Asset Management

Asset Management update - February 2017

The Securities Financing Transaction Regulation (SFTR)

SFTR came into effect on 12 January 2016 to help enhance the transparency around the use of Securities Financing Transactions (SFTs) and Total Return Swaps (TRSs) in the shadow banking industry. Find out more

 

Annual industry outlook 2017

Grant Thornton US has recently published its Annual Industry Outlook 2017 which features perspectives on seven critical industry sectors which are all experiencing dynamic change. This compilation illustrates the common and diverging challenges experienced right now by companies in sectors such as asset management, banking and real estate.

 

ESMA Q&A updates

On 2 February 2017 European Securities and Markets Authority (ESMA) updated its EMIR Q&A on practical questions regarding the European Markets Infrastructure Regulation (EMIR).

The Q&A clarifies that the reporting entities are not obliged to update all the outstanding trades upon the application date of the revised technical standards and that they are required to submit the reports related to the old outstanding trades only when a reportable event takes place (e.g. when the trade is modified).

ESMA also updated its MiFID II Q&A regarding the implementation of the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). The updated Q&A provides responses to questions posed by the general public and market participants in relation to the practical application of MiFID II and MiFIR.

 

ESMA issues opinion on UCITS share classes

On 30 January 2017 ESMA issued an opinion on the extent to which different types of units or shares (share classes) of the same UCITS fund can differ from one another, having found diverging approaches in different EU countries. ESMA sets out four high-level principles which UCITS must follow when setting up different share classes in order to ensure a harmonised approach across the EU:

  • common investment objective: Share classes of the same fund should have a common investment objective reflected by a common pool of assets. ESMA considers that hedging arrangements at share class level – with the exception of currency risk hedging – are not compatible with the requirement for a fund to have a common investment objective;
  • non-contagion: UCITS management companies should implement appropriate procedures to minimise the risk that features specific to one share class could have a potentially adverse impact on other share classes of the same fund;
  • pre-determination: All features of the share class should be pre-determined before the fund is set up; and
  • transparency: Differences between share classes of the same fund should be disclosed to investors when they have a choice between two or more classes. Find out more