ESMA opinion on key principles for a European framework on loan origination funds
On 13 April 2016 ESMA published an opinion setting out its view on the necessary elements for a common European framework for loan origination by investment funds. The key areas which ESMA draws attention to in its opinion are:
- authorisation requirements, both for loan originating funds and their managers;
- types of loan-originating AIFs;
- types of investors;
- organisational requirements for AIFMs managing loan-originating AIFs;
- general requirements for loan-originating AIFs: leverage, liquidity, stress testing, reporting;
- diversification, eligible investments and eligible debtors; and
- systemic risk.
ESMA Publishes Remuneration Guidelines
On 31 March 2016, the European Securities and Markets Authority (“ESMA”) published its final Guidelines on sound remuneration policies under the UCITS Directive and AIFMD. ESMA has also written to the European Commission, European Council and European Parliament on the proportionality principle and remuneration rules in the financial sector.
The UCITS Remuneration Guidelines, which apply from 1 January 2017, provide clarity on the requirements for management companies when establishing and applying a remuneration policy for key staff in accordance with the UCITS Directive. The Guidelines will ensure a convergent application of these provisions and provide guidance on the governance of remuneration, requirements on risk alignment and disclosure. Find out more
On 24 March the OECD released a follow-up consultation as part of the BEPS Action 6 on “Preventing the Granting of Treaty Benefits in Inappropriate Circumstances”. The consultation considers the tax treaty entitlement of investment funds that do not qualify for tax treaty benefits as “collective investment vehicles (“CIVs”) in their own right. Such investment funds, which would include AIFs that do not meet the definition of a CIV, have been termed “non-CIV funds”. The consultation document requests input on a broad range of areas.
The closing date for responses is 22 April 2016. Find out more
Central Bank of Ireland Markets Update
The Central Bank of Ireland has recently issued a markets update. This update covers a number topics such as UCITS & AIFMD Q&A, Investment Money Regulations (“IMR”) and Umbrella Fund Cash Accounts. Some of the key points include:
- Umbrella Fund Cash Accounts
- revised guidance on Umbrella Fund Cash Accounts holding subscription, redemption and dividend monies which provides for these accounts to be applied to cleared fund models.
- Revised UCITS and AIFMD Q&A
- the revised Q&A provide information on the conditions where the above Umbrella Fund Cash Accounts can have unattributed money for up to 5 working days on an exceptional basis. They also provide that only monies payable to investors or to sub-funds should be paid through these accounts; and
- a question has been added for information around Securities Financing Transaction Regulation disclosures.
- Investment Money Regulation
- the IMR Statutory Instrument (S.I. no. 87 of 2016) was formally published. This moves the application date of IMR to 1 July 2016.
EU Audit Reform
Accounting reform in the European Union (“EU”) will require public-interest entities to change their auditor periodically from 2016. The reforms will also impact on the relationship between a public-interest entity and its auditor.
How will these changes affect your business? View our updates here:
IFRS 16 “Leases”
The International Accounting Standards Board (“IASB”) has published IFRS 16 ‘Leases’, completing its long-running project to overhaul lease accounting.
IFRS 16 will require lessees to account for leases ‘on-balance sheet’ by recognising a ‘right-of-use’ asset and a lease liability. For many businesses, however, exemptions for short-term leases and leases of low value assets will greatly reduce the impact. Find out more
See all our Asset Management updates here.