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    ALFI Newsdigest september 28, 2015    
          in this edition      
    1. Headlines
2. News from ALFI's Asia representative office
3. Upcoming ALFI events
4. Past ALFI events
5. Professional training



ALFI Study : Pension funds are increasingly investing abroad

Pension funds around the world are increasingly looking beyond their borders to address their investment needs, according to the global pension fund report “Beyond their borders: evolution of foreign investment by pension funds” commissioned by ALFI and produced by PwC Luxembourg. The report has been presented at ALFI’s 2015 Global Distribution Conference in Luxembourg on 16 September.

The report - which looks at the growth of pension funds globally, the asset allocation of pension funds on a regional basis and the foreign investment of pension funds - found that South America’s pension funds showed the highest growth rate globally, with assets soaring from USD 184 billion (bn) in 2008 to USD 528 bn in 2014, a 19.2% compound annual growth rate (CAGR).

In terms of investing overseas, foreign investment for the pension funds of the majority of OECD countries (excluding the US) accounted for about 25% on average of their total pension investments in 2008, but jumped to almost 31% in 2014.           

(Read more)

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ALFI responds to IOSCO consultation regarding fund fees and expenses

On 23 September 2015, ALFI responded to the International Organization of Securities Commissions (IOSCO) consultation report on Elements of International Regulatory Standards on Fees and Expenses of Investment Funds, which proposes an updated set of common international standards of best practice for the operators of Collective Investment Schemes(CIS) and regulators.

Download the document here.

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ALFI response to ESA technical discussion paper on PRIIPs

On 17 August 2015, ALFI responded to the technical discussion paper on packaged retail and insurance-based investment products (PRIIPs), which was published end of June 2015 by the European Supervisory Authorities (ESAs).

The ESAs are mandated by the Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products to develop draft Regulatory Technical Standards (RTS) on the content and presentation of the Key Information Documents (KIDs) for PRIIPs. The aim of the latter is to provide EU retail investors with consumer-friendly information about investment products with the ultimate aim of improving transparency in the investment market.

The technical discussion paper aimed to collect views on the possible methodologies to determine and display risks, performance and costs in the KID for PRIIPs.

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ALFI response to the European Commission’s consultation on regulation EU No 648/2012 on OTC derivatives, central counterparties

On 13 August 2015 ALFI submitted its response to the European Commission’s consultation on regulation EU No 648/2012 on OTC derivatives, central counterparties and trade repositories.

Click here to read the ALFI response.

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NEW Twitter campaign #askALFI

ALFI recently launched a new campaign on Twitter called #askALFI. Followers can ask questions related to the investment fund industry using hashtag #askALFI and ALFI experts respond to selected questions via short video messages.

The videos recorded at the conference are available here.

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AML - CSSF Circular 15/616

On 2 July 2015 CSSF issued Circular 15/616 drawing the attention of all entities under its supervision to the declarations published by the FATF in June with regard to jurisdictions that may pose a risk to the international financial system. In particular, the list of jurisdictions with strategic anti-money laundering and combating the financing of terrorism deficiencies for which a call for action applies, and the list of jurisdictions with strategic AML/CFT deficiencies for which they have developed an action plan with the FATF have been updated by the abovementioned declarations.

Please click here to access the text of the Circular.

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AML - Grand-ducal Regulation of 5 August 2015

The Grand-ducal Regulation modifying Grand-ducal Regulation of 1 February 2010 providing details on certain provisions of the AML law was published in the Memorial A-156 on 10 August 2015. This text completes article 2 relating to simplified due diligence obligations towards clients as regards online payment services or electronic currency.

The CSSF published a consolidated text of Grand-ducal Regulation of 1 February 2010 further to this modification.

Please click here to access the Regulation of 5 August 2015.  here to access the English consolidated text of the Regulation and here to access the French consolidated version.

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Luxembourg: Draft Law on the Automatic Exchange of Information published

On 14 August 2015, the Luxembourg draft law transposing Council Directive 2014/107/EU of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation and approving the Multilateral Competent Authority Agreement signed in Berlin on 29  October 2014 was submitted to Parliament. The Directive extends the automatic exchange of information to (i) interest, dividends and other income (ii) gross proceeds from the sale or redemption of financial assets and (iii) account balances.

Member States must transpose this Directive into their national legislation by 31 December 2015. The Directive takes effect as from 1 January 2016 with information on the above categories of revenues being reported within 9 months from the end of each calendar year.  Financial institutions must implement reporting and due diligence rules which are consistent with the Common Reporting Standard developed by the OECD.

