Fund News - Issue 113 - March 2014

FUND NEWS

Financial Services / Regulatory and Tax / Issue 113

Developments in March 2014 Investment Fund Regulatoryand Tax developments in selected jurisdictions

2 / Fund News / Issue 113 / Developments in March 2014

Regulatory Content

European Union 3 UCITS V – EU reaches final compromise 5 EC legislative proposal for a revised IORP Directive 6 ECON voted on the proposal for a regulation on

European Long-Term Investment Fund (ELTIF) 8 The European Parliament voted legislative

resolution on draft AML legislation 9 EC Communication on Crowdfunding 9 ESMA updated the Q&A on OTC derivatives,

central counterparties and trade repositories (EMIR) 9 ESMA updated its Q&A regarding its guidelines

on ETFs and other UCITS issues 10 ESMA updated the Q&A on the application of

AIFMD and documents for the reporting 11 ESMA issues good practices for structured retail

product governance 11 ESMA issued a Q&A on the application of the

EuSEF and EuVECA Regulations

Finland 11 Finland transposes the AIFMD into national law

Ireland 12 CBI publishes first reporting dates for AIFM 12 CBI consultation on AIFMD “depositary lite”

services offered by fund administrators 12 CBI publishes feedback to consultation on types of

AIF under AIFMD including EUTs, REITs, and SPVs. 13 CBI guidance for AIFs and their investment

managers/advisors 14 CBI publishes 8th Edition of AIFMD Q&A 14 CBI publishes 8th Edition of AIFMD Q&A

Department of Finance consultation on Member State discretions under EMIR

14 CBI notes on completion of MMIF return by fund administrators

15 Funds and the CBI’s themed inspections and enforcement priorities for 2014

15 Speech by Gareth Murphy of the CBI 15 Annual/half-yearly reports – Central Bank

requirements for transactions with connected parties

15 Key Dates Reminder

Contents

Luxembourg 16 CSSF updated the FAQ on AIFMD and issued an

updated application form for AIFM authorisation

Switzerland 17 FI NMA Circular 2013/08:’Market Conduct Rules’ 17 FINMA confirms further cooperation with foreign

authorities to supervise distribution of funds to non-qualified investors

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European Union 18 Enhanced EU Savings Directive has been adopted

by the Council

Luxembourg 19 Luxembourg and the United States sign FATCA

Agreement 20 Abolishment of the withholding tax option under

the EU Savings Directive20 Mandatory and automatic exchange of

information: Law of 26 March 2014 (Memorial A of 28 March 2014, No 43, page 508) transposing article 8 of Directive 2011/16/EU

Fund News / Issue 113 / Developments in March 2014 / 3

Regulatory News

Depositary rules

• Single depositary functions. Only one depositary will be appointed by the UCITS to be the single interlocutor of the UCITS, the management company and the investors in case a problem occurs in relation with the assets but also to provide them with a comprehensive inventory on a regular basis. The current depositary regime only regulates the oversight functions but the rules vary according to whether the UCITS takes is a contractual fund or a corporate fund. The new regime for oversight functions will provide the same rules for both types of legal structures. In addition, two other functions will be regulated at the EU level: safe-keeping, with differing requirements for financial assets and other assets, and cash-monitoring.

• Restriction on the reuse by the depositary or its delegate of assets held in custody. The reuse of assets can only be performed when the following criteria are fulfilled:

– it is executed for the account of the UCITS;

– the depositary carries out the instructions of the management company on behalf of the UCITS

– the purpose is the benefit of the UCITS and of the investors;

– the UCITS receives a high quality and liquid collateral in return, the value of which is at all times equal to the market value of the reused assets plus a premium.

These provisions go further than the AIFMD requirements where the depositary can be allowed to reuse the assets by simple prior consent of the AIF or the AIFM acting on behalf of the AIF.

• Delegation rules. Only safe-keepings duties can be delegated. The decision to delegate and the choice of the delegate is subject to an initial due diligence. During the performance of its activities, the delegate will be subject to an on-going due diligence by the depositary and will have to comply at all time with following requirements:

– have structure and expertise in line with the nature and complexity of the assets received in custody

– be subject to effective prudential regulation, including minimum capital requirements, and supervision in its jurisdiction

– be subject to external periodic audit to make sure that financial instruments are in its possession

– segregate the assets of the clients of the depositary from its own assets and from the assets of the depositary to ensure that clear identification of ownership is possible at any time.

– take all necessary steps to ensure that, in case of its own insolvency, the assets held in custody are not available to pay-off the creditors

European Union

UCITS V – EU reaches final compromise

Background

The Madoff fraud and the Lehman Brothers default highlighted the insufficient protection provided by the UCITS framework to instruments held in custody and the lack of harmonisation in the depositary functions and liabilities. In fact, the depositary rules have remained unchanged since the launch of the UCITS framework in the mid 80’s though the UCITS framework had been reshaped recently by Directive 2009/65/EC. The need for a new Directive was also stressed by the adoption of the AIFMD which regulated the alternative investment funds sector and dramatically improved non-retail investors’ protection, making it urgent to increase the level of protection provided by the retail fund regime to investors.

On 3 July 2012 the EU Commission issued a proposal and a compromise was finally reached between the Council and the European Parliament on 13 March 2014. The text is expected to be adopted in April 2014 during the last plenary session of the European Parliament before the elections which will be held in May. It will align the retail regime on depositary and remuneration rules, the sanction mechanism and the reporting of breaches to authorities.


• Clarification of the scope of the entities eligible to perform depositary functions. The new Directive provides a long list of criteria regarding internal organisation matters that the “other legal entities” (beside national central banks and credit institutions) authorised under the laws of the Member State, subject to capital adequacy requirements, prudential regulation and ongoing supervision will have to comply with to be considered as eligible depositaries. Despite these requirements, if the current depositary does not meet all these requirements, the fund manager will have two years after the transposition deadline to appoint a compliant entity if the appointed one does not undertake the necessary changes.

• Liability of the depositary for losses. UCITS V creates a stronger liability regime for the depositary by introducing, on the one hand, a liability without fault for the losses of safe-kept financial instruments by the depositary or by a third party The depositary can only discharge itself from liability if it can prove that the loss arose as a result of:

– an external event,

– beyond reasonable control, and

– unavoidable despite all reasonable effort to the contrary.

On the other hand, the depositary will be liable to the UCITS and to the investors for all other losses suffered as a result of the depositary’s negligence or intentional failure to properly fulfil its obligations. Unlike the

depositary regime organised by the AIFMD, there will be no possibility for a contractual discharge of liability.

