Dear Readers,
fund distribution within Europe is to be simplified.
According to the EU Commission, more than two-thirds of fund volumes are held by investors from the fund’s respective home market. Only 37% of UCITS and 3% of AIFs are authorized for public distribution in more than three EU member states. This shows that too high requirements are placed on the cross-border distribution of investment funds. The EU Commission now wants to counteract this. Administrative requirements should be minimized and regulatory burdens eliminated. To this end, the European legislator has presented drafts for a directive and an EU regulation.
BaFin has reconfirmed that it generally adopts the pronouncements of the European financial supervisory authorities (ESAs) on the interpretation of EU regulations in its administrative practice. Market participants are therefore advised to also keep an eye on guidelines and Q&A catalogs from the ESAs. In line with this, ESMA has set up an online tool in which all relevant EU regulations can be accessed by users and interested parties.
With warm regards,
Henning Brockhaus
European legislation
EU Commission consults on directive and regulation for facilitated cross-border fund distribution
On March 12, 2018, the EU Commission published two draft regulations for facilitated cross-border marketing of UCITS and AIFs, which will be consulted until May 7, 2018. The aim of the regulations is to reduce regulatory barriers to intra-European distribution (e.g., special distribution requirements of member states, regulatory fees, administrative requirements, and notification requirements).
These are the proposal for a directive amending the UCITS and AIFM Directives and the proposal for a regulation to regulate the details.
You can access the proposal for the directive here and the one for the regulation here.
European supervision
European Supervisory Authority ESMA Publishes “Interactive Single Rulebook
ESMA published its so-called Interactive Single Rulebook (ISRB) on February 14, 2018.
With the online tool, the Securities and Markets Authority is creating a central platform with which users and interested parties can access European regulatory works quickly and efficiently. The ISRB initially includes the Level 1 text of the UCITS Directive and links to key Level 2 and Level 3 measures.
ESMA’s goal is to gradually include all Level 1 texts relevant to securities supervision in the ISRB and to provide links to Level 2 and Level 3 measures. The texts of MiFID2 and MiFIR, among others, are to follow next.
You can find more information here.
National supervision
BaFin generally adopts all guidelines and Q&As of the ESAs in its administrative practice
On February 15, 2018, BaFin announced on its website that it was adopting the guidelines and Q&A catalogs of the European financial supervisory authorities (ESAs) in principle in its administrative practice in the interest of European harmonization.
If BaFin exceptionally does not apply guidelines or statements from Q&A catalogs due to conflicting German supervisory regulations, these are explicitly stated on BaFin’s homepage.
The list of guidelines that have not been adopted can be found here. You can access the list of Q&As that have not been adopted here.
National supervision
BaFin publishes information sheet on the presentation of the performance of closed-end funds
On March 6, 2018, BaFin published a new fact sheet on its website regarding the appropriate presentation of the performance of closed-end investment funds.
The fact sheet describes the standard to be used to present historical and future performance in the “Key Investor Information.”
You can access the fact sheet here.
National supervision
BaFin consults on amended cost clauses for open-end funds
On February 22, 2018, BaFin posted for public consultation draft revised model building blocks for cost clauses of open-end public investment funds.
With the new model building blocks, BaFin discloses its administrative practice in approving cost regulations in the investment conditions of open-ended public investment funds. These are models that meet the minimum regulatory requirements under the German Investment Code(KAGB).
The previous model clauses date from September 4, 2012 and are based on the Investment Act (InvG) valid at that time. The revised regulations will also outline BaFin’s current administrative practice. In addition, the amendment serves editorial and clarifying changes and corrections.
Comments will be accepted by the Board of Supervisors until April 27, 2018.
More details on BaFin’s publication and links to the new cost clauses can be found here.
