Investment Funds Update: Europe: Legal and regulatory updates for the funds industry from the key asset management centres and primary European fund domiciles - Issue 6, 2017: European Union Developments

by Dechert LLP
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AIFMD and UCITS - ESMA Publishes Updated Q&As

ESMA published updated Q&As on AIFMD and UCITS V on 11 July 2017. 

The AIFMD Q&As include three new questions and answers on the reporting requirements for:

  • loans purchased on the secondary market;
  • conversion of the total value of assets under management; and
  • currency of the net asset value.

The UCITS Q&As include two new questions and answers on:

  • issuer concentration; and
  • group links, independence and cooling-off periods

Read the AIFMD Q&As

Read the UCITS Q&As

Read the associated press release.

MiFID II - ESMA Issues Guidelines on MiFID II Product Governance Requirements and Updates Q&As

ESMA issued its final report on 6 June 2017 on product governance guidelines. The guidelines address issues specific to manufacturers and distributors as well as issues common to both.

Read the report

Read the associated press release

On 6 June and 10 July, ESMA issued updated Q&As on MiFID II and MiFIR investor protection topics.

The Q&A provide clarifications on the following topics:

  • Appropriateness;
  • Best execution;
  • Suitability;
  • Post-sale reporting;
  • Inducements (research);
  • Information on charges and costs; and
  • Underwriting and placement of a financial instrument.

Read the Q&A on MiFID II investor protection topics

Read the Q&A on MiFIR investor protection topics

Read the associated press release on MiFID II investor protection

Read the associated press release on MiFIR investor protection

On 7 July ESMA issued update Q&As on various MIFID and MIFIR market structures topics. The Q&As address the following:

Commodity derivatives issues

  • Position limits and position reporting

Market data issues

  • Reporting details and data fields
  • Reference date
  • Order Record Keeping

Market structure issues

  • Multilateral trading systems
  • Direct Electronic Access and algorithmic trading
  • Access to CCPs and Trading Venues

Read the Questions and Answers on MiFIR data reporting

Read the Questions and Answers on MiFID II and MiFIR commodity derivatives topics

Read the Questions and Answers on MiFID II and MiFIR market structures topics

Read the associated press release

On 19 June, ESMA issued its consultation paper on its proposed regulatory technical standards on the “trading obligation” for derivatives under MiFIR.

Once a class of derivatives needs to be centrally cleared under EMIR, ESMA must determine whether these derivatives (or a subset of them) should be traded on-venue, meaning on a regulated market (RM), multilateral trading facility (MTF), organised trading facility (OTF) or an equivalent third-country trading venue (the “Trading Obligation”).

Key elements of the consultation include:

  • the proposal on how to phase-in the trading obligation for derivatives;
  • ESMA’s approach concerning the instrument register to be maintained by ESMA for the trading obligation; and
  • a high-level cost-benefit-analysis.

Read the consultation paper

Read the associated press release.

PRIIPs: Guidelines and Q&As

The European Commission published guidelines on 7 July 2017 on key information documents for packaged retail and insurance-based investment products (PRIIPs). The guidelines are aimed at facilitating implementation of, and compliance with, the PRIIPs Regulation as well as improving consistent interpretation by defining various terms, such as ‘PRIIP manufacturer’.

Read the guidelines

On 4 July, ESMA and its fellow European Supervisory Authorities published Q&As on the PRIIPs key information document (KID) covering presentation, content and review of the KID as well as the methodologies underpinning the risk, reward and costs information.

Read the Q&As.

ESMA Opines on Pre-Brexit Supervisory Convergence

Further to its cross-sectoral opinion in May, on 13 July ESMA issued sector-specific opinions on the supervisory approach to Brexit-related relocations of MiFID entities, funds and fund management companies.

The opinions are aimed at ensuring a consistent interpretation of the requirements relating to authorisation, supervision and enforcement, to avoid regulatory and supervisory arbitrage.

The opinions are available here: 

Investment firms

Investment management

Secondary markets

Read the associated press release.

 

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