The depositary regime provided by UCITS V is clearly inspired by the AIFMD. The same is true for the remuneration rules for which ESMA is expected to produce guidelines aligned, as far as possible, with those applying to AIFMs, which will be applied following a principle of proportionality.

Remuneration policies and practices

• A mandatory remuneration policy. As provided by the AIFMD, management companies will need a remuneration policy, adopted by the management body, which aims at fostering sound and effective risk management and which does not reward inconsistent risk taking. The policy must be at least annually reviewed.

• Scope? The remuneration policy will apply to the categories of staff whose professional activities have a material impact on the risk profiles of the management company or of the UCITS they manage, including senior management, risk takers, control functions and any employee receiving total remuneration equivalent to those of senior management and risk takers. The ESMA Guidelines should provide further information on this topic, more specifically the inclusion of investment advisers and analysts in the scope of the remuneration policy and its extension to the delegates as is suggested in the recitals.

• Governance. Beside the participation of the management body, UCITS V adds a new actor in the definition of the remuneration policy: the remuneration committee. However, pursuant the principle of proportionality, this committee will only be mandatory for larger entities and those whose activity would qualify as complex.

• The variable remuneration. Three types of remuneration will have to be addressed by remuneration policies and practices: fixed, variable and discretionary pension benefits. Fixed and variable remunerations must be appropriately balanced. In principle, the variable part cannot be guaranteed and at least 50% of it must consist of units of the managed UCITS or other instruments with equally effective incentives. These instruments must be subject to retention rules. Further, at least 40% of the variable remuneration will have to be deferred over a period which is appropriate in view of the holding period recommended to the investors of the managed UCITS and aligned to the risks of this UCITS. When performance related, the variable remuneration must be determined on the basis of a combination between performance and risk assessment and of the company’s results. The assessment of performance is set in a multi-year framework appropriate to the holding period recommended to investors.

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• Transparency. For the publication in the prospectus, the management companies will be given the choice to provide investors either with very detailed information on the remuneration policy and practices, or a summarised version of the remuneration policy with a reference to the publication of all further details on a website and on the possibility to obtain a copy free of charge. Regarding information to provide in the KIID, only the second option is mandatory. Information on remuneration will also have to be integrated in the annual reports.

Administrative sanction regime and reporting of breaches

• Harmonisation of administrative sanctions. Member States must lay down rules on administrative sanctions and measures to be imposed to the members of the management body and to other natural persons who are responsible for the breach.

– The maximum administrative penalties will have to reach at least: EUR 5 million or 10% of the turnover of a corporation, EUR 5 million for individuals or at least twice the amount of the benefit derived from the breach even if above the previous amounts.

– Other administrative sanctions that may be applied such as: suspension/ withdrawal of authorization of the Management Company or UCITS, temporary or permanent ban from management functions, public statement with identification of the person responsible and the breach.

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• Report of breaches. In order to encourage whistle-blowing by employees of depositaries, investment funds and management companies, Member States and ESMA will have to implement secured channels to receive and follow up of for the report of breaches of national provision transposing the Directive.

After the vote?

• Level 2. The Member State will have 18 months to implement the Directive in national law. In the meantime, in the same way as for the AIFMD, the European Commission will adopt a Delegated Regulation to clarify the depositary regime, which will be at least as restrictive as those prepared for the AIFMD

• Level 3. ESMA is expected to elaborate Guidelines, among others on remuneration policies.

The text of the compromise is available under following link:

http://register.consilium.europa.eu/doc/srv?l=EN&t=PDF&gc=true&sc=false&f=ST%207411%202014%20INIT

EC legislative proposal for a revised IORP Directive

On 27 March 2014 the European Commission adopted a legislative proposal for new rules on occupational pension funds (IORP 2). This legislative proposal forms part of a package of measures to stimulate new and different ways of unlocking long-term financing and support Europe’s return to sustainable economic growth.

There are some 125,000 occupational pension funds operating across the EU that hold assets worth €2.5 trillion on behalf of around 75 million Europeans.

The IORP Directive (Directive 2003/41/EC) lays down basic requirements for occupational pension funds and their supervision, including rules which oblige occupational pension funds to invest their assets prudently, in the best interest of members and beneficiaries. The new proposal aims at improving governance and transparency of these funds, promoting cross-border activity, and helping long-term investment. In particular, the three main objectives of the proposal are:

– to ensure proper protection of pension scheme members

– to remove obstacles for cross-border provision of services by occupational pension funds

– to reinforce the capacity of occupational pension funds to invest in financial assets with a long-term economic profile.





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3. Removing obstacles for cross-border provision of services so that occupational pension funds and employers can fully reap the benefits of the single market. The proposal makes it easier for occupational pension funds to operate a pension scheme that is subject to the social and labour law of another Member State and for fund assets to be transferred across Member States, notably by introducing a pension fund transfer procedure.

4. Encourage occupational pension funds to invest long-term in growth-, environment- and employment-enhancing economic activities. The proposal modernizes investment rules to allow occupational pension funds to invest in financial assets with a long-term economic profile thereby supporting the financing of growth in the real economy. The proposal would change the existing provisions on investment restrictions to make sure occupational pension funds remained free to invest in infrastructure, unrated loans etc., thus ensuring that investments, in particular with a long-term profile, should not be restricted if the restriction is not justified on prudential grounds.

The text of the legislative proposal is available at the following link:

http://ec.europa.eu/internal_market/pensions/docs/directive/140327_proposal_en.pdf

ECON voted on the proposal for a regulation on European Long-Term Investment Fund (ELTIF)

On 10 March 2014, the ECON committee voted amendments on the Commission proposal regarding the European Long-Term Investment Funds (ELTIF).

The main amendments voted by the ECON committee are as follows:

• Authorization

The authorization procedure is simplified and an EU AIFM that applies to manage an ELTIF can refer to their AIFMD application files and authorization. In the application for authorization, the AIFM must indicate its previous fund management experience that is relevant to long-term investment. The manager of the ELTIF should not previously have been subject to penalties for infringements of national or Union law governing fund management.

• Eligible assets and portfolio diversification

Regarding the qualifying portfolio undertakings, new provisions stipulate that the entity may be admitted to trading on a regulated market or MTF if has a market capitalization of no more than EUR 1 billion, or is an SME. Within the 70% bucket of eligible investments, the ELTIF must invest 60% of this threshold in equity or quasi-equity instruments corresponding to the conditions setting out in the Regulation, and/or debt instruments and loans with a maturity aligned to the life of the ELTIF. A new article

The proposal has four key objectives and introduces improvements in all these areas to:

1. Soundness of occupational pensions and better protect pension scheme members and beneficiaries.

– new governance requirements on key functions (risk management, internal audit and where relevant actuarial function),

– new provisions on remuneration policy, so that institutions have a sound remuneration and regularly disclose relevant information on such policy,

– a self-assessment of the risk-management system (through a Risk Evaluation for Pensions),

– the requirement to use a depositary, particularly to reduce operational risk,

– enhanced powers for supervisors including for chain-outsourcing (outsourcing and all subsequent re-outsourcing) and stress testing.

