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    ALFI News Digest july 6, 2011    
          in this edition      
    1. Headlines
2. News from Asia Office
3. ALFI past events
4. ALFI new brochures & publications
5. ALFI events
6. Other events
     
 
 

1.

Headlines

Publication of the Alternative Investment Fund Managers Directive (AIFMD) in the Official Journal of the European Union

On 1 July 2011, the AIFMD has been published in the Official Journal.

The directive will enter into force 20 days following its publication. Member States will then have two years for the transposition into national law.

Directive 2011/61/EU of the European Parliament and of the Council  of 8 June 2011 in English, French and German.

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Introduction of the Key Investor Information Document (KID) in Switzerland

On 29 June 2011, the Swiss Funds Association SFA welcomed the introduction of the KID in Switzerland, following the Federal Council’s decision to give this the go-ahead at its meeting on the same day.

The press release includes a table showing the transition period for the use of the simplified prospectus.

Please click here for the English version of the press release, here for the French version and here for the German version.

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ALFI KID implementation project: Issue 8 of Q&A Document

ALFI has published issue 8 of its Q&A Document with questions and proposed answers about Key Investor Information Document (KID) implementation. Changes compared to the previous edition are shown in mark-up.

This issue is the last one before summer break. ALFI’s members are welcome to submit further questions to the KID working group, which will continuously be informed of new questions and meet again at the beginning of September. More information on how to submit questions is included on page 2 of the Q&A Document.

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European Market Infrastructure Regulation (EMIR) - Presidency compromise

The European Council has published a Presidency compromise proposal for EMIR.

The proposal was for discussion at the meeting of the Working Party of Financial Services Attachés on 30 May.

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Presidency compromise proposal on EMIR

The Presidency of the Council of the European Union has published a further Presidency compromise proposal, dated 14 June, on the proposed Regulation on OTC derivative transactions, central counterparties and trade repositories (also know as the European Market Infrastructure Regulation – EMIR). The proposal was discussed on 16 June 2011 at a meeting with the Council of Permanent Representatives (COREPER).

Presidency compromise proposal.

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Share your opinion about a European passport for venture capital funds

On June 15th, 2011, the Commission services launched a consultation on new European rules for venture capital funds. Venture capital is an important source of financing and support for innovative SMEs that encounter difficulties in accessing bank loans or listing on stock exchanges. The development of venture capital funds will improve SMEs' access to finance, and thus their opportunities to grow and expand, as outlined in the Single Market Act ( see IP/11/469).

The consultation document outlines what could be the broad contours of a European passport that would be made available to venture capital funds so that they would be able to raise capital freely throughout the EU from professional investors and invest in innovative SMEs.

Once the passport had been obtained (upon registration in one Member State), the fund manager could then operate throughout the EU without having to register in each Member State where it wants to raise capital, as is often the case today. The consultation asks for stakeholders' input on this initiative. The results, together with the impact assessment, will serve as a basis for an initiative on European rules for venture capital. Interested parties are invited to send their comments by 10 August.

The consultation document is available here

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Commission study concerning European contract law

The European Commission has issued a public consultation on a feasibility study carried out by an Expert Group on a possible initiative on European contract law. This feasibility study follows a consultation in 2010 on a 'Green Paper on policy options for progress towards a European contract law for consumers and businesses'. In its feasibility study, the Expert Group has delivered a text which strives to constitute a complete set of contract law rules covering those issues which, at a practical level, are relevant in a contractual relationship in the internal market of the European Union. It is now up to the Commission to decide if, how and to what extent this feasibility study could serve asa starting point for the preparation of a political follow-up initiative.

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Council of the EU: Progress report on Value Added Tax treatment of insurance and financial services

In December 2007, the Commission submitted to the Council a proposal to amend Council Directive 2006/112/EC on the common system of value added tax, as regards the treatment of financial and insurance services, and a proposal for a Council Regulation laying down implementing measures for Council Directive 2006/112/EC, as regards the treatment of financial and insurance services. The proposals are aimed at clarification and modernisation of the definitions of exempt financial and insurance services in order to ensure consistent interpretation across the European Union.

The proposals have been discussed extensively in the Council’s Working Party on Tax Questions under the Slovenian, French, Czech, Swedish, Spanish and Belgian Presidencies, and progress was made.

Please click here for the draft Presidency progress report on the VAT treatment of insurance and financial services, which takes into account discussions at the working party on tax questions (indirect taxation) on 1 June 2011.

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Transparency: Launch of a common interest representative register for the European Commission and the European Parliament

On 23rd June, the European Parliament and the European Commission have launched their common interest representative register as agreed by both institutions and voted in the European Parliament on 11th May.