Click here for the text of the draft law (in French) and here for the text of the Directive.

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Luxembourg: Draft Law Transposing UCITS 5 published

On 5 August 2015, the Luxembourg draft law transposing Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 and amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities as regards depositary functions, remuneration policies and sanctions (“UCITS 5”) was submitted to Parliament. Member States must transpose UCITS 5 by 18 March 2016 at the latest. The Law and the Directive will be further supplemented by a Commission Delegated Act on depositaries which is expected by the end of 2015 or early 2016. The Luxembourg legislator has further seized this opportunity to align the depositary regime of funds established pursuant to part 2 of the Law of 17 December 2010 on the depositary regime under UCITS 5.

Click here for the text of the draft law (in French).

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Sharp increase in UCITS net sales in July

The European Fund and Asset Management Association (EFAMA) reports that in July 2015 UCITS experienced a sharp increase in net sales which totaled EUR 63 billion, compared to net outflows of EUR 17 billion in June.  This rebound can be attributed to a turnaround in net sales of money market funds and bond funds.

Long-term UCITS (UCITS excluding money market funds) registered net inflows of EUR 39 billion, up from EUR 18 billion in June, which suggests that investor confidence strengthened at the beginning of the summer.

Bond funds recorded net inflows of EUR 4 billion, compared to net outflows of EUR 7 billion in June.  Net sales of balanced funds increased to EUR 18 billion, compared to EUR 15 billion in June. Equity funds also enjoyed stronger net sales of EUR 12 billion, up from EUR 7 billion in June. Money market funds recorded net inflows of EUR 24 billion, compared to net outflows of EUR 35 billion in June.

Total non-UCITS net sales amounted to EUR 8 billion in July, down from EUR 19 billion in June.  Net sales of special funds (funds reserved to institutional investors) totaled EUR 7 billion, compared to EUR 17 billion.

Net assets of UCITS stood at EUR 9,070 billion at end July 2015, representing an increase of 1.8 percent during the month, whilst net assets of non-UCITS increased by 0.8 percent to stand at EUR 3,594 billion at month end.  Overall, total net assets of the European investment fund industry rose by 1.5 percent to stand at EUR 12,663 billion at end July 2015.  

(Read more)

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EFAMA letter to ESMA on alignment of disclosure requirements

The European Fund and Asset Management Association (EFAMA) has sent a letter to the European Securities and Markets Authority (ESMA) regarding an alignment of the UCITS KIID with the increased MiFID II disclosure requirements.

According to the letter, (i) EFAMA believes this to be a technical issue that may be resolved through Level‐4 Q&As or Level‐3 guidelines and that (ii) EFAMA will provide suggestions on such an alignment after the final outcome of the product and cost presentation in the PRIIPs KID.

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EMIR – Conclusions of the CSSF survey

On 11 August 2015 CSSF issued a press release outlining the main conclusions of the survey launched in September 2014 regarding the Regulation (EU) N°648/2012 on OTC derivatives, central counterparties and trade repositories (“EMIR”) and compliance by supervised entities with this Regulation. Although the survey shows that most players have tried to fully comply with the EMIR obligations, the CSSF insists in this press release on the fact that management companies and AIFMs must improve their processes further. The supervisory authority will contact potentially problematic entities before the end of the year.

The press release can be accessed here.

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EMIR - ESMA reports on the functioning of EMIR and its review

On 13 August 2015 ESMA published four reports on the functioning of the EMIR framework. The three first reports focus on non-financial counterparties, pro-cyclicality and the segregation and portability for CCPs. The fourth report makes recommendations to the European Commission as to the review of EMIR, in particular as regards clearing obligation, recognition of third country CCPs, trade repositories, non-financial counterparties and the limiting of pro-cyclicality.

To access the reports click here.

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IOSCO issues report on cross-border regulation

On 17 September 2015, the International Organization of Securities Commissions (IOSCO) published its final report of the IOSCO Task Force on Cross-Border Regulation (Task Force).


The final report indicates that cross-border regulation is moving towards more bilateral and occasionally multilateral engagement via different forms of recognition to solve regulatory overlaps, gaps, and inconsistencies. While the increased engagement is mostly bilateral at this stage, multilateral engagement is likely to develop further as markets continue to grow and emerge around the world and with the greater use of supervisory Memoranda of Understandings.


