March 2020


CONTENT

CACEIS

EUROPEAN UNION

Benchmarks Regulation (BMR)

ESMA publishes compliance table for Guidelines on non-significant benchmarks (ESMA70-145-1209)

  • On 11 March 2020, the European Securities and Markets Authority (ESMA) published compliance table for Guidelines on non-significant benchmarks (ESMA70-145-1209).

  • European Commission launched a consultation on the Review of the Benchmark Regulation

  • On 18 March 2020, the European Commission launched a consultation on the Review of the Benchmark Regulation.

    The initiative aims to ensure that European citizens and businesses have access to a variety of robust and reliable financial benchmarks. All EU banks, both small and large, use critical interest rate benchmarks to conduct wholesale financing competitively, as well as to grant loans to consumers and businesses. In addition, EU market participants should continue to have access to benchmarks to hedge currency and interest rate risk, even where those benchmarks are only produced outside the EU.

    The consultation was opened until 15 April 2020.

  • COVID-19 Regulatory Measures

    ESMA recommends action by financial market participants for COVID-19 impact

  • On 11 March 2020, the European Securities and Markets Authority (ESMA) published  recommendation to financial market participants on COVID-19 impact.

    ESMA is making the following recommendations to financial market participants:

    • Business Continuity Planning – All financial market participants, including infrastructures should be ready to apply their contingency plans, including deployment of business continuity measures, to ensure operational continuity in line with regulatory obligations;
    • Market disclosure – issuers should disclose as soon as possible any relevant significant information concerning the impacts of COVID-19 on their fundamentals, prospects or financial situation in accordance with their transparency obligations under the Market Abuse Regulation; 
    • Financial Reporting – issuers should provide transparency on the actual and potential impacts of COVID-19, to the extent possible based on both a qualitative and quantitative assessment on their business activities, financial situation and economic performance in their 2019 year-end financial report if these have not yet been finalised or otherwise in their interim financial reporting disclosures; and
    • Fund Management – asset managers should continue to apply the requirements on risk management, and react accordingly.
  • ECB announces a coordinated action to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements

  • On 13 March 2020, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank announced a coordinated action to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements.

    • ECB and other major central banks to offer weekly US dollar operations with 84-day maturity in addition to existing 1-week operations
    • Pricing of all US dollar operations to be lowered to USD OIS rate plus 25 basis points
    • New pricing and additional operations effective as of the week of 16 March, to remain in place for as long as appropriate to support smooth functioning of US dollar funding markets.
  • Council of the EU publishes Statement on COVID-19 on the economic policy response

  • On 16 March 2020, the Council of the EU published a Statement on COVID-19 on the economic policy response.

    Facing these exceptional circumstances, the Council agreed that an immediate, ambitious and co-ordinated policy response was needed. Members of the Eurogroup have decided to act and will respond swiftly and flexibly to developments as they unfold.

    The use of all instruments necessary to limit the socio-economic consequences of the COVID-19 outbreak will be prioritized. Therefore a first set of national and European measures were put together while setting a framework for further actions to respond to developments and to support the economic recovery. Preliminary estimates of the European Commission show that total fiscal support to the economy will be very sizeable.

    The following measures are part of our co-ordinated responses to protect the EU Member States’ economies:

    • All national authorities will allow automatic stabilisers to function and in addition implement all necessary measures to ensure that the economic consequences of COVID-19 are tackled and that they do not put in danger our economic and social achievements;
    • Coordinated efforts at the European level will supplement national measures;
    • Need to reflect on the resilience of our European strategic value chains to better protect Europe from product and capital market disruptions in the future. The Eurogroup have already significantly strengthened the crisis management framework, including with the establishment of the ESM;
    • Discussion on the application of the SGP, state aid rules and prudential rules.

    The EU is committed to take whatever further coordinated and decisive policy action is necessary, including fiscal measures, to support growth and employment.

  • ESMA publishes decision on thresholds for reporting net short positions

  • On 16 March 2020, the European Securities and Markets Authority (ESMA) published its decision of 16 March 2020 to require natural or legal persons who have net short positions to temporarily lower the notification thresholds of net short positions in relation to the issued shares capital of companies whose shares are admitted to trading on a regulated market above a certain threshold to notify the competent authorities in accordance with point (a) of Article 28(1) of Regulation (EU) No 236/2012 of the European Parliament and of the Council.

    The decision temporarily requires the holders of net short positions in shares traded on a European Union (EU) regulated market to notify the relevant national competent authority (NCA) if the position reaches or exceeds 0.1% of the issued share capital after the entry into force of the decision. 

    ESMA considers that lowering the reporting threshold is a precautionary action that, under the exceptional circumstances linked to the ongoing COVID-19 pandemic, is essential for authorities to monitor developments in markets. The measure can support more stringent action if required to ensure the orderly functioning of EU markets, financial stability and investor protection. 

    ESMA considers that the current circumstances constitute a serious threat to market confidence in the EU, and that the proposed measure is appropriate and proportionate to address the current threat level to EU financial markets. The measure applies immediately, requiring net short position holders to notify NCAs of their relevant positions as at the close of the trading session on Monday 16 March 2020. 

    The temporary transparency obligations apply to any natural or legal person, irrespective of their country of residence. They do not apply to shares admitted to trading on a regulated market where the principal venue for the trading of the shares is located in a third country, market making or stabilisation activities. 

    ESMA, in coordination with NCAs, continues to monitor developments in financial markets as a result of the COVID-19 situation and is prepared to use its powers to ensure the orderly functioning of EU markets, financial stability and investor protection.

  • EU publishes Decision (EU) 2020/407 of the European Central Bank of 16 March 2020 amending Decision (EU) 2019/1311 on a third series of targeted longer-term refinancing operations

  • On 17 March 2020, Decision (EU) 2020/407 of the European Central Bank of 16 March 2020 amending Decision (EU) 2019/1311 on a third series of targeted longer-term refinancing operations (ECB/2020/13) was published in the Official Journal.

    The decision is amended at follows:

    • Each participant’s borrowing allowance shall equal 50 % of its total reference outstanding amount
    • Each participant’s bid limit for each TLTRO-III shall be equal to its borrowing allowance reduced by the amounts borrowed under previous TLTROs-III
    • From September 2021, starting 12 months after the settlement of each TLTRO-III, participants shall, on a quarterly basis, have the option of terminating or reducing the amount of TLTRO-III concerned before maturity.
  • European Parliament updates on Temporary border controls in the Schengen area

  • On 17 March 2020, the European Parliament published a newsalert to update on the Temporary border controls in the Schengen area.

    Free movement across internal borders is one of the EU's most important achievements, with important benefits for EU citizens. The Schengen Borders Code (or Schengen Code) specifies the conditions under which Member States can introduce temporary checks at their internal borders in cases of serious threats to public policy or internal security. 

    The Code was revised in 2017 in order to strengthen the EU's external borders and to help cope with unprecedented migratory pressure and cross-border security threats. A Commission legislative proposal to further update the Schengen Code in order to tighten up the rules on temporary border controls is currently with the co-legislators. The recent coronavirus outbreak has pushed several Member States to reintroduce border controls at some of the EU's internal borders in an attempt to contain the spread of the virus.

    There are currently three cases in which Member States can introduce temporary border checks at their internal borders on grounds of a serious threat to public policy or internal security:

    • in the case of a foreseeable threat (e.g. a special event such as a sporting competition);
    • in the case of an immediate threat; and 
    • in the situation of persistent serious deficiencies relating to external borders.
  • Council gives go-ahead to support from EU budget in the context of COVID-19 outbreak

  • On 18 March 2020, the Council of the EU adopted two legislative proposals which will free up funds to tackle the effects of the COVID-19 outbreak. 

    Given the urgency of the situation, both proposals were approved without amendments.

    The so-called Coronavirus Response Investment Initiative will make available €37 billion of Cohesion funds to member states to address the consequences of the crisis. About €8 billion of investment liquidity will be released from unspent pre-financing in 2019 for programmes under the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund. The measure will also provide access to €29 billion of structural funding across the EU for 2020. Expenditure on crisis response will be available as of 1 February 2020. 

    The new measures will support SMEs to alleviate serious liquidity shortages as a result of the pandemic, as well as strengthen investment in products and services necessary to bolster the crisis response of health services. Member states will also have greater flexibility to transfer funds between programmes to help those most adversely affected. 

    EU ambassadors also endorsed without amendment a legislative proposal to extend the scope of the EU Solidarity Fund to cover public health emergencies. The fund was initially set up to help member states and accession countries deal with the effects of natural disasters. Including public health emergencies will enable the Union to help meet people's immediate needs during the coronavirus pandemic. The aim is to complement efforts of the countries concerned.

  • EU Commission adopts Temporary Framework to enable Member States to further support the economy in the COVID-19 outbreak

  • On 19 March 2020, the European Commission adopted a Temporary Framework to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the COVID-19 outbreak.

    Together with many other support measures that can be used by Member States under the existing State aid rules, the Temporary Framework enables Member States to ensure that sufficient liquidity remains available to businesses of all types and to preserve the continuity of economic activity during and after the COVID-19 outbreak.

    The State aid Temporary Framework to support the economy in the context of the COVID-19 outbreak, based on Article 107(3)(b) of the Treaty on the Functioning of the European Union, recognises that the entire EU economy is experiencing a serious disturbance.

    To remedy that, the Temporary Framework provides for five types of aid:

    • Direct grants, selective tax advantages and advance payments: Member States will be able to set up schemes to grant up to €800,000 to a company to address its urgent liquidity needs.
    • State guarantees for loans taken by companies from banks: Member States will be able to provide State guarantees to ensure banks keep providing loans to the customers who need them.
    • Subsidised public loans to companies: Member States will be able to grant loans with favourable interest rates to companies. These loans can help businesses cover immediate working capital and investment needs.
    • Safeguards for banks that channel State aid to the real economy: Some Member States plan to build on banks' existing lending capacities, and use them as a channel for support to businesses – in particular to small and medium-sized companies. The Framework makes clear that such aid is considered as direct aid to the banks' customers, not to the banks themselves, and gives guidance on how to ensure minimal distortion of competition between banks.
    • Short-term export credit insurance: The Framework introduces additional flexibility on how to demonstrate that certain countries are not-marketable risks, thereby enabling short-term export credit insurance to be provided by the State where needed.

    The Temporary Framework therefore includes a number of safeguards. For example, It links the subsidised loans or guarantees to businesses to the scale of their economic activity, by reference to their wage bill, turnover, or liquidity needs, and to the use of the public support for working or investment capital. The Temporary Framework complements the many other possibilities already available to Member The Framework will be in place until the end of December 2020. With a view to ensuring legal certainty, the Commission will assess before that date if it needs to be extended.

  • ESMA issues Public Statement on Reporting SFTR in the context of COVID-19 pandemic

  • On 19 March 2020, the European Securities and Markets Authority (ESMA) issued a Public Statement to ensure coordinated supervisory actions on the application of Securities Finance Transactions Regulation (SFTR), in particular, on the requirements regarding the reporting start date, as well as the registration of Trade Repositories (TR).

    This approach is needed in response to the effect of current adverse developments events as a result of the COVID-19 pandemic.

    ESMA expects competent authorities not to prioritise their supervisory actions towards entities subject to Securities Finance Transactions (SFT) reporting obligations as of 13 April 2020 and until 13 July 2020. ESMA also expects TRs to be registered sufficiently ahead of the next phase of the reporting regime, i.e. 13 July 2020, for credit institutions, investment firms, CCPs and CSDs and relevant third-country entities to start reporting as of this date.

    ESMA continues monitoring closely the implementation by the relevant market participants as well as the impact of the relevant measures taken with regards to COVID-19 to ensure alignment of SFT reporting requirements and supervisory practices in the EU.

  • ESMA clarifies position on call taping under MiFID II

  • On 20 March 2020, the European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, issued a Public Statement to clarify issues regarding the application by firms of the MiFID II requirements on the recording of telephone conversations.

    ESMA reminds firms of the MiFID II requirements in this area. ESMA also recognises that, considering the exceptional circumstances created by the COVID-19 outbreak, some scenarios may emerge where, notwithstanding steps taken by the firm, the recording of relevant conversations required by MiFID II may not be practicable. If firms, under these exceptional scenarios, are unable to record voice communications, ESMA expects them to consider what alternative steps they could take to mitigate the risks related to the lack of recording. 

    Firms are expected to deploy all possible efforts to ensure that the above measures remain temporary and that recording of telephone conversations is restored as soon as possible.

  • ESMA extends consultations response dates

  • On 20 March 2020, the European Securities and Markets Authority (ESMA) decided to extend the response date for all ongoing consultations with a closing date on, or after, 16 March by four weeks.

    This announcement concerns the following consultations:

    • Consultation on Guidelines on Internal Controls for CRAs
    • Consultation on MiFIR report on SI
    • Guidelines on securitisation repository data completeness and consistency thresholds
    • Consultation on MiFID II/ MiFIR review report on the transparency regime for equity
    • Draft Regulatory Technical Standards under the Benchmarks Regulation
    • Draft technical standards on the provision of investment services and activities in the Union by third-country firms under MiFID II and MiFIR
    • Consultation paper on MiFIR Review Report on Transparency for Non-equity TOD.
  • European Commission approves French and German schemes to support economy in COVID-19 outbreak

  • On 21 and 22 March 2020, the European Commission approved three French State and German aid schemes to support the economies in the context of the Coronavirus outbreak. The schemes were approved under the State aid Temporary Framework to support the economy in the context of the COVID-19 outbreak adopted by the Commission on 19 March 2020. The Commission approved the French schemes within 48 hours from the entry into force of the Temporary Framework.

    France notified to the Commission three separate support schemes under the Temporary Framework. More specifically:

    • - Two schemes enabling the French public investment bank Bpifrance to provide State guarantees on commercial loans and credit lines, respectively, for enterprises with up to 5,000 employees.
      A scheme to provide State guarantees to banks on portfolios of new loans for all types of companies. This is direct aid to the companies that will enable banks to quickly provide liquidity to any company that needs it.
    • The French plan is expected to mobilise more than €300 billion of liquidity support for companies affected by the economic impact of the Coronavirus outbreak.

    Germany notified to the Commission two separate support measures under the Temporary Framework, implemented through the German promotional bank Kreditanstalt für Wiederaufbau (“KfW”):

    (i)   A loan programme covering up to 90% of the risk for loans for companies of all sizes. Eligible loans may have a maturity of up to 5 years and can reach €1 billion per company, depending on the company's liquidity needs.

    (ii)  A loan programme in which the KfW participates together with private banks to provide larger loans as a consortium. For this scheme, the risk taken by the State may cover up to 80% of a specific loan but not more than 50% of total debt of a company.

