AIFMD: ESMA Final Guidelines on Sound Remuneration Policies
On February 11, the European Securities and Markets Authority (ESMA) published its final report in relation to sound remuneration policies under the Alternative Investment Fund Managers Directive (AIFMD). The guidelines are intended to ensure that the provisions on remuneration in Articles 13 and 22(2)(e) and (f) of Annex II to the AIFMD are applied in a consistent and uniform manner.
The full text of the final guidelines is contained in Annex III to the report and include key information on:
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the categories of staff that they apply to;
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the types of remuneration covered by the guidelines; and
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internal governance arrangements of Alternative Investment Funds in respect of remuneration.
The guidelines will apply from July 22, 2013, subject to the transitional provisions prescribed by the AIFMD.
Short Selling Regulation: ESMA Call for Evidence
On February 12, the European Securities and Markets Authority (ESMA) published a call for evidence in order to evaluate the effects of the Short Selling Regulation. The call for evidence was published in response to the European Commission's request for technical advice, issued in December 2012.
The call for evidence is focused on the six main areas of the Short Selling Regulation:
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Requirements relating to transparency and reporting.
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Restrictions on the short selling of sovereign debt and shares.
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Restrictions on entering uncovered sovereign credit default swaps.
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Settlement discipline, including buy-in procedures.
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Exemptions.
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Intervention powers and emergency measures.
The deadline for responses to the call for evidence is March 15, 2013.
FSA Fines UBS £9.45 Million for Failings in AIG Fund Sales
On February 12, the FSA published a final notice issued to UBS AG, setting out a fine of £9.45 million in respect of failings identified in its sale of the AIG Enhanced Variable Rate Fund (the Fund). Having reviewed sales of the Fund made by UBS to 33 customers, the FSA identified that 19 of those customers were mis-sold the Fund, with a considerable risk that 12 of the remaining 14 may also have been mis-sold the fund.
The FSA found that UBS was in breach of a number of conduct of business rules, including:
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Principle 9 of the FSA's Principles for Business (failure to take reasonable care to ensure suitability of advice).
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Principle 6 of the FSA's Principles for Business (failure to treat its customers fairly and pay due regard to their interests).
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FSA's Dispute Resolution: Complaints Sourcebook and Principle 6 (failure to assess complaints fairly).
As a result of agreeing to settle at an early stage, UBS qualified for a 30% discount on what would otherwise have been a £13.5 million fine.
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