2. Better informing pension scheme members and beneficiaries. The proposal introduces a Pension Benefit Statement standardised at EU level that provides pension scheme members with simple and clear information about their individual pension entitlements.





regarding breaches of the portfolio diversification provides that if the contravention of the portfolio diversification is beyond the control of the manager, this latest has 6 months to takes necessary corrective measures.

• Borrowings

Securities lending and borrowing and repurchase agreements or any other agreement that would encumber ELTIF’s assets are no longer prohibited. The cash borrowing threshold is increased to 40% of the capital and the duration of the borrowing shall be aligned with the life of the ELTIF.

• Distinction between “professional” ELTIF and “retail” ELTIF

The new text introduces a distinction between two new types of ELTIF: the “professional” ELTIF and the ELTIF (also called “retail” ELTIF). The professional ELTIF is defined as an ELTIF eligible to be marketed only to professional and semi-professional investors. Semi-professional investors are considered as an investor who commits to investing a minimum of €100,000 and who agrees with the risks associated with the investment. A redemption right cannot be foreseen in a professional ELTIF.

Regarding ELTIF, if retail investors participate in the ELTIF, then all investors shall have the possibility to ask for redemption of their shares or units before the end of the life cycle. When the rules of the ELTIF foresee a regular redemption right, the ELTIF shall maintain a liquidity reserve at the predefined

redemption periods that take into account the requirements and conditions for exercise of the redemption rights. Technical standards will be issued specifying the structure of the illiquidity reserve. This redemption by retail or institutional investors can only take place whenever the life of the ELTIF is halfway and for a total maximum of 20% of the total amount of the fund. If no redemption rights are foreseen in the rules of the ELTIF, investors’ units and shares shall be redeemable as the day after the end of life of the ELTIF. ESMA will issue regulatory technical standards in order to specify the conditions and requirements of the redemption policy structure of ELTIFs. The legal form of the ELTIF shall be such that retail investors cannot lose more than the amount that they have invested into the fund.

• Life cycle of the ELTIF

The rules of the ELTIF shall now provide the right to extend the life-cycle and as well how this right shall be used. If no specific date is indicated, the life of the ELTIF shall not be limited.

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• Transparency

On the transparency side, the prospectus, KID or any other marketing documents shall inform investors about the strategy regarding the use and value of derivatives, and at least once a year regarding the progress of each investment, the value of the individual qualifying portfolio investments and the value of other assets. Moreover, the prospectus of “professional” ELTIF shall contain information required under article 23 of the AIFMD.

Next step

The European Parliament is expected to vote the text as amended by ECON on 15 April 2014.

The text voted by ECON on the proposal for a regulation on ELTIF is aviable at the following web link.

http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A7-2014-0211+0+DOC+PDF+V0//EN






The European Parliament voted legislative resolution on draft AML legislation

The European Parliament adopted their position on the Commission’s proposal on the prevention of the use of the financial system for the purpose of money anti-laundering and terrorist financing on 11 March 2014 as well as a resolution on the information accompanying transfers of funds. Some of the main aspects include:

• Creation of a public central register to identify ultimate owners of legal arrangements Under the anti-money laundering directive (AMLD), as amended by MEPs, a public central register in each EU country would list information on the ultimate beneficial owners of all sorts of legal arrangements, including companies, foundations, holdings and trusts. These registers would be interconnected across the EU and would be publicly available following prior identification of the person wishing to access the information through basic online registration. Several provisions were amended regarding data privacy protection and to ensure that only the minimum information necessary is put in the register.

• Suspicious transactions The proposed rules would require banks, financial institutions, auditors, lawyers, accountants, tax advisors and real estate agents, among others, to be more vigilant about suspicious transactions made by their clients. Casinos are included in the scope of the draft rules, but other gambling services posing a low risk may be excluded by Member States.

• The amended AMLD provides for a risk-based approach, enabling Member States to better identify, understand and mitigate money laundering and terrorist financing risks. Parliament also voted on the Transfer of Funds Regulation, which aims to improve the traceability of payers and payees and their assets.

• Politically-exposed persons The rules on “politically-exposed

persons” are extended to “domestic” politically-exposed persons. These people are those who are or have been “entrusted by the member state with prominent public functions”, such as heads of state, members of government, Supreme Court judges, and members of parliaments. In case of high-risk business relationships with such persons, additional measures should be put in place.

Next steps

The European Parliament voted its first reading of the draft legislation. The proposal will be discussed at the European Council in the coming months.

The text of the proposal as voted by the European Parliament is available at the following web link


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EC Communication on Crowdfunding

This Communication seeks to contribute to support the emergence of crowdfunding activities, with the following priorities:

• Establishing an Expert Group on Crowdfunding to provide advice and expertise to the Commission in this area. In particular, the Expert Group should provide advice to the Commission to explore the potential of establishing a “quality label” to build trust with users and provide expertise to the Commission in promoting transparency, best practices and certification;

• Raising awareness with regard to crowdfunding, promoting information and training as well as raising standards; and

• Mapping national regulatory developments and holding regulatory workshops to ensure an optimal functioning of the internal market, and to assess if regulatory intervention is necessary at EU level.

The Commission will report back on progress in the course of 2015. The full text of the Communication is available via the following web link:

http://ec.europa.eu/internal_market/finances/docs/crowdfunding/140327-communication_en.pdf

Regulatory News

ESMA updated the Q&A on OTC derivatives, central counterparties and trade repositories (EMIR)

On 20 March 2014 the European Securities and Markets Authority (ESMA) issued updated Questions and Answers (Q&A’s) on the implementation of the European Markets Infrastructure Regulation (EMIR). These updated Q&A’s clarify, among others:

– The application for risk mitigation techniques for EU-based counterparty when executing OTC-derivative contracts cleared by a third country CCP not recognized by EMIR;

– Collateral requirements and recording of clients assets and more precisely what to include in notifications to national competent authorities about intragroup exemptions from Central counterparties clearing house;

– Trade repository registration on the definition of the buyer and seller in an FX forward deal;

– Reporting to trade repositories and exchange rate;

– How to construct and generate Unique Trade Identifiers (UTI).

