acknowledge the importance of aligning new tokenization frameworks with existing financial regulations to promote innovation while prioritizing investor protection and market integrity.
- The European Union should consider supporting innovative pilot and sandbox projects, providing a controlled environment for testing tokenized fund models, while simultaneously implementing robust investor protections to ensure market confidence.