  • European Parliament publishes a briefing on the European Union response to COVID-19 threat

  • On 23 March 2020, the European Parliament published a briefing on the European Union response to coronavirus threat, in particular:

    • Regarding EU-level action on alleviating the socio-economic impact, the  Commission has approved a Temporary Framework allowing them to derogate from State aid rules until at least December 2020. It also considers the conditions to activate the general escape clause on fiscal rules under the Stability and Growth Pact to have been met, and asks the Council to endorse this measure. The Commission has made three urgent legislative proposals on funding and relief measures in response to the outbreak.
    • Regarding the support to the financial system,  the European Central Bank has also committed to providing a €750 billion Pandemic Emergency Purchase Program to relieve government debt during the crisis, as well as €120 billion in quantitative easing measures and €20 billion in debt purchases. Mobilizing a further €500 billion from the European Stability Mechanism, as proposed by some, could result in a total financial intervention of close to €2 trillion.
  • European Commission approves €300 million Luxembourg scheme to support companies affected by COVID-19 outbreak

  • On 24 March 2020, the European Commission approved Luxembourg's €300 million scheme to support companies affected by the coronavirus outbreak to be in line with EU State aid rules.

    The scheme aims at supporting companies, as well as liberal professions, affected by the economic impact of the coronavirus outbreak. The support takes the form of a repayable advance granted in one or more instalments to allow beneficiaries to face their operating costs in the difficult situation caused by the coronavirus outbreak.

    The Commission found that the scheme notified by Luxembourg is in line with the conditions set out in the Temporary Framework. In particular, it allows for repayable advances of up to €500,000 per company.

  • European Commission approves German guarantee measure to further support economy in COVID-19 outbreak

  • On 24 March 2020, the European Commission approved another German State aid scheme to support the German economy in the context of the coronavirus outbreak.

    Following the approval of the German measures adopted on 22 March 2020, Germany notified to the Commission an additional support measure under the Temporary Framework, implemented through the German federal and regional authorities, as well as promotional and guarantee banks.

    The scheme is open to all companies. It enables the granting of guarantees on loans at favourable terms to help businesses cover immediate working capital and investment needs.

  • ESMA issues guidance on accounting implications of COVID-19

  • On 25 March 2020, the European Securities and Markets Authority (ESMA) issued a Public Statement on some accounting implications of the economic support and relief measures adopted by EU Member States in response to the COVID-19 outbreak.

    The measures include moratoria on repayment of loans and have an impact on the calculation of expected credit losses in accordance with IFRS 9.

    In view of the upcoming periodic information to be published by European issuers, the Statement provides guidance to issuers and auditors on the application of IFRS 9 Financial Instruments, specifically as regards the calculation of expected credit losses and related disclosure requirements.

  • Europe publishes Decision (EU) 2020/441 on the implementation of the corporate sector purchase programme

  • On 25 March 2020, the Decision (EU) 2020/441 of the European Central Bank of 24 March 2020 amending Decision (EU) 2016/948 of the European Central Bank on the implementation of the corporate sector purchase programme (ECB/2020/18) was published on the Official Journal of the European Union (OJ).

    Taking into account the exceptional economic and financial circumstances associated with the spread of coronavirus disease 2019 (COVID-19), on 18 March 2020, the Governing Council decided to expand the range of eligible assets under the CSPP to non-financial commercial papers, making all commercial papers of sufficient credit quality eligible for purchase under CSPP.

  • ESMA clarifies position on SFTR backloading

  • On 26 March 2020, the European Securities and Markets Authority (ESMA) issued a revised version of its 19 March Public Statement on coordinated supervisory actions on the application of Securities Finance Transactions Regulation (SFTR).

    In the context of  the COVID-19 virus and the related actions taken by the different Member States to prevent its contagion, the revised statement clarifies that SFTs concluded between 13 April 2020 and 13 July 2020 and SFTs subject to backloading under SFTR also fall within those issues in respect of which competent authorities are not expected to prioritise in their supervisory actions towards counterparties, entities responsible for reporting and investment firms in respect of their reporting obligations under SFTR or MiFIR and to generally apply their risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner.

  • ESMA confirms application date of equity transparency calculations

  • On 27 March 2020, the European Securities and Markets Authority (ESMA) decided to keep the date of application of the transparency calculations for equity instruments of 1 April 2020 unchanged.

    Having consulted with various market participants ESMA considers that delaying the application of the new transparency results would in itself entail some risks and might even create additional operational burdens to all the market participants that have already planned for them.

  • ESMA provides clarification for best execution reports under MiFID II

  • On 31 March 2020, the European Securities and Markets Authority (ESMA) published a Public Statement to clarify issues regarding the publication by execution venues and firms of the general best execution reports required under RTS 27 and 28  of MiFID II, in light of the COVID-19 pandemic.

    ESMA and competent authorities are aware of difficulties encountered by execution venues  and firms in preparing these reports due to the COVID-19 pandemic and the related actions taken by the Member States to prevent contagion. In this regard, ESMA recommends that NCAs take into account these circumstances by considering the possibility that:

    • execution venues unable to publish RTS 27 reports due by 31 March 2020 may only be able to publish them as soon as reasonably practicable after that date and no later than by the following reporting deadline (i.e. 30 June 2020); and 
    • firms may only be able to publish the RTS 28 reports due by 30 April 2020 on or before 30 June 2020.

    In view of the exceptional circumstances, ESMA encourages national competent authorities not to prioritise supervisory action against execution venues and firms in respect of the deadlines of the general best execution reports for the periods referred to above. Furthermore, ESMA encourages competent authorities to generally apply a risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of RTS 27 and 28 concerning these deadlines.

  • Directive on the business of Insurance and Reinsurance (Solvency II)

    Europe publishes Commission Delegated Regulation (EU) 2020/442 supplementing Solvency II Directive

  • On 26 March 2020, the Commission Delegated Regulation (EU) 2020/442 of 17 December 2019 correcting Delegated Regulation (EU) 2015/35 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) was published on the Official Journal of the European Union (OJ).

    The amendments aim to:

    • Remove an erroneous on Delegated Regulation (EU) 2015/35: The erroneous exempts certain collective investment undertakings or investments packaged as funds that are also undertakings related to an insurance or reinsurance undertaking from the look-through approach. However, collective investment undertakings or investments packaged as funds should by default be subject to the look-through approach.
    • Change the calculation of the Solvency Capital Requirement for flood risk for the region United Kingdom of Great Britain and Northern Ireland: The table is changed to have one row for each of that region’s 124 risk zones.
  • European Market Infrastructure Regulation (EMIR)

    ESMA consults on Post-Trade Risk Reduction Services under EMIR REFIT

  • On 26 March 2020, the European Securities and Markets Authority (ESMA) launched a public consultation on Post Trade Risk Reduction Services (PTRR) under the European Market Infrastructure Regulation (EMIR).

    Portfolio compression is an existing requirement in the current framework for OTC derivative contracts and EMIR REFIT mandates ESMA, in cooperation with the ESRB, to investigate whether any trades that directly result from PTRR services, including portfolio compression, should be exempted from the clearing obligation.

    The consultation paper considers the different types of PTRR services offered, including what they are, how they function, the risks they aim to reduce and asks for data on the current use of such services.

    ESMA seeks detailed feedback on how the clearing obligation affects these PTRR services and whether there should be an exemption to the clearing obligation for trades directly resulting from PTRR services. ESMA also seeks feedback on the scope of a possible exemption to the clearing obligation and if an exemption should be subject to conditions or restrictions.

    Following the public consultation, ESMA will consider all comments received by 15 June 2020 and expects to publish a final report and to submit it to the European Commission.

  • Europe publishes Commission Delegated Regulation (EU) 2020/448 as regards the specification of the treatment of OTC derivatives in connection with certain simple, transparent and standardized securitisations for hedging purposes

  • On 27 March 2020, the Commission Delegated Regulation (EU) 2020/448 of 17 December 2019 amending Delegated Regulation (EU) 2016/2251 as regards the specification of the treatment of OTC derivatives in connection with certain simple, transparent and standardised securitisations for hedging purposes was published on the Official Journal of the European Union (OJ).

    Counterparties of securitisation may provide in their risk management procedures the following in connection with OTC derivatives contracts that are concluded by a securitisation special purpose entity in connection with a securitisation: 

    (a) that variation margin is not posted by the securitisation special purpose entity but is collected from its counterparty in cash and returned to its counterparty when due;

    (b) that initial margin is not posted or collected.

    The requirement  shall apply where all of the following conditions are met:

    (a) the counterparty to the OTC derivative concluded with the securitisation special purpose entity in connection with the securitisation ranks at least pari passu with the holders of the most senior securitisation note, provided that counterparty is neither the defaulting nor the affected party;

    (b) the securitisation special purpose entity for the securitisation to which the OTC derivatives contract is associated is subject to a level of credit enhancement of the most senior securitisation note of at least 2 % of the outstanding notes on an ongoing basis;

    (c) the netting set does not include OTC derivative contracts unrelated to the securitisation.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    EFAMA publishes the latest Quarterly Statistical Release - Trends in the European Investment Fund Industry in the 4th Quarter of 2019

  • On 3 March 2020, the European Fund and Asset Management Association (EFAMA) published its latest Quarterly Statistical Release describing the trends in the European investment fund industry in the fourth quarter of 2019 as well as a summary for the full year.  The report also includes data on the owners of investment funds in Europe at end September 2019 and their net purchases of funds in January-September 2019.

    Net sales highlights in Q4 and 2019

    • Total net assets of UCITS and AIFs grew by 3.3 percent in Q4 to EUR 17.7 trillion, bringing the annual growth figure to 16.8 percent for 2019. 
    • Continued growth net sales in Q4, at EUR 190 billion, was largely driven by UCITS (EUR 148 billion), bringing annual net sales for both UCITS and AIFs to EUR 546 billion in 2019 (from EUR 258 billion in 2018). AIFs sales amounted to EUR 43 billion in Q4, totalling EUR 152 billion in 2019 (from EUR 137 billion in 2018).
    • ?Bond fund sales slowed down in Q4 but remained the bestselling UCITS category in 2019, gathering EUR 301 billion in net new money. 
    • Equity funds suffered net outflows in 2019 despite a return to positive territory in Q4. A tentatively improving economic outlook, supported by decisive monetary policy actions, increased investor confidence.  Net inflows into equity funds amounted to EUR 53 billion, compared to net outflows of EUR 12 billion in Q3 2019.
    • Investors’ renewed confidence in the last quarter of 2019 saw multi-asset funds recording stronger net sales, amounting to EUR 57 billion, up from EUR 30 billion in Q3 2019.
    • The demand for ETFs strengthened in Q4. Net sales of UCITS ETFs amounted to EUR 46 billion, almost a third of total UCITS net sales.

    Highlights of ownership of investment funds:

    • European investors held EUR 12.6 trillion worth of investments at end September 2019
      The countries with the highest level of fund ownership were Germany (23%), the UK (14%), France (14%), the Netherlands (10%) and Italy (9%).
    • Insurers and pension funds are the largest holders of investment funds with a combined share of 42% at end September.  They are followed by other financial intermediaries and households.
  • ESMA launched a public consultation on its draft guidance to address leverage risks in the Alternative Investment Fund (AIF) sector

  • On 27 March 2020, the European Securities and Markets Authority (ESMA) launched a public consultation on its draft guidance to address leverage risks in the Alternative Investment Fund (AIF) sector.

    The consultation is part of the ESMA response to the recommendations of the European Systemic Risk Board (ESRB) in April 2018 to address liquidity and leverage risk in investment funds. 

    ESMA’s draft guidelines aim to promote supervisory convergence in the way National Competent Authorities (NCAs) assess how the use of leverage within the AIF sector contributes to the build-up of systemic risk in the financial system, as well as how they design, calibrate and implement leverage limits.

    The consultation is open until the 1 September 2020.

  • ESMA consults on standardized information to facilitate cross-border funds distribution

  • On 31 March 2020, the European Securities and Markets Authority (ESMA) launched a consultation on the standard forms, templates, and procedures that National Competent Authorities (NCAs) should use to publish information on their websites to facilitate cross-border distribution of funds.

    In particular, the standard information should cover:

    • National laws, regulations and administrative provisions governing marketing requirements for AIFs and UCITS and the summaries thereof; and
    • Regulatory fees and charges they levy for carrying out their duties in relation to the cross-border activities of fund managers.

    ESMA will consider the feedback it receives to this consultation by 30 June 2020 with a view to finalising the implementing technical standards for submission to the European Commission by 2 February 2021.

  • Markets in financial instruments Directive and Regulation (MiFID II / MiFIR)

    EFAMA publishes the first "3 Questions To" on Market Data Costs

  • On 3 March 2020, the European fund and Asset Management Association (EFAMA) published its first "3 Questions To" on Market Data Costs.

    Q1: Has there been an increase in the cost of market data over the last couple of years? If so, how can it be explained? 

    A1: Yes, the increase in prices of market data is both undeniable and very significant. Over 80% of market data users have experienced substantial cost increases in the last two years.  This finding is corroborated by ESMA according to whom “overall market data prices increased, in particular for data for which there is high demand”. This increase can be explained by changes in the market infrastructures landscape.  

    Q2: Why is this issue important? What impact does it have on asset managers and the end investors?

    A2: The increased cost of data, compounded by the recent extension of reporting requirements imposed by several legislation, is forcing asset managers to scale back data purchases by 40 to 50% for certain strategies. This leads to less information being available to the fund managers and the need to buy specific research information.  These increased costs negatively affect the net performance of investment funds and, by way of consequence, the return to investors. 

    Q3: How to remedy the situation?  

    A3: Strict enforcement of existing MiFID provisions by ESMA and national competent authorities is a necessity. To date, the requirement for trading venues to provide post-trade data on a “reasonable commercial basis” has been largely ignored.

  • Sustainable Finance / Green Finance

    Commission proposes European Climate Law and consults on the European Climate Pact

  • On 4 March 2020, the European Commission presented a proposal to enshrine in legislation the EU's political commitment to be climate neutral by 2050, to protect the planet and our people. The European Climate Law sets the 2050 target and the direction of travel for all EU policy, and gives predictability for public authorities, businesses and citizens. 

    At the same time, the Commission is launching a public consultation on the future European Climate Pact. Through this consultation the public will be involved in co-designing this instrument.

    With the European Climate Law, the Commission proposed a legally binding target of net zero greenhouse gas emissions by 2050. The EU Institutions and the Member States are bound to take the necessary measures at EU and national level to meet the target, taking into account the importance of promoting fairness and solidarity among Member States.

    The Climate Law includes measures to keep track of progress and adjust our actions accordingly, based on existing systems such as the governance process for Member States’ National Energy and Climate Plans, regular reports by the European Environment Agency, and the latest scientific evidence on climate change and its impacts. Progress will be reviewed every five years, in line with the global stock-take exercise under the Paris Agreement.

