The Front Page, Asset Management & Investment Funds: EU & International Developments

SFT Regulation

As anticipated in our November Front Page, the text of the Regulation on transparency of securities financing transactions (SFT Regulation) was published in the Official Journal of the EU. The SFT Regulation entered into force on 12 January 2016 and applies from 12 January 2016, with the exception of certain provisions set out in Article 33. The transparency requirements in respect of prospectus disclosures and reporting obligations are as detailed in the November Front Page.

AIFMD Passport

On 19 January 2016, ESMA published a letter it received from the European Commission relating to the application of the EU passport under the AIFMD to non-EU alternative investment fund managers (AIFMs) and alternative investment funds (AIFs). The Commissions agrees that ESMA's country-by-country approach to the AIFMD passport is correct. It adds that the nature of the test set out in Article 67 of the AIFMD may result in different outcomes depending on the regulatory and supervisory framework of the third countries in which non-EU AIFMs and funds are established. The Commission requests ESMA to:

  • Complete, by 30 June 2016, the assessment of the USA, Hong Kong and Singapore (the remaining countries selected for the first wave) and Japan, Canada, Isle of Man, Cayman Islands, Bermuda and Australia (the countries selected for the second wave).


  • Provide a more detailed assessment of the capacity of supervisory authorities and their track record in ensuring effective enforcements, including in those countries assessed in the first wave of countries.


  • Provide a preliminary assessment of the expected inflow of funds by type and size into the EU from relevant third countries.

The Commission agrees with ESMA's suggestion that ESMA produce another opinion on the functioning of the passport and national private placement regimes once the AIFMD is fully transposed in all member states and there is more experience on the functioning of the framework.

PRIPs Consultation

On 5 January 2016, the Joint Committee of the European Supervisory Authorities (ESAs) issued an errata correcting errors in its November 2015 consultation paper on key information documents (KIDs) for packaged retail and insurance-based investment products (PRIPs). The errata corrects two formulas relating to the market risk measure (MRM), which are set out in paragraphs 27 and 28 of Annex II to the consultation paper (pages 37 and 38). The consultation concerns Article 8(5) of the PRIPs Regulation, which requires the committee to develop draft regulatory technical standards (RTS) on the content and presentation of the KIDs for PRIPs. The consultation closes on 29 January 2016. The RTS and accompanying impact assessment will be submitted to the European Commission for endorsement by 31 March 2016.

  • Under Article 32 of the PRIPs Regulation, UCITS Mancos and SMICS and persons advising on, or selling, units of UCITS shall be exempt from the obligations under the PRIPs Regulation until 31 December 2019.


  • Under Article 33, the PRIPs Regulation will be subject to review. As regards UCITS, the review shall assess whether the deadline of 31 December 2019 might be extended, or whether, subject to adjustments, the UCITS KIID might be replaced by or considered equivalent to the KID under this PRIPs Regulation.

EU Financial Services Regulation

On 19 January 2016, the European Parliament adopted a resolution, which aims to take stock in the context of EU financial services regulation and capital markets union. This resolution looks at the current complexity and challenges currently and considers the way forward towards a more efficient and effective EU framework for financial regulation and a capital markets union. It calls on the EU Commission to:

  • Pursue an integrated approach to the capital markets union.


  • Pay attention to other policy agendas relating to matters including the development of a digital single market, ongoing reforms, and the threat to cyber security from the latest technological developments and so on.


  • Produce a thorough analysis and report of all gold-plating measures taken by member states within financial legislation and submit them to the European Parliament by the end of 2016.


  • Conduct, with the European supervisory authorities, at least annual coherence and consistency checks, including on a cross-sectoral basis and on every draft legislative act, as well as on the implementation of adopted legislation (including regulatory technical standards and implementing technical standards).


  • Publish a green paper exploring new approaches to promoting proportionality in financial regulation.


  • Conduct, with other parties, a comprehensive quantitative and qualitative assessment, every five years, of the cumulative impact of EU financial services regulation on financial markets and its participants at EU and member state level. This assessment should identify shortcomings and loopholes, assess the performance, effectiveness and efficiency of financial services regulation, and ensure that it is not impeding fair competition and the development of the economy. The first assessment is requested by the end of 2016.

PSD2 Published in OJ

On 23 December 2015, the PSD2 ((EU) 2015/2366) was published in the Official Journal of the EU . PSD2 entered into force on 12 January 2016 and must be transposed by member states into their national laws and regulations by 13 January 2018. The PSD2 aims to establish a modern and comprehensive set of rules applicable to all payment services in the European Union. The target is to make cross-border payments as easy, efficient and secure as ’national’ payments within a Member State. The PSD also seeks to improve competition by opening up payment markets to new entrants, thereby fostering greater efficiency and cost-reduction. At the same time PSD2 provides the necessary legal platform for the Single Euro Payments Area (SEPA).

For more information please contact Nollaig Greene or a member of the Asset Management & Investment Funds Team.

Date published: 29 January 2016