Worldwide: Global Registration Services – Market Update, Q3 2017

Last Updated: 9 October 2017
Article by Emma Conaty and Stephen Reilly

AIFMD

ESMA Q&A on AIFMD
On 11 July 2017, the European Securities and Markets Authority ("ESMA") published an updated Q&A on the application of AIFMD and its implementing measures.  The Q&A contains three new questions which address the following matters relating to Annex IV reporting:

  • AUM calculation: how AIFMs should convert the total value of AUM into Euro;
  • Leverage calculation: where an AIF purchases a loan in a secondary market, how it should measure its exposure in relation to that loan; and
  • Reporting currency of NAV: the currency in which the NAV of the AIF should be reported.

Europe

Capital Markets Union: Update

On 20 September 2017, the European Commission issued a press release outlining a large number of proposed reforms designed to strengthen and integrate EU financial market supervision.  Under the proposals, ESMA will be granted a number of direct supervisory powers, including the authorisation and supervision of data reporting service providers required under EU Directive 2014/65/EU on markets in financial instruments ("MiFID II"). 

ESMA: Suitability Requirements

On 13 July 2017, ESMA published a Consultation Paper ("CP") on draft guidelines on certain aspects of the suitability requirements under MiFID II.  ESMA noted that the additional MiFID II suitability requirements which were not contained in MiFID I have necessitated a review of the existing ESMA guidelines in this area.  Through the consultation process and issuing of the draft guidelines, ESMA aims to enhance clarity regarding these obligations and to promote greater convergence between EU Member States in supervisory approaches to MiFID II suitability requirements.  The existing ESMA guidelines will be replaced once the draft guidelines are finalised.  In addition, ESMA aims to:

  • Consider recent technological developments, e.g. "robo-advice";
  • Take into account the results of supervisory activities conducted by national competent authorities ("NCAs");
  • Incorporate the outcome of studies in behavioural finance; and
  • Provide additional detail on some aspects already contained in the existing ESMA guidelines.  

The consultation closes on 13 October 2017 and ESMA expects to publish a final report in Q1/Q2 2018.

Belgium: FSMA FAQ on Advertising Material Approval

As outlined in our Q2 2017 Market Update, the Belgian Financial Services and Markets Authority ("FSMA") has updated its FAQ on the approval of advertising material.  The updates relate to the use of a template for certain advertising materials relating to the public offer of UCITS or AIFs.  The FAQ is available here.

France: AMF Instruction on Marketing AIFs in France

The French competent authority (Autorité des Marchés Financiers ("AMF")) has updated AMF Instruction Doc-2014-03 regarding the procedure for marketing units or shares of AIFs in France.  The updated instruction is available in French through the following link.  By way of background to this update, Article 421-13 of the AMF General Regulation outlines a procedure where an AIF may be marketed to retail investors in France if the AMF has entered into mutual recognition arrangements with the supervisory authority in the home country of the AIF in question.  Article 24 of the instruction, which deals with disclosure to the public in France, clarifies that third country AIFs which are marketed to retail clients in France within the framework of such mutual recognition arrangements are subject to the information disclosure requirements in the mutual recognition arrangements.

Germany: German Investment Tax Act Reform

As referenced in our Q1 2017 Market Update, the German Investment Tax Act ("GITA") will enter into force on 1 January 2018.  Managers of funds which are marketed to investors in Germany or invested in German assets should examine what steps may be required by GITA.  For example, it may be necessary:

  • To request a status certificate (Statusbescheinigung) before 31 December 2017 in order to avoid a higher rate of tax; and
  • To amend the prospectus so that a fund meets a particular classification under German law (e.g. mixed fund, equity fund or foreign real estate fund) which enables German investors to benefit from a partial tax exemption.

Spain: Implementation of MiFID II

The implementation of MiFID II in Spain is likely to result in significant changes for foreign funds marketed by local Spanish distributors.  In the context of discretionary and advisory mandates, Spanish distributors will need to choose the lowest-charging share class in order meet new suitability requirements.  All share classes which are available under the prospectus must be taken into account when making this assessment.  Given the administrative burden involved in identifying the lowest charging share class in each case, Spanish distributors may be reluctant to continue distributing third party investment funds.  Managers whose funds are marketed in Spain are encouraged to engage with their Spanish distributors on this point and to consider launching clean share classes to continue accessing the Spanish market.

