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    Newsflash december 9, 2013    
          in this edition      
    1. Headlines
2. New ALFI brochures
3. Upcoming ALFI events
4. Past ALFI events
5. Upcoming LFF events
6. Other upcoming events
     
 
 

1.

Headlines

Strong UCITS net sales in the 3rd quarter of 2013

The European Fund and Asset Management Association (EFAMA) has recorded strong net inflows into UCITS billion in the third quarter of 2013. According to its most recent Quartlery Statistical Release, net sales of UCITS totalled EUR 34 billion, up from EUR 12 billion in the second quarter.

This increase in net sales can be attributed to the upturn in net sales of equity funds and decreased net outflows from money market funds. Uncertainty about bond market developments during the quarter penalized bond funds, whereas equity funds benefitted from improved investor confidence.

Long-term UCITS attracted EUR 43 billion in net new money during the quarter, down from EUR 65 billion in the second quarter. Bond funds registered quarterly net outflows for the first time since 2011 amounting to EUR 12 billion.

Net sales of equity funds returned to positive territory with inflows of EUR 30 billion, compared to net outflows of EUR 9 billion in the second quarter. Net inflows to balanced funds continued to attract strong net inflows during the quarter (EUR 20 billion), albeit down from EUR 28 billion in the second quarter. Money market funds registered reduced net outflows of EUR 9 billion, down from EUR 53 billion in the second quarter.

ALFI's most recent statistical release provides you an overview of the development of the Luxembourg investment fund industry.

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ALFI survey shows Luxembourg REIFs continue to grow

The 2013 version of ALFI’s annual real estate investment fund (REIF) survey shows that 2012 continued to be a strong year for Luxembourg domiciled REIFs. 22 new direct REIFs were launched, slightly down compared with 26 launches in 2011, bringing the total of Direct REIFs surveyed to 215 funds. The sector has grown 241% since 2006, a compound annual growth rate of 23%.

ALFI chairman Marc Saluzzi observes that the continued growth in the number of REIFs in Luxembourg demonstrates that Luxembourg remains a favoured location to establish and maintain multi-national and multi-sectoral regulated real estate investment funds which continue to appeal to institutional investors and fund managers around the world.

Read also our related press release in English and German.

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ALFI Position Paper on the Commission Regulation regarding the treatment of subscription and redemption orders under AIFMD

The main objectives of this ALFI Position Paper on the Commission Regulation (EU) N° 231/2013 of 19 December 2012 is to outline ALFI’s recommendations by way of providing Best Market Practice Guidelines on the treatment of subscription and redemption orders under AIFMD. This document contains the working group’s assessment of the current market practice across a representation of Luxembourg fund industry participants from the perspective of global cross-border fund servicing of Luxembourg-domiciled funds.

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ALFI publishes the 1st edition of its EMIR/OTC Derivatives FAQ document

ALFI's EMIR / OTC Derivatives FAQ working group has compiled answers to the industries frequently asked questions about the nine regulatory and implementing technical standards that complement the obligations defined under the Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties (CCPs) and trade repositories (the so-called European Markets Infrastructure Regulation - EMIR) adopted on 4 July and entered into force on 16 August 2012.

The answers are not necessarily definitive and they might not be suitable for every circumstance. The document is not meant to be an industry standard or a guide to best practice but it represents the view from a group of market participants.

ALFI's members are welcome to submit a question to the working group, which will review it and consider whether to include it in a future copy of this document. Please send your questions to info@alfi.lu. We will acknowledge receipt of each question but we regret that we may be unable to reply individually to each one.

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Luc Frieden stresses Luxembourg’s commitment to international standards

Finance minister Luc Frieden has reacted to the negative rating of Luxembourg by the Global Forum on Transparency and Exchange of Information for Tax Purposes. In an interview published on the website of the ministry of Finance, he underlines that Luxembourg is fully committed to the fight against tax fraud and tax evasion and to immediately take remedial measures in order to comply to the standard defined by the Global Forum.

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Luxembourg Regulator authorises first RQFII UCITS fund

The Luxembourg regulator CSSF has authorised the first Renminbi Qualified Foreign Institutional Investor (RQFII) fund under the Undertakings for Collective Investment in Transferable Securities (UCITS) scheme.

The fund that has now been authorised is a UCITS investing 100% of its net assets in China A-shares (i.e. shares in mainland China-based companies that are traded on a Chinese stock exchange). The UCITS can invest in these shares through the use of the RQFII quota granted to its manager by the competent Chinese authorities.

read more

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Luxembourg tax authorities issue circular on VAT exemption for risk management services

The Luxembourg VAT authorities released Circular 723ter concerning the VAT exemption for management services provided to investment funds.The circular confirms that risk management services form part of the fund management services addressed by Article 44 1d) of the Luxembourg VAT law.

As a result, risk management services provided by management companies should, in principle, be exempt from VAT, regardless of whether they are provided to UCITS or alternative investment funds.

