FSA Consultation on the Implementation of the Alternative Investment Fund Managers Directive
On November 14, the FSA published its first consultation paper regarding the transposition of the Alternative Investment Fund Managers Directive (AIFMD) into UK law.
The consultation paper sets out proposals on the following areas:
the prudential regime applicable to all types of alternative investment fund managers (AIFMs);
FSA Handbook amendments to reflect the main Level 1 requirements of the AIFMD, such as operating requirements for AIFMs, duties of AIFMs when managing funds, and transparency obligations towards both the Financial Conduct Authority and investors themselves; and
the regime applying to firms which act as depositaries of alternative investment funds, such as eligibility requirements, capital requirements and an independence requirement.
The deadline for consultation responses is February 1, 2013. It is anticipated that a second consultation paper will be published in February 2013.
Criminal Conviction for Insider Dealing
On November 15, the FSA issued a press release stating that Thomas Amman, formerly an investment banker at Mizuho International plc, has pleaded guilty to two counts of insider dealing and two counts of encouraging insider dealing. Mr. Amman will be sentenced at a later date. Two associates were acquitted of one count of insider dealing each, following a trial at Southwark Crown Court.
The offences related to trading in the shares of Océ, a Dutch company, which in late 2008 and 2009 was in the process of being acquired by Canon. Mr. Amman was part of a small team advising Canon on the acquisition and therefore had price sensitive information about Océ. Knowing that he could not trade in the shares himself, Mr. Amman encouraged his two associates to trade in the shares prior to the acquisition being announced.
The conviction is the 21st insider dealing conviction for the FSA. A further 5 prosecutions are currently ongoing, indicating the FSA’s increased focus on this area.
European Banking Federation – Response to Liikanen Report
On November 14, the European Banking Federation (EBF) published its response to the European Commission’s consultation on the EU banking sector structural reforms set out in the Liikanen report.
The EBF disagrees with the Liikanen report’s recommendation that the mandatory separation of proprietary trading activities would adequately address issues such as systemic risk. Instead, it states that such a move may harm the ability of banks to lend and negatively impact the competitiveness of the European financial sector. However, the EBF does agree that recovery and resolution plans need to be strengthened, suggesting that such measures should be an alternative to the mandatory separation of proprietary trading.
The European Commission’s consultation closed on November 13. Further responses will be published online in due course.