Financial Services Quarterly Report
March 24, 2016
A review of recent developments in the international financial services industry, including:
- Lessons for PE Managers from the SEC’s Ongoing Scrutiny of Private Equity Funds
- Singapore Continues Global Trend in Derivatives Regulation: Reporting for OTC Derivatives
- UK Investment Trust Companies for Credit Portfolios – Their Time Has Come
- Northstar Decision on Remand: U.S. District Court Holds SLUSA Precludes State Law Claims Alleging Deviation from Mutual Fund’s Investment Objective
- Fighting Currency Outflows, China Proposes Further Opening its Securities Markets to Fund Managers and Foreign Investors
- 2016 Global Alternative Funds Symposium
- Brexit: Are You Prepared if the UK Leaves the EU?
- Dechert's World Compass
Lessons for PE Managers from the SEC’s Ongoing Scrutiny of Private Equity Funds
A large number of private equity managers were required to register for the first time with the U.S. Securities and Exchange Commission pursuant to the Dodd-Frank Act. Since the Act’s enactment in 2010, there has been a significant increase in SEC scrutiny of private equity managers – primarily through investigations and civil enforcement actions initiated by the SEC’s Division of Enforcement, as well as the Presence Examination Initiative. Given the scope of the deficiencies cited by the SEC Staff following the Initiative, it seems clear that the bar has been raised in this area.
Singapore Continues Global Trend in Derivatives Regulation: Reporting for OTC Derivatives
The Monetary Authority of Singapore continues to develop and strengthen its regulation of derivatives markets, most recently focusing its attention on the formulation and completion of a comprehensive reporting regime. In January 2016, MAS consulted on proposed amendments to the Securities and Futures Regulation relating to MAS’ derivatives reporting regime, which could extend reporting requirements to previously exempt fund managers, and thus bring Singapore’s derivatives reporting regime closer to the scope of other major jurisdictions.
UK Investment Trust Companies for Credit Portfolios – Their Time Has Come
According to statistics published by the Association of Investment Companies, the UK trade association for closed-end investment companies, in 2015 net fundraising for closed-end investment companies, including investment trusts, was a record £5.24 billion, 56% higher than the previous record in 2007. Most of the new capital was raised by investment companies investing in high yielding sectors such as property and debt. This article looks at the attractions for a manager in launching a UK investment trust as a vehicle to invest in credit.
Northstar Decision on Remand: U.S. District Court Holds SLUSA Precludes State Law Claims Alleging Deviation from Mutual Fund’s Investment Objective
In a complete victory for the defendants, a federal district court dismissed with prejudice the final remaining claims in the Northstar case, which had been ongoing for nearly eight years. The court found that the plaintiff’s claims were precluded under a federal statute that forbids shareholders from filing state law claims based on alleged misrepresentations or omissions involving covered securities. In practice, the reasoning behind the court’s broad ruling should compel the dismissal of most similar state law claims premised on an alleged violation of a mutual fund’s fundamental investment objectives.
Fighting Currency Outflows, China Proposes Further Opening its Securities Markets to Fund Managers and Foreign Investors
Faced with redemptions and currency outflows from the country, Chinese regulators have taken welcome steps to make it easier for fund managers and other institutional investors to invest in China. Fund managers, in particular, stand to benefit from two recent proposals. The first proposal would ease the process of obtaining a QFII license, while the second proposal would give a broad range of institutional investors access to China’s inter-bank fixed income market.
Global Alternative Funds Symposium April 6
Please join us for Dechert’s annual symposium, which will feature multiple panels comprising distinguished industry leaders, as well as partners from Dechert offices around the world. Presenters will discuss the dramatically evolving laws, opportunities, trends and risks for hedge funds, private equity funds and debt funds, focusing on current developments in Europe, Asia and the Middle East.
Brexit: Are You Prepared if the UK Leaves the EU?
With a referendum determining the future of the UK’s relationship with the EU now set for 23 June, all companies operating, or having commercial interests, in the UK should be asking themselves what Brexit would mean for their businesses. Dechert has established a webpage that provides resources regarding the potential impact of Brexit.
Dechert's World Compass
World Compass is a web-based subscription service that offers investment firms 24/7 access to concise global marketing and distribution guidance in more than 100 jurisdictions worldwide, updated regularly to ensure accuracy, and covering funds, managed accounts and beneficial ownership reporting.
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