(Read more)

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IOSCO AMCC survey on cyber-security

In order to focus on the security profile of the asset management sector within financial services, a small working group on cyber-security (counting EFAMA and ICI among its members) has been established earlier this year on IOSCO’s Affiliate Members Consultative Committee. This working group has produced a survey that can be accessed by clicking on the following link: https://www.surveymonkey.com/s/GCSSurvey2015  

The survey seeks to benchmark the security posture of the asset management industry globally. There are nine sections covering such topics as authentication, policies and procedures, outsourcing and encryption. The survey is being run across a broad range of jurisdictions and the long term plan is to repeat the survey every two-three years to see how the industry’s security profile evolves as technology and cyber risk change. As a result, institutions will be able to compare their cybersecurity practices with those of the industry at large.

Deadline for responding to this survey is Friday, 2 October 2015.

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SEC removes references to credit ratings in money market fund rule and form

On 16 September, the Securities and Exchange Commission adopted amendments to remove credit rating references in the principal rule that governs money market funds and the form that money market funds use to report information to the Commission each month about their portfolio holdings. The Commission also adopted amendments that would subject additional securities to issuer diversification provisions in the money market fund rule.

(Read more)

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US Dodd Frank Volcker Rule: recent developments

As mentioned in one of our previous newsflashes, the Volcker Rule agencies published two new FAQs, one of which (FAQ 14) addresses the foreign public funds issues. However, this FAQ does not provide any relief for those foreign funds that do not qualify for the foreign public fund exclusion from covered fund status, such as would be the case for alternative investment funds (“AIFs”) organised and offered under the AIFMD. Accordingly, there remains the potential for such AIFs to be considered banking entities because of their governance structure. By means of another letter from EFAMA, the fund industry continued its lobbying efforts to achieve a similar relief for AIFs.

Background information: ALFI newsflash of 30 June 2015

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News from ALFI's Asia representative office

South Korea takes actions to stimulate retail investment

South Korea’s Financial Supervisory Services (FSS) has announced a set of measures to establish fair practices in the domestic asset management sector and thus restore investor confidence in the Korean fund market. The measures deal with any unfairness in asset management businesses at each and every stage from fund creation to sale to management.

While a more stringent screening process for the registration of new small funds is introduced, the number of items of disclosure for asset managers will be drastically reduced, from 100 to 46. A “thematic inspection” will be scheduled to review the practices in the second half of the year.

The FSS states that these new measures are aimed to facilitate fund investment and establish a culture of long-term investment.

Click here for details of FSS statement. 

Furthermore, to revitalize the asset management sector, the Ministry of Strategy and Finance (MOSF) proposed to revise down the existing capital gains tax for investors, from an annual collection to collection only when a fund investment is redeemed.  This comes in the context of a series of tax measures to support growth in the country announced on 6 August, 2015.

In addition, the Financial Services Commission (FSC) announced details regarding the introduction of Individual Savings Accounts (ISAs).  It is expected that the preferential tax arrangement on capital gains and dividends of ISAs will boost the investment appetite of local retail investors.

On the corporate front, the MOSF has decided to include existing products in its proposal to temporarily waive capital gains tax on funds that invest more than 60% of their assets in overseas stocks with a 10-year fixed tenure.

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Taiwan eases restrictions to encourage investment activities in the domestic market

Taiwan’s Securities Investment Trust and Consulting Association (SITCA) announced that, effective on 21 August 2015, the Central Bank allows foreign currency discretionary mandates that have foreign currency share classes to invest in onshore funds that have no more than 30% of their assets in Taiwan securities.

Furthermore, the Financial Supervisory Commission (FSC) in Taiwan has also raised the investment cap for registered offshore funds sold through Offshore Banking Units (OBUs) from 30% to 50% of their assets in the domestic market, effective on 1 September 2015. 

These measures are aimed to accelerate investment and to help industry players to diversify their investment in the domestic stock market.

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China releases guidelines to regulate on the booming internet finance sector

The People’s Bank of China (PBoC) has announced a set of guidelines to govern the development of the fast-growing internet finance sector. The roles of the regulators has been clarified: The China Banking Regulatory Commission (CBRC) is responsible for online lending (which includes peer-to-peer lending, micro finance), the China Securities Regulatory Commission (CSRC) will oversee fund sales and crowd funding and the China Insurance Regulatory Commission (CIRC) will supervise online insurance sales. Measures on risk control are defined to mitigate fraud and illegal fund-raising. 