The Q&A is available at the following web link

http://www.esma.europa.eu/system/files/2014-297_qa_vii_on_emir_implementation_20_march_14_0.pdf

ESMA updated its Q&A regarding its guidelines on ETFs and other UCITS issues

On 24 March 2014 ESMA updated its Questions and Answers regarding its guidelines on ETFs and other UCITS issues. This update concerns questions regarding investment by UCITS in financial indices. The two main elements are:

• The information to be disclosed and provided must be publicly available to investors and prospective investors, and published in such a way that direct access to this information is possible.

• For the purpose of the correlation factor, a UCITS can invest in a commodity index for which a particular commodity component does not have 5 years of price history provided that a similar asset serves as an adequate proxy.


http://www.esma.europa.eu/system/files/2014-295_qa_on_guidelines_on_etfs_and_other_ucits_issues.pdf











ESMA updated the Q&A on the application of AIFMD and documents for the reporting

The ESMA published on 25 March an update of the Questions and Answers on the AIFMD. The Q&A clarifies the following points:

– Reporting to national competent authorities regarding repurchase transactions;

– Reporting period when reporting on “instruments traded and individual exposures”;

– Calculation of the geographical exposure as a percentage of the aggregated value of the AIF;

– Calculation of the breakdown of investment strategies as a percentage of the NAv of the AIF;

– Reporting period after the liquidation of an AIF;

– Calculation of the value for securities and the percentage of trade volumes for derivatives traded on regulated markets and OTC markets;

– Valuation of non-liquid assets;

– Reporting of the information on investor liquidity;

– Definition of inception date of an AIFMs;

– Language of the reporting.

The text of the Q&A is available at the following web link.

http://www.esma.europa.eu/system/files/2014-esma-296_qa_on_aifmd_march_update_for_publication_clean.pdf

On 25 March ESMA updated documents regarding the reporting and IT technical guidance. The two documents are available at the following web links:

• AIFMD reporting

http://www.esma.europa.eu/system/files/2013-1361_aifmd_reporting_xml_documents_v1.2.zip

• AIFMD reporting IT technical guidance

http://www.esma.europa.eu/system/files/2013-1358_aifmd_reporting_it_technical_guidance-revision3.zip

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ESMA issues good practices for structured retail product governance

On 27 March 2014 ESMA issued an opinion on structured retail products. This document is setting out good practices for firms when manufacturing and distributing these products. ESMA expects national competent authorities to embed these good practices in their supervisory approaches to structured retail product providers.

These good practices that product providers could put in place aim to improve investor protection and to clarify the complexity of the structured retail products and the type of investors targeted.

The good practices cover the following areas:

• general organisation of product governance arrangements;

• product design;

• product testing;

• target market;

• distributing strategy;

• value at the date of issuance and transparency of costs;

• secondary market and redemption; and

• review process.

ESMA advises that although the good practices focus on structured products designed for retail customers, they may also be a relevant reference for other types of financial instruments such as asset-backed securities, or contingent convertible bonds, as well as when financial instruments are being sold to professional clients.

The text of the opinion is available at the following web link

http://www.esma.europa.eu/system/files/2014-332_esma_opinion__structured_retail_products_-_good_practices_for_product_governance_arrangements.pdf

ESMA issued a Q&A on the application of the EuSEF and EuVECA Regulations

On 16 March 2014 ESMA published a Q&A regarding the application of the EuSEF and EuVECA regulations. The questions concern the following topics:

• Management of EuSEF and EuVECA by AIFMs

• Registration of EuSEF and EuVECA managers

• Management and marketing of AIFs by EuSEF and EuVECA managers


http://www.esma.europa.eu/system/files/2014-311_qa_eusef-euveca.pdf

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Finland transposes the AIFMD into national law

On 7 March 2014, the Finnish AIFMD Act (162/2014) was signed into law and came into force 15 March 2014.

http://www.finlex.fi/fi/laki/alkup/2014/20140162

On 25 March 2014, the Finnish Ministry of Finance issued its AIFMD decrees (226/2014, 227/2014, 228/2014, 229/2014, 230/2014, 231/2014).

http://www.edilex.fi/saadoskokoelma/20140226.pdf






Finland























CBI publishes first reporting dates for AIFM

On 7 March 2014 the Central Bank of Ireland published the first reporting dates for the submission of regulatory returns for AIFM in accordance with Regulation 4(3)(d) and Regulation 25 of the Irish AIFM Regulations (i.e. both these regulations entail disclosures on the instruments, exposures, and concentrations of AIF).

An AIFM’s first submission date will depend on its reporting frequency with AIFM with a quarterly or semi-annual reporting requirement to report on the period ending 30 June 2014 by 11 September 2014 while AIFM with an annual reporting requirement to report on the period ending 31 December 2014 by 31 January 2015. The Central Bank’s first reporting dates for AIFM (which may be subject to change) are available at the following link:

http://www.centralbank.ie/regulation/marketsupdate/Documents/First%20Reporting%20Date%20for%20AIFMs%20_FINAL.pdf

Ireland

CBI consultation on AIFMD “depositary lite” services offered by fund administrators Regarding the “depositary lite” regime for non-EU AIF which are managed by EU AIFM, the Central Bank published a consultation paper on 7 March 2014 which seeks to address how conflicts of interest should be managed by fund administrators which provide administration services and also perform the depositary duties set out in Regulation 21(7) (i.e. cash flow monitoring) and Regulation 21(9) (i.e. oversight) for the same non-EU AIF.

The Central Bank proposes to amend Chapter 5 of its AIF Rulebook to require administrators in such circumstances to provide functional and hierarchical separation between the respective depositary and administration services by carrying out the depositary services contained in Regulation 21(7) and Regulation 21(9) through a separate subsidiary.

Regarding the depositary service of safe keeping in Regulation 22(8), the Central Bank’s AIFMD Q&A states that any entity wishing to provide this service must be authorised to provide “custodial operations involving the safe-keeping and administration of investment instruments” under the Investment Intermediaries Act 1995.

Responses to the consultation should be received by 30 May 2014. The Central Bank’s consultation paper is available at the following link:

http://www.centralbank.ie/regulation/marketsupdate/Documents/CP78%20FINAL%20VERSION_.pdf

CBI publishes feedback to consultation on types of AIF under AIFMD including EUTs, REITs, and SPVs.

On 28 March 2014 the Central Bank of Ireland published its feedback to the responses it received to its consultation paper (CP 68) on types of alternative investment funds under the AIFMD, specifically exempt unit trusts (‘EUTs’) and real estate investment trusts (‘REITs’) established under the Unit Trusts Act 1990 and special purpose vehicles (‘SPVs’).

