January 2014 - Fund industry news in January

The fund industry in January

Trilogue Agreement on MiFID II

On 14 January, the European Parliament and the Council reached an agreement on updated rules for markets in financial instruments, known as MiFID II.

Apart from the rules relating to market structure, market transparency and clearing, MiFID II will impact investment funds through its provisions concerning remuneration, inducements and stronger investor protection.

EFAMA, the European Fund and Asset Management Association, broadly welcomed the agreement in a press release but  expressed disappointment that insurance products were omitted.

This month’s agreement was an agreement in principle and the final text is still to be formally endorsed. This will conclude the Level 1 process and the Level 2 process, which includes technical details, will start.

CSSF Circular and FAQ on AIFMD Reporting

On 13 January, the Luxembourg supervisor, the CSSF, issued circular 14/581 on new reporting obligations for alternative investment fund managers.

This circular clarifies technical details that these managers need in order to fulfil their reporting obligations under the AIFM directive.

As highlighted in November's newsletter, Fundsquare has updated its e-file platform to include AIFMD reporting,  providing compliance and distribution support.

In addition to the circular, the CSSF published, on 10 January, a revised version of its FAQ on the directive, which includes new sections on marketing and reporting. In particular, the reporting section sets out the reporting periods and dates of first reports.

A positive 2013 for the Luxembourg fund industry, but challenges remain

Overall, net assets reached €2,615.4 billion at the end of December 2013, up by some 10% compared to 2012. ALFI also pointed out that nearly 100 new promoters launched products in Luxembourg.

Commenting on the year, Marc Saluzzi of ALFI, said: “2013 was positive, but there are challenges ahead for the sector [and] the regulatory agenda remains a heavy burden. The proposed Financial Transaction Tax (FTT), the draft regulation on money market funds and the final agreement on MiFID II could have a severe negative impact on the European asset management industry.”

Dring the year, there were a number of interesting moves concerning the new environment for alternative investment fund managers, although Mr Saluzzi pointed out that “we need to wait until at least the end of July 2014 to see Luxembourg’s role in this sector.”
 

_{Published on: 31 January 2014}
 

Fundsquare News 6 - January 2014