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China opens its interbank bond market

On July 1, the Ministry of Finance of the People’s Republic of China published a statement announcing the development of a new scheme which will facilitate foreign institutions investing in the interbank bond market. This new system proposes a  total quota cap versus the current procedure of having individual quota per country.

Furthermore, on July 14, the People’s Bank of China (PBOC) announced new rules allowing institutions such as foreign sovereign wealth funds, central banks and other official organizations, exemption from the current quota requirement and instead establishes a simplified procedure which involves registering with the PBOC before starting to invest.

The new rules take effect immediately.

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Singapore issues new guidelines on good drafting practices for prospectuses

On July 7, the Monetary Authority of Singapore (MAS) issued new guidelines on good drafting practices for prospectuses in order to improve readability and ease of understanding of key information disclosed in the prospectuses. The goal is to provide the information that investors and advisors would reasonably need in order to make an informed investment decision.

The guidelines can be found on the MAS website: click here.

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Upcoming ALFI events

5 - 8 October: Latin America Roadshow

Opening speech by Minister Pierre Gramegna in Colombia

Programmes online!

Registration open!

Please forward the details to your contacts in this region!

Sponsorship opportunities for ALFI members. Contact events@alfi.lu

Event webpage

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14 October: ALFI Leading Edge Conference in London

"New rules of the game for global distribution" is the topic of ALFI's next Leading Edge Conference in London.

The programme will give you practical and technical details on:

  • Changes in global distribution regulations in Europe and beyond MIFID II, private placements, national placement rules, revision of prospectus directive, PRIPs;
  • AML/KYC: Practical approaches to implement the latest regulations;
  • Control your distribution network, role of the Board and ManCo, source of wealth, delegation/Outsourcing;
  • Digital & Big Data: what it means for distribution in the future;
  • The Asian Dimension: What happens from a 'distribution point of view', RQFII, QFII, regional passports, Stock Connect;
  • AIFM passport: feedback and perspectives;
  • Is global distribution getting more efficient and are investors getting the benefits of new regulations?

Seize the opportunity to gain visibility by sponsoring the event.


160 participants already registered with one third coming from top Asset Managers!

Competitive rates from £240 for ALFI members! Team deals for 6 and over! Click here.

Still a few free tickets for international asset managers and institutional investors who are not based in Luxembourg. Click here.

Event webpage

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28 & 29 October : ALFI Roadshow to Switzerland (Geneva & Zurich)

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

Programme and registration online !

Event webpage

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9 - 13 November: ALFI Roadshow to the US (San Francisco, Chicago & New York)

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

Programme and registration online!

Event webpage

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18 November: ALFI TA Forum

"TA 2015 - The cornerstone to fostering a safe and robust Distribution Operations value chain"

  • Keynote speeches, panel discussions, breakout sessions and Q&A:
  • How did recent regulatory and industry developments transform the global fund distribution business?
  • What are the key market considerations for the near future?
  • How do fund industry players ensure the ease of doing business in Luxembourg-domiciled funds?
  • How does the distribution operations landscape evolve?
  • What are the recent developments in distribution oversight?

Programme coming soon!

Sponsorship Opportunities: from EUR 1,500 - contact events@alfi.lu!


  • From only 195 Euros for member early bird bookings before 9th October!
  • Team deals from 4 registrations!
  • Get an overview of the registration fees

Event webpage 

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24 November: ALFI Leading Edge Conference

The next ALFI Leading Edge Conference will be dedicated to product & investors taxation:

  • Tax Reporting (German Tax, Austrian Tax.)
  • FTT
  • TiSA
  • Reclaim processes

 Sponsorship opportunities: contact events@alfi.lu to join!


  • From only 250 Euros for member early bird bookings before 16th October!
  • Team deals from 6 registrations!
  • Get an overview of the registration fees

Event webpage

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7 - 11 December: ALFI roadshow to Asia

Save the dates!

Sponsorship open to ALFI members only until the deadline of 7 October – click here

Confirmed sponsors to date: Deloitte, Elvinger Hoss & Prussen, EY, Linklaters LLP, PwC Luxembourg, State Street Bank Luxembourg...