    The Climate Law also addresses the necessary steps to get to the 2050 target:

    • Based on a comprehensive impact assessment, the Commission will propose a new EU target for 2030 greenhouse gas emissions reductions. 
    • By June 2021, the Commission will review, and where necessary propose to revise, all relevant policy instruments to deliver the additional emissions reductions for 2030.
    • The Commission proposed the adoption of a 2030-2050 EU-wide trajectory for greenhouse gas emission reductions, to measure progress and give predictability to public authorities, businesses and citizens.
    • By September 2023, and every five years thereafter, the Commission will assess the consistency of EU and national measures with the climate-neutrality objective and the 2030-2050 trajectory.
    • The Commission will be empowered to issue Recommendations to Member States whose actions are inconsistent with the climate-neutrality objective, and Member States will be obliged to take due account of these Recommendations or to explain their reasoning if they fail to do so.
    • Member States will also be required to develop and implement adaptation strategies to strengthen resilience and reduce vulnerability to the effects of climate change.
  • EU Commission publishes TEG final report on the EU taxonomy

  • BACKGROUND

    The Taxonomy Regulation (TR), agreed at the political level in December 2019, creates a legal basis for the EU Taxonomy. The TR sets out the framework and environmental objectives for the Taxonomy, as well as new legal obligations for financial market participants, large companies, the EU and Member States. The TR will be supplemented by delegated acts which contain detailed technical screening criteria for determining when an economic activity can be considered sustainable, and hence can be considered Taxonomy-aligned. 

    The European Commission established a Technical Expert Group on Sustainable Finance, which was tasked with developing recommendations on a range of topics, including what the Taxonomy technical screening criteria should be for the objectives of climate change mitigation and adaptation.


    WHAT'S NEW?

    On the 9 March 2020, the European Commission published the final report on the EU taxonomy.

    This report sets out the TEG’s final recommendations to the European Commission. This report contains recommendations relating to the overarching design of the Taxonomy, as well as guidance on how users of the Taxonomy can develop Taxonomy disclosures. It contains a summary of the economic activities covered by the technical screening criteria. 

    This report is supplemented by a Technical Annex containing:

    • A full list of revised or additional technical screening criteria for economic activities which can substantially contribute to climate change mitigation or adaptation (including assessment of significant harm to other environmental objectives); and 
    • Methodological statements to support the above recommendations.

    The TEG report provides updated sustainability criteria for 70 economic activities, including changes resulting from an open call for feedback in the summer of 2019.

    Under the taxonomy regulation (coming into effect in 2021), investors and companies will disclose the environmental performance of the activities they invest in, building confidence and assurance in the green economy.


    WHAT'S NEXT?

    This is the third report from the TEG and follows over 20 months of technical work involving more than 200 technical experts and two open consultations. The European Commission will now develop the legal instruments (Delegated Acts) to bring the Taxonomy criteria into legal effect.

  • EU Commission publishes Usability Guide for the EU Green Bond Standard

  • BACKGROUND

    In March 2018, the European Commission (EC) published its Action Plan on Financing Sustainable Growth (Action Plan) which set out a comprehensive strategy to further connect finance with sustainability.

    The TEG published its interim report on an EU Green Bond Standard (EU GBS) in March 2019 for public feedback. After evaluation of the feedback, the TEG published its final report in June 2019 with recommendations to the EC on principles as well as a draft model of an EU GBS (TEG EU GBS report). 

    The TEG proposes that any type of listed or unlisted bond or capital market debt instrument issued by a European or international issuer that is aligned with the EU GBS should qualify as an EU Green Bond.


    WHAT'S NEW?

    This “EU Green Bond Standard Usability Guide” (Guide) offers recommendations from the TEG, with its views on the practical application of the EU GBS, as it was described by the TEG EU GBS report. This Guide aims to support potential issuers, verifiers and investors of EU Green Bonds. It provides guidance reflecting the latest changes in the draft model of the EU GBS. As described in the TEG EU GBS report, the TEG proposes that the use of EU GBS remains voluntary. Issuers of green bonds that do not want to use the term ‘EU Green Bond’ and prefer opting for other market practices are not obliged to follow the four components of the EU GBS.


    WHAT'S NEXT?

    The EC is planning to hold a public consultation for three months from mid-March. This will form the basis for the Renewed Sustainable Finance Strategy that will be presented in the third quarter of 2020 as announced in the European Green Deal. Part of the consultation will be dedicated to a possible legislative initiative on an EU Green Bond Standard. The draft model of the EU GBS, developed by the TEG, will form the basis of the consultation. After evaluation of the feedback and an internal impact assessment, the EC will publish its decision on whether a legislative approach will be pursued and what form the final EU GBS should have. Green bond market participants are encouraged to participate in the consultation.

  • BELGIUM

    Capital requirements / CRD / CRR / Basel III/IV

    National Bank of Belgium releases full countercyclical buffer

  • On 11 March 2020, the Banque nationale de Belgique (BnB) decided to release the CCyB due to the challenges for the economy posed by the coronavirus crisis.

    This draft NBB decision is to be notified to the European Central Bank and will be formalised through a Royal Decree by the Minister of Finance.

  • COVID-19 Regulatory Measures

    FSMA communicates on the impact of COVID-19 on listed companies

  • On 26 March 2020, the Financial Services and Markets Authority (FSMA) communicated on the  impact of COVID-19 on listed companies. The FSMA understands that the coronavirus crisis poses major challenges to listed companies, including as regards compliance with their information obligations. 

    In it's communication FSMA sets out its position on the questions it has received in this regard since the beginning of the COVID-19 crisis:

    • Publication of inside information
      FSMA takes the view that particular attention needs to be paid to compliance with the provisions regarding inside information. It therefore asks issuers to communicate as soon as possible about any event, decision or information they have become aware of and that is likely to constitute inside information that relates to them directly. The FSMA also asks issuers that publish an annual communiqué to include in it a paragraph about the current and expected impact of COVID-19 on their activities and their financial situation. 
    • Publication of the annual financial report
      FSMA has decided that for companies whose financial year runs from 1 January to 31 December, it will not issue a warning this year on grounds of a late publication of the annual financial report.
      It stresses, however, that a potential postponement of the publication of the annual financial report does not exonerate issuers from their obligation immediately to disclose any inside information that regards them. FSMA also asks companies that decide to postpone the publication of their 2019 annual financial report to inform the public of this, even if they cannot yet give the exact date when the publication will take place.
    • Organization of general meetings
      If listed companies should opt to hold a general meeting remotely, they would have to be particularly attentive to communicating clear information about the way in which shareholders and the holders of other securities will be able to exercise their rights.
  • FRANCE

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    ACPR publishes Guidelines on the AML/CFT in the field of wealth management / L’ACPR publie des lignes directrices relatives à la lutte contre le blanchiment et le financement du terrorisme dans le domaine de la gestion de fortune

  • On 16 March 2020, the Autorité de contrôle prudentiel et de résolution (ACPR) published Guidelines on the fight against money laundering and terrorist financing in the field of wealth management. 

    The guidelines respond to a request from financial institutions subject to ACPR supervision to clarify the Authority's expectations regarding the implementation of anti-money laundering and anti-terrorist financing (AML/CFT) due diligence measures in the area of wealth management for the banking and insurance sectors.

    The purpose of the guidelines is to explain the laws and regulations in force concerning the asset management business and, in particular, to specify the specific risks presented by this activity and the due diligence measures to be implemented.

    These updated guidelines take into account : 

    • case law of the ACPR's Enforcement Committee on compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) obligations;
    • latest legislative and regulatory amendments to the Monetary and Financial Code as of the date of publication of this document.

    Version française

    Le 16 mars 2020, l’Autorité de contrôle prudentiel et de résolution (ACPR) a publié des lignes directrices relatives à la lutte  contre le blanchiment et le financement du terrorisme dans le domaine de la gestion de fortune.

    Ces lignes directrices répondent à une demande des organismes financiers soumis au contrôle de l’ACPR en vue de préciser les attentes de l’Autorité concernant la mise en œuvre des mesures de vigilance en matière de lutte contre le blanchiment des capitaux et le financement du terrorisme (LCB-FT) dans le domaine de la gestion de fortune pour les secteurs de la banque et de l’assurance.

    Les lignes directrices ont pour objet d'expliciter les textes en vigueur concernant l’activité de gestion de fortune et, en particulier, de préciser les risques spécifiques que présentent cette activité et les dispositifs de vigilance à mettre en œuvre.

    Ces lignes directrices actualisées prennent en compte :

    • d’une part, la jurisprudence de la Commission des sanctions de l’ACPR concernant le respect des obligations de lutte contre le blanchiment des capitaux et le financement du terrorisme (LCB-FT) ; 
    • d’autre part, les dernières modifications législatives et règlementaires apportées au code monétaire et financier à la date de publication de ce document.
  • ACPR publishes Guidelines for the consolidated management of the groups' AML/CFT system / L’ACPR publie des lignes directrices relatives au pilotage consolidé du dispositif de LCB-FT des groupes

  • On 16 March 2020, the Autorité de contrôle prudentiel et de résolution (ACPR) published Guidelines for the consolidated management of the groups' AML/CFT system.

    These guidelines have been developed by the ACPR in response to a request from financial institutions under its supervision. 

    They present an analysis of the obligations of group parent undertakings with their head office in France with regard to steering the AML/CFT system within a group. It is an explanatory document that is not binding in itself.

    These measures concern :

    • Governance of the AML/CFT systems 
    • Classification of risks of the groups
    • Internal control of the groups.

    Version française

    Le 16 mars 2020, l’Autorité de contrôle prudentiel et de résolution (ACPR) a publié des lignes directrices relatives au pilotage consolidé du dispositif de LCB-FT des groupes.

    Ces lignes directrices ont été élaborées par l’Autorité de contrôle prudentiel et de résolution (ACPR) et répondent à une demande des organismes financiers soumis à son contrôle.

    Elles présentent une analyse des obligations des entreprises mères de groupe, ayant leur siège social en France, en matière de pilotage du dispositif de lutte contre le blanchiment de capitaux et le financement du terrorisme (LCBFT) au sein d’un groupe. Il s’agit d’un document explicatif qui n’a pas de caractère contraignant en lui-même.  

    Ces lignes directrices traitent les points suivants: 

    • La gouvernance du dispositif de LCB-FT des groupes  
    • La classification des risques et les procédures du groupe
    • Le contrôle interne
  • COVID-19 Regulatory Measures

    The Ministry of Economy admits COVID-19 as a case of "force majeure" / Le ministère de l'Économie reconnait la situation liée au COVID-19 comme un cas de force majeure

  • On 6 March 2020, the Ministry of Economy announced the Coronavirus COVID-19 as a case of "force majeure".

    This announcement means that for all State public markets, penalties for delays will not be applied.

    • Application of support measures on a case-by-case basis to enterprises facing serious difficulties
    • The Minister of Economy and Finance, in conjunction with the Governor of the Banque de France, has decided to mobilise credit mediation to support all SMEs in the départements that would need to renegotiate their contracts and renegotiate their loans
    • Ministers called on major customers to show solidarity with their suppliers and sub-contractors who may find it increasingly difficult to obtain supplies and meet delivery deadlines.
    • Provision of all useful information on the situation of activity and logistics in the various Chinese provinces
    • Accelerating approval procedures in certain sectors for new sources of supply, in particular for the construction or chemical sectors, in order to help them diversify their sources of supply while complying with social, environmental and European standards
    • Launch of a reflection on the security of supplies for certain strategic sectors, such as the automotive sector, in order to make them more independent in relation to their supplies abroad.

    Version française

    Le 6 mars 2020, le ministère de l'Économie a reconnu la situation liée au COVID-19 comme un cas de force majeure.

    En conséquence, pour tous les marchés publics, les pénalités de retards ne seront pas appliquées.

    • Dans les situations les plus difficiles, des mesures de soutien pourront être décidées dans le cadre d'un examen individualisé des demandes ;
    • Un soutien de l’Etat et de la Banque de France (médiation du crédit) pour négocier avec sa banque un rééchelonnement des crédits bancaires ; 
    • Les ministres ont appelé les principaux clients à faire preuve de solidarité avec leurs fournisseurs et sous-traitants qui pourraient avoir de plus en plus de difficultés à se procurer des fournitures et à respecter les délais de livraison ;
    • Transmission de toutes les informations utiles sur la situation de l'activité et de la logistique dans les différentes provinces chinoises ;
    • Accélérer les procédures d'agrément dans certains secteurs pour de nouvelles sources d'approvisionnement, notamment pour les secteurs de la construction ou de la chimie, afin de les aider à diversifier leurs sources d'approvisionnement tout en respectant les normes sociales, environnementales et européennes
    • Lancement d'une réflexion sur la sécurité d'approvisionnement de certains secteurs stratégiques, comme l'automobile, afin de les rendre plus indépendants par rapport à leurs approvisionnements à l'étranger.
  • AMF publishes Communication on general meetings of listed companies in the context of the COVID-19 outbreak / L’AMF a publié un communiqué de presse relatif aux assemblées générales de sociétés cotées

  • On 6 March 2020, the Autorité des marchés financiers (AMF) published a Communication on general meetings of listed companies in the context of the COVID-19 outbreak.

    The Autorité des marchés financiers (AMF) informs on the exercise of shareholders' prerogatives at general meetings of listed companies.

    In the context of the evolving COVID-19 epidemic and the fight against its spread, and having taken note of the decree issued by the Minister for Solidarity and Health on 4 March 2020, which states that public gatherings encourage the rapid transmission of the virus, the AMF reminds shareholders of listed companies that they can vote at general meetings without being physically present.

    Any shareholder may also ask written questions on matters that fall within the jurisdiction of the general meeting pursuant to Article L. 225-108 of the Commercial Code.

    In order to encourage remote voting in the context of the health crisis, the AMF recommends that listed issuers broadcast their general meetings live on their websites and communicate widely on this subject.

    Version française

    Le 6 mars 2020, l’Autorité des marchés financiers (AMF) a publié un communiqué de presse relatif aux assemblées générales de sociétés cotées.

    L’AMF porte une attention particulière à l’exercice, par les actionnaires, de leurs prérogatives dans le cadre des assemblées générales de sociétés cotées.

    Dans le contexte évolutif d’épidémie de COVID-19 et de lutte contre sa propagation, et connaissance prise de l’arrêté du Ministre des Solidarités et de la Santé du 4 mars 2020 qui indique notamment que les rassemblements publics favorisent la transmission rapide du virus, l’AMF rappelle aux actionnaires des sociétés cotées qu’il leur est possible de voter aux assemblées générales sans y être physiquement présent. Tout actionnaire peut également poser des questions écrites sur les sujets qui relèvent de l’assemblée générale en application de l’article L. 225-108 du code de commerce.

