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Funds Bulletin

February 2014

The Deloitte Funds Bulletin delivers you our latest updates and insights on industry developments. We hope you find this edition useful and please contact us if you have any queries.

40% of all new Irish funds appointed Deloitte as their auditors in 2013, according to statistics released by Monterey Insight in its Ireland Fund Encyclopedia 2013. The statistics show that Deloitte has topped the league table for growth of new Irish fund audit mandates in 2013.

The publication of a new draft UCITS Rulebook under CP77 signals a change in approach by the Central Bank of Ireland (CBI) to move to a more concise, rules-based framework. The aim is to eliminate duplication or paraphrasing of the UCITS Regulations and to clearly distinguish between rules and guidance. Much of the guidance will be recast as rules while other elements will be removed entirely or published separately to the Rulebook online. The outcome may therefore have some implications for your compliance approach and it has yet to be fully determined which guidance will be published separately to the UCITS Rulebook. 

After more than two years of negotiations, EU policy markets have reached a deal on the revision to the Markets in Financial Instruments Directive and Regulation (MiFID II / MiFIR).

This marks a key milestone in the progress of the reforms which are set to change the landscape for EU capital markets fundamentally. The deal is intended to make markets more resilient by overhauling OTC derivatives trading and curbing algorithmic and high-frequency trading. Key sticking points relating to commodities trading, competition in clearing and trading markets, the non-EU framework and inducements were finally overcome.

Ireland will soon have a new corporate fund structure offering enhanced distribution and a simplified compliance model. The Irish Collective Asset-management Vehicle (ICAV) will be introduced under new legislation designed solely for investment funds. This means that certain company law rules more suited to ordinary trading companies than investment funds will not apply to the ICAV. The ICAV will be regulated by the Central Bank of Ireland and may be established as a UCITS or an AIF.

 

Transfer Agency is increasingly becoming a strategic market differentiator for leading fund administration organisations in today’s global market. A key component for leading Transfer Agents is having the right platform in place.

Clients and their underlying investors continue to demand more sophisticated service models, yet Transfer Agency providers face the continuous need to manage operating costs while maintaining multiple platforms which have often been the result of acquisitions or diversification. Therefore the requirement for consolidation of these platforms and the surrounding tools that support them is increasing globally.

Download our short guide to TA platform consolidation strategy which includes the current systems landscape, the benefits of consolidating the multiple components of today’s service platforms, as well as the key considerations when embarking on a rationalisation programme.

A major milestone was reached on 18 December 2013 with the official publication of the Irish Funds Industry Association’s (IFIA) sectoral AML guidelines after several years of discussions between industry, the Department of Finance and the Central Bank of Ireland (“CBI”).

The new sectoral guidelines are broadly consistent with the Core Guidelines but go to an additional level of detail tailored to meet the needs of the funds industry. The CBI has confirmed that it will “have regard” to these guidelines in assessing compliance with the AML requirements.

 

New EU proposal on securities financing transactions (SFTs) reporting

Firms that engage in securities lending and repos, referred to as securities financing transactions (SFTs), will face EMIR-like reporting requirements and stricter rules on rehypothecation under a proposal published today by the European Commission...read more

ESMA’s “guidelines on ETFs and other UCITS issues” are almost a year in force. Just as the transitional period for certain requirements is due to end on 18 February 2014, ESMA issued a consultation which proposes to exempt money market funds from the imminent 20% issuer limit for collateral received. The Central Bank of Ireland has also provided clarifications in relation to the classification of financial indices and the annual report disclosure requirement covering revenues arising from efficient portfolio management techniques.

The IRS made important new clarifications in December 2013 regarding the FATCA registration process for Foreign Financial Institutions (FFIs). The deadlines for registration remain unchanged and final submission online can be completed from January 2014. A new search tool to identify FATCA compliant entities is due to launch in June 2014.

The tax landscape for Irish regulated funds and other investment vehicles continues to be enhanced, with recent developments serving to secure Ireland’s reputation as the prime location for the establishment of investment funds.