Noting that the feedback is not a clarification, supplement to, or guidance on the Irish legislation implementing the AIFMD, the Central Bank has concluded that EUT’s should in many instances be regarded as AIF under AIFMD whether or not they provide for participation by the public.

The Central Bank concluded that existing EUT, which fall within the definition of an AIF, are required to apply for authorisation by 1 October 2014 unless they restructure so as to fall outside the definition of an AIF, however, closed-ended EUT whose AIFM can avail of the relevant grandfathering provisions are recommended not to seek authorisation.

From 1 May 2014 the establishment of a new exempt unit trust scheme will require authorisation from the Central Bank under the Unit Trust Act 1990 where the scheme falls within the definition of an AIF under the AIFMD.

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However, the Central Bank has confirmed that as an exemption to this requirement, new EUT are not required to seek authorisation if their eligible investors are confined to charities and/or regulated occupational pension schemes where the occupational pension scheme has multiple beneficiaries and is not a small self-administered scheme (‘SSAS’). The Central Bank has stated that EUT with a tax exemption from the Revenue Commissioners and which allow schemes other than those referred to above to invest in them do not meet the requirements for this exemption and should seek authorisation.

The Central Bank has also confirmed that EUT which are constitutionally confined to one ultimate beneficiary are not required to seek authorisation. In this regard, the Central Bank’s comments mirror those of ESMA’s guidance on the meaning of “number of investors” in its guidelines on the key concepts of the AIFMD, published in August 2013.

The Central Bank will update its AIFMD Q&A to reflect the above.

Regarding REITs, the Central Bank noted that of the Irish REIT structure which it has encountered, it would not regard any as falling outside the definition of an AIF and that the onus remains on a REIT not wishing to be considered to be an AIF to demonstrate why this is the case.

Regarding SPVs, the Central Bank reiterated its guidance given in the AIFMD Q&A that certain SPVs may not be fall within the definition of AIF subject to further guidance that ESMA may provide on this matter. We reported on this in Issue 109 of Fund News (November 2013).

The Central Bank’s feedback to CP 68 is available at the following link:

http://www.centralbank.ie/regulation/poldocs/consultation-papers/Documents/CP68/Feedback%20Statement%20on%20CP%2068-%20FINAL%2028%20MAR%2014.pdf

CBI guidance for AIFs and their investment managers/advisors

On 7 March 2014 the Central Bank of Ireland published revised guidance relating to third party approval and the fund authorisation process.

The Central Bank has confirmed that investment managers and sub-investment managers may not be subject to an additional regulatory review process if such entities are either a UCITS management company, a credit institution or an investment firm which is authorised to proved portfolio management under MiFID, or an externally appointed AIFM.

If the entity does not fall within these categories, the Central Bank will require that the entity’s home regulator has entered in to an AIFMD Memorandum of Understanding with the Central Bank and the entity must submit the Central Bank’s IM application form.

Regarding investment advisors, the Central Bank has confirmed that these entities are not required to undergo the approval process provided that the AIF confirms that the investment advisor will be acting in an advisory capacity only and that it will have no discretionary powers over the AIF’s assets.

Although investment advisory agreements must be submitted to the Central Bank, such agreements will not be formally reviewed provided that the AIF confirms that the agreement does not confer the entity with any discretionary management powers and that it does not conflict with the Central Bank’s regulations and conditions applicable to AIFs.

The Central Bank’s guidance is available at the following link:

http://www.centralbank.ie/regula-tion/marketsupdate/Pages/Third-PartyApprovalandFundAuthorisa-tionProcesses.aspx







http://www.centralbank.ie/regulation/marketsupdate/Pages/ThirdPartyApprovalandFundAuthorisationProcesses.aspx





CBI publishes 8th Edition of AIFMD Q&A

On the 7 March 2014 the Central Bank of Ireland published an eighth edition of its AIFMD Q&A. The Central Bank has clarified its previous answers on the following topics:

• whether AIF in liquidation are required to seek authorisation during the transitional period – the Central Bank has clarified that “liquidation” includes AIF which are undergoing a termination process;

• regarding non-EU AIFM marketing both EU and non-EU AIF to professional investors in Ireland – the Central Bank has clarified that such AIFM must comply with the first reporting dates set out in the Central Bank’s statement concerning the first reporting dates for AIFMs published on 7 March 2014; and

• regarding the rules applicable to professional investor funds – the Central Bank has clarified that a professional investor fund may convert to become either a retail alternative investment fund (‘RIAIF’) or a qualifying alternative investment fund (‘QIAIF’) in which case it must comply with all of the rules applicable to a RIAIF or a QIAIF.

The Central Bank has also addressed two new questions; one confirming that an AIFM may not be authorised under MiFID but that it may avail of Article 6(4) of the AIFMD in order to manage AIFs and managed accounts; the other addressing situations where an AIFM proposes to delegate portfolio management or risk management to an unregulated investment manager and how the Central Bank will assess such proposals.

The eighth edition of the AIFMD Q&A is available at the following link:

http://www.centralbank.ie/regulation/industry-sectors/funds/aifmd/Documents/AIFMD%20QA_VERSION%208%20Final.pdf

Department of Finance consultation on Member State discretions under EMIR

On 28 February 2014 the Department of Finance published a consultation paper on Member State discretions under EMIR in which the investigative powers and sanctions regime of the proposed National Competent Authority (the Central Bank of Ireland) were outlined.

The consultation paper discusses proposals for “statements of compliance” requiring third party certification; the use of an “independent assessor model” with powers to be conferred on “authorised officers” of the Central Bank to (among other things) enter premises, dwellings, and remove records etc.; the use of a “skilled persons report” and independent expert approved by the Central Bank.

Submissions were requested on whether non-financial counterparties should be exempted, either in full or partially, from having to produce the statement of compliance.

Regarding the proposed sanctions regime, the paper proposes different administrative and, significantly, criminal sanctions for breaches of EMIR which are subject to various mitigating factors.

The consultation period closed on 14 March 2014. The Department of Finance’s consultation paper is available at the following link:

http://www.finance.gov.ie/publications/consultations/emir-public-consultation-document

CBI notes on completion of MMIF return by fund administrators

The Central Bank has updated its notes on the completion of resident money market and investment funds (MMIF) returns. MMIF returns will replace the OFI1 and funds annual survey of liabilities returns from April 2014 with the first MMIF return is due to be reported in April 2014 for Q1 data.