Should the aforementioned services be delegated to a third party service provider, they could be VAT exempt if, viewed broadly, they form a distinct whole, specific to and essential for the management of funds, or are intrinsic to the activity of the fund. As already clarified by the Court of Justice of the EU, the exemption cannot apply to purely material or technical services.

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EFAMA response to the FSB Consultation regarding shadow banking risks in securities lending and repos

The European Fund and Asset management Association (EFAMA) has responded to the consultation organised by the Financial Stability Board on a “Policy framework for addressing shadow banking risks in securities lending and repos”. The Association stresses that investment funds are playing a significant role in the securities lending markets (where investment funds act as lenders of securities) and on the repo markets.

read more

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ESMA updates its Guidelines on the reporting obligations for alternative investment fund managers (AIFMS)

The European Securities and Markets Authority (ESMA) has published an updated version of its "Guidelines on reporting obligations under Articles 3(3)(d) and 24(1), (2) and (4) of the AIFMD".

 

The guidelines aim to clarify provisions of the AIFMD and its "delegated act" ("Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012") on required information, which will help to have a more comprehensive and consistent oversight of AIFMs' activities.

In addition to the Guidelines and the Opinion, ESMA has published on its website technical documents that should help regulators and the AIFMs to transmit the requested reporting in a standardised way to national competent authorities and to ESMA.

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ESMA publishes an updated Q&A on its Guidelines on ETFs and other UCITS issues

ESMA has published an updated version of its Q&A on the Guidelines on ETFs and other issues. The updated Q&A is available on ESMA’s website.

Two additional questions have been added in the document, respectively pertaining to the sections of the Guidelines on collateral management and on financial .

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IOSCO urges implementation of principles for financial benchmarks

The International Organization of Securities Commissions (IOSCO) encourages administrators to take all the necessary measures to comply with the IOSCO Principles for Financial Benchmarks.

In a public press release, IOSCO also requests that administrators publically disclose every year the extent of their compliance with the Principles for Financial Benchmarks, which were issued on 17 July.

The communique says: IOSCO believes these Principles provide a solid framework to ensure the quality, integrity, continuity and reliability of Benchmarks, and therefore encourages Administrators to take all the necessary measures to comply with them and provide the public disclosure set out above.

The report published with the Principles set out a 12 month period for benchmark administrators to implement the Principles. In the communique, IOSCO reminds benchmark administrators of the importance of implementing the Principles within the given timeframe.

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Joint Forum consultation “Point of sale disclosure in the insurance, banking and securities sectors”

The so called Joint Forum, of which IOSCO is a member, published in September a consultative document on Point of Sale ("POS") disclosure in the insurance, banking and securities sectors. The latter looked at ways to ensure that consumers across all financial sectors receive adequate product disclosure at the POS. In particular it:

  • identified and assessed differences and gaps in regulatory approaches to POS disclosure for investment and savings products across the insurance, banking and securities sectors;
  • considered whether regulatory approaches to POS disclosure need to be further aligned across sectors; and
  • proposed various recommendations, mainly to policymakers and supervisors, to assist them in considering, developing or modifying their POS disclosure regulations.

ALFI’s PRIPs KID working group analysed the proposed recommendations and sent its position to EFAMA. EFAMA incorporated the comments in its position paper which was sent to the Joint Forum in due course.

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European Parliament adopts text on PRIPs KID regulation

On 20 November 2013, the European Parliament adopted during a plenary session its position with respect to the proposed regulation on key information documents, in view of the upcoming trilogue negotiations with the Council of the EU.

Click here for a provisional version of the text, and here for the official press release.

Background information: ALFI newsflash of 28 October 2013

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Financial Transaction Tax: literature review report released

With continuing uncertainty over the potential plans for the introduction of a multi-jurisdictional financial transaction tax (FTT) in Europe, 27 trade associations, financial market organisations and business groups, including ALFI and the ABBL, have commissioned the compilation of a literature review distilling the main points from a large body of literature that has been generated to date on the European Commission’s proposal for a harmonised FTT.

The report offers an impartial view and provides an indication of the expected impact of the FTT across the financial services sector, as well as the spill-over effects beyond the EU-11 states. It includes key arguments for and against the EC’s proposal and the experiences of the implementation of several historical and contemporary national FTTs.

The executive summary of the report synthesises the key findings of the literature review in order to serve as a briefing note for policymakers and senior officials, who are being sent the report to assist in their decision making processes as the debate on the introduction of the FTT continues.

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Foreign Account Tax Compliance Act (FATCA): IRS Notice 2013-69

The U.S. Internal Revenue Service (IRS) released Notice 2013-69 which provides:

  • guidance for foreign financial institutions (FFIs) entering into a FFI agreement with the IRS to be treated as participating FFIs;
  • a draft FFI agreement;
  • procedures for FFIs to register for participating FFI or reporting Model 2 FFI status;
  • background on the statutory and regulatory requirements for FFIs to be exempt from withholding under FATCA;
  • a description of the general responsibilities of participating FFIs and reporting Model 2 FFIs, and
  • some of the intended updates to the FATCA Regulations.

