November 12, 1991
TO: INVESTMENT ADVISERS COMMITTEE NO. 56-91
INTERNATIONAL COMMITTEE NO. 27-91
RE: PROPOSED EC DIRECTIVE ON INVESTMENT AND MANAGEMENT OF
PENSION FUND ASSETS
__________________________________________________________
The Commission of the European Communities recently agreed
on a proposed directive governing the investment and management
of pension fund assets. The directive would remove some national
restrictions on management and investment of pension funds and is
intended to facilitate transnational pension systems. A copy of
the Commission's press release describing the proposed directive
is attached.
Specifically, with respect to pension management, the
proposed directive provides that EC member states may not
restrict the freedom of a pension fund to select a manager or
custodian established in another member state. With respect to
pension fund investment, the proposed directive contains
"prudential principles" that establish the applicable standard of
care. In addition, under the proposed directive, member states
would be prohibited from requiring pension funds to invest in
particular types of assets or to restrict their investments to
assets in a particular member state. Although maximum limits
would be permitted, no provision for a required minimum
investment in any particular category would be allowed.
We will keep you informed of developments.
Frances M. Stadler
Assistant General Counsel
Attachment