Further information on the MMIF return is available for the Central Bank’s website at the following link:

https://www.centralbank.ie/polstats/stats/reporting/Pages/RevisedOFIRe-portingMMIFQuarterlyReturn.aspx

Regulatory News








https://www.centralbank.ie/polstats/stats/reporting/Pages/RevisedOFIReportingMMIFQuarterlyReturn.aspx




Regulatory News

Funds and the CBI’s themed inspections and enforcement priorities for 2014

On 28 February 2014 the Central Bank outlined its enforcement priorities for 2014, noting that all sectors (including the funds industry) would be subject to a review of their fitness and probity obligations under the Central Bank Reform Act 2010 and to a review of their anti-money laundering compliance.

The Central Bank’s enforcement priorities are available from its website at the following link:

http://www.centralbank.ie/press-area/press-releases/Pages/Central-BankPublishesEnforcementPrioritie-sin2014.aspx

Speech by Gareth Murphy of the CBI

On 20 March 2014 Gareth Murphy, the Central Bank’s Director of Markets Supervision, delivered a speech addressing topics of relevance to the investment funds industry including (among other things) that the Central Bank may issue guidance on remuneration under AIFMD; the interaction between EMIR and UCITS; and the proposed European long term investment funds and loan origination.

A copy of the speech is available on the Central Bank’s website at the following link:

http://www.centralbank.ie/press-area/speeches/Pages/AddressbyD.aspx

Annual/half-yearly reports – Central Bank requirements for transactions with connected parties

In May 2013 the Central Bank removed the requirement to include a list of transactions with all connected parties in the annual and half-yearly reports of investment companies.

Connected parties include the promoter, manager, trustee, investment adviser and/or associated or group companies of these.

The Central Bank instead included new requirements in the UCITS Notices, Non-UCITS Notices, and the AIF Rule Book requiring the board of directors of management companies/self-managed investment companies to include a confirmation in the company’s annual and, where relevant, half-yearly reports that the directors are satisfied that transactions with connected parties have been carried out as if negotiated at arm’s length and are in the best interest of shareholders.

The new requirements apply to reporting periods beginning after 30 April 2013. The Irish Funds Industry Association’s Technical Committee has published a paper to assist schemes prepare written procedures to meet these requirements.

It should be noted that the above requirement is separate from the requirements under Financial Reporting Standard 8 (‘FRS 8’) regarding the element of control that the parties have over the entity making the reports. This is not an element of the requirement discussed above.

Key Dates Reminder

• 25 April 2014

Obtain a GIIN by 25 April 2014 for FATCA compliance by registering online via the IRS portal. See KPMG Ireland’s advice at the following link:

http://www.kpmg.com/IE/en/Issue-sAndInsights/ArticlesPublications/Pages/fatca-registration-the-time-to-act-is-now.aspx

• T+10 following the end of April

First MMIF return due. See above.

• 1 May 2014

From this date the establishment of a new exempt unit trust scheme will require authorisation from the CBI under the Unit Trust Act 1990 where such scheme falls within the definition of an AIF under the AIFMD per the CBI’s Feedback to CP68.

• 21 May 2014

Deadline for responses to the Revenue Commissioner’s updated draft FATCA guidance. See Issue 112 of Fund News (February 2014).

• 30 May 2014

Deadline for responses to the Central Bank’s consultation paper on AIFMD “depositary lite” services offered by fund administrators. See above.

http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankPublishesEnforcementPrioritiesin2014.aspx






http://www.kpmg.com/IE/en/IssuesAndInsights/ArticlesPublications/Pages/fatca-registration-the-time-to-act-is-now.aspx





CSSF updated the FAQ on AIFMD and issued an updated application form for AIFM authorisation

On 17 March the CSSF published the 6th version of their Frequently Asked Questions (FAQ) document concerning the AIFM law in Luxembourg. The new FAQs provide clarification on the starting dates of reporting.

Key elements are:

• The starting point of the initial reporting period

The FAQs have confirmed that AIFMDs authorized between 22 July 2013 and 30 June 2014 will begin reporting to the CSSF on 1 July 2014 (although AIFMs can, should they wish, submit reports for earlier periods in accordance with ESMA reporting guidelines). The end date for the reporting period and transmission deadlines will, of course, depend on the reporting frequency and type of AIF.

For AIFMs authorized between 1 and 22 July 2014 the AIFM will be required to cover the period from 1 October 2014 to 31 December 2014 in their first reports, regardless of an AIF’s reporting frequency.

Luxembourg

• Lighter reporting regime

The start date for registered AIFMs who fall under the lighter reporting regime will depend on the year they received their registration confirmation. AIFMs registered and confirmed in 2013, will have to cover the period from 1 January to 31 December 2014 (or earlier for voluntary adopters of ESMA reporting guidelines). For AIFMs registered in 2014, a detailed reporting table has been prepared by the CSSF for guidance.

The FAQ is available at the following web link:

http://www.cssf.lu/fileadmin/files/AIFM/FAQ_AIFMD.pdf

On 20 March, the CSSF updated the application form for the set-up of a fully licensed AIFM.

Key aspects include:

• Remuneration policy

A new appendix is required to allow for easy comparison between a company’s remuneration policy and the requirements outlined in Annex II of the AIFM law and ESMA’s Guidelines on sound remuneration. For each requirement, the reference table should include an extract of the corresponding part of the remuneration policy, the status of compliance as well as justifications for partial or non-compliance.

• Remuneration regarding delegated activities

If portfolio or risk management activities are delegated, the AIFM will need to demonstrate third party providers also respect the remuneration requirements laid out in Annex II of the AIFM Law. This should include information about any other regulatory standards that they comply with, such as MiFID or the CRD.

The application form for AIFM authorization is available at the following web link:

http://www.cssf.lu/fileadmin/files/Formulaires/AIFMDQuestionnaire.xls

Regulatory News






Regulatory News

FINMA Circular 2013/08: “Market Conduct Rules”

According to FINMA Circular 2013/08: “Market Conduct Rules”, institutes supervised by FINMA that are within the scope of the Circular, had to carry out their first risk assessment by 1 April 2014.