Contact events@alfi.lu

Event webpage

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19 & 20 January 2016: ALFI European Alternative Investment Funds Conference

This year’s edition covers the following topics:

  • Vision of the future potential development of the alternative business in the EU
  • Piloting FinTech in the world of alternative investments
  • Debt and Credit Funds for Europe: alternative financing industry
  • Real Estate is the flavour of the month for investors – or is it?
  • EU Policy Objectives & Fund Labels: putting the ELTIF, EuVECA & EuSEF labels to work
  • 3rd country passporting under AIFMD
  • Private Equity SWOT Talk – Strengths, weaknesses, opportunities and threats for the PE/VC: EU & US views

Open for Sponsorship & Exhibition (deadline 16 October for general sponsorship)

More details & registration coming soon!

Event webpage

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ALFI events calendar

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

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

Note: the event calendar allows to have events listed either chronologically or by event category. Click on the name of the event for detailed information.

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Past ALFI events

15-16 September: ALFI Global Distribution Conference

Speakers from Europe, Asia and Latin America analysed and discussed trends, opportunities and challenges for the international asset management industry and the investor at ALFI’s annual Global Distribution Conference that attracted more than 700 participants to the prestigious Philharmonie in Luxembourg. New at this year’s event: A FinTech corner, where participants could discover the most promising innovations in financial technology.

Our photomontage shows a few of the conference speakers and panelists (clockwise, starting in the upper left corner): David Capocci, International Tax Partner, Deloitte, Luxembourg; José Carlos H. Doherty, Chief Executive Officer, Brazilian Financial and Capital Markets Association, Brazil; Anne Richards, CIO, Aberdeen Asset Management, Edinburgh; Stephanie Flanders, Chief Market Strategist for Europe, J.P. Morgan Asset Management, London; Jean-Marc Goy, Counsel for International Affairs, Commission de Surveillance du Secteur Financier, Luxembourg; Michael Chow, Managing Director, Head of International Business, Fullgoal Asset Management (HK) Ltd., Hong Kong; Kristina Danielson, Head of Global Client Portal Distribution, UBS Global Asset Management, Zurich; H.E. Pierre Gramegna, Minister of Finance, Luxembourg, and Jonathan P. Griffin, Managing Director, J.P. Morgan Asset Management (Europe) S.à r.l., Luxembourg.

Center picture: The insurance panel moderated by Marc Hengen, CEO of the Association des Compagnies d’Assurances et de Réassurances du Grand-Duché de Luxembourg.

See our photostream on Flickr.

Read a report about the conference here.

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14 September: ALFI Golf tournament

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Professional training

Upcoming IFBL/ALFI training modules

The IFBL has added the following course dates to its 2nd semester training schedule (all courses are in English):

  • Actors and Legal Environment – 16th October: Pillars of the fund industry, stakeholders and actors, legal framework, supervision and link to alternative products.
  • UCIs Key Insights into IFRS – 16th October: Understanding IFRS and their use in accounting for alternative investment funds, differences Lux Gaap vs. IFRS, financial instrument recognition, measurement and preparation of disclosures.
  • Risk for Conducting Officers and Directors – 16th October: Principles and methods of risk management and governance for UCITS and AIF funds (including case studies).
  • Understanding AIFMD – 19th (am) & 29th (am) October: The directive and its environment, objectives, impact and scope. Passports, conduct of business, delegation, transparency provisions and implementation.
  • International Fund Registrations – 23rd October: Key principles, roles of actors, European domestic market specificities, registrations outside the EU.
  • Introduction to Fund Compliance – 30th October: Ethics, governance and rules of conduct, market abuse, insider trading, customer complaints, conflict of interest, data and confidentiality.
  • Introduction to European Fund Taxation – 9th November: Basic notions, terminology, key EU markets and reporting.
  • Applied AML for Funds – 18th (am) & 25th (am) November: Applied understanding of AML and industry guidelines, roles and responsibilities, the risk based approach, due diligence, vigilance and outsourced partners.
  • UCIs Custody & Depositary Functions – 30th November: Background, legal and regulatory framework, mission and responsibilities, main instruments and principles of custody.Investment Policies and Restrictions – 4th December: Legal framework, UCITS investment restrictions involving simple derivatives, securities lending and repo transactions.
  • UCITS and Non-UCITS ManCos – 7th December - Explanation of the role, responsibilities, authorization, passport and programme of activities.

More information can be found on both the IFBL and ALFI websites (http://www.ifbl.lu/ & http://www.alfi.lu/) or via the IFBL customer service team (46 50 16-1 / customer@ifbl.lu).

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