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    ALFI Newsdigest march 3, 2014    
          in this edition      
    1. Headlines
2. News from ALFI's Asia Representative Office
3. New ALFI brochures
4. Upcoming ALFI events
5. Past ALFI events
6. Upcoming LFF events
     
 
 

1.

Headlines

"A positive 2013, but challenges ahead"

During a press conference held at the close of January, ALFI draw a positive conclusion of the year 2013. Read the related press release entitled "A positive 2013, but challenges ahead".

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ALFI response to ESMA's consultation paper on ETF Guidelines and other UCITS issues

On 31 January 2014, ALFI responded to ESMA's consultation paper on the review of the guidelines on ETFs and other UCITS issues. This response focuses on a possible exemption for government securities from the 20%-issuer limit foreseen in paragraph 43(e) of the ESMA ETF and other UCITS issues guidelines and the proposal by ESMA that government securities received as collateral should come from at least six different issues (and that any single issue should not account for more than 30% of the collateral received). To access this document click here.

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PRIPs: Beginning of trilogue negotiations and concerns raised by EFAMA

On 29 January 2014, the first political trilogue on a regulation on key information documents for investment products (PRIPs) took place in Brussels. All parties expressed their genuine willingness to close the file as soon as possible and to aim for an agreement still in this parliamentary term. Without discussing them in depth, the following main issues (non-exhaustive list) were identified as political points:

  • Scope
  • Design/content of the KID
  • Supervisory powers of national and European competent authorities
  • Annex.

The European Fund and Asset Management Association (EFAMA) proposes some key suggestions on the European Parliament text voted in plenary on 21

November 2013 and on the position of the Council of the EU dated 24 June 2013. Both the scope and the idea to introduce a complexity label are major concerns of the fund industry.

Background information: See ALFI newsflash of 9 December 2013

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State aid: Commission adopts new rules on risk finance

The European Commission has adopted new guidelines setting out the conditions under which Member States can grant aid to facilitate access to finance by European SMEs and companies with a medium capitalization (the so-called "midcaps"). Certain SMEs and midcaps, in particular innovative and growth-oriented SMEs in their early development stages, have difficulties to get funding, independently of the quality of their business potential. State aid can help address this funding gap, not by replacing existing funding channels but by attracting fresh money into new ventures through well-designed financial instruments and fiscal measures. The guidelines will enter into force on 1 July 2014.

Key features of the new guidelines are

  • a wider range of financial instruments admissible, including equity, quasi-equity, loans and guarantees, to better reflect market practices,
  • a mandatory participation of private investors tailored to the development stage and riskiness of the company,
  • new and more flexible forms of support to alternative trading platforms, and
  • more flexibility and clearer conditions for tax incentives to investors.

( more)

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FINMA and CSSF sign cooperation agreement

The Swiss regulator FINMA and the supervisory authority of the Luxembourg financial sector CSSF have recently signed an MOU dealing with the distribution of foreign investment vehicles to retail investors in Switzerland.

In accordance with article 120 of the revised Swiss Fund Law, this agreement is a prerequisite for FINMA to continue to approve the distribution of foreign investment vehicles to non-qualified investors.

FINMA has issued a more detailed communication to this end in French and German.

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ECB interest rate cuts support long-term UCITS

The European Fund and Asset Management Association (EFAMA) reports that improved investor sentiment after the ECB cut interest rates in November provided support to net sales of long-term UCITS, in particular to bond funds.

Net sales and/or net assets data provided by 26 associations representing more than 99.6 percent of total UCITS and non-UCITS assets at end November 2013 show that long-term UCITS (UCITS excluding money market funds) registered net inflows of EUR 22 billion, compared to EUR 26 billion in October.  Equity funds attracted net inflows of EUR 11 billion, down from EUR 15 billion in October.  Bond funds registered net inflows of EUR 7 billion, compared to break-even point a month earlier. Net sales of balanced funds amounted to EUR 9 billion, compared to EUR 7 billion in October.

