March 2014 - European fund industry news

Fund industry news in March

European Commission adopts measures for long term financing in Europe

On 27 March, the European Commission adopted a package of measures to improve long-term financing of the European economy. As part of these measures, it unveiled on the same day two specific actions: 

• a proposal to revise the rules for occupational pension funds 
• a communication on crowdfunding as alternative financing options for SMEs.

The pension fund proposal is in fact  the revision of the IORP (institutions for occupational retirement provision) directive. It includes provisions to modernise investment guidelines, to improve investor protection, and, importantly, to improve cross-border activity and pension mobility across the EU, the procedures for which are currently unclear.

EFAMA proposes guidelines to inspire investor education initiatives

On 24 March, the European Fund and Asset Management Association (EFAMA) released the findings of its study on financial literacy and investor education. 

Entitled "Building Blocks for Industry Driven Investor Education", it highlights a very high rate of financial illiteracy in Europe that, as Peter De Proft, Director General of EFAMA, pointed out “bodes ill for the future, as responsibility for financial provision increasingly shifts from the state to the individuals.”  

The report includes a review of initiatives by associations and investment managers in Europe.

It stresses the importance of developing partnerships between governments, the financial industry, European institutions and the media in order to promote financial education in an effective manner and to help potential investors make better-informed investment decisions. 

ESMA publications and consultation 

ESMA, the European Securities and Markets Authority, was quite active in March with a number of documents and reports published:

• The first edition of a Q&A on European Venture Capital Funds (EuVECA)  and European Social Entrepreneurship Funds (EuSEF)
• Its final report on the revision of guidelines for ETFs and other UCITS issues
• An opinion on good practices for structured retail product governance
• Technical advice to the European Commission on Article 67(3) of the AIFMD
• A report entiltled "Trends, Risks and Vulnerabilities" in Europe, with an interesting chapter on fund flows. 

On 21 March, ESMA opened a consultation on its draft regulatory technical standards under the revised Transparency Directive relating to the notification of major shareholdings and the indicative list of financial instruments subject to notification requirements.

The consultation runs until 30 May 2014.

AIFMD reporting updates

During the month there were two important updates related to reporting and the application of the Alternative investment Fund Managers Directive (AIFMD).

On 17 March, the CSSF updated its FAQ on alternative investment fund managers with the dates when both authorised AIFMs and registered AIFMs have to file their first reports with the CSSF, as well as with other reporting details.  On 20 March, it also updated its "aplication questionnaire" for these fund managers.

The CSSF FAQ should be read in conjunction with the ESMA Q&A, and this was updated on 25 March with seventeen new questions and answers on reporting.

FATCA: Luxembourg and USA sign 

On 28 March, Luxembourg and the USA signed an intergovernmental agreement on FATCA (Foreign Account Tax Compliance Act). The negotiating teams had previously agreed on the "Model 1" agreement.

ALFI, the Luxembourg fund association, will be issuing a Q&A document on this topic in the future.

_{Published on: 31 March 2014}

Fundsquare News 8 - March 2014