This common register replaces the European Parliament register for interest representatives seeking access to its premisses in place since 1996, and the European Commission register for organisations (companies, trade associations or professional firms) seeking to represent their interests in Brussels created in 2008. Some of ABBL and ALFI staff are registered in the EP register that gives access to the permanent visitor badge, and ABBL and ALFI were amongst the first organisations to register in the Commission register in 2008. 

ABBL and ALFI dedicated entries on the register have already been updated to ensure compliance with the new information requested on lobbying activities and persons representing the associations.

In terms of next steps, the Council will discuss in September options to join this common register, whilst there is will in the European Parliament and the European Commission to develop further this register in order to make it mandatory.

The common register is now available on line by clicking here.

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European Commission: Financial sector taxation

On 29 June 2011, President Barroso presented the Commission's proposals for the 2014-2020 Multi-Annual Financial Framework.

In his speech, he referred to a new system of resources based on financial sector taxation, namely on financial transactions, and a new resource based on value added tax.

In terms of a taxation of the financial sector, the Commission has so far been in favour of introducing a Financial Activities Tax (FAT) at EU level, whereas the European Parliament advocated a global Financial Transaction Tax (FTT). Nevertheless, the Parliament called on the Commission to assess the consequences of an introduction of an FTT in a first step only at European level.

The Commission’s impact assessment was expected for June 2011, but it has not yet been published.

Answering to the consultation conducted by the Commission at the beginning of the year, both ALFI and EFAMA were of the opinion that the asset management industry should be excluded from the scope of financial sector taxation.

  • Communication from the Commission: Link
  • Consultation paper issued by the Commission:Link
  • ALFI response to the consultation: Link
  • EFAMA’s reply to the consultation: Link

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Report of the Reflection Group on the Future of EU Company Law

At the occasion of a recent conference, the European Commission – DG Internal Market has published a “Report of the Reflection Group on the Future of EU Company Law”. The Report can be found here.

The Report has been prepared by a “Reflection Group” appointed by the European Commission. It seeks to address current problems in EU company law and to provide analysis and suggested initiatives where appropriate. Subjects raised are among other short term versus long term in listed companies, risk management, institutional investors and board of directors. Annex 1 of the Report consists of a list of recommendations by the Reflection Group.

The Report has been finalized before the publication of the Commission’s Green Paper “The EU corporate governance framework”. The Report insists that the Reflection Group was not involved in the preparation of the Green Paper and the consultation. It mentions however that both projects are initiated by the Commission to rethink company law against the background of the economic crises and the lessons to be learned. It suggests that the discussion in the Report may help to clarify issues that are raised in the Green Paper.

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BaFin: Circular on Product Information Sheet (“Produktinformationsblatt”, PIB)

The German regulator BaFin has published a circular (n° 6/2011 (WA)) on the recently adopted investor protection law ("Anlegerschutz- und Funktionsverbesserungsgesetz”), which entered into force on 8 April 2011. It includes a summary of relevant provisions, preliminary implementing rules and further information on transposition.

The law lays down requirements for the distribution of some savings products, including investment funds. Distributors are required to provide to retail investors a disclosure document called "Produktinformationsblatt” (PIB), similar but not identical to the UCITS KID. The legislation provides for the possibility to use the KID as of 1 July 2011 to fulfil the PIB requirement, and in the final text it has been clarified that the simplified prospectus can be used instead of the PIB by non-German funds during their transitional period. In other words, to avoid providing a PIB, a KID will be required for German UCITS from 1 July 2011 while for foreign UCITS the simplified prospectus may continue to be provided up to 1 July 2012 (according to their transitional period).

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EFAMA response to Commission Green Paper on VAT

As described in detail in our Newsflash of 3 December 2010, the European Commission published a Green Paper on the future of Value Added Tax, in which the Commission invited all interested stakeholders to contribute to the public consultation until 31st May 2011.

ALFI contributed to EFAMA’s response. Please click here for the document and here for its appendix, which includes EFAMA’s comments on the compromise texts published by the Hungarian Presidency on 29 March 2011.

On 13 May 2011, the Hungarian Presidency published the latest available compromise texts:

  • Proposals for a Council Directive amending Directive 2006/112/EC on the common system of value added tax, as regards the treatment of insurance and financial services
  • Proposal for a Council Regulation laying down implementing measures for Directive 2006/112/EC on the common system of value added tax, as regards the treatment of insurance and financial services

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Prospectus Directive as amended by Directive 2010/73/EU

ESMA has published on 15thJune a Consultation Paper on technical advice to the European Commission on possible delegated acts concerning the Prospectus directive as amended by Directive 2010/73/EU.

