September 2015 - European fund industry news

European fund industry review

Final technical standards published for MiFID II, MAR and CSDR

On 28 September, ESMA, the European Securities and Markets Authority, published its final technical standards on some of the most important pieces of post-crisis financial regulation: the Markets in Financial Instruments Directive (MiFID II), the Market Abuse Regulation (MAR) and the Central Securities Depositaries Regulation (CSDR).

These standards translate how the legislation will apply in practice and will change the functioning of European markets by increasing transparency, safety and resilience as well as investor protection.

Steven Maijoor, ESMA Chair, said, “The magnitude of this change should not be underestimated. This will entail a certain cost but we should not forget the other side of this equation, which is the great benefits safer and sounder markets will bring to everybody.”

These final technical standards have been sent for endorsement to the European Commission, which has three months to approve them. MAR and MiFID II will enter into force in 2016 and 2017 respectively.

ESMA updates and consultations

During August and September, ESMA published:

• The responses to its consultation on key information documents
• Draft implementing technical standards, which will apply from 18 March 2016, on penalties and measures under UCITS V
• A consultation on its regulatory technical standards on the “European Single Electronic Format”
• Four reports on how the European Markets Infrastructure Regulation (EMIR) framework has been functioning and providing input and recommendations to the European Commission’s EMIR review.

ALFI Q&A on the impact of Target2 Securities on investment funds

In September, ALFI released a Q&A document on TARGET2 Securities (T2S) and investment funds.

T2S will have a significant impact on the European securities industry and will also change the way the fund industry operates. It was designed primarily for bonds and equities and the specific needs of investment funds are not fully catered for.

Over time T2S for funds will most likely enable investors, distributors, asset managers and service providers alike to benefit from secure and efficient way of cross border settlement by using highly scalable and automated processes.

AIMA celebrates 25 years

With more than 10,000 corporate and individual members in over 50 countries. AIMA, the  Alternative Investment Management Association, is this year marking its twenty-fifth anniversary. AIMA views the global hedge fund industry as a valuable contributor to the global economy and the association provides a global forum for members to establish a common adherence to industry sound practice. As part of its anniversary celebrations, it has released a brochure entitled 25 Years in Hedge Funds.

Investment Association to propose “radical simplification” of investment managers’ pay

The Investment Association, representing the UK investment management industry, has announced the creation of a working group, the Executive Remuneration Working Group, to bring forward proposals for a radical simplification of executive pay.

This move follows mounting concern in the investment industry that pay structures are becoming too complex, leading to a lack of clear incentives for management to act in the best long term interests of their companies and their investors.

The working group is expected to bring forward proposals in the spring of 2016.

Notable fund industry publications

During August and September, interesting publications from the fund industry included:

• The International Organization of Securities Commissions, IOSCO, released two reports of note, the first on cross-border regulation and the second on sound practices for investment risk education
• ALFI and PwC Luxembourg published a global pension fund report entitled Beyond their borders: evolution of foreign investment by pension funds
• The Investment Association issued the results of its annual asset management survey
• EY Luxembourg released the 2015 edition of its technical guide to Luxembourg funds as well as an update to its wall poster on European fund distribution.
• Finally for those who did not attend, ALFI issued a roundup of its global distribution conference which took place in September.
   

_{Published on: 30 September 2015}

Fundsquare News 23 - September 2015