Asset Management Regulatory Roundup - January 2018, Issue 2

January 24, 2018

A compact summary of the most recent regulatory developments relevant to the UK asset management industry. This issue includes details of the publication of delegated regulations under the Benchmark Regulation; a call for evidence on measures to protect retail investors relating to contracts for differences; regulatory technical standards for data reporting services providers under the MiFID II Directive; a request for feedback on liquidity requirements under the Money Market Fund Regulation; and the publication of a guide to EEA rules and practices relating to notifications of major holdings under the Transparency Directive.


BENCHMARK REGULATION: publication of delegated regulations 

The following four Delegated Regulations which supplement the Benchmark Regulation (BMR) have been published in the Official Journal of the European Union (OJ): 

  • Commission Delegated Regulation (EU) 2018/64, specifying how the criteria of Article 20(1)(c)(iii) of the BMR are to be applied for assessing whether certain events would result in significant and adverse impacts on market integrity, financial stability, consumers, the real economy or the financing of households and businesses in one or more member states. 
  • Commission Delegated Regulation (EU) 2018/65, specifying technical elements of the definitions laid down in Article 3(1) of the BMR. 
  • Commission Delegated Regulation (EU) 2018/66, specifying how the nominal amount of financial instruments other than derivatives, the notional amount of derivatives and the net asset value of investment funds are to be assessed. 
  • Commission Delegated Regulation (EU) 2018/67, with regard to the establishment of the conditions to assess the impact resulting from the cessation of or change to existing benchmarks. 

These Delegated Regulations will enter into force on 6 February 2018. 

CONTRACTS FOR DIFFERENCES: ESMA call for evidence on measures to protect retail investors 

The European Securities and Markets Authority (ESMA) has published a call for evidence on measures to protect retail investors from the impact of certain specific potential product intervention measures under article 40 of the Markets in Financial Instruments Regulation (MiFIR) relating to the provision of contracts for differences, including rolling spot forex and binary options, to retail investors across the European Union. 

This relates to ESMA’s statement at the end of last year that it was considering the use of product intervention powers under Article 40 of MiFIR to address investor protection concerns relating to the marketing, distribution and sale of CFDs and binary options to retail investors. 

Comments are to be received by 5 February 2018. 

Read the call for evidence » 

MiFID II: Delegated Regulation published 

The following Delegated Regulation has been published in the Official Journal of the EU: 

  • Commission Delegated Regulation (EU) 2018/63. This amends a Delegated Regulation supplementing the MiFID II Directive with regard to regulatory technical standards (RTS) on the authorisation, organisational requirements and publication of transactions for data reporting services providers. 

The Delegated Regulation will enter into force on 6 February 2018. 


MONEY MARKET FUND REGULATION: European Commission calls for feedback on roadmap on delegated act on liquidity requirements 

The European Commission has published a roadmap relating to a delegated act under the Regulation on money market funds (MMF Regulation), which specifies quantitative and qualitative liquidity requirements for assets received under a reverse repurchase agreement and credit quality assessment. 

The MMF Regulation empowers the Commission to adopt three pieces of level two legislation. These are to be enacted as a single delegated act following technical advice from ESMA. They will introduce detailed requirements for credit risk assessment and specify the relationship between the MMF Regulation and the Securitisation Regulation. 

ESMA published its final report setting out its technical advice, implementing technical standards and guidelines for this purpose in November 2017. 

The Commission has now launched a four week consultation period to receive any additional feedback closing on 12 February 2018. The Commission is not consulting separately on the delegated act. 

TRANSPARENCY DIRECTIVE: ESMA publishes a jurisdictional guide to notifications of major holdings 

ESMA has published a guide summarising the main rules and practices across the European Economic Area relating to notifications of major holdings under the Transparency Directive. Part 1 of the guide summarises the rules and practices while Part 2 presents key data on notification thresholds, triggering events, deadlines for learning of triggering events and making a notification, as well as permitted channels and the format for filings and the deadline for publishing a notification. 

The guide will be updated on an on-going basis. 

Read the guide » 

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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