The Paper includes measures regarding the summary and its link to PRIPs.

Read more.

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IIFA Submission to IOSCO on its Consultation on Suspensions of Redemptions for CIS

Please click here for a copy of the IIFA submission to IOSCO responding to its Consultation on Suspensions of Redemptions for  Collective Investment Schemes.

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CPSS-IOSCO principles for financial market infrastructures

New and more demanding international standards for payment, clearing and settlement systems have been issued for public consultation by the Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organization of Securities Commissions (IOSCO).

The new standards (called principles) are designed to ensure that the essential infrastructure supporting global financial markets is even more robust and thus even better placed to withstand financial shocks than at present. They are set out in a consultative report Principles for financial market infrastructures which contains a single, comprehensive set of 24 principles designed to apply to all systemically important payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories (collectively financial market infrastructures or FMIs). These FMIs collectively record, clear and settle transactions in financial markets.

When finalised, the new principles will replace the three existing sets of CPSS and CPSS-IOSCO standards, the Core principles for systemically important payment systems (2001); the Recommendations for securities settlement systems (2001); and the Recommendations for central counterparties (2004). The CPSS and IOSCO believe that a single set of principles will provide greater consistency in the oversight and regulation of FMIs worldwide.

Comments on the principles are invited from all interested parties and should be sent by 29 July 2011. After the consultation period, the CPSS and IOSCO will review all comments received and publish a final report in early 2012.

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LuxFLAG Environment Label

The Luxembourg Fund Labelling Agency (LuxFLAG) announced the launch of the LuxFLAG Environment Label in June 2011. The Environment Label is designed to reassure investors that labelled Investment Funds actually invest the majority of their assets in environment-related sectors in a responsible manner.

For detailed information about the Eligibility Criteria and application procedures for the Environment Label please refer to our website www.luxflag.org or contact:

Daniel Dax or Sachin Vankalas

daniel.dax@luxflag.org / sachin.vankalas@luxflag.org

Tel: +352 22 30 26 40

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LFF Mediawatch

Please see LFF Mediawatch 01-15 June 2011 and 16 June - 1 July.

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2.

News from Asia Office

Hong Kong : Publication of Circular related to investor characterization requirement

On May 20, Hong Kong’s Securities and Futures Commission (SFC) issued a circular related to licensed corporations and registered institutions and investor characterization. This circular testifies that the Commission agreed to extend by 3 months the effective date of the investor characterization requirement under paragraph 5.1A of the Code of Conduct. The requirement will therefore take effect on 4 September 2011.

The paragraph 5.1A of the Code of Conduct stipulates that as part of the “Know Your Client” (KYC) procedures, licensed corporations and registered institutions should assess its client’s knowledge of derivatives.

Licensed corporations and registered institutions shall explain the risks related to a derivative product when a client does not have knowledge about derivative products and advice on the suitability of the product to the client’s profile. Licensed corporations and registered institutions shall keep records of all warning communications made to the client.

The circular and the Code of Conduct are available on the Securities and Futures Commission’s website:

Circular

Code of Conduct

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Malaysia: Update of the guidelines on compliance function for fund management companies

The Securities Commission Malaysia released an updated version of its guidelines on compliance function for fund management companies taking effect on May 23.

The guidelines are available on the Securities Commission Malaysia's website.

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Mainland China: Third parties to enter mutual fund distribution

So far the Chinese distribution channel has been dominated by domestic banks.

On June 21, the China Securities Regulatory Commission (CSRC) released a revision of its “Measures for the Administration of the Sale of Securities Investment Funds” allowing third parties such as independent financial advisors and foreign banks to become fund distributors in China under certain conditions such as, minimum capital of RMB 20million at registration.

The new regulation will take effect on October 1, 2011.

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3.

ALFI past events

15 & 16 June: ALFI Roadshow to Switzerland (Zurich & Geneva)

Luxembourg – the global opportunity for asset management

This year’s roadshow to Switzerland was a success. In Zurich, 240 attendees (including a Luxembourg delegation of 80 people) and in Geneva 160 attendees (including a Luxembourg delegation of 60 people) followed the presentations with great interest and in a very interactive way.

This year, our experts addressed the opportunities and practical implications of UCITS IV and V as well as AIFMD.

The first session examined the opportunities offered by UCITS IV while focusing on the KIID, the new notification procedure, the passport "Management Company", the Master Feeder & Cross-border mergers, procedures, risk management and    alternative UCITS. A brief presentation was also made regarding the potential changes expected within UCITS V.

