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

MMF Regulation
The European Parliament is scheduled to consider the Regulation on Money Market Funds (MMF Regulation) on 25 March 2015.

Fourth Anti Money Laundering Directive and Wire Transfer Regulation
The Council of EU issued a press release on 10 February announcing that it approved the political agreement with the European Parliament on the Fourth Anti Money Laundering Directive and Wire Transfer Regulation. The press release links to the texts. The EU Council's approval paves the way for adoption of the package by the European Parliament at second reading. Member states will have two years to transpose the Fourth Anti Money Laundering Directive into national law. The Wire Transfer Regulation will be directly applicable.

ELTIF Regulation
The European Parliament is scheduled to consider the proposed Regulation on European Long-Term Investment Funds (ELTIF Regulation) on 9 - 12 March 2015. The European Commission issued a Fact Sheet on European Long-Term Investment Funds

EuSEF and EuVECA Regulations
ESMA published its final report setting out technical advice to the European Commission on the delegated acts for the European Social Entrepreneurship Funds (EuSEF) and European Venture Capital Funds (EuVECA) Regulations. The implementing measures address the following topics:

  • the types of goods and services, methods of production for goods and services and financial support embodying a social objective;
  • conflicts of interest of EuSEF and EuVECA managers;
  • the methods for the measurement of the social impact; and
  • the information that EuSEF managers should provide to investors.

Benchmark Regulation
The European Parliament is scheduled to consider the Regulation on indices used as benchmarks in financial instruments and financial contracts (Benchmark Regulation) on 7 -10 September 2015. The Council of EU issued a press release stating that its Permanent Representatives Committee (COREPER) agreed the Council's negotiating position on the Benchmark Regulation. The Council had sent an "I" item note to COREPER (Part 2) recommending the negotiating mandate, as set out in the Annex. The Council's press release confirms that COREPER has adopted the text in the "I" item note as the Council's negotiating position. An ECON report is due to issue in March. The European Commission has published a press release welcoming the Council's action. It states that it expects a final agreement on the Benchmark Regulation by summer 2015.

IOSCO report on Financial benchmarks
The International Organization of Securities Commissions (IOSCO) published its report setting out the findings of a review of the implementation of its principles for financial benchmarks, which were published in July 2013.

SFT Regulation
European Parliament will consider the proposed SFT Regulation on reporting and transparency of securities financing transactions (SFT Regulation) on 6- 9 July 2015. The SFT Regulation includes a reporting obligation for SFT counterparties, as well as provisions on transparency, the registration and supervision of trade repositories and public disclosure to investors. SFTs are transactions that use assets belonging to one counterparty to generate financing, such as lending or borrowing of securities and commodities, repurchase or reverse repurchase transactions, or buy-sell back or sell-buy back transactions. The SFT Regulation will impact UCITS management companies, self- managed UCITS investment companies and alternative investment fund managers in respect of investment fund SFT activity.

Best execution under MiFID
ESMA published a peer review report on best execution supervisory practices under the Markets in Financial Instruments Directive (2004/39/EC) (MiFID). ESMA finds some shortcomings, identifies a number of areas for future work and notes that implementation of the MiFID II Directive (2014/65/EU) could help to solve some of the shortcomings. It concludes that further work on the implementation, supervision and enforcement of the best execution requirements, and how to deliver the best service for investors, is necessary.

ESMA published a feedback statement following its consultation on applying the clearing obligation under EMIR to a class of foreign-exchange non-deliverable forward (FX NDF) OTC derivatives. It does not propose a clearing obligation on the NDF classes at this time more time is needed to deal with the concerns raised in the consultation responses.

New market abuse regime under MAR
ESMA published its final report setting out technical advice to the European Commission on possible delegated acts under the Market Abuse Regulation following its consultation in July 2014

IOSCO final report on risk mitigation standards for non-centrally cleared OTC derivatives
On 28 January 2015, IOSCO published a final report on risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives. The report sets out nine risk mitigation standards which were developed in consultation with the Basel Committee on Banking Supervision and the Committee on Payments and Market Infrastructures.

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

Date published: 27 February 2015