Investment Funds Update - Europe - Legal and regulatory updates for the funds industry from the key asset management centres and primary European fund domiciles: European Union

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AIFMD - Updated Q&A from ESMA

On 12 May, ESMA issued new Questions and Answers of the application of the AIFMD, including new questions and answers on reporting and calculation of leverage.

The revised Questions and Answers and press release are below – new content is highlighted in the document itself.

Read the press release "ESMA publishes updates to Q&As on the AIFMD application" (12 May 2015)

Read "Questions and Answers: Application of the AIFMD" (12 May 2015)


Capital Markets Union - Maijoor Comments, ESMA and EACB Respond to Consultation

Steven Maijoor, ESMA chair, gave a speech on 12 May 2015 setting out the priorities for the Capital Markets Union. Maijoor emphasised the need for increase participation by retail investors in the capital market, and the need for further integration of EU capital markets.

Read Mr. Maijoor's full speech.  

ESMA responded to the European Commission’s (the “Commission”) public consultation Green Paper on building a Capital Markets Union on 13 May 2015. ESMA was generally supportive of the Commission’s proposals, and stressed the need to develop alternatives to complement traditional bank financing.

Read ESMA's response to the Commission Green Paper on Building a Capital Markets Union.

The European Association of Co-Operative Banks (“EACB”) delivered its comments on the initiatives for a Capital Markets Union on 22 May 2015. Again the EACB was supportive, though highlighted a need for review of certain parts of the Prospectus Directive.

The EACB’s responses to the Commission’s three consultations of building a capital markets union, developing transparent and standardised securitisation practices and a review of the Prospectus Directive are available below:

Read:

EACB delivers comments on the European initiatives for a Capital Markets Union

EACB Comments on Commission Green paper on Capital Markets Union

EACB Comments - Commission Consultation Document - An EU framework for simple, transparent and standardised securitisation

EACB Response to the EC Consultation Document - Review of the Prospectus Directive


EMIR - New Consultation Paper Setting Out Regulatory Technical Standards for Clearing of Remaining Interest Rate Swaps

ESMA issued its fourth consultation paper on 11 May 2015 regarding regulatory technical standards (“RTS”) for clearing of interest rate swaps.

This paper sets out draft regulatory technical standards establishing a clearing obligation on additional classes of OTC interest rate derivatives that were not included in the first RTS on the clearing obligation for interest rate swaps.

The addition consists of the following classes: fixed-to-float interest rate swaps denominated in CZK, DKK, HUF, NOK, SEK and PLN as well as forward rate agreements denominated in NOK, SEK and PLN.

A copy of the consultation paper is available below:

Read: Consultation Paper - Clearing Obligation under EMIR (no.4)


MiFID - ESMA Releases Final Guidelines Clarifying the Definition of Commodity Derivatives under MiFID

After over seven years in the waiting, on 6 May ESMA has released final guidelines clarifying the definition of commodity derivatives under MiFID. These will remain in force until MiFID II comes into force on 3 January 2017.

Read the full guidelines.


UCITS - ESMA Calls for Modification of UCITS Directive

On 22 May, ESMA called for modification of UCITS Directive, such that it should no longer distinguish between OTC financial derivative transactions and exchange-trade derivatives (ETDs). Instead, the distinction should be between cleared and non-cleared OTC financial derivative transactions.

For OTC financial derivative transactions that are not centrally cleared, ESMA is of the view that there is no need to modify the UCITS Directive and the current counterparty risk limits of Article 52 of the UCITS Directive should continue to apply.

Read: Discussion paper on the impact of EMIR on the calculation of counterparty risk for OTC financial derivative transactions by UCITS

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