Author Archives: Barry Stimpson
FCA consults on patient capital and permitted links
Following the Patient Capital Review on regulatory barriers to investment in illiquid “patient capital” assets FCA is consulting on: changes to the COBS 21.3 permitted links rules to enable retail investors to invest in patient capital through unit-linked funds and more generally on how UK authorised funds can be used to invest in patient capital. […]
BEIS confirms AML safeguards for partnerships
BEIS has published its response to its consultation on the reform of Limited Partnership law. It has confirmed new measures, applicable to all limited partnerships in the UK (and, for Scottish Limited Partnerships, in addition to the beneficial ownership reportingrequirements previously introduced), to: require anyone registering a Limited Partnership to show they are registered with an […]
MEPs vote on fund marketing changes
MEPs in ECON have voted through the proposals for changes to the rules on cross-border investment fund distribution. As part of the vote, they stipulated that marketing communications should be clearly identified as such and should include a detailed note of risks, investors’ rights and redress mechanisms. On pre-marketing, ECON defined the key point as […]
FMLC comments on funds onshoring measures
FMLC has noted a number of legal uncertainties in the various draft onshoring legislation relating to investment funds and their managers. In relation to the drafts for AIFMs and Collective Investment Schemes, FMLC has spotted issues with: references to other legislation – and conflict between pin-pointed dates on which terms take effect; the temporary recognition […]
ESMA updates AIFMD FAQ
ESMA has updated its AIFMD FAQs to include questions on how notification requirements apply to AIFMs managing umbrella AIFs on a cross-border basis.
ILPA updates members on activities
ILPA‘s (the Institutional Limited Partners Association) latest member update includes items on: a comment letter in response to SEC’s proposed Interpretation on the standard of conduct for investment advisers, which among other things suggests that advisers of private equity funds should treat the fund as a whole as its client and not the individual limited […]
ESMA response to EIOPA on AIFMD
ESMA has responded to some queries EIOPA raised with it on the definition of AIF and leverage in the AIFMD. EIOPA had asked: whether AIFs that use certain borrowing arrangements and derivative instruments under the Solvency II Delegated Regulation considered leveraged for AIFMD purposes. ESMA points out that the AIFMD has no formal definition of […]
ESMA updates funds FAQs
ESMA has updated its FAQs on the UCITS Directive and the AIFMD. New questions include those addressing when UCITS invest in UCITS with different investment policies and supervision of branches of UCITS management companies or AIFMs that provide MiFID investment services.
Prospectus exemptions amended
The FSMA (Prospectus and Markets in Financial Instruments) Regulations 2018 take effect on 21 July and amend two of the thresholds that trigger the requirement to produce a prospectus. The changes reflect the 2017 EU Prospectus Regulation and: increase the threshold amount for offers to trigger the prospectus requirement from €100,000 to €8 million; and reduce […]
ESMA updates UCITS FAQ
ESMA has updated its FAQs on the application of the UCITS Directive. The additions look at how to apply remuneration disclosure requirements to staff or the delegate of a UCITS management company who have been delegated investment management functions.
FCA speaks on asset management
Andrew Bailey has given a regulatory perspective on asset management. His speech considered: market-wide risks: he looked at the growth in the asset management sector and particularly the increase in proportionate growth of the asset management sector over others. open-ended funds: he considered the risks of funds offering daily redemption in illiquid assets which also […]
FCA focuses on closet trackers
FCA has updated on its work reviewing potential closet tracker funds and closet constrained funds – funds that look like and charge fees in the same way as active funds do, but are managed like passive funds. Closet constrained funds do make active decisions, but on a restricted basis around their benchmarks. FCA is concerned […]
Commission launches AIFMD survey
The European Commission is carrying out a survey on how the AIFMD has worked in practice and how it has met its objectives. Anyone can respond to the online survey.
FCA updates AIFMD transparency reporting information
FCA has published updated guidance on reporting Annex IV transparency information under the Alternative Investment Fund Managers Directive (AIFMD). The document details: Transparency reporting requirements (pursuant to both the AIFMD and the FCA Handbook); How this information is submitted to the FCA (via the Gabriel system); The form of report (AIF001 Manager Report and AIF002 Fund Transparency Report); and […]
ILPA issues Model Subscription Agreement
In December, the Institutional Limited Partners Association (ILPA) issued the first in a series of model documents to be produced through its Limited Partnership Agreement (LPA) Simplification Initiative. The Model Subscription Agreement (MSA) seeks to streamline fundraising, increase clarity and improve the efficiency of capital formation by providing a balanced, off-the-shelf subscription document solution which […]
Government to tax non-residents on UK commercial property disposals
The Chancellor announced in his Budget statement that he intends to bring gains made by non-UK residents from the disposal of UK commercial property within the UK tax net. Our briefing looks at the details of the proposed change, and its effects on managers of real estate funds.
Commission publishes funds distribution responses
The Commission’s consultation on cross border distribution of investment funds closed on 9 October, and the Commission has now published the 62 responses it received.
