Financial Services Regulation and Compliance - Funds December 2023
Domestic
Asset valuations - FMCs to review asset valuation frameworks by end Q2 2024
The CBI wrote to Irish fund management companies (FMCs) following its review of asset valuation (which was part of the ESMA Common Supervisory Action on the topic). FMCs are required to complete a review of their asset valuation frameworks to ensure they continue to be fit for purpose and adhere to all relevant legislative requirements by the end of Q2 2024.
New UCITS and AIFMD Regulations
European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2023 (S.I. No. 629 of 2023) revise the 2019 provisions on the segregation/remoteness of UCITS assets in the event of the insolvency of the depositary or sub-custodian. The European Union (Alternative Investment Fund Managers) (Amendment) Regulations 2023. S.I. No. 630 of 2023 revoke 2019 provisions on the segregation/remoteness of AIF assets in the event of the insolvency of the depositary or sub-custodian. In both cases, the updates ensure that Irish regulations are in alignment with EU requirements.
European and International
ESMA updates timeline for its guidelines on ESG and sustainability-related terms in fund names
ESMA released an update on the status of ESMA’s guidelines on ESG and sustainability-related terms in fund names. Publication is now expected in Q2 2024, subject to the timing of the publication of the AIFMD and UCITS Directive revised texts. The guidelines will apply three months after the date of their publication on the website in all EU official languages.
The average cost of retail investment products declines but significant differences across EU Member States remain
ESMA published its sixth market report on the costs and performance of EU retail investment products. In this annual report ESMA finds that the average costs of investing in key EU retail financial products had declined by the end of 2022.
ESMA finalised technical standards under the revised ELTIF Regulation
ESMA published the final report setting out the draft regulatory technical standards (RTS) for the European Long-Term Investment Fund (ELTIF) Regulation. ESMA submitted the draft technical standards to the European Commission for endorsement and final approval.
ESMA updates the parameters and methodology for MMF stress testing
ESMA published its final report on the guidelines on stress test scenarios under the Money Market Funds Regulation (MMFR). The guidelines will be translated into the official EU languages and published on the ESMA website. The publication of the translations will trigger a two-month period during which National Competent Authorities notify ESMA whether they comply or intend to comply with the guidelines. The new 2023 parameters and the revised methodology will apply two months after the publication of translations of the guidelines.
FSB and IOSCO publish policies to address vulnerabilities from liquidity mismatch in open-ended funds
Revised FSB recommendations and IOSCO guidance on anti-dilution liquidity management tools (LMTs) issued. They aim to strengthen liquidity management by open-ended fund (OEF) managers.
For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.
Date published: 17 January 2024