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  • AIFMD Developments19 February 2015

    Linkn Learn

    Leading Business Advisors

  • Contacts

    Paola Liszka Draper

    Senior Manager Outsourced Solutions

    Deloitte Luxembourg

    E: pliszkadraper@deloitte.lu

    T: +352 451 452 803

    Aisling Costello

    Senior Manager Investment Management Advisory

    Deloitte & Touche Ireland

    E: acostello@deloitte.ie

    T: +353 1 417 2834

    Linkn Learn AIFMD Developments 2

    mailto:pliszkadraper@deloitte.lumailto:acostello@deloitte.ie

  • Market review

    3

  • Alternative Investment Fund Managers Directive

    Linkn Learn AIFMD Developments 4

    AIFMD

    TIMELINE

    July

    AIFMD

    adopted

    2011 2013

    22 July

    AIFMD in

    force

    2014

    22 July

    Grace

    period ends

    7 Nov

    ESMA call

    for

    evidence

    on possible

    extension

    of EU

    passport

    2015

    8 Jan

    Deadline

    for

    responses

    to Call for

    evidence

    22 July

    ESMA

    must

    submit its

    opinion &

    advice re

    NPPR &

    passport

    22 Oct*

    Commission

    determines

    whether to

    extend the

    passport to

    non-EU

    managers

    and non-EU

    funds, and

    sets the date

    2016

    2016*

    Potential

    date of

    operation

    of the

    extended

    passport

  • Overview of European regulation

    Linkn Learn AIFMD Developments 5

    * Estimated timeframes subject to change

    Exchange of reportable FATCA info for 2014 by

    30 Sept. 2015

    2015

    I June 2015Companies Act 2014

    entry into force*

    MMF Parliament consideration

    25 March 2015*

    Final ICAV Bill enacted* Q1 2015

    AIFMD ESMA advice on on-EU passport 22 July

    8 Jan 2015 deadline for AIFMD call for evidence

    on non-EU passport

    30 Jan 2015 AIFMD - ESMAs Consultation paper on

    asset segregation closes. AIFMD Regulatory

    reporting period ends

    27 March 2015Deadline for feedback on

    ESMAs Consultation paper on UCITS share classes

    Expected in Q1 2015: Feedback on ESMAs Revised Guidelines

    on ETFs and other UCITS issues*

    UCITS Rulebook expected from the

    Central Bank*

    Expected Q3 2015: Feedback on CP84 *

    Implementation of the Fourth AML Directive

    (late 2015)*

    22 Oct 2015Decision on

    non-EU passport

    under AIFMD

    Q1 2015 Expected publication of Central Banks

    new client asset requirements*

    Expected in Q2 2015: Feedback on ESMAs

    consultation on AIFMD asset segregation*

    23 Feb 2015Deadline for responses to

    IOSCO consultation on

    cross-border regulation

    ESMA to submit to Commission final RTS

    2nd March Consultation on draft RTS and ITS closes

    By 2nd March -ESMA technical advice on delegated acts concerning MAR By 2nd July

    ESMA must deliver to Commission final RTS and ITS on MAR

    First clearing obligations likely, but will be subject to phasing in.

    5th January -Consultation closes on ESMA guidelines for definition of commodity derivatives under C6 and C7of Annex 1 of MiFID

    1st July Reporting any derivatives for which a repository is still unavailable

    1st December New margin requirements for unclearedderivative trades to be phased in between Dec 15 and Dec 19

    31st December Sunset date for transitional relief for limited branches and limited FFIs

    31st December - ESMA, EBA and EIOPA Expected to submit to the Commission the draft RTS

    ESMA,EBA and EIOPA Expected to consult on draft RTS on the content, presentation and calculation of info in the KID

    30th April ESMA to submit advice on implementing measures.

    22nd July EU Commission to report on the possibility of allowing social entrepreneurship funds established in a third country to use the EuSEF Regulation

    1st January FATCA withholding begins on US FDAP payments on pre-existing accounts of non-documented prima facie FFIs

    13th February ESMAs consultation on amending trade reporting RTS and ITS closes

    16th May Member State Regulators MSs must notify the EU Commission and ESMA about the rules they have implemented on administrative penalties and other measures applicable to breaches of EUSEF Regulation.

