Credit funds regulation in the EU and the debate on NPLS and AMCS: the need for further harmonization


In the current EU legislative framework for investment funds – UCITS Directive and
AIFMD – credit funds have rightly been singled out as something quite unique. In fact, they
stand at the crossroads of capital markets’ and credit institutions’ regulations, playing a role of
both an investor in a particular asset class, and of a credit facility provider. They may also
effectively perform other functions, such as those of securitization vehicles, or comparable to
Asset Management Companies (“AMCs”) for the management and processing of non-performing
loans. They are, therefore, hybrid creatures, difficult to regulate and, sometimes, to
understand. This is due not only to the absence of any specific product regulation in the context
of the AIFMD, but also to the uncertainties surrounding the notion of “credit” and “credit
granting” in EU law. Within the EU, legislation on credit funds developed, until now, in a
haphazard manner. Absent a clear reference scheme, the result is unsatisfactory, and far from
being able to integrate EU Markets in this respect. Further, more robust harmonization is
therefore needed in this area, now more than ever in the context of the debate on the effects
of the pandemic and the management of NPLs. The paper aims to provide sufficient evidence
to support these assumptions, also taking into account the lively debate on the role of Asset
Management Companies and the development of an efficient secondary market for loans in
the EU.