EU Directive Allows Member States to Impose Investment Rules on Pension PlansWashington, DC, June 24, 2002 - Under an agreement reached by the Council of Ministers of the European Union, the proposed Directive on Occupational Pensions will be drafted to allow European Union member states to impose investment rules, including quantitative rules, on pension plans located in their territories. Under the agreement, member states can require of institutions conducting cross-border activity in their territory: - a 30 percent cap on investments in unregulated markets;
- a 5 percent cap on investments in a single issuer;
- a 10 percent cap on investment in issuers of the same group; and
- a 30 percent cap on investment in assets denominated in currencies other than those in which liabilities are expressed.
The Council of Ministers also accepted the prudent man principles proposed by the European Commission and approved by Parliament.
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