ALFI applies lessons learnt from the crisis
ALFI applies lessons learnt from the crisis
In a press conference on 20 September 2009, the Association of the Luxembourg fund Industry (ALFI) revealed a vast two year action plan designed in response to recent developments in the sector.
Placing investor protection at the centre of its policy and targeting increased competitiveness, ALFI announced five initiatives that have been launched in response to the financial crisis. At the head of the list, an Investor Forum will be launched to ensure that the voice of clients is heard. ALFI will also accompany legislative developments, contributing to the legal debate in the belief that all investment structures should be regulated. In a third initiative, ALFI wishes to promote more efficient products that are better adapted to the needs of the investor. At the same time, it will promote the growth of new sectors such as Islamic funds, socially responsible investment and ETFs. ALFI is committed to reinforcing the competitiveness of the financial centre by attracting talent (for example through closer cooperation with the University of Luxembourg) and through increased automisation and standardisation in the transmission of orders. The application of the UCITS IV Directive should bring about additional cost savings. Finally, ALFI will step up its international presence, adapting its road shows to the needs of local markets and, if necessary, opening representative branches - for instance in Asia.
As we emerge from the global financial crisis the Luxembourg fund industry is in remarkably good shape. Assets under management grew by 5% in the first half of the year (which is in line with growth prior to the crisis), with net positive subscriptions of 22.4 billion euros in July and total assets under management at 31 July of 1,706 billion euros.
Finally, ALFI revealed the final conclusions of the Madoff task force, set up in December 2008 with the triple objective of identifying weaknesses in governance or legislation, analysing the role played by any Luxembourg actors concerned in the affair and making recommendations for detecting fraud in the future. The task force came up with three recommendations of which the first was the publication of a code of conduct for the industry and the second, the development of a specific code of conduct for custodians. Both of these codes, which will establish “best practice” standards, will be shared with ALFI’s European partner s through EFAMA, the European Fund and Asset Management Association. Finally, the task force recommended the creation of a forum for listening to the investor.
Following a year full of self-interrogation, ALFI is determined to answer the questions of the public. “Investors are confident when they understand, and they understand because the industry is transparent” commented Charles Muller, deputy director general of ALFI. Firstly, he is determined to make the ALFI website the unique portal for investor information; this site will be available in January 2010. Muller also spoke about the creation of a blog, the launch of a telephone information line for investors and an e-mail service for answering questions. Finally, ALFI will propose an ambitious programme of education for secondary school children in Luxembourg.