The session was followed by a presentation of UBS on their experiences and expectations of UCITS IV.
The second session gave the audience the opportunity to study the expected impact of the implementation of AIFM Directive. This panel analysed the AIFM Directive in its various aspects: management, distribution, monitoring and responsibilities of stakeholders.

The session was followed by a presentation of Mirabaud & Cie Private Bankers on their experiences and expectations of the AIFM Directive.

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4.

ALFI new brochures & publications

New ALFI AIFMD brochure and flyer

The AIFMD brochure and flyer provide you with the main definitions about the Alternative Investment Fund Managers Directive.

The AIFMD brochure contents has been taken from an Arendt & Medernach brochure of the same name.

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5.

ALFI events

2011 confirmed events dates

 

 6 September

 ALFI Roadshow to Edinburgh

 26 September

 ALFI Golf Tournament

 27-28 September

 ALFI Global Distribution Conference in association with   NICSA & HKIFA  20th Anniversary!

 4-7 October

 ALFI Roadshow to Toronto & USA

 24 October

 ALFI Seminar Frankfurt

 22-23 November

 ALFI European Alternative Investment Funds Conference

 5-8 December

 ALFI Roadshow to Asia (Taipei & Hong Kong)

 

ALFI events calendar 2011 - please click here.

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6 September: ALFI roadshow to Edinburgh

The programme and registration will be available in mid-July. 

Click here for more information.

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26 September: ALFI Golf Tournament

Kikuoka Country Club, Canach, Luxembourg.

Registration to play will be open in mid-July.

Read more.

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27 & 28 September: ALFI Global Distribution Conference in association with NICSA & HKIFA

Highlights of the programme include:

  • Opening speeches by H.R.H. Prince Guillaume of Luxembourg and H.E. Jeannot Krecké, Minister of Economy & Foreign Trade
  • EU regulatory updates from Jean Guill, Director General, Commission de Surveillance du Secteur Financier, Luxembourg and Tilman Lueder, Head of Unit, Asset Management, European Commission, Brussels   
  • Global issues in Asset Management by Paul Schott Stevens, President & CEO of ICI
  • News from Asia in panels and presentations with the participation of Christina Choi, Director, Investment Products of the Hong Kong Securities and Futures Commission and Sally Wong, CEO of the Hong Kong Investment Funds Association
  • Keynote speech by Gérard Lopez, co-founder and Managing Partner of Mangrove Capital Partners, Luxembourg and owner of the Renault Formula 1 Team
  • A roadmap for the European Fund and Asset Management Industry by Claude Kremer, newly elected Chairman of EFAMA
  • Vision of the future of Luxembourg by Marc Saluzzi, newly elected Chairman of ALFI
  • CEO interviews with leaders from France, Hong Kong, the UK and the US
  • and many more 

The programme can be downloaded here

Exhibition: click here

Registration: click here

Conference webpage: click here

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4-7 October: ALFI Roadshow to the US and Canada

Toronto – Greenwich - New York - Boston

Fund Industry seminars will take place in each city from about 8.30 to 13.30 (free of charge).

4th – Toronto: premises of RBC Dexia Investor Services Trust, 155 Wellington Street West, 10th floor

4th or 5th – Greenwich, Connecticut: venue and time tbc

6th – New York: Jumeirah Essex House, 160 Central Park South, NY10019

7th – Boston: Four Seasons Hotel, 200 Boylston Street, MA 02116

More information coming soon.

Contact events@alfi.lu

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24 October: ALFI Roadshow to Frankfurt

The programme will start in the morning with an introduction by ALFI, followed by plenary sessions giving an overview on latest trends and developments in UCITS IV, UCITS V and Alternative Investments. After the coffee break, the seminar will then divide into three more detailed workshops discussing Hedge Funds, Operational Challenges and the AIFM Directive. The seminar concludes with a networking lunch buffet.

Presentations will be in German and entry is free of charge.

More information.

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22-23 November: ALFI European Alternative Investment Funds Conference

Centre de Conférence Kirchberg, Luxembourg.

Programme, Sponsorship and Exhibition Opportunities coming soon.

Contact events@alfi.lu

Website

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5-8 December: ALFI Roadshow to Asia

Fund Industry Seminars in Taipei and Hong Kong (free of charge).

More information coming soon.

Read more.

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6.

Other events

17-21 October: LFF Asia Tour

Luxembourg for Finance will organise a financial mission to Singapore, Kuala Lumpur and Shanghai from 17 to 21 October 2011 led by Mr Luc Frieden, Minister of Finance, Chairman of Luxembourg for Finance.

Please will find further details by downloading the invitation and the agenda. Please register using the registration form.

Read more.

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