Financial Services Regulation and Compliance - Funds Oct 2021
Domestic
UCITS KIIDs & performance fee updates
The CBI clarified its expectations for the filing of KIIDs for UCITS which are implementing ESMA’s performance fee guidelines with effect from 31 December 2021. UCITS may either make two filings on 31 December 2021 and by 22 February 2022 or one filing by 22 February 2022. If opting for making a single filing by 22 February 2022, the UCITS must ensure that prospective investors are provided with sufficient information in relation to changes to the UCITS arising from implementation of ESMA's performance fee guidelines in order to help them reach an informed investment decision.
UCITS Liquidity Risk Management review
All Irish authorised UCITS ManCos and SMICs are required to conduct a specific review of their liquidity risk management practices, documentation, systems and controls. This review has to be completed and an action plan discussed and approved by the board of each UCITS ManCo and SMIC by the end of Q4 2021.
CBI approach to the Regulation on cross-border distribution of funds
The CBI expects full compliance with the ESMA CBDF marketing guidelines in line with their application date of 2 February 2022.The CBI will consult on the incorporation of a provision into both the CBI UCITS Regulations and AIF Rulebook setting out that compliance with the ESMA CBDF marketing guidelines is required. The CBI clarified issues around compliance with the ESMA CBDF marketing guidelines, the CBI UCITS Regulations and the CBI Consumer Protection Code.
CBI on the treatment of investments, by QIAIFs and RIAIFs, in UK AIFs originally authorised as UK UCITS
The CBI is currently considering the treatment of investments, by QIAIFs and RIAIFs, in UK AIFs originally authorised as UK UCITS. During this period, such UK AIFs can be treated as a category 2 investment fund.
DAoFI may safe keep aircraft
The CBI has updated its list of permissible non-financial asset classes which a DAoFI may safe-keep to include aircraft.
European
EU Taxonomy RTS on product disclosures - ESA final report
The final report on the EU taxonomy-related environmental product disclosures issued. It contains the regulatory technical standards for taxonomy related disclosures under the Sustainable Finance Disclosures Regulation.
ESAs invite stakeholders' input on PRIIPs review
The ESAs opened a call for evidence regarding the PRIIPs Regulation, closing 16 December 2021. The input provided will feed into the ESAs' technical advice to the EC on a review of the key information document (KID) for PRIIPs.
Money Markets Funds
ESMA contributed to a review of MMFR and the Financial Stability Board published its final report on MMF resilience. IOSCO plans to revisit its 2012 policy recommendation for MMFs. The European Systemic Risk Board concluded that the presence of weekly liquid asset requirements linked to liquidity management tools can amplify redemptions, therefore supporting the removal of the links between fees and gates and liquidity buffers.
For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.
Date published: 11 November 2021