Money market funds registered reduced net outflows in November of EUR 3 billion, down from EUR 5 billion in October.  

Total non-UCITS recorded net sales of EUR 12 billion in November, compared to EUR 19 billion in October.  EFAMA attributes this decrease in net sales to special funds (funds reserved to institutional investors) which registered net inflows of EUR 8 billion, down from EUR 18 billion in October.

( read more)

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CSSF issues circular on AIFM reporting

On 14 January 2014, the CSSF published circular 14/581 on reporting under the Alternative Investment Fund Managers Directive (AIFMD). It aims to clarify technical details that AIFMs need in order to fulfil their reporting obligations.

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CSSF updates its FAQs on the Law on Alternative Investment Fund Managers

The Luxembourg supervisory authority of the financial sector CSSF has published a fourth updated version (version 4, 10 January 2014) of its set of Frequently Asked Questions concerning the law of 12 July 2013 on alternative investment fund managers as well as the Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012. These FAQs highlight key aspects of the AIFML from a Luxembourg legal perspective. Two new topics have been added since July 2013 which relate to marketing issues and reporting aspects.

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Commission: delegated regulation on types of AIFM

On 17 December 2013, the European Commission adopted a Delegated Regulation  supplementing the AIFM-Directive (2011/61/EU) with regard to regulatory technical standards determining types of alternative investment fund managers.

The Delegated Regulation determines whether an Alternative Investment Fund Manager (AIFM) is an AIFM of open-ended AIF(s) and/or closed-ended AIF(s). Under the Directive AIFMs have to follow specific rules depending on whether or not they are AIFMs of open-ended and/or closed-AIFs. Therefore, it is important to foresee detailed rules determining whether an AIFM is managing open-ended and/or closed-ended AIF(s).

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FATCA final FFI agreement

At that end of December 2013, the Internal Revenue Service of the United States released the final foreign financial institution (FFI) agreement to implement the Foreign Account Tax Compliance Act (FATCA). The final agreement contains a number of changes and clarifications to the draft FFI agreement (contained in Notice 2013-69).

(read more)

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2.

News from ALFI's Asia Representative Office

Hong Kong's SFC revises application lapse policy for investment products

Hong Kong's Securities and Futures Commission (SFC) strives to enhance the authorisation process for unit trusts and mutual funds, investment-linked assurance schemes, unlisted structured investment products and real estate investment trusts ("SFC-authorised Investment Products"). The SFC has adopted a revised application lapse policy with effect from 1 January 2014 whereby the time period for the lapse of applications will be reduced from 12 to 6 months.

This means that the application will lapse if for any reason 6 months have elapsed from the date of take-up of an authorisation application ("Take-up Date") and no authorisation has been granted. Once an application has lapsed, if the applicant wishes to seek authorization of an SFC-authorized investment product, he shall make a new application, whereupon he will need to pay the application fee for the new application and repeat the application procedures.

The full Circular with background information is available on the SFC website.

 

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3.

New ALFI brochures

Luxembourg - Successful REIF Center : Lessons learnt and opportunities from the real estate downturn

The effects of the financial crisis have been felt through the entire value chain of the real estate funds and the wider real estate industry, from investors to asset managers, lending banks and service providers. All parties have to revisit their strategies. Luxembourg's real estate funds specialists now share their experiences and the lessons learnt during the crisis in a new ALFI brochure presenting illustrative cases and discussing some of the challenges and opportunities facing real estate investors.

The paper "Luxembourg - Successful REIF Center: Lessons learnt and opportunities from the real estate downturn" provides information and guidance as well as practical examples on real estate funds industry relevant topics together with a brief outline of the key advantages, flexibility and opportunities of using Luxembourg in a real estate investment fund context.

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ALFI/NICSA slideshows on remuneration under AIFMD available

The slideshows worked out by ALFI and NICSA providing an overview of AIFMD requirements and of the ESMA guidelines on sound remuneration policies under AIFMD can be accessed by clicking the respective links.

