* ICI Global says changes proposed with consulting
* Luxembourg, some other EU states oppose changes
* France, Greece among supporters of new proposals
LONDON, March 16 (Reuters) - A major revamp of how investment funds are managed and regulated in Europe appears to be aimed at taking business from Britain and should be scrapped as there is no evidence it is needed, leading international trade body ICI Global said.
European Union policymakers last year said they planned to toughen scrutiny around so-called "delegation," where a fund is legally based in one country but managed from another, in time for Britain's exit from the European Union in 2019.
The European Securities and Markets Authority (ESMA) said in May it wanted funds in Britain to have sufficient "substance," or employees, in the EU after Brexit.
European Commission also presented a draft law in September to grant ESMA powers to check if delegation arrangements met certain conditions and to recommend their withdrawal, if needed.
The draft law needs approval from EU states and the European Parliament.
Luxembourg and several other EU members oppose giving ESMA such powers, while France, which is home to ESMA, and Greece are among those states backing the changes. Funds say it will add to their costs and say these will be passed on to consumers.
Delegation arrangements are now policed by national watchdogs. ESMA has said it did not want to damage the long-standing, global practice.
The plans have shocked many of those offering 9 trillion euros in funds under the EU's flagship UCITS brand, most of which are domiciled in Dublin and Luxembourg but managed across the world, from the United States to Japan and Brazil.
Dan Waters, managing director of ICI Global, whose members manage a collective $30 trillion in assets, said the move appeared to be political and designed to win business from Britain as there was no evidence of the need for change.
"We had the ESMA opinions in the summer, which we didn't much like," he said, adding "zero evidence" had been provided for changing rules that "have been working perfectly well."
"Worse, much worse, was the Commission regulation," he said, adding the Commission's draft law took the industry and others by surprise "including most of the member states, which is pretty shocking."
EU officials have said the changes were being made to ensure more consistent supervision across the bloc and to stop one member state offering sweeteners to attract asset managers from London.
Waters said the proposal was made without consultation on costs and benefits or impact on markets, and ESMA and the Commission had not shown how existing delegation rules were not working.
"There is no evidence, so our objective at this point is that that article should be stricken from the proposal," he said.
The EU's funds industry body, EFAMA, also opposes the new delegation proposals.
Nicolas Mackel, chief executive of Luxembourg for Finance, which promotes the Grand Duchy as a financial center, said "very few" countries backed the plans but that the Commission was still pressing ahead. He said funds had to be more vocal.
"If they come out and communicate more on what the actual practical consequences of this will be for consumers of financial services, what this can mean for pension funds in terms of inefficiencies and cost, that is probably something that will speak to politicians more," Mackel said. (Editing by Edmund Blair)