Entry into force of the revised European Long-Term Investment Fund Regulation (ELTIF 2) - AMF clarifies fund authorisation requirements

The revised regulation enters into force on 10 January 2024

ELTIFs are alternative investment funds (AIFs) that invest in assets that favour the financing of long-term investments in the real economy, in line with the European Union's objective of smart, sustainable and inclusive growth. The "ELTIF 1" regulation, which came into force in 2015, was not as successful as expected and was therefore revised to relax certain rules to encourage its use. The revised regulation, ELTIF 2, enters into force on 10 January 2024.

Application to the AMF for ELTIF authorisation

A French AIF that meets the conditions of the ELTIF regulation, in particular investing at least 55% in long-term assets, may apply to the AMF for authorisation.

Once authorised, and subject to notification, the ELTIF may be marketed to retail investors in other European Union countries. It will be able to grant loans directly to companies and will benefit from preferential prudential treatment for insurance companies.

The procedures for authorising a new or existing fund remain similar to those already in place under ELTIF 1. The updated authorisation can be found by clicking on this link.

However, it is important to note that prior to the publication of the revised ELTIF regulatory technical standards, funds will need to add a note to their prospectus informing investors of the possibility of a subsequent amendment to make the fund compliant with the new standards, if this has not already been done.

ELTIF approval facilitation option for FCPR/OPCI: user guide

Article 39 of the French Law on Green Industry allows certain real estate collective investment undertakings (OPCIs) and certain retail private equity investment funds (FCPRs) established before 1 January 2024 to opt to be governed by the provisions of the Monetary and Financial Code on SPFs in order to facilitate their transformation into an ELTIF 2 authorised fund by avoiding the overlap between the rules applicable to OPCIs or FCPRs and those applicable to ELTIFs. The AMF must be notified of this choice and investors must be informed individually.