We hope that you have had a good start to 2017 and, as usual, we would like to provide you with an overview of current developments in the field of alternative investments.
One of the most important innovations in January concerns the publication of a new BaFin circular on the minimum requirements for the risk management of capital management companies (KAMaRisk). BaFin has also published a revised draft of the new Remuneration Ordinance for Institutions (InstitutsVergV), which is expected to come into force on March 1, 2017.
We wish you an insightful reading and remain
With best regards
Dr. Ulrich Keunecke
BaFin published Circular 01/2017 (WA) on the Minimum Requirements for the Risk Management of Capital Management Companies (KAMaRisk) on January 10, 2017. In terms of content, this is a revision of InvMaRisk.
The KAMaRisk specify certain requirements of the “Delegated Regulation (EU) No. 231/2013 (“AIFM Level 2 Regulation”)”. on organization, risk management and outsourcing. They also set out the minimum risk management requirements for AIF management companies that grant money loans or invest in unsecuritized loan receivables for the account of an AIF. These requirements are essentially based on the requirements for lending business in the Minimum Requirements for the Risk Management of Banks (MaRisk) and have been adapted to the special features of lending and investing in the context of collective portfolio management.
Information on Circular 01/2017 (WA) – KAMaRisk can be accessed here.
The circular itself is available here.
BaFin published the revised draft of the new Remuneration Ordinance for Institutions (InstitutsVergV) on January 19, 2017. The new InstitutsVergV is expected to be issued in February and enter into force on 01.03.2017. The main topics of the new regulation are a sharper contouring of the types of compensation as well as a greater differentiation in the treatment of the various manifestations of variable compensation. Other key points are the specification of risk adjustment and the now mandatory clawback clauses, which allow the recovery of variable compensation components already paid out, the payment of variable compensation in bail-in eligible instruments and the Group-wide compensation strategy including Group risk carriers.
You can find all the information about the consultation at this
The effective date of the PRIIPs Regulation has been postponed by one year to 01.01.2018. The corresponding “Regulation (EU) 2016/2340 of the European Parliament and of the Council of 14.12.2016 amending Regulation (EU) No 1286/2014 on key information documents for packaged retail investment products and insurance investment products as regards the date of application” has now been published in the EU Official Journal of 23.12.2016.
The European Supervisory Authorities (ESAs) published a letter to the European Commission on Dec. 23, 2016, regarding the newly submitted amendments to the Level 2 measures of the PRIIPs regime. EBA, ESMA and EIOPA were not able to agree on a unified opinion and therefore do not see themselves in a position to send a unified vote to the Commission.
The letter from the three EU regulators can be viewed here.
The German version of the “Delegated Regulation (EU) 2015/35 supplementing Directive 2009/138/EC of the European Parliament and of the Council with respect to the taking-up and pursuit of the business of insurance and reinsurance (Solvency II)” has been corrected by “Delegated Regulation (EU) 2016/2283”, published in the EU Official Journal of 20.12.2016). The corrections concern the German language version, primarily with regard to incorrect translations or incorrect cross-references.
The ordinance can be viewed here.
The German Banking Industry (DK) and the Association of Foreign Banks (VAB) have published comments on the draft bill of 15.12.2016 on the implementation of the Fourth Money Laundering Directive (EU) 2015/849.
DK points out, among other things, the disproportionate nature of the planned tightening of fines and the need for a more precise definition of who is meant by “beneficial owner” and who is meant by “member of the management level” in the new Money Laundering Act (AMLA), as well as the need for the new transparency register to be reliable for credit institutions.
With regard to the identification and identity verification of foreign contracting parties and beneficial owners, the VAB proposes in particular a clarification that other types of documents may be used in addition to passport and identity documents if the former do not contain all the required information. In addition, the VAB believes that the requirements that go beyond what is stipulated in the Directive should be reconsidered, such as the submission of original (instead of copy) founding documents of legal entities.
On 17/01/2017, ESMA published the translations of the “MAR Guidelines – Information on Commodity Derivatives Markets or Related Spot Markets with Regard to the Definition of Inside Information on Commodity Derivatives” into all official EU languages. Within two months of the publication of the official translations, the national supervisory authorities must indicate whether they will comply with the guidelines on the Market Abuse Regulation (MAR).
All translations of the MAR guidelines can be accessed here.
The Financial Stability Board (FSB) published the “Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities” on Jan. 12, 2017. The document contains 14 final recommendations to avoid structural vulnerabilities that may cause risks to the stability of the financial system.
You can find the recommendations at this link.
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