Background information: See ALFI Newsflash of 4 October 2013

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Council sets out its position on UCITS

The Permanent Representatives Committee of the Council of the EU (Coreper) has agreed with the general approach to the proposal for a Directive amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions.

This agreement enables negotiations with the European Parliament to start with a view to adopting UCITS V at first reading. Member States will have two years to transpose UCITS V into national law.

Press release

General approach

Note

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IFBL catalogue 2014 published

The Luxembourg training institute IFBL has published the catalogue of its training programmes for the year 2014. The Institute offers 300 different pragmatically orientated training modules. The catalogue is available on the Institute’s website www.ifbl.lu.

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2.

New ALFI brochures

Updated versions of 3 ALFI technical brochures now available

ALFI has updated its technical brochures about Luxembourg hedge funds, real estate funds and private equity & venture capital investment vehicles. The brochures provide general background information on the legal and taxation aspects of these regulated and unregulated alternative investment vehicles domiciled in the Grand Duchy of Luxembourg.

The brochures are available for download in the publications-and-statements section of the ALFI website. Hard copies may be ordered at the ALFI secretariat (info@alfi.lu).

 

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ALFI's general brochure about the Luxembourg fund centre now also in Chinese

After having issued its general brochure presenting the Luxembourg investment fund centre in French and German at the close of September, ALFI has now published a Chinse version of the brochure. The various brochures can be downloaded from ALFI’s website.

Hard copies may be ordered at the ALFI secretariat via info@alfi.lu.

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3.

Upcoming ALFI events

17 December 2013: The evolving taxation agenda and its impact on the Asset Management Industry - An ALFI Leading Edge Conference

Become a last minute sponsor now!

(See Sponsorship opportunities and contact events@alfi.lu)

Event webpage

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18 & 19 March 2014: ALFI Spring Conference

NCCK, Kirchberg, Luxembourg

Event webpage

Sponsorhip & exhibition forms with details

Extended deadline for sponsorship: Friday, 13 December 2013!

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18 March 2014, evening: ALFI Gala dinner

Location: LuxExpo, Luxembourg

Event  webpage

Sponsorship agreement form with details.

Extended deadline for sponsorship: Friday, 13 December 2013!

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Save the dates

Tue 23 - Wed 24  September 2014 ALFI Global Distribution Conference

Tue 25 - Wed 26  November 2014 ALFI European Alternative Investment Funds Conference

Reserve your exhibition space and sponsorship for these events within the ALFI member year package! (Extended deadline: Friday, 13 December 2013. Contact events@alfi.lu if you have not received the offer).

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ALFI events calendar

For an overview of all events scheduled or endorsed so far by ALFI in 2014, have a look at the ALFI events calendar.

Check out all upcoming events. Click on  "Search Events" to filter by event type.

ALFI endorsed events calendar. New link!!!:

Click on the name of the event to get your ALFI member discount code. For information on the endorsed event itself, please refer to the general calendar above.

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4.

Past ALFI events

19-20 November 2013: 600 participants at ALFI's EAIF Conference

With some 600 registered participants, ALFI’s 2013 European Alternative Investment Funds Conference was once again a great success. In a series of plenary sessions and dedicated workshops, speakers and panelists analysed trends, opportunities and challenges on the private equity, real estate and hedge fund markets.

Get an impression of the event by visiting our picture gallery on flickr.

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12 November 2013: Frankfurt Roadshow

Recent developments regarding UCITS V & VI, first experiences with the AIMFD now that it has entered into force, cross-border distribution of UCITS and alternative funds as well as tax and operational questions were the main topics at ALFI’s Roadshow held on 12 November 2013 in Frankfurt.

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4-6 November 2013: US Roadshow - Boston & New York

At the beginning of November, ALFI hosted a highly successful roadshow in Boston and New York. The seminars focused on the opportunities and challenges the AIFMD entails for US managers, including raising capital in Europe and the setting-up of alternative products. Detailed sessions dealt with distribution, product, operations & reporting and remuneration issues.

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5.

Upcoming LFF events

Luxembourg for Finance at the Asian Financial Forum 2014

Luxembourg for Finance will be present at the Asian Financial Forum 2014 (AFF) in Hong Kong with a promotional booth from 13-14 January 2014. The agency for the development of the financial centre invites the Luxembourg financial community to attend the Forum and to be present at its booth. Interested parties will have the opportunity to register at a discounted fee (475 USD instead of 950 USD).

Please refer to the LFF website for more detailed information.

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6.

Other upcoming events

6 February 2014: Training Course on INREV fund valuation and reporting

On 6 February 2014, a practical one-day introductory course will outline the key elements in fund valuation and reporting in line with the proposed INREV Guidelines to help investors, fund managers as well as advisors who play a central role in the preparation or analysis of fund reports to understand and replicate best practice in this area.

The course will include the following topics:

  • INREV Guidelines: approach and overview of changes
  • Integrated Reporting Framework and SDDS
  • Understanding INREV NAV and how to calculate it
  • Fee metrics

The course will be given by leading industry experts with an emphasis on group discussions and case studies to allow participants to share their views.

read more

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