Organisational requirements

FINMA Circular 2013/08 “Market conduct rules” (the “Circular”) sets out specific details of FINMA’s supervisory practices in combating market abuse. In terms of conduct prohibited under stock market law, the Circular is directed at all market participants. Besides the aforementioned provisions regarding market abuse, the Circular contains additional organisational requirements for institutions subject to prudential supervision by FINMA, such as banks, insurance companies, securities dealers, fund management companies, SICAVs, limited partnerships for collective investment, SICAFs, custodian banks and asset managers of collective investment schemes. The organisational requirements include measures regarding information barriers/areas of confidentiality, surveillance of employee transactions, watch lists and restricted lists, documentation and recording requirements etc. For further details regarding the organisational requirements see:

http://www.finma.ch/e/regulierung/Documents/finma-rs-13-08-e.pdf

Switzerland

Risk assessment

Supervised institutions must assess the risk arising within the scope of the Circular once a year and additionally on an ad-hoc basis as required. The organisational measures required to comply with the Circular are then defined on the basis of the risk assessment. The risk assessment and the measures must be signed off by the supervised institution’s executive governing bodies.

Compliance with the organisational requirements must be ensured by 1 January 2015. The first risk assessment, however, had to be carried out by 1 April 2014 already.

More information on the Circular can be found in the FUND NEWS issue No. 105.

FINMA confirms further cooperation with foreign authorities to supervise distribution of funds to non-qualified investors

The Swiss Financial Market Supervisory Authority FINMA has concluded further Memorandums of Understanding, “MoU” on cooperation and the exchange of information with the supervisory authorities of the following countries regarding the distribution of foreign collective investment schemes in Switzerland to non-qualified investors (retail investors):

• Guernsey

• Malta

• Austria

• Belgium

• Netherlands

• Sweden

• Norway

• Estonia

• Denmark

More information on that topic can be found in the FUND NEWS issue No. 112.




Tax News

Enhanced EU Savings Directive has been adopted by the Council

Following political agreement reached between EU heads of state, the Council of the European Union formally adopted on 24 March 2014 a directive amending the EU Savings Directive (2003/48/EC). The amended Directive will broaden the scope of the current rules in order to close certain loopholes. The new rules will likely be applicable as from 2017.

Background

The Savings Directive has been in force since 1 July 2005 and is intended to prevent evasion of tax on savings income within the EU. The Directive requires exchange of information between EU tax authorities regarding interest payments made from one Member State to a resident of another Member State. For these purposes the Directive also lays down reporting obligations on Member State financial institutions. For a transitional period, Austria and Luxembourg were permitted to operate a withholding tax system. Luxembourg has indicated

European Union

that it will move to information exchange from 2015. Similar arrangements were entered into with Switzerland, Liechtenstein, Monaco, Andorra and San Marino as well as certain dependent or associated territories of EU Member States, such as the Cayman Islands, Netherlands Antilles and the Channel Islands.

Proposals to amend the existing Directive were put forward by the EU Commission in 2008 and were primarily designed to prevent loopholes being exploited. Adopting the revised Directive was a key element of the Commission’s action plan to fight tax fraud and evasion. However, progress on the adoption of the new Directive had been blocked largely due to concerns from Austria and Luxembourg that equivalent measures should be introduced in Switzerland and the other four jurisdictions mentioned above. The EU Commission was given a mandate in May 2013 to negotiate arrangements for such equivalent measures. It appears that the Commission was able to provide sufficient comfort as regards the progress made in these negotiations for all Member States to support the changes.

Enlarged scope

The primary aim of the changes is to include all types of savings income and products that generate interest or equivalent income. It would include life insurance contracts as well as a broader coverage of investment funds. It also applies a “look through” approach to certain EU as well as non-EU interposed entities or legal arrangements. The Directive should be seen in conjunction with the proposals to extend the scope of the current EU Directive on Mutual Administrative Cooperation (2011/16/EU). EU Taxation Commissioner Semeta stated in a speech announcing its adoption, that the revised Directive would be part of the EU’s legislative structure implementing the new global standard on automatic information exchange put forward by the OECD, with which the new Directive is “fully consistent”.

Timing

The Member States will have to have legislation in place to implement the new rules by January 1, 2016 and it is likely that these would be applied as from January 1, 2017. Commissioner Semeta also indicated that he expects to conclude negotiations with Switzerland before the end of the year.

The text of the Directive is available under the following link:






Tax News

Luxembourg and the United States sign FATCA Agreement

On 28 March 2014 Luxembourg signed a so-called IGA with the United States of America to implement the US legislation known as FATCA.

Background

The Foreign Account Tax Compliance Act (FATCA) was signed into law on 18 March 2010. Its purpose is to uncover U.S. persons who may be evading U.S. taxes by investing through foreign financial institutions (FI) or other foreign entities. Initially, it was envisaged that financial institutions around the world would sign an agreement with the Internal Revenue Service (IRS), i.e. the U.S. tax authorities, under which they would have to disclose their US clients in order to avoid a punitive 30% withholding tax to be applied on payments of U.S.-sourced income.

In early 2013, the U.S. Department of Treasury along with five European countries developed an alternative approach to the aforementioned approach, the Intergovernmental Agreement (IGA), aiming at reducing the substantial burden and legal impediments brought by FATCA on financial institutions around the world by enforcing FATCA into local law.

Since then, 24 countries (including Luxembourg) have signed such an agreement on FATCA with the U.S., and many more are still under negotiation.

Luxembourg

Luxembourg IGA

Luxembourg signed an IGA that relies on the approach taken by Model 1 IGA and is close to the Model 1 Agreement in terms of content.

Thus, the IGA signed by Luxembourg essentially provides for an automatic exchange of information on an annual basis between the Luxembourg tax authorities and the U.S. authorities.

It should be noted that Luxembourg has signed a reciprocal agreement, meaning that the exchange of information between the U.S. authorities and the Luxembourg tax authorities encompasses information about account holders in each country’s financial institutions that are residents of the other country.

The Luxembourg IGA, like all other IGAs signed to date, is composed of 3 parts:

• The core text, essentially treating the exchange of information between both authorities;

• Annex I, treating the due diligence requirements to be fulfilled by Luxembourg financial institutions; and

• Annex II, providing a list of Luxembourg financial institutions and products that are generally exempt from FATCA reporting because they represent a low risk of tax evasion for U.S. persons.

First KPMG observations

The core text and Annex I of the Luxembourg IGA are very close to the Model I Agreement in terms of content.

Annex II of the IGA is where country specifics were negotiated and taken into account. In the following, some of the essential carve-outs provided for by the Annex II:

• The FATCA Status “Banks Issuing Covered Bonds” may apply to banks that have as their sole activity the issuance of covered bonds, i.e. the so-called “banques d’émission de lettres de gage’. This carve-out can to date only be found in the Luxembourg IGA.

• The FATCA Status “FI with a Local Client Base” may apply to a Luxembourg Bank for which 98% of its accounts are held by residents of Luxembourg, an EU Member State or Switzerland even in case some of the accounts are U.S. accounts.

• The FATCA Status “Luxembourg Investment Advisors and Investment Managers” may apply to many Luxembourg Management Companies.

