Guidance for Member States on the selection of bodies implementing financial instruments

Managing authorities willing to use financial instruments as a tool for achieving the objectives of the programme may either undertake implementation tasks directly, invest in the capital of a newly created or existing legal entity or entrust implementation tasks to other bodies. In the latter case, Article 38(4)(b) of the CPR provides for different possibilities for entrusting financial instruments implementation tasks. This note aims at providing clarifications about the possibilities of such an entrustment.

Financial instruments may be implemented through a structure with or without a fund of funds. In case financial instruments are implemented through a structure including a fund of funds, typically two levels of bodies will be selected: the body implementing the fund of funds and bodies implementing the specific financial instruments product(s), i.e. financial intermediaries (both being referred to below as bodies implementing financial instruments). The managing authority decides on the most appropriate implementing structure taking into consideration the findings of the ex-ante assessment required under Article 37(2) of the CPR.

The CPR identifies several types of entities to whom tasks of implementation of financial instruments may be entrusted by managing authorities without specifying the procedures that need to be followed for such an entrustment.