Financial Services Quarterly Report: Second Quarter 2018

July 17, 2018

A review of recent developments in the international financial services industry, including:

  • U.S. SEC Issues ETF Rule Proposal
  • New EU Reporting Obligations in Relation to Cross-Border Transactions
  • Current U.S. Sanctions Against Russia, Venezuela and Iran
  • 2018 Regulatory Horizon Highlights Series
  • Fund Board MiFID II Questions Answered
  • Cryptocurrency and Blockchain Tracker
  • U.S. Financial Regulation Reform Tracker
  • Dechert’s World Compass


U.S. SEC Issues ETF Rule Proposal 

The Securities and Exchange Commission has proposed a new rule under the Investment Company Act of 1940, together with certain form amendments, which would allow most exchange-traded funds to operate without first obtaining exemptive relief and enhance disclosure requirements for ETFs. This article highlights certain significant aspects of the proposal. A companion Dechert OnPoint provides a comprehensive discussion of the proposal. 



New EU Reporting Obligations in Relation to Cross-Border Transactions 

The European Council has adopted new rules aimed at providing EU tax authorities with advance information in relation to aggressive cross-border tax planning. A failure to provide prompt disclosure of such arrangements could lead to the imposition of significant penalties. The scope of the new EU Directive applies to all cross-border arrangements involving an EU party, even if the other party or parties are based outside the EU. 



Current U.S. Sanctions Against Russia, Venezuela and Iran 

International sanctions are a major compliance challenge for companies worldwide. The regulatory risks associated with economic sanctions, asset-freezing measures and trade embargoes are not new, but they continue to grow in scope and complexity. U.S. sanctions programs have undergone a number of significant changes in recent months, including new (and pending) sanctions on Russia, Venezuela and Iran that directly affect companies in the financial services sector. 



2018 Regulatory Horizon Highlights Series 

It is now a time of intense regulatory change for the asset management sector. This video series provides a roundup of developments involving MiFID II and PRIIPs since the end of 2017, and looks forward to key areas including Brexit, the impact of Fintech on asset managers, how firms can protect themselves against cybersecurity threats, and preparation for the extension of the UK Senior Management and Certification Regime. The videos may be viewed here


Fund Board MiFID II Questions Answered 

The EU’s Markets in Financial Instruments Directive II (MiFID II) impacts the ability of asset managers with a physical presence or domicile in the EU to receive and pay for research provided by investment banks, brokers and independent research providers. Specifically, MiFID II bans EU investment managers from accepting and retaining inducements (i.e., fees, commissions or monetary or non-monetary benefits) from third parties relating to their provision of portfolio management services to clients. 

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Cryptocurrency and Blockchain Tracker 

Cryptocurrencies and the encrypted, decentralized blockchain protocol that underpins them have grown from abstract theories to a transformational force that is disrupting the way many industries will operate for decades to come. To assist our clients around the globe in navigating this rapidly evolving space, Dechert has launched a Cryptocurrency and Blockchain Technology website. Subscribe to Tracker updates. 



U.S. Financial Regulation Reform Tracker 

To assist clients in navigating the reform of the regulation of U.S. financial services by Congress and the Trump Administration, Dechert has created a Financial Regulation Reform Tracker website. Lawyers contributing to the Tracker include members from Dechert’s banking, investment management, derivatives, corporate, securities, finance/securitization, employee benefits and litigation groups. Subscribe to Tracker updates.

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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 approximately 100 jurisdictions worldwide, updated regularly to ensure accuracy. World Compass modules cover: commercial lending; cross-border marketing of funds and investment management services; and beneficial ownership reporting. 

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