Asset Management Regulatory Roundup - January 2018, Issue 1

January 10, 2018

A compact summary of the most recent regulatory developments relevant to the UK asset management industry. This issue includes details of the matters to be considered by users of financial benchmarks when selecting an appropriate benchmark; an FMLC paper on the potential impact of Brexit and WTO rules on financial services; together with information on MiFID II and MiFIR following the implementation date of 3 January 2018.


BENCHMARKS: IOSCO statement on matters to consider in the use of financial benchmarks 

The International Organization of Securities Commissions (IOSCO) has published a statement setting out matters to be considered by users of financial benchmarks when selecting an appropriate benchmark. The statement also provides guidance on contingency planning for occasions when a selected benchmark becomes unavailable. 

The statement is intended to inform benchmark users and complements existing IOSCO principles for financial benchmarks which focussed on benchmark administrators and submitters. 

Read the statement » 

BREXIT: FMLC paper and impact of WTO rules on financial services 

The Financial Markets Law Committee (FMLC) has published a paper on the potential impact of Brexit and World Trade Organisation (WTO) rules on financial services. The paper focuses on the future of the UK's cross-border trade with the EU and contains an overview of the WTO agreements relevant to financial services and their application. It then examines the legal uncertainties arising from the impact of these rules. 

Read the paper » 

MiFID II: FCA updates webpages and forms 

Following the implementation of MiFID II and MiFIR on 3 January 2018, the FCA has updated its webpages and published new forms as follows: 

Transaction reporting webpages » 

Change of legal status webpages » 

Change in control webpages » 

The FCA has also published general guidance on the authorisation process, forms and prudential categorisations for first time applicants and existing investment firms seeking to vary their scope of permissions. 

Read the MiFID II general guidance » 

MiFID II: ESMA publishes registers 

ESMA has added various MiFID II and MiFIR databases to its webpage of registers and data compiled on the basis of notifications and data provided by national competent authorities. 

Consult the registers » 

MiFIR: LEI implementation period extended 

The European Securities and Markets Authority (ESMA) has issued a statement to assist with the smooth implementation of Legal Entity Identifier (LEI) requirements under the Markets in Financial Instruments Regulation (MiFIR). 

EU investment firms are required to identify clients that are legal persons with LEIs for the purpose of MiFID II transaction reporting. Trading venues are also obliged to identify each issuer of a financial instrument traded on their systems with an LEI code when making daily data submissions to the Financial Instruments Reference Data System. Owing to difficulties faced by investment firms in obtaining LEIs before the 3 January 2018 entry into force of MiFIR, ESMA announced that it will grant a six month temporary period during which: 

  • Investment firms may provide a service triggering the obligation to submit a transaction report to the client, from which it did not previously obtain an LEI code, under the condition that before providing such service the investment firm obtains the necessary documentation from this client to apply for an LEI code on his behalf; and 
  • Trading venues report their own LEI codes instead of LEI codes of non-EU issuers currently not having their own LEI codes. 

Read the statement » 

Fund distribution resources 

Dechert maintains two services designed to assist managers with global fund distribution and registration. 

World Compass - A global web-based service offering investment firms 24/7 access to detailed information on fund marketing, separate accounts and beneficial ownership reporting 

World Passport - An outsourced solution for fund registration globally for both UCITS and AIFs

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