Financial Services Regulation and Compliance - Funds Feb 2020

Domestic

Liquidity

The CBI issued a detailed UCITS liquidity questionnaire to certain Irish UCITS fund management companies and Irish UCITS for completion in March 2020. This is stage 1 of the common supervisory action with national competent authorities on UCITS liquidity risk management announced by ESMA on 30 January 2020.

Property Funds

The CBI issued a survey to property funds with responses due by 20 March 2020. The CBI aims to assess resilience. CBI will also assess whether there is a need for a macroprudential response to any potential risks. CBI will continue to work with colleagues in Europe and in global fora on these issues.

CBI Expectations on Securities Market Conduct Risk and Market Abuse

The CBI published a Dear CEO letter on Securities Market Conduct Risk. The Dear CEO letter sets out CBI expectations in respect of both Securities Market Conduct Risk and Market Abuse

CBI proposal to split PCF-39 Designated Person into six PCF roles aligned to the specific managerial functions

CBI issued a notice of intention to split PCF-39 Designated Person into six new PCF roles aligned to the specific managerial functions set out the CBI’s UCITS Regulations, the CBI’s AIF Rulebook requirements and the CBI's Fund Management Companies – Guidance 2016  As such, the Central Bank proposes to split PCF-39 into six new PCF roles. CBI invites comments from stakeholders by 26 March 2020.

European

ESMA Strategy on Sustainable Finance

ESMA published its Strategy on Sustainable Finance. The strategy sets out how ESMA will place sustainability at the core of its activities by embedding Environmental, Social, and Governance factors in its work. The key priorities for ESMA include transparency obligations, risk analysis on green bonds, ESG investing, convergence of national supervisory practices on ESG factors, taxonomy, and supervision.

Scope of SFTR reporting obligations for non-EU AIFs

The International Securities Lending Association (ISLA) published correspondence between AIMA, the European Commission and ESMA. The correspondence clarified that Non-EU AIFs (i.e. AIFs not established in the Union), are not subject to the obligations set out in Article 4(1) SFTR, even if the AIFM is authorised or registered under AIFMD, except in respect of SFTs concluded in the course of the operations of a branch in the Union of the Non-EU AIF.

AIFMD MoUs signed by the EU authorities    

ESMA issued an updated list of AIFMD MoUs signed by the EU authorities, dated 20 February 2020.

ESMA's product intervention powers – AIFMs and UCITS Mancos

ESMA issued its final Report on product intervention requirements under MiFIR. The report recommends that NCAs and ESMA should have the powers to apply product intervention measures directly to AIFMs and UCITS management companies.

For more information on this topic please contact any member of A&L Goodbody's Financial Regulation team.

Date published: 6 March 2020