Funds and asset management regulatory news, September 2020 # 3

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Our latest Funds and asset management regulatory news supplements our General regulatory news with items specific to the funds and asset management industry. Read both to keep abreast of recent regulatory developments.

Contents

  • ELTIF Regulation review: European Commission consults on inception impact assessment
  • FinTech engagement: IA guide

ELTIF Regulation review: European Commission consults on inception impact assessment

The European Commission has published for consultation an inception impact assessment relating to its review of the Regulation on European long-term investment funds (ELTIF Regulation).

Article 37 of the ELTIF Regulation requires the Commission to produce a report on the application of the Regulation accompanied, if appropriate, by a legislative proposal. The purpose of the review is to evaluate the effectiveness of the ELTIF framework and to identify the reasons for the market's failure to develop in line with expectations. In particular, the Commission notes the need to address the low uptake of ELTIFs and to enable the ELTIF framework to direct increased financing towards long-term investments in the real economy.

The Commission will not consider issues concerning member states' tax incentives in the review as these fall outside of its mandate under EU Treaties.

The deadline for providing feedback to the Commission's consultation on the inception impact assessment is 14 October 2020. The Commission indicates that it will publish a consultation on the ELTIF review in Q4 2020 and a proposal for a regulation in Q3 2021.

FinTech engagement: IA guide

The Investment Association has launched "Best Practice for FinTech Engagement: Being a responsible partner & client". The guide follows the process of considering FinTech engagement from the establishment of a clear "problem statement" or business need through to the implementation of new technologies within investment management firms, and provides operational advice and checklists for both investment managers and FinTechs. The guide also provides recommendations on the following areas:

  • organisational readiness for being able to consider engagement with FinTech firms;
  • scouting out and assessing FinTech solutions;
  • common pitfalls to avoid when working with FinTechs
  • mutual intellectual property considerations;
  • ensuring technology solutions are fit for investment management; and
  • being a responsible client of a start-up.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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