Ethics and governance in the European Financial centers

EFAMA, the European Fund and Asset Management Association, has announced that Mr Claude Kremer was appointed as Vice-President Mr Claude Kremer is Chairman of the Association of the Luxembourg Fund Industry (ALFI). He is also a founding partner and head of Investment Management of the law firm of Arendt & Medernach, based in Luxembourg.

EFAMA never answered my question on the failures of the Luxembourg UCITS legal and regulatory frameworks where Commissioner Mc Creevy did (detailed e-mail from Niall Bohan, Head of Unit. DG MARKT G4. European Commission, dated 19 March 2009).

It is before the EFAMA that the ALFI presented in January its deceptive views on the Madoff affair and its implications for the Luxembourg fund industry.

What was officially said definitely does not comply with the reality, which was confirmed later by two main facts late May:

1. Commissioner McCreevy admited failures in the transposition of the liability of depositories.

2. The Luxembourg regulator did not sanction UBS and admitted that UBSL shall have to indemnify a UCI depositor according to its obligations as a Luxembourg depositary bank, subject to valid and opposable contractual clauses to the contrary and, as the case may be, to a court decision in such matter.

In this context, I am afraid the appointment this month is not of good omen for the investor’s protection.