12 Days of Christmas Legal, Regulatory and Tax updates 2017

Deloitte sent to me...

Over the next 12 working days we will be sending you a different Legal, Regulatory or Tax insight. As the year end approaches, we hope you will find these informative and useful when finalising your strategic plans. We look forward to continuing to collaborate with you in 2018 to create innovative solutions for all of your global business needs.

On the 12th day of Christmas Deloitte sent to me...

12. EMEA Financial Markets Regulatory Outlook 2018

Deloitte UK's annual assessment from Deloitte’s EMEA Centre for Regulatory Strategy explores how major regulatory trends will shape the financial services industry in the year ahead and provides solutions to guide leaders in effectively navigating the changes.

The European financial services industry faces considerable strategic challenges in 2018. There is a large volume of implementation work being carried out, alongside uncertainties around the future shape of regulation. And though many initiatives have their roots in the financial crisis (now ten years past), others – such as work to address cyber resilience, Brexit, and Open Banking – reflect more recent concerns.

11. 2018 Investment Management Outlook

Narrowing profit margins and stagnancy will put added pressure on asset management companies. Some exceptional companies will rise above the malaise of averageness and will excel in this challenging environment. As millennials grow in importance, winning firms will retool by focusing on three key areas: restructuring product portfolios, streamlining operations, and delivering technology-inspired customer experiences designed for the digital era. Their success will require a vision for the future and a tenacious focus on near-term execution to turn aspiration into strategic advantage.

10. Future Winners in China's Asset Management Industry - Casey Quirk by Deloitte

Asset management in China is a young industry and, as a consequence, Chinese investors, intermediaries and asset managers are not constrained by legacy infrastructure, regulatory frameworks and investment approaches. New thinking can be seen in the proliferation of investment strategies, products and distribution approaches. Powering all of this development is a furious pace of asset growth that no other emerging market has yet been able to replicate.

9. The ETF market in Europe

The European exchange-traded fund (ETF) industry continues to build on the significant growth over the last 10 years. Ireland is the leading domicile for European ETFs with assets of over $300bn. Looking to 2018, what impact will MiFID II, MiFIR and other regulatory and tax developments have on the ETF market?

8. Brexit Contingency Plans

The Central Bank of Ireland ( the“CBI” ) issued an industry wide letter on the 6th of November 2017. The letter outlines the CBI expectation that Brexit Contingency Plans are being developed by boards of funds and fund management companies. These contingency plans should include an analysis of the effect of Brexit on fund investors, day-to-day fund operations and delivery of investment strategies.

Brexit scenarios and associated risk contingency plans should be developed and firms should communicate with investors where appropriate. The contingency plans must include key dates for decisions and actions to be discussed and actioned at board meetings.

7. Upcoming corporation tax deadlines

Fund promoters should ensure that Irish resident companies within their corporate structure meet their applicable upcoming corporation tax filing/payment deadlines. A non-exhaustive list is set out below:

Deadline Accounting year end in scope Filing/Payment
23 December 2017 31 December 2016 File iXBRL tagged financial statements
23 December 2017 31 March 2017 File corporation tax return
23 December 2017 31 January 2018 Pay second instalment of corporation tax
23 December 2017 31 May 2018 Pay first instalment of corporation tax (“large” companies)
30 December 2017 31 March 2017 File Form 46G

6. Fair Taxation: EU publishes list of non-cooperative tax jurisdictions

On 5 December 2017 the EU published a list of non-cooperative tax jurisdictions. The new list is “part of the EU's work to clamp down on tax evasion and avoidance”.

According to an EU Commission press release, Member States agreed that a single EU list would “hold much more weight than a medley of national lists and would have an important dissuasive effect on problematic third countries.”

17 “blacklist” countries have been named and the EU have put a further 47 on notice on a “grey” list. Countries on the “blacklist” were those that did not make sufficient commitments to the EU to change their current practices and those who failed to meet international standards. The blacklist includes countries such as the Republic of Korea and the United Arab Emirates while Hong Kong and the Cayman Islands have been included on the “grey” list.

5. GDPR for Funds

GDPR is relevant to data controllers and data processors in the public and private sector, and it applies to personal data, which is broadly speaking any information that could be used to identify a living person, regardless of whether the information is stored on a computer or held in a filing cabinet.

With the GDPR coming into force on 25th May 2018, we take a look at some of the data protection considerations for Funds and their Service Providers.

4. Money Market Funds - Regulatory regime revised and reformed

The Money Market Fund Regulation (“the Regulation”) currently pending implementation will apply to all Money Market Funds (“MMF”) whether they are UCITS or Alternative Investment Funds (“AIFs”).

Existing MMFs will have until the 21 January 2019 to comply. Any new MMFs that is created after the 21 July 2018 will have to comply from inception.

The Regulation aims to enhance the liquidity and stability of MMFs and sets out to maintain the essential role that MMFs play in financing the real economy. On 7 December 2016, the Permanent Representatives Committee approved an agreement with the European Parliament on MMFs and the most up to date text of the Regulation itself was published by the EU Council on 26 April 2017. The Regulation lays out rules for MMFs to ensure their diversification and introduces common standards to increase liquidity and prohibits third parties support.

3. Blockchain Control Principles in Financial Services and Beyond Fintech: Disruptive innovation in investment management

Blockchain Control Principles in Financial Services

This publication, prepared during the summer months of 2017 by the Deloitte EMEA Blockchain Lab in Dublin in association with Deloitte Hong Kong and US, explores six control principles essential for blockchain adoption on a global scale:

1. Best practice – Standards for Blockchain Development

2. Interoperability and System Integration Controls

3. Audit Rules

4. Cybersecurity Controls

5. Enhancement of Traditional ICT Controls

6. Business Continuity Planning

Beyond Fintech: Disruptive innovation in investment management

A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” examines disruptive innovation in investment management. Read on to explore key takeaways for the investment management industry, and understand what these findings mean for your business.

2. Country by Country Reporting (CbC)

Fund promoters should consider whether their Irish domiciled funds fall within the remit of Country by Country reporting and if so, the required notifications should be made to Revenue in advance of the fund’s accounting year end (i.e. before 31 December 2017 for affected entities with a 31 December 2017 accounting year end).

On 24 November 2017, Irish Revenue issued an eBrief that extends the upcoming filing deadline for country-by-country (CbC) reports for calendar year 2016 from 31 December 2017 to 28 February 2018.

1. Investment Limited Partnership (Amendment) Bill 2017

On the 18th of July 2017 The Minister for Finance and Public Expenditure and Reform announced that the Irish Government has approved the legal drafting of the Investment Limited Partnership (Amendment) Bill, 2017. These changes aim to ensure that Ireland continues to remain a leading centre of excellence as an international fund domicile for investment funds and remains at the cutting edge of market developments for global equity funds. Also worth noting is that The Irish Collective Asset-management Vehicles Act 2015 (“ICAV Act”) will also be amended, as it was agreed that technical amendments will be drafted.

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