Government announces Asset Management Taskforce
Stephen Barclay, City Minister, announced the creation of an Asset Management Taskforce to preserve the UK’s leading position as an asset management hub. Among his comments, he said: the Government sees delegation as key going forwards, and is using the Brexit challenge as a spur to spearhead this; it is critical to maintain gold standard […]
HFSB changes name
The Hedge Funds Standards Board has changed its name to the Standards Board for Alternative Investments, to reflect the evolution of the alternative investment industry.
ESMA publishes opinion on asset segregation and depositary delegation
On 20 July ESMA published its opinion on asset segregation and the application of depositary delegation rules to central securities depositaries (CSDs). In the opinion, ESMA outlines its view on: the optimal approach to asset segregation under the AIFMD and the UCITS Directive frameworks; and how the depositary delegation rules should apply to CSDs. ESMA believes […]
FCA finds funds should consider external risks
FCA’s review of fund suspensions and pricing adjustments following the Brexit vote has indicated that property funds should plan better to take external events into account so they can deal with liquidity risks. It found that some daily-dealt property funds suspended dealing or applied pricing adjustments in the immediate aftermath of the vote because they […]
ESMA updates funds FAQs
ESMA has updated its FAQs in relation to UCITS and the AIFMD. The additions relate to: on the AIFMD, reporting requirements for loans purchased on the secondary market, conversion of total value of AUM and currency of the net asset value and on UCITS, issuer concentration and group links, independence and cooling off periods.
The conundrum of open-ended property funds
Property Funds can be either closed ended or open ended. In a closed ended fund (such as a Real Estate Investment Trust or “REIT”), the amount of equity invested is fixed and investors may gain liquidity by selling their shares in the market. In an open ended fund, units or shares are created and cancelled […]
IOSCO consults on fund liquidity risk management
IOSCO is consulting on recommendations and good practices in liquidity risk management for funds, and has accompanied the consultation with examples of good and bad practices. The consultation builds on a report in 2013 and addresses structural vulnerabilities the FSB has identified. The papers covers: investor disclosure alignment between asset portfolio and redemption terms availability […]
Changes to SLP PSC requirements published
The Scottish Partnerships (Register of People with Significant Control) Regulations 2017, made on 22 June and taking effect mainly from 26 June, have been published. The Regulations transpose Article 30 of MLD4 on beneficial ownership for Scottish Limited Partnerships and certain Scottish general partnerships. They require registration by qualifying partnerships, and impose an obligation to […]
ESMA updates funds FAQs
ESMA has updated its FAQs on the AIFMD and the UCITS Directive. Both address the exemption for intra-group transactions for the purposes of EMIR. The AIFMD set also addresses notifications of AIFs domiciled in another Member State and on reporting to supervisors on the breakdown between retail and professional investors.
ESMA reports on fund notifications
ESMA has published a report on notification frameworks and home-host responsibilities under the UCITS and AIFMD regimes. It carried out a study looking at the cross-border management and marketing activities of UCITS and their managers. It found many examples of good practice by supervisors and firms. A similar study looking at the mirroring activities of […]
ESMA updates funds FAQs
ESMA has updated its FAQs on AIFMD and UCITS. The additions focus on: clarifying that the AIFMD marketing passport under Article 32 AIFMD can be used only for marketing to professional investors as defined in AIFMD and cannot include any additional categories of investor that individual Member States have introduced (such as “qualifying” or “semi-professional”); and […]
Private Fund Limited Partnerships introduced
The Legislative Reform (Private Fund Limited Partnerships) Order 2017 comes into force on 6 April and amends the Limited Partnerships Act to introduce the “private fund limited partnership”. Treasury has introduced the Order despite industry expectation that it would wait for the outcome of a BEIS consultation on how LPs could be used for criminal […]
Investment Association consults on disclosure
The Investment Association is consulting on an industry code for standardising disclosure for charges and transaction costs. The Code is designed to help trustees and governance committees of pension funds to access and scrutinise costs, give distributors the information needed to make disclosures compatible with MiFID 2 and PRIIPs requirements, and also help make the […]
IA updates authorised funds guidance
The Investment Association (IA) has published an updated version of its guidance for members on authorised funds. This is a document designed for use by investors who are considering investment in a UK authorised fund and for firms to use in answering their questions.
FCA looks at illiquid asset risks
FCA has published a discussion paper looking at the issues that arise when open-ended funds invest in illiquid assets, such as real estate, infrastructure and unlisted securities. It seeks views generally, but also raises specific questions, such as how best to strike the balance between the potential strong returns this type of investment can bring […]
Treasury proposes limited partnership changes
Treasury has published a draft legislative reform order to amend the Limited Partnerships Act 1907 in respect of private investment funds, such as venture capital and private equity funds. The proposals include the creation of a private fund limited partnership (PFLP) as a new form of limited partnership. The order is due to come into force […]