    An d’encourager le vote à distance dans ce contexte de crise sanitaire, l’AMF recommande aux émetteurs côtés de retransmettre en direct leur assemblée générale sur leur site Internet et de communiquer largement à ce sujet.

  • AMF communicates about the continuity of market activities in the context of COVID-19 epidemic / L’AMF communique sur la continuité des activités de marché pendant l’épidémie de COVID-19

  • On 10 March 2020, the Autorité des marchés financiers (AMF) announced it was ensuring the continuity of market activities in the context of COVID-19 infection.

    The AMF is in contact with financial institutions and other supervisory authorities as part of its duties. It closely monitors developments in the situation and ensures that the market is able to operate normally.

    Version française

    Le 10 mars 2020, l’Autorité des marchés financiers (AMF) a publié un communiqué sur la continuité des activités de marché en période de COVID-19.

    L’AMF est en contact avec les établissements financiers et les autres autorités de supervision dans le cadre de ses missions. Elle suit avec attention l’évolution de la situation et s’assure que la Place soit en mesure d’opérer normalement.

  • AMF announces a short selling ban for one month and updates FAQ on the ban of net short position / L'AMF annonce une interdiction des positions courtes pour une durée de 1 mois et met à jour les FAQ

  • On 17 March 2020, the Autorité des marchés financiers (AMF) announced a short selling ban for one month.

    In the light of the outbreak of COVID-19 and its consequences on the economy and financial market in France, the Autorité des marchés financiers has decided to ban the creation or increase of short net positions with immediate effect.

    Given that the current exceptional circumstances represent a serious threat to market confidence, the AMF Chairman has decided this ban pursuant to Article L 421-16 II of the code monétaire et financier and Article 20 of the European Short Selling Regulation, for an initial period of 20 days. The AMF Board has already decided to extend this period for a further 10 days, which leads to a ban for 30 days in all. This decision has been forwarded to the European Securities and Markets Authority (ESMA). It will be the subject of an opinion from ESMA, which will be published on its website.

    This ban to create all short net position or increase of all short net position applies to persons established or resident in France or abroad when the position involves a share admitted to trading on a trading venue in France and the share falls under the jurisdiction of the AMF within the meaning of the regulation. The ban is applicable from 18 March 2020 at 00:00 hours until 16 April 2020 at midnight.

    The ban does not concern market making activities carried out by persons who are exempted under article 17 of the Short Selling Regulation.

    Moreover, on 24 March 2020, the AMF updated its frequently asked questions on the ban of net short positions, in order to support investors in the implementation of its decision taken on March 17.

    The AMF announced on 17 March to ban the creation or increase of net short positions when the position involves a share admitted to trading on a trading venue in France and the share falls under the jurisdiction of the AMF within the meaning of the regulation. This ban applies to any person established or resident in France or abroad.

    The ban has been applicable since 18 March 2020 at 00:00 hours and will be until 16 April 2020 at midnight.

    Version française

    Le 17 mars 2020, l’Autorité des marchés financiers (AMF) a annoncé une interdiction des positions courtes pour une durée de 1 mois.

    Compte tenu de l’épidémie de COVID-19 et de ses conséquences sur l’économie et les marchés financiers en France, l’Autorité des marchés financiers a décidé d’interdire avec effet immédiat toute nouvelle création de positions courtes nette et toute augmentation d’une positon existante.

    Considérant que les circonstances exceptionnelles actuelles constituent une menace sérieuse pour la cofinance des marchés, le Président de l’AMF a décidé cette mesure d’interdiction en application de l’article L 421-16 II du code monétaire et financier et de l’article 20 du règlement européen sur les ventes à découvert, pour une durée initiale de 20 jours. Le collège de l’AMF a d’ores et déjà prorogé cette décision de 10 jours supplémentaires, ce qui conduit à une durée de 30 jours au total. Cette décision a été transmise à l’Autorité européenne des marchés financiers (AEMF ou ESMA en anglais). Elle fera l’objet d’un avis de cette autorité qui sera publié sur son site internet.

    L’interdiction de toute création de positon courte nette ou d’augmentation d’une position courte nette existante vaut pour toute personne établie ou résidant en France ou à l’étranger dès lors que la position concerne une action admise à la négociation sur une plateforme de négociation établie en France et que le titre relève de la compétence de l’AMF au sens du règlement. Elle s’applique à compter du 18 mars 2020 à 0 heure au 16 avril 2020 à minuit.

    Elle ne concerne pas les activités de tenue de marché effectuées par les personnes qui bénéficient d’une exemption en application de l’article 17 du règlement sur les ventes à découvert.

    De plus, le 24 mars 2020, l'Autorité des marchés financiers (AMF) a mis à jour son FAQ sur l'interdiction des positions courtes nettes, afin d'accompagner les investisseurs dans la mise en œuvre de sa décision prise le 17 mars.

    L'AMF a annoncé le 17 mars l'interdiction de créer ou d'augmenter des positions courtes nettes lorsque la position concerne une action admise à la négociation sur une plate-forme de négociation en France et que l'action relève de la compétence de l'AMF. Cette interdiction s'applique à toute personne établie ou résidant en France ou à l'étranger.

    L'interdiction est applicable depuis le 18 mars 2020 à 00h00 et sera jusqu'au 16 avril 2020 à minuit.

  • AMF publishes information for management companies in the context of the COVID-19 epidemic / L’AMF publie des informations pour les sociétés de gestion dans le contexte du COVID-19

  • On 18 March 2020, the Autorité des marchés financiers (AMF) published information for management companies in the context of the COVID-19 epidemic.

    In the context of the COVID-19 coronavirus pandemic, and in accordance with instructions given by the government, the presence of personnel is limited to the maximum on AMF premises.

    The AMF has organized itself to be able to ensure the pursuit of its mission and ensure the continuity of the processing of files relating to asset management. File deposits from the GECO extranet are maintained. 

    Submissions of files previously sent by post must be made until further notice only via the address CourriersDGA@amf-france.org . The other specific AMF email addresses remain operational.

    Portfolio managers can be contacted by phone and email.

    Version française

    Le 18 mars 2020, l’Autorité des marchés financiers (AMF) a publié des informations pour les sociétés de gestion dans le contexte du COVID-19.

    Dans le contexte de la pandémie liée au Coronavirus COVID-19, et conformément aux instructions données par le gouvernement, la présence des personnels est limitée au maximum dans les locaux de l’AMF.

    L’AMF s’est organisée pour pouvoir assurer la poursuite de sa mission et assurer la continuité du traitement des dossiers relatifs à la gestion d’actifs. Les dépôts de dossiers à partir de l’extranet GECO sont maintenus.  Les envois de dossiers auparavant transmis par voie postale doivent être réalisés jusqu’à nouvel ordre uniquement via l’adresse CourriersDGA@amf-france.org. Les autres adresses mail spécifiques de l’AMF restent opérationnelles. Les chargés de portefeuille restent joignables par téléphone et par mail.

  • France stenghthens financing support to business / La France renforce son dispositif de soutien au financement des entreprises

  • On 19 March 2020, the Ministry of Economy announced the strengthening of the business financing support mechanism to deal with the crisis.

    In the face of the unprecedented health crisis that is hitting the country and its economic consequences on French businesses, the Government announced it is acting vigorously to preserve the continuity of economic activity and the sustainability of businesses and jobs.

    The Minister of Economy and Finance detailed the measures implemented to strengthen the financing of French companies in the face of the pronounced slowdown in activity and the destabilisation of production chains resulting from the COVID-19 epidemic.

    This measure, which has been introduced in the Amended Budget Bill presented to Parliament for urgent consideration, complements the measures already announced to strengthen companies' cash position (postponement of social and tax payments, solidarity fund) and to support credit (mediation of business credit).

    It has three main components: 

    • A massive system of cash loans to companies backed by a state guarantee of 300 billion euros
    • The activation of public reinsurance on credit insurance outstandings to the tune of 10 billion euros
    • In order to support French exporters, reinsurance of short-term export credits has been set up for an outstanding amount of EUR 2 billion.

    Version française

    Le 19 mars 2020, le ministère de l’Economie et des Finances a annoncé un renforcement du dispositif de soutien au financement des entreprises pour faire face à la crise.

    Face à la crise sanitaire sans précédent qui frappe la France et ses conséquences économiques sur les entreprises, le Gouvernement a décidé d’agir avec vigueur pour préserver la continuité de l’activité économique, la pérennité des entreprises et des emplois.

    Le ministre de l’Economie et des Finances, a détaillé le dispositif mis en œuvre pour renforcer le financement des entreprises françaises face au ralentissement prononcé de l’activité et à la déstabilisation des chaînes de production découlant de l’épidémie de coronavirus.

    Ce dispositif, qui a été introduit dans le projet de loi de finances rectificative présenté au Parlement qui les examine en urgence, vient en complément des mesures déjà annoncées en faveur du renforcement de la trésorerie des entreprises (report d’échéances sociales et fiscales, fonds de solidarité) et du soutien au crédit (médiation du crédit aux entreprises).

    Il comporte trois volets principaux :

    • Un dispositif massif de prêts de trésorerie aux entreprises adossés à une garantie de l’Etat de 300 milliards d’euros
    • L’activation d’une réassurance publique sur les encours d’assurance-crédit à hauteur de 10 milliards d’euros
    • Une réassurance des crédits-export de court terme est mise en place à hauteur de 2 milliards d’euros d’encours 
  • AMF states its expectations on market activities continuity during the COVID-19 pandemic / L’AMF précise ses attentes en terme de continuité des activités de marché en période de COVID-19

  • On 19 March 2020, the Autorité des marchés financiers (AMF) clarified its expectations on market activities continuity during the COVID-19 pandemic.

    In order to fully accompany financial market professionals in the current context, the AMF reminds the financial industry of the various requirements arising from the European texts. Where possible, for example in the case of non-critical requirements, the Authority has decided to grant participants time extensions.

    • Authorised place of work: the recent instructions given by the government allow financial sector employees, when homeworking is not possible, to go to their place of work, provided they have permission from their employer; 
    • Audit trail and voice-recording obligations: the AMF wishes to stress the importance of audit trail and voice-recording obligations;
    • EMIR and MIFID II transaction reporting: transaction reporting is crucial for the fulfilment of a regulator’s duties and nonetheless so for the AMF in its monitoring of markets and participants, especially in times of crisis. Participants must ensure that the transmission of reports remains steady, of good quality and is carried out within the regulatory timelines;
    • SFTR reporting: entry into application for credit institutions and investment providers is scheduled for 13 April 2020. For CCPs and CSDs, this is scheduled for 13 July 2020;
    • RCSI Annual questionnaire: annual questionnaire submission will begin shortly. The Webpage address for collection will be made known in a timely manner to participants. The submission deadline is postponed until 15 May 2020 and may be subject to further postponement depending upon national confinement measures.

    Version française

    Le 19 March 2020, l’Autorité des marchés financiers (AMF) a précisé ses attentes en terme de continuité des activités de marché en période de COVID-19.

    Afin d’accompagner au mieux les professionnels dans le contexte actuel, l’AMF revient sur les différentes obligations découlant des textes européens. Lorsque c’est possible, pour les obligations non critiques par exemple, elle accorde des délais aux acteurs.

    • Concernant les lieux de travail autorisés : Les dernières consignes du gouvernement permettent aux salariés du secteur financier, lorsqu'ils n’ont pas la possibilité de télétravailler, de se rendre dans les locaux de leur entreprise, sous réserve d’un justificatif produit par l’employeur.
    • Concernant les obligations en matière de piste d’audit et d’enregistrement des conversations : L’AMF souligne à nouveau l’importance du maintien de la piste d’audit et de l’enregistrement des conversations.
    • Concernant les reportings des transactions EMIR et MIF 2 : Leur importance est cruciale pour les missions des régulateurs, dont l’AMF, de surveillance des marchés et des acteurs, particulièrement en temps de crise. Les établissements doivent veiller à ce que leur transmission reste régulière, de qualité et conformément aux délais réglementaires.
    • Concernant le reporting SFTR : L’entrée en application du reporting pour les établissements de crédit et les entreprises d’investissement est prévue le 13 avril 2020. Pour les contreparties centrales, et les dépositaires centraux, l’entrée en application est prévue pour le 13 juillet 2020.
    • Concernant le questionnaire annuel RCSI : La campagne de collecte est ouverte depuis le 20 mars, permettant aux établissements qui le souhaitent de commencer à renseigner le questionnaire. La date limite de remise, habituellement fixée au 30 avril, est décalée jusqu'au 30 juin au regard de la situation actuelle.
  • France publishes orders implementing contingency measures in the context of the COVID-19 epidemic / La France publie des arrêtés mettant en œuvre des mesures d'urgence dans le cadre de l'épidémie de COVID-19

  • On 26 March 2020,  orders implementing contingency measures in the context of the COVID-19 epidemic were published in the French Official Journal.

    1) Order No. 2020-317 of 25 March 2020 establishing a solidarity fund for companies particularly affected by the economic, financial and social consequences of the spread of the COVID-19 epidemic and the measures taken to limit that spread:

    • provides for the creation of the fund, for a period of three months, extendable by decree for a maximum of three months, and specifies that the purpose of this fund is the payment of financial aid to natural and legal persons under private law exercising an economic activity particularly affected by the economic, financial and social consequences of the spread of the COVID-19 epidemic and the measures taken to limit its spread ;
    • specifies that this fund will be financed by the State and, on a voluntary basis, by the regions, the communities covered by Article 74 of the Constitution, New Caledonia and any other territorial community or public establishment for inter-communal cooperation with its own tax system;
    • refers to a decree the task of setting the conditions for eligibility and allocation of aid, its amount and the conditions for managing the fund.

    2) Report to the President of the Republic on Order No. 2020-317

    3) Order No. 2020-318 of 25 March 2020 adapting the rules relating to the preparation, decree, audit, review, approval and publication of accounts and other documents and information that legal persons and entities without legal personality under private law are required to file or publish in the context of the COVID-19

    • extend by three months the period for drawing up the accounts and the documents attached thereto where such documents have to be drawn up by the liquidator in the light of the inventory which he must have drawn up of the various assets and liabilities ; 
    • extend by three months the deadlines for approving the accounts of legal persons or entities without legal personality where the accounts have not been approved by 12 March 2020 ;
    • extend by two months the deadlines imposed on the boards of directors, management boards or managers of companies with 300 or more employees or with net sales of 18 million euros;
    • extends by three months the time limit imposed on private law bodies receiving a public subsidy to produce the financial report.

