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Steven Maijoor, chair of the European Securities and Markets
Authority (ESMA), told a conference in Paris that the regulators
would look at both passive and active funds.
Passive investing, where funds typically charge the cheapest
fees for tracking a stock index, has grown enormously.
Active funds charge more for their services, but some have been
accused by critics of being "closet" trackers, meaning they
track an index by stealth rather than - as they advertise -
using their expertise to pick investments.
Regulatory agencies in Europe have become more focused on fees
charged by investment funds in order to encourage people to
invest more in their own retirement, rather than relying on the
state.
Maijoor said ESMA and the European Banking Authority would
assess the reporting of costs and past performance of retail
investment products, to "increase investors’ awareness of the
net return of these products, and the impact of fees and
charges."
The regulators will obtain more data on costs and charges under
new EU securities rules known as MiFID II that come into force
in January, Maijoor said.
Maijoor told Reuters that today's very low interest rates on
investments mean that costs and charges have become an important
issue.
"We want to see to what extent do costs and charges affect
performance," Maijoor said.
However, increased transparency under MiFID II from next January
will boost competition and help to drive down charges for
investors, Maijoor said.
Valdis Dombrovskis, vice president of the EU's executive
European Commission, told the conference that Brussels would
publish proposals to remove obstacles to the cross-border sales
of funds regulated under EU law.
"This would ... broaden the offer of fund products across the EU,"
Dombrovskis said.
(Reporting by Huw Jones; Editing by Maya Nikolaeva and Larry
King
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