Leading industry experts share their views on asset management, risk, regulation and distribution.

This January 2014 edition of Performance, which was shared at the Economic World Forum in Davos, Switzerland, includes a wide range of contributions from industry thought leaders:

  • The future of asset management in Switzerland (panel discussion)
  • David Blumer (BlackRock), Martin Bidermann (Rahn & Bodmer Zurich), Thomas Kubor (Capital Dynamics), Francois Rayroux (Lenz & Staehelin), Petra Reinhard (Credit Suisse).
  • Regulation is changing the distribution landscape 
  • Christophe Girondel (Nordea Asset Management)
  • Europe’s M&A recovery: a long awaited chance for investors
  • Philippe Lecoq (Edmond de Rothschild Asset Management)
  • This time its different: reshaping the way we look at risk
  • Laurent Seyer (Axa IM) 
  • Competition, consolidation and change – key considerations in European securities clearance
  • Michael Albanese (JP Morgan)
  • The case for social media in the decade ahead
  • Julien Semonsu, Franklin Templeton

We also bring you a range of articles covering: retrocessions – a thing of the past?, the results of our fair value pricing survey, asset collection trends in Europe, differentiation and distribution in the digital world, evolving risk models as well as fund governance and tax developments from key fund jurisdictions.

 

Leading industry experts share their views on asset management, risk, regulation and distribution.

 

Leading industry figures share insights

 

This January 2014 edition of Performance, which was shared at the Economic World Forum in Davos, Switzerland, includes a wide range of contributions from industry thought leaders:

  • The future of asset management in Switzerland (panel discussion)
    David Blumer (BlackRock), Martin Bidermann (Rahn & Bodmer Zurich), Thomas Kubor (Capital Dynamics), Francois Rayroux (Lenz & Staehelin), Petra Reinhard (Credit Suisse).
  • Regulation is changing the distribution landscape 
    Christophe Girondel (Nordea Asset Management)
  • Europe’s M&A recovery: a long awaited chance for investors
    Philippe Lecoq (Edmond de Rothschild Asset Management)
  • This time its different: reshaping the way we look at risk
    Laurent Seyer (Axa IM) 
  • Competition, consolidation and change – key considerations in European securities clearance
    Michael Albanese (JP Morgan)
  • The case for social media in the decade ahead
    Julien Semonsu, Franklin Templeton

We also bring you a range of articles covering: retrocessions – a thing of the past?, the results of our fair value pricing survey, asset collection trends in Europe, differentiation and distribution in the digital world, evolving risk models as well as fund governance and tax developments from key fund jurisdictions.

 

Leading industry experts share their views on asset management, risk, regulation and distribution.

 

Leading industry figures share insights

 

This January 2014 edition of Performance, which was shared at the Economic World Forum in Davos, Switzerland, includes a wide range of contributions from industry thought leaders:

  • The future of asset management in Switzerland (panel discussion)
    David Blumer (BlackRock), Martin Bidermann (Rahn & Bodmer Zurich), Thomas Kubor (Capital Dynamics), Francois Rayroux (Lenz & Staehelin), Petra Reinhard (Credit Suisse).
  • Regulation is changing the distribution landscape 
    Christophe Girondel (Nordea Asset Management)
  • Europe’s M&A recovery: a long awaited chance for investors
    Philippe Lecoq (Edmond de Rothschild Asset Management)
  • This time its different: reshaping the way we look at risk
    Laurent Seyer (Axa IM) 
  • Competition, consolidation and change – key considerations in European securities clearance
    Michael Albanese (JP Morgan)
  • The case for social media in the decade ahead
    Julien Semonsu, Franklin Templeton

We also bring you a range of articles covering: retrocessions – a thing of the past?, the results of our fair value pricing survey, asset collection trends in Europe, differentiation and distribution in the digital world, evolving risk models as well as fund governance and tax developments from key fund jurisdictions.

 

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