  • Market overview

    Implementation

    Asset Segregation Annual reports

    Distribution UCITS V

    Linkn Learn AIFMD Developments 6

  • Distribution

  • EU AIFM & EU AIF

    EU AIFM & Non-EU AIF

    Non-EU AIFM & EU AIF

    Non-EU AIFM & Non-EU AIF

    AIFMD Timeline for Marketing in the EU

    22 July 2013 2014 2015 2016 2017 2018 2019

    Deadline for

    implementatio

    n of AIFMD in

    Member

    States

    Grandfathering

    provisions re.

    delay to apply

    for AIFM licence

    ESMA decision on

    availability of the EU

    passport for non-EU

    AIFM and non-EU AIF

    ESMA decision on

    abolishment of

    national placement

    regimes

    * Passport anticipated end 2015 / early 2016 depending on ESMA opinion to be issued in July 2015

    ** Member States may decide at their own discretion to end National Placement regimes anytime prior to 2018

    EU Passport

    EU Passport*

    EU Passport*

    EU Passport*

    National Placement **

    National Placement **

    The AIFM Directive foresees different timelines for making an EU distribution passport available, and

    for ending EU National Placement regimes **.

    Prior to 2018, marketing in the EU via either an EU passport or National Placement Regimes is, in

    principle, possible.

    After 2018, only marketing through an EU passport will be possible.

    8Linkn Learn AIFMD Developments

  • Scope & Distribution Options

    Scope

    Professional investors

    Alternative Investment Fund Manager

    (AIFM)

    - EU AIFM managing and marketing EU

    or non-EU AIF

    - Non-EU AIFM managing EU AIF

    - Non-EU AIFM marketing EU or non-

    EU AIF within the Union

    Alternative Investment Funds

    EU AIFM + EU AIF (Article 32)

    Marketing in the EU only possible

    via marketing passport

    EU AIFM + Non-EU AIF (Article 36)

    Marketing to EU state only possible

    via notification to host state regulator

    Non-EU AIFM + Non-EU AIF (Article 42)

    Marketing to EU state only possible via

    notification to host state regulator

    AIFMD does not regulate the product (i.e. the AIF) but the AIFM

    AIFMD does not grant a distribution passport to the AIF but the AIFM

    Investment policy as such does not qualify an investment fund as AIF; rather all investment funds that do not qualify as UCITS, are de facto AIFs

    9Linkn Learn AIFMD Developments

  • Article 32 Distribution via EU PassportingOperational Considerations

    Key factors

    which impact

    Article 32

    notifications

    Filing done on EU AIF basis to home

    member state regulator of EU AIFM

    EU AIFM may target EU AIFs to

    professional investors

    EU AIFM must comply with Articles

    22, 23 & 24 AIFMD

    Host state regulators may not

    impose stricter rules on EU AIFM

    than on domestic AIFMs

    EU AIFM may target EU AIFs to retail

    investors if host jurisdiction permits

    Harmonised approach for

    documentation requirements and

    approval deadlines

    This applies to EU AIFMs managing and marketing EU AIFs

    10

  • AIFM AIF Distribution Steps taken

    Submission is done to CSSF for each EU AIF it intends to market

    Notification shall comprise the documentation and information set

    out in Annex IV AIFMD

    CSSF has 20 working days following receipt of a complete

    notification to submit to host state regulator

    EU AIF may start marketing once notification file is transmitted to

    host state regulator and confirmation received by AIFM from CSSF

    EU AIFM shall submit Annex IV notification for each EU AIF it

    intends to market in each host state

    Case Study Lux AIFM with Lux AIF (Article 32 AIFMD)

    ABC IM Lux entity has its AIFM license from its home state regulator, the CSSF

    ABC IM Lux entity intends to use its AIFM notification passport to submit notifications of

    intention to market its Luxembourg domiciled AIFs in several jurisdictions across the EU

    in accordance with Article 32 AIFMD

    EU EU

    EU

    EU

    EU

    * Only country to have imposed major gold-plating is France with the requirement to appoint an

    agent centralisateur

    11Linkn Learn AIFMD Developments

    http://www.flags.net/AUST.htmhttp://www.flags.net/AUST.htmhttp://www.flags.net/SWDN.htmhttp://www.flags.net/SWDN.htm

  • Current AIFMD marketing options if the AIFM is unable to access the EU passport

    Full fledged and most costly option

    Preferred solution from a regulatory standpoint if you

    actively raise capital in the EU or wish to have easier

    market access to EU investors

    Possibility for efficient solutions leveraging existing

    infrastructure and potential fund restructuring to minimise

    cost impact for non-EU investors

    Do Nothing

    Not an option if you raise

    capital or approach

    investors in the EU

    Reverse Solicitation

    Sometimes presented as a possible option

    but

    is not a strategy for raising capital in the

    EU

    requires complexity in demonstrating total

    absence of marketing

    poses a major f