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4.

Upcoming ALFI events

4 March 2014 : Roadshow to Amsterdam

Event webpage for programme & registration

Thank you for informing your contacts in The Netherlands!

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18 & 19 March 2014: ALFI Spring Conference

NCCK, Kirchberg, Luxembourg

Event webpage

Sponsorhip & exhibition forms with details - Exhibition : only 1 space left !

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18 March 2014, evening: ALFI Gala dinner

Location: LuxExpo, Luxembourg

Event  webpage Open for registration!

Sponsorship agreement form with details.

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24 April 2014: ALFI Leading Edge Conference

Topics:

  •   AML / KYC
  •   FATCA
  •   MIFID II
  •   Inducement / Remunerations

 Save the date! More information coming soon!

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29 April 2014: ALFI & ALRiM Risk Management Conference

Event webpage

  • Meet market experts and leading practitioners
  • Latest trends and strategies to measure, manage and mitigate risks
  • First-hand insights into operational risk in the management of UCITS and AIFs
  • New reporting obligations for Alternative Investment Fund Managers, (ESMA Guidelines and CSSF Circular 14/581)
  • Workshops on the major sources of risk within an investment fund portfolio (i.e. market, liquidity, operational and credit risks

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14 May 2014 : ALFI London Conference

Event webpage

Save the Date!

Sponsorship open to ALFI members! Contact events@alfi.lu

More information coming soon.

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16 May 2014: ALFI Roadshow to Edinburgh

Event webpage

Save the Date!

Sponsorship open to ALFI members! Contact events@alfi.lu

More information coming soon.

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27 May 2014 : ALFI Impact & Microfinance Conference

Event webpage

Open for sponsorship ! Sponsorship agreement form with details.

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ALFI events calendar 2014

Check out confirmed dates of the most important fund industry events!

Refer to the ALFI upcoming events calendar to access event information on our public website.

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5.

Past ALFI events

ALFI Code of Conduct seminar

About 200 fund industry professionals attended the ALFI Code of Conduct seminar taking place on 20 January 2014 in the Luxembourg Chamber of Commerce. The high attendance shows the great interest as well as the importance of the topic.

ALFI thanks all participants for joining the event! For any queries regarding the updated version of the Code of Conduct and its application, please contact David Zackenfels at ALFI (david.zackenfels@alfi.lu).

View the picture gallery

Henry Kelly, Chairman of the ALFI Fund Governance Forum, moderated the panel discussion detailing the content of the revised Code as well as dealing with practical questions of adherence to the Code and disclosure thereof.

The panelists were:
Michèle Eisenhuth, Partner, Arendt & Medernach
Graham Goodhew , Director and Conducting Officer, JPMorgan Asset Management (Europe) S.à r.l.
William Lockwood, Conducting Officer, Franklin Templeton International Services S.A.
Christel Müller, Conducting Officer, UBS Fund Management (Luxembourg) S.A.
Jérôme Wigny, Partner, Elvinger, Hoss & Prussen

The updated version of the ALFI Code of Conduct reflects:

  • new principle on external governance (i.e. the exercise of shareholder rights);
  • new principle on the remuneration of Board members;
  • recommendation that consideration should be given to the appointment
  • of one or more independent directors;
  • focus on the role of the chairperson;
  • recommendation that the Board conduct a periodic review of its performance and activities;
  • update of the description of the Board's responsibilities with respect to risk management, internal controls and conflicts of interest.

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6.

Upcoming LFF events

LFF at City Week in London

Luxembourg for Finance will attend City Week 2014 in London, from 31 March to 2 April 2014.

Minister Pierre Gramegna will be a keynote speaker on the panel "Reforming the EU and completing the Single Market: implications for the financial services industry" on the first day of the conference.

(more)

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LFF agenda and sponsoring opportunities

Luxembourg for Finance, the agency for the development of the financial center, has updated its events agenda and offers a series of sponsoring opportunities.

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