Spain: Public Consultation on Circular 2/2011

On 25 September 2017 the Spanish competent authority (Comisión Nacional del Mercado de Valores – "CNMV") published a draft Circular, including an Annex for public consultation.  It is intended to amend Circular 2/2011 on information of foreign collective investment schemes (CIS) registered with the CNMV.  In its current format, the draft Circular will increase the quarterly statistical information which foreign UCITS distributed in Spain are obliged to provide to the CNMV via statistical statement A01.  Also, for the first time, it will extend the requirement to file statistical statement A01 to AIFs which are distributed in Spain.  The consultation closes on 16 October 2017 and the draft Circular is due to enter into force on 1 January 2018.

Switzerland: Draft Financial Services Act and Financial Institutions Act

In September 2017, the Swiss National Council (i.e. the lower house of the Federal Assembly of Switzerland) concluded its debate on the drafts of the Financial Services Act ("FinSA") and Financial Institutions Act ("FinIA").  It is likely that final versions of FinSA and FinIA will be adopted by Parliament in Spring 2018 and will enter into force during 2019.  Although the drafts have not yet been finalised, some of the principal measures can be summarised as follows:

  • A new code of conduct rules with which financial service providers must comply vis-à-vis their clients;
  • Investors to be categorised as "retail clients", "professional clients" and "institutional clients"; and
  • The obligation to appoint a Swiss representative and Swiss paying agent when distributing funds to qualified investors (currently applicable) will be abolished except when offering funds to high net worth individuals.

Asia Pacific

Hong Kong: FAQ on Advertising Materials of CIS Authorised under the Product Codes

On 18 September 2017 the SFC issued an updated version of its "Frequently Asked Questions on Advertising Materials of Collective Investment Schemes Authorized under the Product Codes" (the "FAQ").  The FAQ includes new guidance at question 34A on the presentation of performance information for an unauthorised scheme.  Question 34A deals with the circumstances in which a management company of an SFC-authorised scheme may present past performance of an unauthorised scheme from the same management group and with the same investment strategy, in advertisements for the SFC-authorised scheme.  The FAQ outlines detailed requirements relating to the presentation of past performance in these circumstances and also makes available a practical example in order to illustrate the requirements in question 34A.

New Zealand: Financial Services Legislation Amendment Bill

On 3 August 2017 the Financial Services Legislation Amendment Bill was introduced to the New Zealand Parliament.  The Bill repeals the Financial Advisers Act 2008 and revokes associated regulations and notices.  It also makes amendments to the Financial Markets Conduct Act 2013 (the "FMC Act") and the Financial Service Providers (Registration and Dispute Resolution) Act 2008.  The reforms to be introduced are wide ranging and include the following:

  • The Bill is technology neutral and will fully enable the provision of "robo-advice".  The current requirement for some types of advice to be given by a natural person will no longer apply.
  • It aligns the definition of "wholesale client" with the definition of "wholesale investor" under the FMC Act.  This is designed to reduce complexity and lead to fewer individuals being classified as wholesale instead of retail.
  • Providers of financial advice will be required to disclose certain prescribed information to retail and wholesale clients.
  • The Bill aims to address misuse of the Financial Service Providers Register ("FSPR") by offshore entities, in that it introduces more stringent requirements to register on the FSPR.
  • A new code of conduct, yet to be drafted, will set minimum standards of competence, knowledge, skill, ethical behaviour and client care, and will apply to all who give financial advice to retail clients.

The Bill is expected to come into force circa May 2019.

How Maples can help

Maples Global Registration Services ("Maples GRS") supports UCITS[i] and AIFMs in their multi-market distribution strategies by providing an integrated global network of experts coordinated by a dedicated central team supporting all legal and regulatory aspects governing the cross border marketing of investment funds on both a private placement and public offer basis.

Should you require any further information or assistance in this regard, please do not hesitate to contact any member of the Maples GRS team.


[i] Domiciled in Ireland and Luxembourg.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Emma Conaty
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.