Financial Services Regulation and Compliance - Funds May 2022
Domestic
CBI notice of intention on UCITS side-pocket arrangements
The CBI issued a notice of intention on UCITS side-pocket arrangements. ESMA's public statement on the implications of Russia’s invasion of Ukraine on investment fund portfolios is also relevant in this context.
New CBI guidance on derogations and processes for investment managers, investment advisers, and non-EU AIFMs
The CBI website has a dedicated section setting out information on the process in respect of requests for derogation for UCITS, Retail Investor AIFs, and Qualifying Investor AIFs. It also has guidance on how investment managers, investment advisers, and non-EU AIFMs are reviewed by the CBI.
New UCITS Regulations- PRIIPs KID update
The European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2022 will come into operation on 1 January 2023. These new regulations provide that a UCITS which produces a PRIIPs KID will be regarded as having complied with its obligation to produce a UCITS KIID.
European
ESMA statement on the implications of Russia’s invasion of Ukraine on investment fund portfolios.
ESMA issued a public statement on the implications of Russia’s invasion of Ukraine on investment fund portfolios. It sets out ESMA expectations on fund managers in case of exposures to Russian, Belarusian and Ukrainian assets, given valuation and liquidity uncertainties.
European Commission responses to SFDR/ Taxonomy queries
The European Commission provided answers to a number of questions in relation to the applicability of the SFDR and TR. ESMA's plans for Q2/Q3 include a review of PAI indicators in the context of SFDR.
ESMA guidance for NCAs on the integration of sustainability risks and disclosures
ESMA published a supervisory briefing to ensure convergence across the European Union in the supervision of investment funds with sustainability features, and in combating greenwashing by investment funds.
ESMA report on the Common Supervisory Action on costs and fees for investment funds
ESMA published a report on the Common Supervisory Action on costs and fees for investment funds that was carried out with NCAs during 2021. ESMA highlights the importance of supervision in ensuring investors are not charged with undue costs, considering its high impact on investors’ returns.
Updated ESMA Q&As - ESMA’s guidelines on performance fees in UCITS and certain types of AIFs
ESMA issued updated Q&A's on the application of the AIFMD and on the application of the UCITS Directive. The updated Q&As relate to ESMA’s guidelines on performance fees in UCITS and certain types of AIFs.
ECON draft report on proposals for amendments to AIFMD and UCITS Directive
The European Parliament's Economic and Monetary Affairs Committee published its draft report on the proposed Directive amending the AIFMD and UCITS directive as regards delegation arrangements, liquidity risk management, supervisory reporting, provision of depositary and custody services and loan origination by AIFs. It contains suggested amendments.
PRIIPs KID
The ESAs issued a joint supervisory statement regarding the 'What is this product?' section of the KID for PRIIPs. The supervisory statement provides an overview of poor practices and sets out the ESAs' expectations on how to improve the clarity and comparability of KIDs. Also, the ESAs furnished technical advice to the European Commission on the review of the PRIIPs Regulation.
ESMA consultation on RTS/ ITS for the notifications for cross-border marketing and cross-border management of AIFs and UCITS
ESMA opened a consultation on implementing technical standards and regulatory technical standards to specify the information to be provided and content and format of notification letters to be submitted to national competent authorities in relation to cross-border marketing and cross-border management of AIFs and UCITS.
ESMA study on the relatively lower ongoing costs, and better performance, of ESG funds compared to other funds, between April 2019 and September 2021
ESMA published a study looking at the potential reasons behind the relatively lower ongoing costs, and better performance, of ESG funds compared to other funds, between April 2019 and September 2021.
2021 update of ESMA guidelines on stress test scenarios under the MMF Regulation
ESMA issued its 2021 update of its guidelines on stress test scenarios under the MMF Regulation.
Sanctions imposed in response to the crisis in the Ukraine
Since February, the EU imposed a number of sanctions in response to the crisis in the Ukraine. Given that the crisis is developing and sanctions are continuing to evolve, the CBI is publishing details of new restrictive measures/sanctions that are adopted in this regard, as well as any associated EU/UN guidance, on their dedicated webpage.
For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.
Date published: 14 June 2022