    4) Report to the President of the Republic on Order No. 2020-318

    5) Order No 2020-321 of 25 March 2020 adapting the rules for meetings and deliberations of the assemblies and governing bodies of legal persons and entities without legal personality under private law as a result of the COVID-19 epidemic:

    • provides a non-exhaustive list of such persons and entities;
    • extends and facilitates the dematerialized exercise of the right of communication that the members of the assemblies enjoy prior to the meetings of the latter;
    • exceptionally authorizes the holding of meetings without their members - and other persons entitled to attend - being present at the meeting, either physically or by means of videoconferencing or telecommunication.

    6) Report to the President of the Republic on Order No. 2020-321 of 25 March 2020.

    Version française

    Le 26 mars 2020, des arrêtés mettant en œuvre des mesures d'urgence dans le cadre de l'épidémie de COVID-19 ont été publiés au Journal officiel.

    1) Arrêté n ° 2020-317 du 25 mars 2020 instituant un fonds de solidarité pour les entreprises particulièrement touchées par les conséquences économiques, financières et sociales de la propagation de l'épidémie de COVID-19 et les mesures prises pour limiter cette propagation:

    • prévoit la création du fonds, pour une période de trois mois, prorogeable par décret pour une durée maximale de trois mois, et précise que ce fonds a pour objet le versement d'une aide financière aux personnes physiques et morales de droit privé exerçant une activité économique particulièrement affectée par les conséquences économiques, financières et sociales de la propagation de l'épidémie de COVID-19 et les mesures prises pour limiter sa propagation;
    • précise que ce fonds sera financé par l'État et, sur une base volontaire, par les régions, les communautés couvertes par l'article 74 de la Constitution, la Nouvelle-Calédonie et toute autre communauté territoriale ou établissement public de coopération intercommunale avec son propre régime fiscal;
    • se réfère à un décret chargé de fixer les conditions d'éligibilité et d'allocation de l'aide, son montant et les conditions de gestion du fonds.

    2) Rapport au Président de la République sur l'ordonnance n ° 2020-317.

    3) Arrêté n ° 2020-318 du 25 mars 2020 portant adaptation des règles relatives à l'élaboration, au décret, à l'audit, à l'examen, à l'approbation et à la publication des comptes et autres documents et informations que les personnes morales et les entités sans personnalité juridique de droit privé sont tenues de déposer ou publier dans le cadre de la COVID-19.

    4) Rapport au Président de la République sur l'ordonnance n ° 2020-318

    5) Arrêté n ° 2020-321 du 25 mars 2020 portant adaptation du règlement des réunions et délibérations des assemblées et organes directeurs des personnes morales et personnes morales de droit privé du fait de l'épidémie de COVID-19.

    6) Rapport au Président de la République sur l'ordonnance n ° 2020-321 du 25 mars 2020.

  • AMF informs on continuity of periodic information in the context of a COVID-19 outbreak / L'AMF informe sur la continuité de l’information périodique dans le contexte d’épidémie de COVID-19

  • On 30 March 2020, the Autorité des marchés financiers (AMF)  informed on the continuity of periodic information in the context of a COVID-19 outbreak.

    The European Transparency Directive requires companies listed on a regulated market to file their annual financial reports no later than four months after the end of the financial year. For financial years ending on 31 December, the annual financial report - which includes audited financial statements - must therefore be filed no later than 30 April of the following year. For half-yearly financial reports, issuers have a maximum of three months.

    They must file their half-yearly financial report no later than 31 March for the first half year ended 31 December.

    In accordance with ESMA's announcement, the AMF will also postponed its policy of reminding issuers that they have failed to publish their half-yearly reports:

    • for a period of two months beyond the deadline for annual financial reports for a financial year ending between 31 December and 31 March ;
    • for a period of one month beyond the deadline for half-yearly financial reports for the same period.

    Issuers remain subject to their ongoing disclosure obligations under the European Market Abuse Regulation: all inside information must be disclosed to the market as soon as possible. 

    The AMF reiterates that companies must inform the market of any significant trends, liquidity positions and key figures from unaudited financial statements. The process of preparing, closing, auditing and reviewing financial statements may give rise to inside information without legitimate grounds for deferring publication in the current circumstances.

    Version française

    Le 30 mars 2020, l’Autorité des marchés financiers (AMF) a apporté quelques précisions sur le calendrier de publication des comptes annuels et semestriels.

    La directive européenne Transparence impose aux sociétés cotées sur un marché réglementé de déposer leurs rapports financiers annuels au plus tard dans les quatre mois suivants la clôture de l’exercice. Pour les exercices clos au 31 décembre, le rapport financier annuel – qui intègre des états financiers audités - doit donc être déposé au plus tard le 30 avril de l’année suivante. S’agissant des rapports financiers semestriels, les émetteurs ont trois mois maximum. Autrement dit, ils doivent déposer leur rapport financier semestriel au plus tard le 31 mars pour un premier semestre achevé au 31 décembre.

    Conformément à l'annonce de l'ESMA, l'AMF décalera également sa politique de relance des émetteurs en défaut de publication :

    • durant une période de deux mois au-delà de la date butoir pour les rapports financiers annuels portant sur un exercice arrêté entre le 31 décembre et le 31 mars ;
    • durant une période d’un mois au-delà de la date butoir pour des rapports financiers semestriels arrêtés durant cette même période.

    Les émetteurs restent soumis à leurs obligations d’information permanente, au titre du règlement européen sur les Abus de marché : toute information privilégiée doit être communiquée dès que possible au marché. Ainsi, l’AMF rappelle que les sociétés doivent informer le marché de toute tendance significative, position de liquidité, chiffres-clés issus d’états financiers arrêtés mais non audités. En effet, le processus d'établissement, d'arrêté, d'audit, de revue des comptes peut faire naître une information privilégiée sans motif légitime pour en différer la publication dans les circonstances actuelles. Au contraire, une information régulière du marché est importante. Dans ce contexte, une mention de l’état d'avancement de l’audit ou de l’examen limité peut constituer le cas échéant une information importante à communiquer au marché à cette occasion.

  • France publishes a Decree on the solidarity fund for businesses particularly affected by the COVID-19 / La France publie un Décret relatif au fonds de solidarité à destination des entreprises particulièrement touchées par les conséquences du COVID-19

  • On 31 March 2020, Decree No. 2020-371 of 30 March 2020 on the solidarity fund for businesses particularly affected by the economic, financial and social consequences of the spread of the COVID-19 epidemic and the measures taken to limit that spread was published in the Official Journal.

    This Decree organizes the functioning of the fund established by Decree No. 2020-317 of 25 March 2020 establishing a solidarity fund for businesses particularly affected by the economic, financial and social consequences of the spread of the COVID-19 epidemic and the measures taken to limit this spread.

    This fund, financed in particular by the State, the overseas regions and communities, will benefit natural persons (self-employed workers, artists and authors, etc.) and legal persons under private law (companies, associations, etc.) engaged in an economic activity and meeting the following conditions:

    • the number of employees is less than or equal to ten ; 
    • the turnover before tax during the last financial year is less than one million euros; 
    • the taxable profit plus any sums paid to the director in respect of the last financial year is less than 60,000 euros;
    • these companies were either subject to an administrative ban on receiving the public between 1 and 31 March 2020, or they suffered a loss of turnover of more than 70% during this period compared with the previous year. Persons holding a full-time employment contract or an old-age pension or who have received daily social security benefits in excess of EUR 800 over the period are excluded from the scheme.

    These persons will receive a lump-sum grant of 1,500 euros (or a grant equal to their loss of turnover if this is less than 1,500 euros) upon request. The application for aid must be made in paperless form by 30 April at the latest.

    These persons will be eligible for an additional flat-rate aid of EUR 2 000 if they employ at least one employee, are unable to settle their debts within 30 days and have been refused a cash loan by their bank. The application for the supplementary aid must be made electronically, by 31 May at the latest, and will be examined by the regional councils.

    Version française

    Le 31 mars 2020, le Décret no 2020-371 du 30 mars 2020 relatif au fonds de solidarité à destination des entreprises particulièrement touchées par les conséquences économiques, financières et sociales de la propagation de l’épidémie de COVID-19 et des mesures prises pour limiter cette propagation a été publié au journal officiel.

    Ce décret organise le fonctionnement du fonds institué par le décret no2020-317 du 25 mars 2020 instituant un fonds de solidarité pour les entreprises particulièrement touchées par les conséquences économiques, financières et sociales de la propagation de l'épidémie de COVID-19 et les mesures prises pour limiter cette propagation.

    Ce fonds, financé notamment par l'État, les régions et collectivités d'outre-mer, bénéficiera aux personnes physiques (indépendants, artistes et auteurs, etc.) et aux personnes morales de droit privé (entreprises, associations, etc.) engagées dans un l'activité économique et répondant aux conditions suivantes:

    • le nombre de salariés est inférieur ou égal à dix;
    • le chiffre d'affaires avant impôt du dernier exercice est inférieur à un million d'euros;
    • le bénéfice imposable majoré des sommes éventuellement versées à l'administrateur au titre du dernier exercice est inférieur à 60 000 euros;
    • ces sociétés ont fait l'objet d'une interdiction administrative de réception du public entre le 1er et le 31 mars 2020 ou ont subi une perte de chiffre d'affaires de plus de 70% au cours de cette période par rapport à l'année précédente. Les personnes titulaires d'un contrat de travail à temps plein ou d'une pension de vieillesse ou ayant perçu des prestations journalières de sécurité sociale supérieures à 800 EUR sur la période sont exclues du régime.

    Ces personnes recevront sur demande une allocation forfaitaire de 1 500 euros (ou une allocation égale à leur perte de chiffre d'affaires si celle-ci est inférieure à 1 500 euros). La demande d'aide doit être introduite sans support papier le 30 avril au plus tard.

    Ces personnes pourront bénéficier d'une aide forfaitaire supplémentaire de 2 000 EUR si elles emploient au moins un salarié, ne sont pas en mesure de régler leurs dettes dans les 30 jours et se sont vu refuser un prêt en espèces par leur banque. La demande d'aide complémentaire doit être introduite par voie électronique, au plus tard le 31 mai, et sera examinée par les conseils régionaux.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    AFG and France Invest publish the results of the activity study of infrastructure funds managed in France in 2019 / AFG et France Invest publie les résultats de l’étude sur les activités de fonds d’infrastructure gérés en France

  • On 11 March 2020, the Association Française de Gestion (AFG) and France Invest published the results of the activity study of infrastructure funds managed in France in 2019.

    This 3rd joint edition was carried out among 25 member structures of the two associations that manage infrastructure funds in equity or debt present in France, out of 27 surveyed, representing 93% of active members and 99.7% of the amounts managed in this market segment.

    In 2019 :

    • 15.6bn raised in 2019, capital raising increases by 7% vs. 2018
    • 10.9bn were invested, an increase of 67% vs. 2018.

    Version française

    Le 11 mars 2020, l' Association Française de Gestion (AFG) and France Invest ont publié les résultats de l’étude sur les activités de fonds d’infrastructure gérés en France.

    Cette 3ème édition conjointe a été réalisée auprès de 25 structures membres des deux associations regroupant des gestionnaires de fonds d'infrastructures en fonds propres ou en dette présents en France.

    En 2019 :

    • 15,6 Mds€ levés en 2019, la collecte de capitaux augmente de 7% vs. 2018 
    • 10,9 Mds€ investis (+4,4 Mds€ vs. 2018) dans 267 opérations
  • AMF publishes a doctrine on information of investors by collective investment firms incorporating non-financial approaches / L’AMF publie une doctrine sur l'information aux investisseurs en gestion collective sur les critères extra-financiers

  • On 11 March 2020, the Autorité des marchés financiers (AMF)  published its first doctrine DOC-2020-03: Information to be provided by collective investments incorporating non-financial approaches.

    Supported by growing demand from investors, the deployment of funds integrating environmental, social and governance criteria is accelerating.

    If the rapid development of "sustainable" management is undoubtedly a very positive development, the growth of commercial discourse on these themes is not without raising questions of good information for investors and in particular the challenges of preventing the risk of " greenwashing ".

    Responsible for ensuring the clear, exact and non-misleading nature of the information communicated to investors, the AMF publishes a doctrine aimed at ensuring proportionality between the reality of taking extra-financial factors into account in the management and the place that reserved for them in the communication to investors. A better readability of the offer will strengthen the protection of savers when they demonstrate a growing interest in investments that highlight the taking into account of extra-financial criteria.

    Funds wishing to highlight this consideration of extra-financial criteria as a central element of communication must comply with minimum standards specified by this doctrine and in particular justify an approach based on a significant commitment as defined below.

    • Measurable objectives for taking into account extra-financial criteria must appear in regulatory documents such as the prospectus. 
    • These measurable objectives must be significant to ensure a real distinction between the approaches.  
    • “Best-in Class” approaches - the most used by managers - quantitative thresholds from the French SRI label will be used as a reference to judge the significance of the commitment. For example, “selectivity” approaches will have to commit to a minimum reduction of 20% of issuers with the lowest ESG rating in the investment universe. 
    • For the other approaches, the management companies must be able to demonstrate to the regulator how the commitment chosen is significant.

    The doctrine applies immediately for new collective investments, modifications to existing collective investments and for new notifications to the AMF of the marketing in France of a foreign UCITS. Concerning existing products, the update of the name, commercial documentation and the KIID must be done by the end of November 2020.

    This first stage of the AMF doctrine does not exhaust all of the quality issues of the extra-financial information communicated on collective investments and is part of a logic of progressive improvement of practices. Important issues such as the quality and relevance of the extra-financial data used or the measurement of the possible impacts of the strategies implemented are not particularly addressed by this doctrine.

    The AMF may need to clarify its doctrine or adapt it according to changes in market practices and European texts such as the regulations on transparency (“Disclosure” Regulations). It also works to specify the methods of communication of funds which take into account extra-financial criteria in their management without making a significant commitment within the meaning of this doctrine.  

    Version française

    Le 11 mars 2020, l’Autorité des marchés financiers (AMF) a publié la doctrine DOC-2020-03 sur la finance durable et la gestion collective en matière d’information des investisseurs.

    Soutenu par une demande croissante de la part des investisseurs, le déploiement de fonds intégrant des critères environnementaux, sociaux et de gouvernance s’accélère.

    Si le rapide développement d’une gestion « durable » constitue sans conteste une évolution très positive, la croissance du discours commercial sur ces thématiques ne va pas sans soulever des questions de bonne information des investisseurs et en particulier des enjeux de prévention du risque de « greenwashing ».

    Chargée de veiller au caractère clair, exact et non trompeur de l’information communiquée aux investisseurs, l’AMF publie une doctrine visant à assurer une proportionnalité entre la réalité de la prise en compte des facteurs extra-financiers dans la gestion et la place qui leur est réservée dans la communication aux investisseurs. Une meilleure lisibilité de l’offre renforcera la protection des épargnants au moment où ces derniers démontrent un intérêt grandissant pour les placements qui mettent en avant la prise en compte de critères extra-financiers.

