Displaying items for 2016

The Alternative Investment Fund Managers Directive (AIFMD) is bedded down, and the costs have generally beenabsorbed by the asset management community without too much disruption. The European Commission (EC) is obliged to review AIFMD’s progress in 2017, but managers should not brace themselves for radical change. It is hoped that uncertainties about asset segregation rules will be settled, but remuneration provisions are unlikely to be amended. Reporting requirements under Annex IV could be reassessed although the specificities have not been laid out.  Anecdotally, there is talk that liquidity risk management and leverage rules are being tightened or at least synchronised with policy guidelines due to be outlined…

Regulation has been at the forefront of asset managers’ agendas over the last few years, and a number of rules and obligations will take effect over the coming 12 months including the byzantine Markets in Financial Instruments Directive II (MiFID II). To complicate matters further, there is a very strong possibility that asset managers (certainly those with a lot of capital derived from EU-based clients) will have to implement logistical and operational changes to their business depending on how Brexit talks conclude. The UK’s Senior Managers and Certification Regime (SM&CR) is yet another regulatory requirement which the industry needs to…

What now for EMIR?The European Market Infrastructure Regulation (EMIR) requires financial institutions such as fund managers to centrally clear their straightforward, vanilla over-the-counter (OTC) derivatives. Regulators have put enormous faith into central counterparty clearing houses (CCPs) to scale down the risk in the OTC market, turning these utilities into systemically important financial institutions (SIFIs). CCPs are certainly not invincible (there have been failures in Malaysia and Paris and a near-failure in Hong Kong), but they are a major improvement on the pre-crisis OTC environment. However, CCPs’ creditworthiness is dependent on the conservative nature of their margining policies and the quality…

The latest advice from the European Securities and Markets Authority (ESMA) on which third countries meet the conditions and criteria to enable their domestic fund managers to passport freely under the Alternative Investment Fund Managers Directive (AIFMD) has experienced a mixed reception from the industry. Firstly, the advice is not legally binding, and it still needs sign off from the European Commission, the European Parliament and the European Council before it can be rolled out in force. Attaining agreement could also take a while, particularly given other pressing priorities facing European policymakers at present, namely Brexit negotiations and the solvency…

The drama and uncertainty of the UK’s referendum result to leave the European Union (EU) has inevitably distracted numerous financial institutions, and rightly so. Fund managers should be in the early throes of analysing their contingency plans for Brexit and reassuring their investors, particularly those in the EU, that they are doing so.But it is also important to remember that the UK will remain a member of the EU for at least two years, and probably longer while exit negotiations unfold. One of the first acts of the UK Financial Conduct Authority (FCA) following Brexit was to remind financial institutions…