Financial Services Regulation & Compliance - Funds October 2018
DOMESTIC
Colm Kincaid, CBI Director of Securities and Markets Supervision spoke at the A&L Goodbody Annual Asset Management and Investment Funds Seminar
Colm Kincaid, CBI Director of Securities and Markets Supervision delivered a speech on The Supervision of Conduct in the Funds Market to the A&L Goodbody Annual Asset Management and Investment Funds Seminar on 24 October 2018. Mr Kincaid's speech included insights into CBI expectations on substance, diversity, CP86 and Brexit planning.
Martina Kelly, CBI Head of Markets Policy Division spoke on Implementing CP86
Martina Kelly, CBI Head of Markets Policy Division delivered a speech giving insights into CBI expectations regarding the implementation of CP86. In particular, the CBI will be developing guidance on the organisational effectiveness role.
CBI moves to self-certification for many aspects of the authorisation and post-authorisation process for UCITS and Retail AIFs
The CBI moved to self-certification for many aspects of the authorisation and post-authorisation process for UCITS and Retail AIFs. This is subject to receipt of relevant CBI application forms and written confirmations. The CBI has also issued an application form for UCITS merger applications which reflects the requirements under the UCITS Regulations and does not introduce any new requirements.
CBI moves to self-certification for UCITS using (most) financial indices
The CBI introduced a self-certification regime in respect of (most) financial indices used by UCITS for investment or efficient portfolio management purposes. A pre-approval submission will be required in limited circumstances. No certification is required where an index is used solely as a performance benchmark. The changes are reflected in updated guidance on the use of financial indices by UCITS.
For more inforamation please see our Asset Management & Investment Funds insight on the topic.
EUROPEAN
PRIIPs KIDs and UCITS KIIDs
The Joint Committee of the ESAs published a letter to the European Commission about KIDs for PRIIPs. The ESAs suggest that legislative changes are needed to avoid a situation where retail investors would have to receive both a PRIIPs KID and UCITS KIID from 1 January 2020. Overlapping disclosure documents may deter investors from using them rather than facilitating informed decision making. Moreover, the PRIIPs KID and UCITS KIID may not provide consistent information due to technical difficulties in the methodologies used in the presentation of risks, performance and costs. The ESAs intend to propose targeted amendments to the PRIIPs Delegated Regulation. The ESAs intend to launch a public consultation in Q4 2018.
Revised depositary safekeeping duties under AIFMD and the UCITS Directive
Two EU delegated regulations will apply from 1 April 2020. The regulations set out detailed UCITS and AIFMD requirements where custody is delegated to a third party (a sub-custodian).
ESMA AIFMD Q&A - AIFMs managing EU umbrella AIFs on a cross-border basis - notifications
ESMA updated its Alternative Investment Fund Manager Directive (AIFMD) Q&A on 4 October 2018 with a new Q&A. The Q&A concern notification requirements where an AIFM intends to manage an EU umbrella AIF on a cross-border basis by way of the AIF management passport.
ESMA and the Money Market Funds Regulation
ESMA has published a letter on the implementation of the Money Market Funds (MMF) Regulation. The letter from Commission VP Dombrovskis welcomes that all relevant competent authorities are aware of the opinion of the Legal Service of the Commission that the reverse distribution mechanism is incompatible with the legal framework established by the MMF Regulation.
Separately, ESMA is holding a consultation on draft (updated) guidelines on stress test scenarios under the MMF Regulation. ESMA intends to finalise the guidelines in Q1 2019.
For further information please contact a member of the Financial Regulation team.
Date published: 8 November 2018