    Les fonds qui souhaitent mettre en avant cette prise en compte de critères extra-financiers comme un élément central de communication devront respecter des standards minimaux précisés par cette doctrine et notamment justifier d’une approche fondée sur un engagement significatif tel que défini ci-dessous.

    Des objectifs mesurables de prise en compte de critères extra-financiers devront figurer dans les documents réglementaires tels que le prospectus. Ces objectifs mesurables devront être significatifs pour assurer une réelle distinction entre les approches. Ainsi, pour les approches dites « Best-in Class » - les plus utilisées par les gérants -, des seuils quantitatifs issus du label ISR français seront utilisés comme référence pour juger du caractère significatif de l’engagement.  Par exemple, les approches en « sélectivité » devront s’engager sur une réduction minimale de 20 % des émetteurs disposant de la moins bonne note ESG de l’univers d’investissement. Pour les autres approches, les sociétés de gestion devront être en mesure de démontrer au régulateur en quoi l’engagement retenu est significatif.

    La doctrine s’applique immédiatement pour les nouveaux placements collectifs, les modifications de placements collectifs existants et pour les nouvelles notifications à l’AMF de la commercialisation en France d’un OPCVM étranger. Concernant les produits existants, la mise à jour de la dénomination, documentation commerciale et le DICI doit se faire d’ici n novembre 2020.

    Cette première étape de la doctrine de l’AMF n’épuise pas l’ensemble des problématiques de qualité de l’information extra-financière communiquée sur les placements collectifs et s’inscrit dans une logique d’amélioration progressive des pratiques. Des enjeux importants comme la qualité et la pertinence des données extra-financières utilisées ou la mesure des éventuels impacts des stratégies mises en œuvre ne sont en particulier pas traités par cette doctrine.

    L’AMF pourra être amenée à préciser sa doctrine ou à l’adapter en fonction de l’évolution des pratiques de marché et des textes européens tels que le règlement en matière de transparence (Règlement « disclosure »). Elle travaille également à préciser les modalités de communication des fonds qui prennent en compte dans leur gestion les critères extra-financiers sans en faire un engagement significatif au sens de la présente doctrine.

  • France publishes a Decree about funds with extinctive management / La France publie un Décret relatif aux fonds à gestion de type extinctive

  • On 22 March 2020, Decree No 2020-286 of 21 March 2020 amending the legal framework of UCITS funds with extinctive management (funds under closure or merger) was published in the Official Journal.

    The decree, targets portfolio management companies and investors, it aims at modifying rules applicable to UCITS funds with extinctive management, hence under closure or merger and it is an update of the 2019-486 of 22 May 2019 relating to the growth and transformation of companies.

    Shareholders must be informed immediately by the management company and a make available information about  the old and new structure. Shareholders must be informed immediately of assets transfer and documents related to the process shall also be made available.

    The decree further presents the delay, processes, and handling of potential fees as well as auditing of accounts by the external auditors.

    Version française

    Le 22 March 2020, la France a publié le Décret no 2020-286 du 21 mars 2020 modifiant le cadre juridique de la gestion d’actifs relatif aux fonds à gestion de type extinctive.

    Le décret vise les sociétés de gestion de portefeuille et les investisseurs, il vise à modifier les règles applicables aux OPCVM à gestion extinctive. Il s'agit d'une mise à jour du 2019-486 du 22 mai 2019 relative à la croissance et à la transformation des sociétés.

    Les actionnaires doivent être informés immédiatement par la société de gestion et mettre à disposition des informations sur l'ancienne et la nouvelle structure. Les actionnaires doivent être informés immédiatement du transfert d'actifs et les documents liés au processus doivent également être mis à disposition.

    Le décret présente en outre le retard, les processus et le traitement des frais potentiels ainsi que l'audit des comptes par les auditeurs externes.

  • AMF publishes results of inspection on real estate services by asset management companies / L’AMF publie la synthèse des contrôles de sociétés de gestion de portefeuille portant sur leurs réalisations de prestations immobilières

  • On 27 March 2020, the Autorité des Marchés Financiers (AMF) issued a review summary of short SPOT inspections (“Supervision des Pratiques Opérationnelle et Thématique”) of arrangements and conditions  for the provision of real estate management services within investment management companies. This theme featured among its supervision priorities for 2019.

    For this new series of SPOT inspections, the AMF selected six investment management companies with a variety of profiles, whether in terms of the types of funds managed (real estate collective investment undertakings - OPCI, real estate investment companies - SCPI), the types of assets held, their clients or the amount of assets under management.

    For each investment management company, the regulator focused on the 2016-2019 period and on the following items:

    • Organisation with regard to asset management and property management (internal resources allocated, any outsourcing, etc.), including relevant related procedures;
    • Process and procedures for the selection of real estate management service providers and related pricing arrangements;
    • Information of investors concerning these services (organisation, fees calculation, fee rates charged to the fund, etc.);
    • Management of conflicts of interest;
    • Control framework.


    Main observations

    The review exercise shows that property asset management services (strategy for major works, rental strategy, etc.) and property rental management services (rent invoicing and collection, expenses paid by tenants, etc.) are generally performed in-house. However, technical management of the property assets, including maintenance or management and follow-up of repairs, for example, is generally carried out by third-party service providers (including intra-group companies).

    The inspections identified some good practices which are presented in the review summary, in particular pertaining to the selection of real estate service providers (records of the responses received to tender processes and of the rationale for the choice of service providers). The companies in the sample group have also set up a conflict of interest management framework governing the selection of service providers and second-level controls relating to the selection of service providers, fees and conflict of interest management.

    The AMF does note, however, that improvements must be made to the frameworks in place within the investment management companies that were audited:

    • Most of the companies in the sample group do not have sufficiently accurate and operational procedures covering the processes relating to property asset, rental and technical management. In a significant number of cases, these procedures do not cover, for example, the conditions of asset disposal, the processes for following up rent invoicing and lease management, the procedures for monitoring overdue rents or for managing expenses paid by the tenant;
    • The audit trail for the selection process is insufficient in most cases, thereby making the conflict of interest management system poorly operational. Similarly, ex-post reviews of the services performed are insufficiently formalised and traced;
    • Permanent and periodic controls (concerning the selection of service providers, fees and conflict of interest management) are often insufficiently traceable;
    • The information for unitholders concerning real estate management services is not very detailed or non-existent, while information on fees also offers little detail. It therefore appears difficult to make comparisons between funds. Although these levels of detail are not required by the regulations, they do constitute good practices identified by the inspections.

    Version française

    Le 27 mars 2020, l’Autorité des Marchés Financiers (AMF) a publié la synthèse des contrôles SPOT de l’année 2019 visant des sociétés de gestion de portefeuille (« SGP ») porté sur les modalités de réalisation des prestations immobilières.

    Pour cette série, l’AMF a sélectionné six sociétés de gestion de portefeuille aux profils variés.

    • L’organisation des SGP en matière d’asset management et de property management (ressources internes, externalisation auprès de sociétés tierces, etc.) ;
    • Le corps procédural relatif à ces activités ;
    • Les modalités de sélection des prestataires immobiliers externes ;
    • Les modalités de tarification de ces prestations immobilières ;
    • L’information des souscripteurs concernant ces prestations (organisation retenue, modalités de calcul des frais, montant de frais effectivement à la charge du fonds, etc.) ;
    • La gestion des conflits d’intérêts relatifs à ces activités ;
    • Le dispositif de contrôle (permanent et périodique) relatif à ces prestations.

    L’AMF constate, au travers des constats mis en exergue par cette série de missions SPOT, que des améliorations doivent être apportées au dispositif en place au sein des SGP contrôlées.

  • Transparency Directive

    ANC adopts recommendation on the codification of financial statements / L’ANC publie une recommandation relative à la codification des états financiers

  • On 6 March 2020, the Autorité des normes comptables (ANC) adopted Recommendation No. 2020-02 of 6 March 2020 on the codification of financial statements in Recommendation 2020-01.

    This document proposes guidelines for coding financial statements drawn up in accordance with the models set out in Recommendation 2020-01 of the French Accounting Standards Authority (AMF). It also recommends certain attachments for the extensions to be created, but these extensions remain specific to each issuer. 

    These tags are proposed for information purposes only and must be adapted to the financial statements prepared by the entity. It is therefore necessary to ensure that the definition of the recommended tag corresponds to the item referred to in the entity's financial statements (taking into account the meaning and accounting scope of this item).

    Version française

    Le 6 mars 2020, l’Autorité des normes comptables (ANC) a publié la recommandation n° 2020-02 du 6 mars 2020 relative à la codification des états financiers de la recommandation 2020-01.

    Ce document propose des balises permettant de coder les états financiers établis suivant les modèles de la recommandation 2020-01 de l’Autorité des normes comptables. Il recommande également certains rattachements pour les extensions à créer, ces extensions demeurent cependant propres à chaque émetteur. 

    Ces balises sont proposées à titre indicatif, elles doivent être adaptées aux états financiers établis par l’entité. Il convient ainsi de s’assurer que la définition de la balise recommandée correspond à l’élément visé dans les comptes de l’entité (compte tenu du sens et du périmètre comptable de cet élément).

  • GERMANY

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    BaFin publishes ML/TF sub-sector risk analysis dedicated to the financial industry

  • On 17 March 2020, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) published a ML/TF sub-sector risk analysis dedicated to the financial industry.  BaFin produced this analysis to evaluate the ML/TF risks to which the German domestic financial sector is currently exposed. BaFin also proposed a series of appropriate measures to reduce the identified risks.

  • COVID-19 Regulatory Measures

    BaFin publishes declaration regarding the situation in light of COVID-19

  • On 4 March 2020, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) announced that it takes the current risk situation by the corona virus ( SARS -CoV-2) very seriously. 

    BaFin is in close contact with banks and other financial market players about possible reactions and emergency plans. It continuously analyses further developments and possible effects on the financial industry.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    BaFin publishes Consultation 03/2020 on revision of the depositary circular

  • On 13 March 2020, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) published consultation 03/2020 of the revised circular on the duties and obligations of the depositary according to section 1 chapter 3 of the Capital Investment Code.

    The main changes concern the following areas:

    • Requirements for the separate safekeeping of investment fund assets and those of the depositary at the level of the first sub-custodian;
    • Extension of the legal obligations to be taken into account in the (sub) custody contracts;
    • Clarification that the depositary must also understand the specific calculation of the performance-related fee in individual cases;
    • Inclusion of a provision that stipulates in advance in the depositary contract when the capital management company can request an expense allowance from the depositary for the provision of information.

    The consultation was opened until 15 April 2020.

  • Shareholders' Rights Directive (SRD II)

    BaFin publishes FAQ on the mandatory electronic submission process

  • On 13 March 2020, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) released an  FAQ on the mandatory electronic submission process.

    The FAQ highlights, among others:

    • the main characteristics of the electronic submission process;
    • the advantages of the electronic submission process;
    • the question whether this submission process is mandatory or may a notification still be submitted via fax/mail to BaFin and the issuer;
    • What applies if a notification is nevertheless submitted via fax/mail.
  • HONG KONG

    COVID-19 Regulatory Measures

    SFC releases Further Guidance on the Joint Statement in relation to Results Announcements in light of the COVID-19 pandemic

  • On 16 March 2020, the Securities and Futures Commission (SFC) released further guidance for listed issuers with 31 December financial year end on the publication of their preliminary results and annual reports, together with the Stock Exchange of Hong Kong Limited (the Exchange), as follows:

    • Guidance for issuers unable to publish a preliminary results announcement in accordance with the Rules by 31 March 2020: In all cases, the announcement should also explain how and why the travel and other restrictions have affected the issuer’s ability to meet its reporting deadline.
    • Guidance on publication of annual reports due by 31 March 2020 (GEM issuers) and 30 April 2020 (Main Board issuers): The SFC and the Exchange appreciate that it is uncertain when the travel restrictions and other precautionary measures against the COVID-19 pandemic can be lifted and that an extension beyond the 60-day period may be warranted in some cases. To apply for a further extension, an issuer must provide the Exchange with:
      (i) an explanation of why such further extension is necessary (e.g. why the necessary accounting or other information remains unavailable or why its auditors continue to be unable to obtain the verification needed to provide assurance to the required standards);
      (ii) the details of its plans to prepare and publish its annual report; and
      (iii) its proposed announcement in relation to such further extension (including any updated financial and operational information that it is able to provide to the market in the interim).
    • Issuers are reminded that they need to separately comply with any additional requirements that apply under the laws and regulations of their jurisdiction of incorporation and their articles of association, especially with regards to holding Annual General Meetings.  An extension granted by the Exchange would not modify, exempt or defer any requirements that apply under the laws and regulations of their jurisdiction of incorporation and their articles of association.  Issuers should consult their professional advisers as necessary.  See Q.10 of FAQ.
  • SFC publishes Circular to management companies and trustees and custodians of SFC-authorized funds

  • On 27 March 2020, the Securities and Futures Commission (SFC) published a Circular to management companies and trustees and custodians of SFC-authorized funds, in view of the volatility in local and international markets caused by the COVID-19 outbreak.

    Managers are reminded to:

    (i)  closely monitor the dealing and trading of the funds under their management

    (ii)  keep investors informed at all times and immediately report to the SFC any untoward circumstances including without limitation, 

    • the use of liquidity risk management tools and 
    • any decision to defer redemption, suspend creation and/or redemption in the primary market and/or the secondary market trading and 
    • potential impact on the fund,

    (iii)  ensure that all assets of the funds are fairly and accurately valued in good faith and in the best interests of investors

    (iv)  consider the need for any fair value adjustment and constantly review the fair value adjustment policies and procedures to ensure their continued appropriateness and effective implementation in light of the rapidly changing market conditions.  

    (v)  exercise due care, skill and diligence in managing liquidity of funds

    (vi)  use appropriate liquidity risk management tools to properly allocate the costs of redemption to the redeeming investors, and to ensure fair treatment to investors who remain in the funds.

    Trustees and custodians are also reminded of their duty to safeguard fund assets and provide independent oversight of the management of funds, for example, on valuation of the funds and use of liquidity risk management tools.

  • SFC publishes Circular to Intermediaries - Reminder of important obligations to ensure suitability and timely dissemination of information to clients

  • On 27 March 2020, the Securities and Futures Commission (SFC) published Circular to Intermediaries - Reminder of important obligations to ensure suitability and timely dissemination of information to clients.

    This circular reminds licensed and registered persons of their obligations under the Code of Conduct when distributing investment products, such as funds and bonds, to their clients. In particular, these include 

    (i) the suitability obligations when they make a solicitation or recommendation and 

    (ii) the obligation to disseminate information in a timely manner where they hold an investment product directly or indirectly on behalf of their clients.