• Further, the Luxembourg IGA is the first IGA to have special rules for the interpretation of the so-called “Restricted Fund” status.


Tax News

Memorandum of Understanding

Luxembourg and the United States have signed a Memorandum of Understanding on FATCA along with the IGA. The Memorandum of Understanding essentially clarifies three points:

• First, as of the date of the signature of the IGA all Luxembourg financial institutions are deemed compliant with FATCA, irrespective if the IGA has been ratified by Parliament or not. This is important to help Luxembourg FIs meet the deadline of 1 July.

• Second, in case there would be a delay in the ratification process, Luxembourg’s status of a “partner country” would not get lost until September 2015 or even September 2016.

• The third point is that each Reporting Luxembourg FI shall use a GIIN number as for identification purposes under FATCA and should register on the IRS portal to obtain such a GIIN.

Abolishment of the withholding tax option under the EU Savings Directive With the submission to the Parliament of the bill of law 6668, Luxembourg is now about to abolish the withholding tax option it has been authorized in 2005 to offer to individuals resident of another EU Member State and deriving interest income from Luxembourg source as an alternative to the exchange of information. The entry into force of this major reform is expected on 1 January 2015.

The text of the Bill of Law is available under the following link:

http://www.chd.lu/wps/portal/public/!ut/p/b1/04_SjzQ0MrMwMLC-0MDfTj9CPykssy0xPLMnMz0vMAf-GjzOJdjFzCgjxNjAzczQNNDIy8X-L3MQ4P9jC3cjYEKIoEKjCwsgoP-cHX1dLS1DnQw8DZwNg10DnY-wMPI2I02-AAzgaENLv55G-fm6qfG5XjZuGoqAgA-UA_vA!!/dl4/d5/L0lDU0lKSWdrbUEhIS-9JRFJBQUlpQ2dBek15cXchLz-RKQ2lEb01OdEJqdEJIZmxDRUEhL1o3X0QyRFZSSTQyMEdWTTEwMkJJM1FKUDkzOEUxLzA!/?PC_Z7_D2DVRI420GVM-102BI3QJP938E1019404_action=doDocpaDetails&id=6668&filter_action=doDocpaDetails&PC_Z7_D2DVRI420GVM-102BI3QJP938E1019404_displayLink=true&PC_Z7_D2DVRI420GVM102BI3QJP93

Mandatory and automatic exchange of information: Law of 26 March 2014 (Memorial A of 28 March 2014, No 43, page 508) transposing article 8 of Directive 2011/16/EU

The Law of 29 March 2013 transposed partly Directive 2011/16/EU on administrative cooperation in the field of taxation. In particular, this law introduced the exchange of information upon request, the spontaneous exchange of information as well as certain forms of administrative cooperation between Member States.

The first vote on the bill of law 6632 took place on 12 March and was positive by 58 votes out of 60. The request for exemption from the second vote has been accepted. The Law was adopted on 26 March 2014 (Memorial A of 28 March 2014, No 43, page 508).

http://www.chd.lu/wps/portal/public/!ut/p/b1/04_SjzQ0MrMwMLC0MDfTj9CPykssy0xPLMnMz0vMAfGjzOJdjFzCgjxNjAzczQNNDIy8XL3MQ4P9jC3cjYEKIoEKjCwsgoPcHX1dLS1DnQw8DZwNg10DnYwMPI2I02-AAzgaENLv55Gfm6qfG5XjZuGoqAgA-UA_vA!!/dl4/d5/L0lDU0lKSWdrbUEhIS9JRFJBQUlpQ2dBek15cXchLzRKQ2lEb01OdEJqdEJIZmxDRUEhL1o3X0QyRFZSSTQyMEdWTTEwMkJJM1FKUDkzOEUxLzA!/?PC_Z7_D2DVRI420GVM102BI3QJP938E1019404_action=doDocpaDetails&id=6668&filter_action=doDocpaDetails&PC_Z7_D2DVRI420GVM102BI3QJP938E1019404_displayLink=true&PC_Z7_D2DVRI420GVM102BI3QJP93






















Tax News

According to the Law of 26 March 2014, an article 9bis is introduced in the law of 29 March 2013 in order to transpose article 8 of Directive 2011/16/EU concerning the mandatory and automatic exchange of information. According to the new provision, all the information concerning taxable periods after 1st January 2014 has to be notified to the competent authorities of another M-S concerning the following types of income:

i) Employment income

ii) Directors’ fees

iii) Pensions

According to the Directive, a Member State is not obliged to exchange information when it does not have this information at its disposal. Luxembourg had already declared on 7 December 2010 – when political agreement on Directive 2011/16/EU was reached at ECOFIN – that it is in a position to provide information only regarding the above three categories of income, which are not covered by bank secrecy or other professional secrecy and which can easily be collected from the electronic files which are managed by the tax authorities. This is not the case for the other two categories of income ( i) life insurance contracts not covered by other EU legal instruments on exchange of information and ii) income from immovable property).

The information is communicated at least one time per year at the latest on 30 June following the end of the calendar year during which the information became available. The exchange of information will be made using a standard IT format.

It needs to be underlined that categories of income such as dividends, capital gains and royalties are for the time being not concerned by the mandatory and automatic exchange or information.

The text of the Law is available at the following link:

http://www.legilux.public.lu/leg/a/archives/2014/0043/a043.pdf

Publications

FINANCIAL SERVICES

EvolvingInvestment

Management Regulation

Light at the end of the tunnel?

June 2013

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Schweizerisches Recht der Kollektiven Kapitalanlagen

Swiss FinancialServices Newsletter: Special Edition Investment Management

EvolvingInvestmentManagementRegulation



The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2014 KPMG Holding AG/SA, a Swiss corporation, is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Printed in Switzerland. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

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Markus SchunkPartnerT: +41 58 249 36 82 E: [email protected]

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Yvan MermodPartnerT: +41 58 249 37 80 E: [email protected]

Lugano

Lars SchlichtingPartner, LegalT: +41 58 249 32 59 E: [email protected]

Astrid KellerPartnerT: +41 58 249 28 82 E: [email protected]

Dominik RüttimannPartnerT: +41 58 249 20 56 E: [email protected]

Pierre ZächPartnerT: +41 58 249 64 12 E: [email protected]

Pascal SprengerDirector, LegalT: +41 58 249 42 23 E: [email protected]

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Contacts

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Fund News - Issue 113 - March 2014

Documents

cbi consultation

fund administrators

eu fund news issue

contractual fund

corporate fund

application of aifmd

cbi notes

cbi guidance