13.10.2017 | KPMG Law Insights

Investment | Law | Compact – Issue 10/2017

Dear Readers,

Anyone who has observed the regulation of European financial markets in recent years will not be surprised to learn that the trend continues toward strengthening European supervisory powers. The EU Commission has now presented comprehensive proposals for the reform of European financial supervision by the ESAs, which underpin this development.

However, the European supervisory authorities are already playing a major role right down to the details of regulation: this issue of “Investment Recht Kompakt” with information on key drafts, pronouncements and interpretative aids from Brussels and Paris confirms this.

We would like to draw particular attention to the revised Q&A catalog on the AIFM Directive, in which ESMA addresses important questions regarding the disclosure of remuneration.

With warm regards

Henning Brockhaus

European supervision

ESMA publishes updated Q&A on benchmark regulation

The European Securities and Markets Authority (ESMA) expanded its Q&A on the Benchmark Regulation (BMR) on September 29, 2017.

The added Q&A addresses the applicability of the Benchmark Regulation to third-country central banks, as well as further clarifications on the definitions contained in the BMR.

You can find the Q&As here.

European legislation

EuVECA and EuSEF Regulation: EU Parliament Adopts Outcome of Trilogue Negotiations

On September 14, 2017, the EU Parliament formally approved the outcome of the trilogue negotiations between the EU Commission, Parliament and Council on the planned revision of the regulations for European Venture Capital Funds (EuVECA) and European Social Entrepreneurship Funds (EuSEF).

Once the Council has formally approved the proposals, the final texts will be published in the EU Official Journal.

European supervision

ESMA updates Q&A catalog on MiFID2/MiFIR and launches new Q&A catalog on post-trade transparency

ESMA updated its Q&A on MiFID2 and MiFIR on October 3, 2017.

The additions address customer categorization, post-sales reporting, recording of telephone calls and electronic communications, best execution, and information on costs and fees.

The revised Q&A can be found here.

In addition, ESMA published a new Q&A catalog on post-trade transparency on October 10, 2017. You can find it here.

European supervision

ESMA updates Q&A catalogs on AIFM and UCITS Directive

On October 5, 2017, ESMA added several items to its Q&A catalogs on the AIFM and UCITS Directives.

Reporting according to the SFTR Regulation (AIFMD and UCITS)

One of the additions concerns both Q&A catalogs: ESMA comments on the question whether the reporting required under the SFTR Regulation (Securities Financing Transactions Regulation (EU) 2015/2365) for securities financing transactions for UCITS and AIFs must cover the entire period under consideration or whether reporting as of the reporting date is sufficient.

In response to this question, ESMA differentiates according to the type of securities financing transaction and provides a tabular list from which the type of reporting for the respective transaction can be derived.

Disclosure of remuneration (AIFMD)

ESMA addresses the question of whether the disclosure of remuneration under Art. 22 para. 2 e) of the AIFM Directive (implemented in section 101 (3) no. 1 KAGB) also includes the remuneration of employees of an outsourced portfolio manager or risk manager.

The European Supervisory Authority answers this question in the affirmative and distinguishes between two possibilities:

  • In cases where the outsourcing company itself is also subject to a regulatory obligation to disclose remuneration similar to that of Art. 22 para. 2 of the AIFM Directive is equivalent, the AIFM may rely on the outsourcing entity’s disclosure to comply with its disclosure obligations.
  • In other cases, it must be ensured that the AIFM contractually assures itself of the supply of corresponding information in order to be able to fulfill the disclosure obligations on its part.
  • In addition, ESMA clarifies that the disclosure of remuneration must explicitly be part of the annual report. A reference to a place where the relevant information can be retrieved is not sufficient.

The Q&As on the AIFMD can be found here the Q&As on the UCITS Directive here.

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Henning Brockhaus


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