    To fulfill their suitability obligations under the Code of Conduct, licensed and registered persons are reminded to, among other things:

    • ensure that due diligence is conducted on investment products on the current approved product lists on a continuous basis at appropriate intervals 
    • give due consideration to all relevant circumstances specific to a client when assessing the suitability of an investment product for the client
    • explain to the client the risks and features of the investment product
    • when recommending an investment product to a client, present balanced views at all times.

    Further, where licensed or registered persons hold investment products directly or indirectly on behalf of their clients, they are also reminded to disseminate to their clients notices and other communications prepared or issued by the investment products’ issuers, product arrangers or management companies on a timely basis upon receipt.

  • SFC publishes Circular to intermediaries on extended deadlines for implementation of regulatory expectations and reminder of order recording requirements under COVID-19 pandemic

  • On 31 March 2020, the Securities and Futures Commission (SFC) informs the industry that the SFC has decided to extend the deadlines of three regulatory expectations that are due for implementation in 2020 by six months in light of the pandemic and the disruptions it causes. It also reminds intermediaries of the alternative order recording options under the existing regulatory framework that may be adopted during the pandemic. 

    The SFC has also issued FAQs to address a number of licensing related matters arising from firms re-configuring staffing arrangements.

    Upcoming regulatory expectations for implementation:

    • Use of external electronic data storage (“EDSP”): change from 30 June 2020 to 31 December 2020
    • New measure to protect client assets: change from 31 July 2020 to 31 January 2021
    • Data standards for order life cycles: change from 31 October 2020 to 30 April 2021.

    Regarding Compliance with order recording requirements: In light of the global COVID-19 pandemic, intermediaries’ staff may not work from their usual place of business. When considering order placing and recording alternatives, intermediaries should have in place appropriate control measures for ensuring that the alternatives are properly implemented in compliance with the order recording requirements.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    HK publishes Limited Partnership Fund Ordinance

  • On 20 March 2020, the Limited Partnership Fund Bill was published on the Government Gazette of Hong Kong.

    The Bill applies to:

    • A limited partnership fund:
      (a) is a fund set up in the form of a limited partnership under this Ordinance; and
      (b) does not have a legal personality.
    • Limited partnership: a partnership consisting of:
      (a) one or more than one partner, each commonly called a general partner, who is liable for all debts and obligations of the partnership; and
      (b) one or more than one partner,  each commonly called a limited partner, who
      (i) under an agreement entered into among the partners in the partnership, agrees to make contributions (whether in the form of property, services or otherwise) valued at a stated amount to the partnership; and
      (ii) is not liable for the debts and obligations of the partnership beyond the stated amount;
    • an arrangement in respect of any property is a fund if:
      (a) either or both of the following apply:
      (i) the property is managed as a whole by, or on behalf of, the persons operating the arrangement (operating persons);
      (ii) the contributions of the persons participating in the arrangement (participating persons), and the profits or income from which payments are made to them, are pooled;
      (b) under the arrangement, the participating persons do not have day-to-day control over the management of the property;
      (c) the purpose or effect, or purported purpose or effect, of the arrangement is to enable one or more operating persons and participating persons, whether by acquiring any right, interest, title or benefit in the arrangement.

    A fund is eligible to be registered as a limited partnership fund if, on its registration as a limited partnership fund:

    • the fund is constituted by a limited partnership agreement,
    • the fund has one general partner and at least one limited partner
    • the fund follows other conditions such as requirements for partners, fund's name, office, etc.
  • IRELAND

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    Irish Parliament publishes S.I. No 64 2020 - European Union (restrictive measures concerning Venezuela) regulations 2020

  • On 12 March 2020, the Houses of the Oireachtas (Ireland's national parliament) published Statutory Instrument No. 64 2020 - European Union (restrictive measures concerning Venezuela) regulations 2020.

    These regulations provide for the enforcement of restrictive measures contained in Council Regulation (EU) 2017/2063 regarding restrictive measures concerning Venezuela.

    These regulations provide that competent authorities of the State may issue directions for the purpose of giving full effect to the sanctions.

  • COVID-19 Regulatory Measures

    IF informs on the Revenue Update: Form IU(3e) - Deadline Extension

  • On 30 March 2020, the Irish Funds Industry Association (IF) informed that the Office of the Revenue Commissioners has advised Irish Funds that they are extending the deadline for Form IU(3e) to 30 June 2020 due to the impact of COVID-19. 

    The filing deadline for Form IU(3e) “De Minimis” Election under section 739E(2A)(a)(ii) of the Taxes Consolidation Act 1997 on behalf of investment undertakings is 31 March 2020. In order to assist with difficulties arising from the impact of COVID19 regarding certain compliance and filing obligations, the Office of the Revenue Commissioners extended the deadline for Form IU(3e) to 30 June 2020.

  • CBI publishes Statement on Essential Services

  • On 31 March 2020, the Central Bank of Ireland(CBI) published its Statement on how it expects the Chief Executive Officer or other relevant member of senior management of banking and financial services should be accountable for ensuring an adequate process so that only individuals in roles necessary to perform essential financial services, who cannot work remotely, are designated as essential financial services workers.

    In the context of maintaining essential financial services this includes, but is not limited to:

    • Ensuring Business Continuity Plans are kept under review with appropriate contingency plans in the context of evolving developments both locally and globally.
    • Ensuring appropriate designation of staff as essential financial services workers in order to be able to rotate and/or replace essential staff as necessary.
    • Engaging with critical services providers, contractors and other services to ensure maintenance of services and designation of their staff as essential service staff as necessary.
    • Ensuring cooperation with other financial services providers in order to seek to ensure continuity of essential consumers services in a service sector or region.
    • Notifying the Central Bank, as soon as possible, where they believe circumstances present a risk to the maintenance of essential services to consumers, industry or markets.
  • Shareholders' Rights Directive (SRD II)

    Ireland publishes S.I. No. 81 of 2020 - European Union (Shareholders’ Rights) Regulations 2020

  • On 20  March 2020, the Statutory Instrument No. 81 of 2020 - European Union (Shareholders’ Rights) Regulations 2020 was published on the Irish Statute Book, which aims to transpose Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement (SRD II) into national regime.

    These Regulations shall amend the Companies Act 2014 (No. 38 of 2014) by inserting new Chapters 8A, 8B, 8C and 8D into Part 17 of the Act, concerning:

    • Rights of shareholders
    • Transparency of institutional investors, asset managers and proxy advisors 
    • Remuneration policy, remuneration report and transparency and approval of related party transactions
    • Offences and penalties.

    In general, the new provisions will apply to ‘intermediary’ which means a person, whether situated in a Member State or elsewhere, that provides services, in relation to a traded public limited company (PLC), of safekeeping of shares, administration of shares or maintenance of securities accounts on behalf of shareholders or other persons, and includes:

    (a) an investment firm as defined in MIFIR, 

    (b) a credit institution as defined in CRR, as amended 

    (c) a central securities depository as defined in CSDR.

    A traded PLC, or its nominee (a third party to make a request on its behalf), may request, from an intermediary that provides services with respect to the shares of the traded PLC:
    (i) information regarding shareholder identity that relates to shares held in that traded PLC, and (ii) the details of the next intermediary, if any, in the chain of intermediaries.

    An intermediary that receives a request and is in possession or control of the information to which that request relates shall, as soon as practicable, provide the requester with that information. 

  • Supervisory fees

    Irish Parliament publishes S.I. No 89 2020 - Financial Services Industry Levy Regulations 2020

  • On 26 Mar 2020, the Irish Parliament published Statutory Instrument No 89 2020 - Financial Services and Pensions Ombudsman Act 2017 [Financial Services and Pensions Ombudsman Council] Financial Services Industry Levy Regulations 2020. Each financial service provider shall pay to the Office an annual charge, being the required levy contribution, in respect of the services provided by the Ombudsman to the financial services industry. The required levy contribution shall be paid by direct bank transfer or equivalent instantaneous transfer of funds to the bank account specified by the Office, or in such other manner as the Office may direct. 

    These Regulations provide for:

    • each financial service provider to be liable to pay an annual levy in respect of the services provided by the Ombudsman to the financial services industry
    • the collection and recovery of the levy and provide for certain obligations in respect of self-assessment and record keeping by financial services providers
    • the calculation of the required levy contribution payable by each category of financial services provider for the year ended 31 December 2020. 

    In particular, the different levy applies to different type of entities, such as:

    • Credit Institutions:
      (i) with Authorisations under Irish Legislation: at the rate of €0.574 cent per consumer as at 31 December 2018 (minimum levy of €375/each firm)
      (ii) as a cross-border service providers: levy of €375 is payable/each firm
      (iii) others: at the rate of €0.574 cent per consumer as at 31 December 2018 (minimum of €375/each firm)
    • Intermediaries including Investment Product Intermediaries: a sum no greater than 15% of the levy payable to the Central Bank in 2018 (minimum levy of €125/each firm)
    • Investment Firms: a sum no greater than 26.409% of the annual industry funding levy payable  to the Central Bank in 2018 (minimum levy of €375/each firm)

    The regulations are also apply to Insurance Undertakings, Credit Unions, Approved Moneylenders, Approved Professional Bodies, Bureaux de Change, Default Assessments, Retail Credit Firms, Home Reversion Firms and Credit Servicing Firms, Payment Institutions and E-Money Institutions, Pawnbrokers, Business Transfers, Creditors, Owners of Goods Subject to Hire Purchase, Owners of Goods Subject to Consumer Hire, Mortgage Lender, Credit Intermediaries.

  • ITALY

    COVID-19 Regulatory Measures

    CONSOB suspends the terms of the regulation 18750/2013 until April 3rd, 2020

  • On the 12th of March 2020, in light of the measures aiming to reduce the diffusion of CoVid-19, CONSOB communicated its decision to suspend the terms of the regulation 18750/2013. 

    This decision impacts sanctioning processes already initiated by CONSOB, or which will be initiated after the date of adoption of this resolution.

  • CONSOB suspends the payment of contributions pursuant to art. 40 of law no. 724/1994

  • On 18 March 2020, due to the situation of economical emergency arising as consequence of CoVid-19, CONSOB communicated the suspension of the payment of contributions pursuant to art. 40 of law no. 724/1994 imposed to banks and other financial intermediaries.

  • Banca d'Italia communicates the suspension of all administrative procedures and CONSOB publishes clarifications on the suspension of procedures

  • On 23 March 2020, Banca d'Italia communicated that all administrative procedures which were either pending or not started on the 23rd of February 2020 would be suspended. as decided based on the Decree published on the Gazzetta Ufficiale n. 70 of the 17th of March 2020. 

    Plus, on 25 March 2020, CONSOB published further information concerning the scope of suspension of procedures under its jurisdiction, following the introduction of art 103, paragraph 1, of the decree-law of the 17th of March 2020, no. 18, containing measures related to the epidemiological emergency from COVID-19. Such clarifications cover administrative procedures, precautionary and urgent measures, and communication with CONSOB itself.

  • CONSOB publishes clarifications on the suspension of procedures (communication n. 2/20, 25th of March 2020)

  • On the 25th of March 2020, CONSOB published further information concerning the scope of suspension of procedures under its jurisdiction, following the introduction of art 103, paragraph 1, of the decree-law of the 17th of March 2020, no. 18, containing measures related to the epidemiological emergency from COVID-19. Such clarifications cover administrative procedures, precautionary and urgent measures, and communication with CONSOB itself.

  • CONSOB extends the deadline for supervised entities to report

  • In light of the extraordinary circumstances due to CoVid-19, on the  25th of March 2020, CONSOB communicated the extension of the deadline for supervised entities to share data and documents, as established by the legislative act Delibera 17297 of April 28, 2010.

  • Banca d'Italia publishes a series of deadlines' extensions granted by UIF following COVID-19 outbreak

  • On the 27th of March 2020,  Banca d'Italia published several deadlines' extensions granted by UIF following the outbreak of CoVid-19 and subsequent measures. Such deadlines' extension  mainly cover the sending of data and communication and administrative procedures.

  • Trading rules

    Borsa Italiana publishes amendments to the parameters for trading

  • On the 5th of March 2020, Borsa Italiana published a document listing amendments to trading parameters impacting mainly the ETFPlus market. 

    Such amendments cover: the number of transactions per second, the minimum quantity for a RFQ, the spread of listing obligations on stock futures for voluntary Market Maker operators and for Market Maker Mifid2 operators.

  • LUXEMBOURG

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    CSSF publishes Circular CSSF 20/738 on the last FATF statements

  • On 12 March 2020, the Commission de Surveillance du secteur financier (CSSF) published Circular CSSF 20/738 on FATF statements concerning:

    1. high-risk jurisdictions on which enhanced due diligence and, where appropriate, counter-measures are imposed
    2. jurisdictions under increased monitoring of the FATF
  • CSSF extends the deadline to complete the 2019 AML/CFT Survey

  • On 17 March 2020, the Commission de Surveillance du Secteur Financier (CSSF) extended the deadline to complete the 2019 Survey related to the fight against money laundering and terrorist financing.

    The Survey was launched on 3rd of February 2020 and answers had to mandatorily be submitted through the CSSF eDesk portal by 15 March 2020. 

    On an exceptional basis due to the COVID-19 pandemic, the CSSF is granting an extension of four additional weeks for the submission of the Survey. Consequently, the new deadline for the submission of the Survey will be close of business on 10th of April 2020.

  • Luxembourg publishes Law of 25 March 2020 partly transposing Directive (EU) 2018/843 (AMLD V)

  • On 26 March 2020, Law of 25 March 2020 transposing Directive (EU) 2018/843 (AMLD V), amending Laws on the organization of the notarial profession, on the organization of the bailiff service, on the profession of a lawyer, on the organization of the profession of chartered accountant, relating to the audit profession was published on the Legilux (Journal Officiel du Grand-Duché de Luxembourg).

    With the objective to transpose certain provisions of AMLD V into the Law of 12 November 2004, as amended, and by taking into account the level of precision of the Financial Action Task Force (FATF) Recommendations, the Draft Law focuses mainly on the following elements:

    • The prevention of risks associated with the use of virtual currencies
    • Strengthening and harmonization of the treatment of the “high-risk third countries”
    • Strengthening the means of the supervisory authorities to cooperate with their counterparties.
  • Chambre des députés publishes amendments to the Draft Law n°7216B establishing a register of trusts (“fiducies”)

  • On 30 March 2020, the Chambre des députés published amendments to the Draft Law n°7216B establishing a register of trusts (“fiducies”). Draft Law n° 7216B aims at creating a register of fiduciary arrangements – the Registre des Fiducies, which is subject to largely the same regime as the RBE.

