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

ESMA Discussion Paper on UCITS Share Classes
As discussed in the December Front Page bulletin on 23 December, the European Securities and Markets Authority (ESMA) issued a discussion paper on UCITS Share Classes. 27 March 2015 is the closing date for responses. Please speak with your usual contact in our A&L Goodbody Asset Management and Investment Funds team if you wish to contribute to our response to the discussion paper.

ESMA Q&A on ETFs and other UCITS issues
ESMA updated its Q&A on ETFs and other UCITS issues on 9 January 2015. It added new Q&A 5f on FDI and new Q&A 6n on collateral management.  

ESMA Q&A on the Application on the AIFMD
ESMA updated its Q&A on the Application on the AIFMD – to give more detail on the finer points of reporting requirements to  national competent authorities under Articles 3, 24 and 42.

AIFMD Reporting by national competent authorities to ESMA
On 18 December 2014, the European Commission published the text of a Delegated Regulation it adopted on information to be provided by national competent authorities (NCAs) to ESMA under AIFMD.

Under Article 67(3) of the AIFMD, NCAs must report quarterly to ESMA information on AIFMs that are managing or marketing AIFs under their supervision, either under the application of the passport regime or under their national regimes. The Delegated Regulation sets out the information to be reported. The draft Delegated Act  follows the advice delivered by ESMA, with additional detail on reporting of measures adopted by NCAs, as well as information on the impact on UCITS funds and their managers. The Delegated Regulation will come into force 20 days after its publication in the Official Journal of the EU (OJ). 

MMF Regulation
On 18 December 2014, the Presidency of the Council of the EU published its third compromise proposal relating to the proposed Regulation on Money Market Funds (MMF Regulation). The Council also published a progress report. This topic is extremely active at present so please speak with your usual contact on our A&L Goodbody Asset Management and Investment Funds team if you need up to date information. 

Benchmark Regulation
On 22 January 2015, the Presidency of the Council of the EU published a compromise proposal (dated 21 January 2015) on the proposed Regulation on indices used as benchmarks in financial instruments and financial contracts (Benchmark Regulation).

Fourth Anti Money Laundering Directive and Wire Transfer Regulation
On 27 January 2015, the Presidency of the Council of the EU published a press release announcing that, at a meeting of the Economic and Financial Affairs Council (ECOFIN) held on 27 January 2015, the Council endorsed the agreement reached with the European Parliament on the proposed Fourth Money Laundering Directive. The Parliament is expected to vote on the proposed Fourth Money Laundering Directive and the revised Wire Transfer Regulation during a plenary session in March or April 2015. The press release also states that, following the recent terrorist attacks in Paris, the Council and the European Commission have agreed on a joint statement highlighting the need to take decisive actions against terrorist financing. To enhance the efficiency of the Fourth Anti Money Laundering Directive and the revised Wire Transfer Regulation, the statement calls for further efforts to be made towards accelerating national implementation of the new rules, strengthening co-operation on terrorist financing between EU member states' financial intelligence units (FIUs) and addressing terrorist financing risks by way of the EU's supranational risk assessment. The text of the joint statement is set out in a Council "I" item  note (dated 27 January 2014). The Council and the Commission will be examining further actions on countering terrorist financing and a first discussion is expected to take place at the informal meeting of the European Council on 12 February 2015. 

Also on 27 January 2015, the European Parliament's Economic and Monetary Affairs Committee (ECON) and its Committee on Civil Liberties, Justice and Home Affairs (LIBE) published a press release announcing that they voted in favour of the proposed Fourth Money Laundering Directive and the proposed revised Wire Transfer Regulation.

On 26 January 2015, the Council of the EU published an "A" item note (dated 23 January 2015) from the Council's General Secretariat to the Council. The Council also published an "I" item note from its Presidency to COREPER (dated 23 January 2015). This contains a revised Addendum 3 to document 5116/15, which sets out declarations by certain EU member states.

On 13 January 2015, the Council of the EU published:

  • An "I" item note (dated 12 January 2015) relating to the proposed Fourth Anti Money Laundering Directive and the proposed revised Wire Transfer Regulation.
  • Addendum 1 to the "I" item note, which sets out the final compromise text for the revised Wire Transfer Regulation.
  • Addendum 2 to the "I" item note, which sets out the final compromise text for the proposed Fourth Anti Money Laundering Directive.
  • Addendum 3 to the "I" item note, which sets out a declaration by Austria.

The proposed Fourth Money Laundering Directive will oblige EU member states to keep central registers of information on the ultimate beneficial owners of corporate entities and trusts. The central registers will be accessible to regulatory authorities and their financial intelligence units, obliged entities (such as banks conducting customer due diligence) and the general public. To access a register, a person will have to demonstrate a legitimate interest in suspected money laundering or terrorist financing. Provisions have been inserted into the Fourth Anti Money Laundering Directive text to protect personal data.  

Risk mitigation standards for non-centrally cleared OTC derivatives
On 28 January 2015, the International Organization of Securities Commissions (IOSCO) published a final report on risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives (FR01/2015).

In the report, IOSCO 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. 

ESMA advice and opinion on investment-based crowdfunding
ESMA issued an opinion and advice looking at existing EU rules applicable to investment-based crowdfunding, identifying regulatory gaps and outlining key components for an appropriate regime for investment-based crowdfunding activities.  

US-EU financial markets regulatory dialogue
On 15 January 2015, the European Commission published a statement reporting on the latest meeting (on 12 January 2015) of the US-EU financial markets regulatory dialogue. The dialogue involves EU and US officials (including the EU Commission, ESMA, the US Treasury and independent US regulatory agencies) working together to bolster the resilience of financial markets and to advance financial regulatory reform in a consistent and convergent manner. The statement outlines the discussions that took place in a number of key areas, including OTC derivatives, banking and cross-border resolution. Participants also exchanged views on bank structural measures, securitisation, MMFs, AIFMs, benchmarks, information sharing for supervisory and enforcement purposes, the implementation of UCITS reforms and macro-prudential oversight. 

MiFID II and MiFIR
ESMA published its final technical advice and launched a consultation on its draft regulatory technical and implementing standards regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

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

Date published: 29 January 2015