Investment Funds Update - Europe: Legal and regulatory updates for the funds industry from the key asset management centres and primary European fund domiciles - Issue 9, October 2015: EU

by Dechert LLP

AIFMD – Updated Q&As Clarify Position on Sub-Delegation of Custody by AIF Depositaries

ESMA updated its Q&As on 1 October regarding the application of the AIFMD, clarifying its position on AIFMD provisions on depositaries and CSDs.

The Q&A now clarifies that when an Alternative Investment Fund’s (AIF) depositary sub-delegates custody of the AIF’s assets to either an EU or third-country central securities depositary (CSD), that CSD must comply with the provisions on delegation under Article 21(11) of the AIFMD.

Read the press release 'ESMA clarifies AIFMD provisions on depositaries and CSDs', 1 October 2015. 

EMIR - New Guidance on Updating LEIs

ESMA updated its EMIR implementation Q&As on 1 October.  

The update reflects guidance on the procedure to be followed by counterparties and trade repositories in order to update a counterparty’s identifier in case where a counterparty obtains LEI or its LEI changes due to a merger or acquisition.

Read the press release 'ESMA publishes 14th update to its EMIR Implementation Q&As', 1 October 2015.

MiFID II – final report and draft regulatory and implementing standards published

ESMA issued its final report, draft regulatory and implementing technical standards on MiFID II and MiFIR to the European Commission on 28 September.

The European Commission now has three months to approve the Standards (28th December 2015). Once endorsed, both the European Parliament and the Council have a one month objection period.

Read the supporting 'Cost Benefit Analysis – Annex II', 28 September 2015.

ESMA has also issued very high level briefings on how the above impact trading venues, investment firms and commodity derivatives markets.

Capital Markets Union – Action Plan Launched

The European Commission formally launched its action plan for building a capital markets union on 30 September, setting out 20 key measures to achieve a single market for capital in Europe.

Read the press release 'Capital Markets Union: an Action Plan to boost business funding and investment financing', 30 September 2015. 

Read 'Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committe of the Regions: Action Plan on Building a Capital Markets Union', 30 September 2015.

Other EU developments – Market Abuse Regulation and Central Securities Depositories Regulation

ESMA issued its final report and draft technical standards on the Market Abuse Regulation to the European Commission on 28 September.

Read the press release 'ESMA readies MiFID II, MAR, and CSDR', 28 September 2015. 

ESMA also issued its final report and draft technical standards on the central securities depositories regulation to the European Commission on 28 September.

The European Commission now has three months to approve both sets of standards (28th December 2015). Once endorsed, both the European Parliament and the Council have a one month objection period.

Challenge of Reporting Under AIFMD – An update from Arkk Compliance 

With the move to online submission of regulatory returns, firms are increasingly required to manage both regulations and technology in order to achieve timely compliance. Nowhere is this challenge felt more than by firms required to report quarterly, half-yearly or annual Annex IV returns under AIFMD.

Not only are AIFMs required to consider both EU & national layers of regulation, they are also required to deliver their Annex IV data electronically to standards determined by each national competent authority. This can be challenging enough for a firm filing with just one authority, but for non-EEA managers required to file individually with each jurisdiction into which they market, AIFMD compliance has become a significant undertaking.

Since interpreting regulations and fixing XML are not commonly shared skillsets, a lot of firms engage people like Arkk Compliance to provide support during AIFMD filing periods. Typically we will assist firms in populating the Annex IV forms, review data for errors and unusual items, and ensure all returns are filed complete and on time. If you would like to know more about what we do please contact the AIFMD team at

Written by:

Dechert LLP

Dechert LLP on:

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