With the new Ministerial Decree 703, expected between June and July, the Copernican revolution starts in the world of supplementary pension funds (but in all likelihood it will also concern professional funds in the future). With the new legislation, a review of decree 703/96 currently in force, the pension plan will be able to draw on new investment areas that were previously precluded, such as alternative funds. With a radical change of perspective. While the current decree 703 provides that “everything is forbidden except what is expressly permitted”, the new system will be founded on the opposite principle: “everything is allowed except what is expressly forbidden”.
A positive change of approach for pensions? For Assoprevidenza, the Italian association for supplementary social security, the measures established by the current decree (the limits on investments, the institute of the custodian bank, the civil prohibitions on the concentration of investments and the subjectivity imposed on pension funds) have proved successful for the safety of the members. "However - underlines the president Sergio Corbello – even good regulation gets old and in the light of the evolution of the pension sector and of the markets in general, today appears inadequate. The reform of ministerial decree 703/96 has been under discussion for at least four years, but the measure is slow in coming”.
However, time is running out: on 22 July the EU directive on alternative funds comes into force (Dgefia, n. 2011/61/EU) which aims at the free circulation of alternative funds in Europe through the establishment of a passport similar to that of Ucts IV funds. Being professional investors, pension funds must also be able to buy them. Which will not happen in the absence of the new decree. However, any restriction in this sense will constitute a violation of the Community principles of free movement: if the new decree does not arrive before 22 July, theItaly thus risks an infringement procedure by the EU.
THE NEW INVESTMENTS FOR PENSION FUNDS
Hedge funds are one of the main asset classes authorized by the New 703 and previously banned. These are non-harmonised UCIs (Fia as defined by the Dgefia) including hedge funds, real estate funds, debt funds (funds that finance companies by investing in their debt, not just bonds), private equity and new companies linked to renewable energy. However, there are quantitative limits to be respected as well as new and stringent prudential and risk control principles that are part of the new architecture of the 703. There are no knots. Starting from the "look through" criterion, i.e. the general principle of transparency the composition of the investor's securities portfolio based on the need to examine the UCI investments in which the fund's resources are used to verify whether they comply with the objectives.
“If this verification presents difficulties already for the “harmonised” funds, the only ones currently permitted – he explains the lawyer Francesco P. Crocenzi – it is very probable that far more serious problems will arise in the case of master/feeder structures (structures in which the feeder fund invests at least 85% of its assets in the master fund, editor's note) or funds of funds having the characteristics of Funds of alternative investments (Fia, understood as non-harmonised UCI funds, ed), since it will be necessary to look through a series of veils formed by as many UCIs to know the underlying investments and evaluate whether they comply with the investment objectives of the pension fund". Hence the managers of the UCIs (harmonised or not) in which pension funds invest should be prepared to disclose investments to the extent required by pension funds.