    The proposed amendments released by the Commission des Finances et du Budget concern:

    • The amendments take into the comments of the State Council
    • The main Supervisory powers are given to the Administration de l'Enregistrement, des Domaines (AED). The CSSF and the CAA remain invested with the power of injunction with regard to persons subject to their supervisory power.
  • COVID-19 Regulatory Measures

    CSSF publishes clarification regarding the conduct to adopt by supervised entities for COVID-19

  • On 2 March 2020, the Commission de Surveillance du secteur financier (CSSF) published a communication concerning Coronavirus (COVID-19): clarification from the CSSF regarding the conduct to adopt by supervised entities.

    The professionals must take reasonable and appropriate security measures for the safety of their staff members. If, in that context, a professional is required, as a precautionary measure, to ask its employees to stay at home and refrain from attending work, the recourse to long-distance work should be possible under certain conditions. Starting out from an exceptional and temporary situation, a professional might decide to ask one or more of its employees to work from home, subject to satisfactory IT security conditions.

  • CSSF publishes statement regarding the potential impacts of COVID-19 on the financial sector and the objective to guarantee stability of markets

  • On 12 March 2020, the Commission de Surveillance du secteur financier (CSSF) published statement in the context of Coronavirus highlighting the potential impact on the financial sector and the objective to guarantee the stability of the market.

  • CRF informs on continuity of service in the context of COVID-19 outbreak

  • On 16 March 2020, the Cellule de renseignement financier (CRF) informed the public on the continuity of service in the context of COVID-19 outbreak.

    The receipt of suspicious transaction reports continues to function normally using the goAML computer tool.

    CRF notes that access to this tool is via the Internet using a LuxTrust ID.

    In addition to the notification sent by e-mail, the FIU will contact the professionals by telephone for any urgent or very urgent request.

  • LBR publishes warning regarding new measures implemented in the current exceptional national context

  • On 18 March 2020, the Luxembourg Business Register (LBR) informed on the new measures implemented in the current exceptional national context:

    • The client desks of LBR Luxembourg and Diekirch are closed to the public, temporarily until 03/31/2020.
    • LBR continues to provide its online services (electronic filing, extracts, declaration to the RBE, etc.).
    • LBR's telephone helpdesk will no longer be available, for important matters, contact by email at helpdesk@lbr.lu.
    • Filing of the annual accounts for the financial year 2019: Companies will have an additional administrative period of 4 months to make their financial data filings at the RCS, at the standard rate of € 19 excl. VAT (excluding registration fees and the CNC tax). The surcharge for late filing of financial data is exceptionally suspended, until 30/11/2020 for filing delays of up to 4 months included. Thus, for a financial year ending, for example, on 31/12/2019, the filing of annual accounts will be subject, until 30/11/2020, to the standard administrative costs of € 19 excluding VAT.
  • CSSF updates FAQ on Swing Pricing Mechanism

  • On 20 March 2020, the Commission de Surveillance du secteur financier (CSSF) updated its FAQ on the use of swing pricing (applied similarly to dilution levy) by UCIs (UCITS, UCI Part II & SIFs), in the context of the financial market developments around the Coronavirus (COVID-19).

    1. Can UCIs (UCITS, UCI Part II & SIFs) increase the swing factor to be applied on the NAV up to the maximum level laid down in the prospectus?
      Answer: Yes, this can be done without prior notification to the CSSF.
    2. Can UCIs increase the applied swing factor beyond the maximum swing factor laid down in the fund prospectus in the following situations:
      2.1. where the fund prospectus formally offers the possibility to the Board of Directors of the UCI or, if applicable, the Management Company to go beyond the maximum level under certain predefined conditions?
      Answer: The Board of Directors of the UCI or, if applicable, the Management Company can decide to increase the swing factor in accordance with the provisions and conditions of the prospectus. The decision must be duly justified and take into account the best interest of the investors. 
      2.2. where the fund prospectus does not offer the possibility to the Board of Directors of the UCI  or, if applicable, the Management Company to go beyond the maximum level laid down in the prospectus? 
      Answer: The CSSF permits on a temporary basis the Board of Directors of the UCI or, if applicable, the Management Company, given the current exceptional market circumstances involved by the COVID-19, to increase the swing factor beyond the maximum level mentioned in the UCI prospectus. This decision must again be duly justified and take into account the best interest of the investors.
    3. To what extent can a UCIs increase the applied swing factor beyond the maximum swing factor disclosed in the fund prospectus?
      The maximum swing factor could be raised beyond the maximum level laid down in the UCI prospectus on a temporary basis provided the following minimum elements are observed:
      - the revised swing factors are the result of a robust internal governance process and are based on a robust methodology (including market / transaction data based analysis) that provides for an accurate NAV which is representative of prevailing market conditions;
      - an appropriate communication is made to investors through the usual communication channels, such as the ordinary notice to investors, through the fund’s internet website or other way as disclosed in the prospectus.
  • Luxembourg publishes Grand-ducal regulation of 20 March 2020 introducing measures concerning the holding of meetings in companies and in other legal persons

  • On 20 March 2020, the Grand-ducal regulation of 20 March 2020 introducing measures concerning the holding of meetings in companies and in other legal persons was published on the Legilux (Journal Officiel du Grand-Duché de Luxembourg). 

    Considering that the state of COVID-19 pandemic, the regulation provides that:

    • Companies may hold any general meeting without a physical meeting, and require its shareholders or partners and other participants at the meeting to participate in the meeting and to exercise their rights by/ through:
      (i) remote voting in writing or in electronic form, provided that the full text of the resolutions or decisions to be taken has been published or has been communicated to them;
      (ii) an agent appointed by the company; or
      (iii) videoconference or other means of telecommunication allowing their identification.
    • The other functions of a company may hold their meetings without a physical meeting, by:
      (i) written circular resolutions; or
      (ii) by videoconference or other means of telecommunication allowing the identification of the members of the body participating in the meeting.
    • Companies are authorized to convene its annual general meeting for the later of the following dates:
      (i) a date which is within a period of six months after the end of its financial year or
      (ii) a date that falls within a period up to June 30, 2020.
    • The company is empowered to take this decision for any meeting called for June 30, 2020 at the latest. Any company, which has already convened its meeting and which would take this decision, must publish it, and if necessary, notify it to its shareholders or partners or other participants in the form in which it had convened this meeting or by publication on its website, at the latest, the third working day days before the meeting.
  • CSSF maintains deadlines for regulatory reporting with some flexibility upon specific request

  • On 23 March 2020, the Commission de Surveillance du secteur financier (CSSF) published a communication regarding regulatory reporting, in particular:

    • The CSSF asks supervised entities to perform the CSSF regulatory reporting when it is due. 
    • If, however, for operational reasons supervised entities experience difficulties, then the supervised entities should contact the CSSF through their usual channels as soon as possible and ahead of reporting deadlines. 
    • The CSSF will not apply a strict enforcement policy with regards to reporting if delays are duly justified, during the COVID-19 crisis.
  • ChD publishes Draft Law 7541 on the extension of the time limits for filing and publishing annual reports, consolidated reports and related reports during the state of crisis

  • On 27 March 2020, the Chambre des députés - Luxembourg published the Draft Law 7541 on the extension of the time limits for filing and publishing annual reports, consolidated reports and related reports during the state of crisis.

    The deadlines for accounting records and annual reports of business and companies are extended for three months, such as:

    • for filing the annual accounts and the balance sheets relating to the a standardized chart of accounts;
    • for publishing of the annual records and the reports on the Recueil Electronique des Sociétés et Associations (RCSA)
    • for publishing of the non-financial statement in the form of a separate report, or for making it available to the public on the company's website 
    • for publishing the corporate governance statement in the form of a separate report, or making  availability to the public on the company's website
    • for publishing the report on payments made to governments by the Recueil Electronique des Sociétés et Associations (RCSA).

    The deadline for publication of the consolidated reports of commercial companies are also extended for three months such as: consolidated accounts and related reports, consolidated non-financial statement, consolidated report on payments made for the benefit of governments.

    This law only applies to annual accounts, consolidated accounts and reports relating to relating to a financial year closed on the date of end of the state of crisis by the law and grand ducal regulation, as amended, on the fight against the COVID-19.

    This law shall come into force on the day of its publication on Legilux.

  • CSSF updates FAQ COVID-19 (version 30 March 2020)

  • On 30 March 2020, the Commission de Surveillance du secteur financier (CSSF) published updated  FAQ COVID-19. 

    The FAQ update concerns 3 new questions: 

    • Can the deadlines for the reports to be submitted by payment institutions and electronic money institutions be extended?
      The CSSF has decided that the deadlines for the submission of various documents may, where necessary, be exceptionally extended, upon reasoned request to be sent by email to the usual contact person at the CSSF.
      The concerned documents are the following:
      - The reports of the internal control functions to be submitted on 31 March;
      - The reports of the management on the state of the internal control to be submitted on 31 March;
      - The reports on the assessment of major operational and security risks to be submitted on 31 March;
      - The fraud data reporting for the year 2019 to be submitted on 30 April. 
    • Can the deadlines for the reports to be submitted by the investment firms be extended?
      The CSSF has decided that the deadlines for the submission of various documents may, where necessary, be exceptionally extended, upon reasoned request to be sent by email to the usual contact person at the CSSF.
      The concerned documents are the following:
      - The audit report and the audited annual accounts to be submitted one month after the ordinary general meeting;
      - The minutes and the attendance list of the ordinary general meeting to be submitted one month after the ordinary general meeting;
      - The management report to be submitted one month after the ordinary general meeting;
      - The statement of compliance with Circular CSSF 12/552 to be submitted one month after the ordinary general meeting;
      - The reports of the internal control functions to be submitted one month after the ordinary general meeting;
      - The ICAAP report to be submitted one month after the ordinary general meeting;
      - The compliance report on the assessment of knowledge and competence in accordance with the ESMA guidelines to be submitted one month after the ordinary general meeting;
      - The annual reports or the audited financial statements of the direct and indirect shareholders to be submitted one month after the ordinary general meeting;
      - The annual reports on the activities and business volumes of the representative offices to be submitted one month after the ordinary general meeting;
      - The report of the réviseur d'entreprises (statutory auditor) on compliance with the professional obligations as regards the fight against money laundering and terrorist financing (concerns only Luxembourg branches of investment firms having their registered office in or outside the European Union) to be submitted six months after the closing date;
      - The report of the réviseur d'entreprises on the conduct of business under MiFID II (concerns only Luxembourg branches of investment firms having their registered office in or outside the European Union) to be submitted six months after the closing date;
      - The recovery plans for which the submission dates are set individually in feedback letter
    • Can the deadlines for the reports to be submitted by the support PFS be extended?
      The CSSF has decided that the deadlines for the submission of various documents may, where necessary, be exceptionally extended, upon reasoned request to be sent by email to the usual contact person at the CSSF.
      The concerned documents are the following:
      - The documents relating to the accounting closing date to be submitted to the CSSF in accordance with Circular CSSF 12/544 within seven months after the end of the financial year;
      - The management letter of the réviseur d'entreprises (statutory auditor) to be submitted one month after the general meeting.
  • DAC 6

    Luxembourg publishes in the Official Journal the transposition of the law on the disclosure for certain cross-border arrangements

  • On 27 March, Luxembourg published the transposition of DAC 6 in it's Official Journal. This DAC 6 Law will apply as from 1 July 2020. The first reportable transactions will however be those whose first implementation step occurred or occurs between 25 June 2018 and 1 July 2020. The relevant information will then have to be reported to the Luxembourg tax authorities by 31 August 2020.

    The Bill followed the text of DAC 6 rather closely. During the Luxembourg legislative process, amendments were made to the initial provisions in relation to professional secrecy, at the request of the State Council. As a result of these amendments, the benefit of professional secrecy, initially limited to lawyers, has been extended to auditors and qualified accountants.

  • Information Technology (IT) / Information and Communications Technology (ICT)

    CSSF publishes FAQ on the COVID-19 measures for IT security system

  • On 3 March 2020, the Commission de Surveillance du secteur financier (CSSF) published an FAQ on the COVID-19 measures for IT security system. The question is on the minimum computer security conditions recommended for remote access set-up to respond to the exceptional situation created by the COVID-19.

    The CSSF makes the following minimum recommendations:

    • Access with high privileges: Professionals should identify the most risky user profiles (such as IT administrators, employees in charge of transactions / payments, etc.)
    • Secure communications: Connections should be secured by encrypting the communication channel (for example using a VPN solution with AES-256 encryption, RSA-2048).
    • Monitoring connections: Professionals should set up controls which guarantee, at a minimum, that the remote connections are consistent with a tele-work type use.
    • Exceptional situation and limited time: These remote accesses come in response to the exceptional situation created by the COVID-19 virus and corresponds to a temporary and limited measures in time.
  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    CSSF publishes updated FAQ concerning the Luxembourg Law of 17 December 2010 relating to undertakings for collective investment

  • On 10 March 2020, the Commission de Surveillance du secteur financier (CSSF) published an updated version of its FAQ concerning the Luxembourg Law of 17 December 2010 relating to undertakings for collective investment.

    The updated version contains 2 new Q&As:

    • How should a UCITS disclose performance fees to the investors and to whom are performance fees of a UCITS payable? 
    • How should a UCITS specify and disclose the investment manager’s fee and the investment advisor’s fee, if any, in comparison with other fees paid out of the assets of the UCITS?
  • CSSF updates Application form or exemption from the subscription tax on UCI and SIF investing in microfinance

  • On 17 March 2020, the Commission de Surveillance du Secteur Financier (CSSF) updated the Application form for exemption from the subscription tax on undertakings for collective investment and specialised investment funds investing in microfinance.

  • CSSF updates Specific Investment Policy Questionnaire for additional sub-funds of an existing SIF

  • On 17 March 2020, the Commission de Surveillance du Secteur Financier (CSSF) updated the Specific Investment Policy Questionnaire for additional sub-funds of an existing SIF.

    This questionnaire is part of the Application Questionnaire to set up additional sub-funds of existing undertaking of collective investment.

  • CSSF updates Application questionnaire for additional sub-fund(s) for UCI

  • On 17 March 2020, the Commission de Surveillance du Secteur Financier (CSSF) updated the  Application questionnaire for additional sub-fund(s) for UCI.

  • CSSF updates Form concerning the legal provisions relating to the investment management of UCIs subject to Part II of the Law of 17 December 2010

  • On 17 March 2020, the Commission de Surveillance du Secteur Financier (CSSF) updated the Form concerning the legal provisions relating to the investment management of UCIs subject to Part II of the Law of 17 December 2010 relating to undertakings for collective investment.

  • NETHERLANDS

    COVID-19 Regulatory Measures

    DNB lowers bank buffer requirements to support lending in the context of COVID-19

  • On 17 March 2020, the De Nederlandsche Bank (DNB) announced it was lowering Dutch National Banks buffer requirements to support lending.

    De Nederlandsche Bank (DNB), the Dutch Authority for the Financial Markets (AFM), the Ministry of Finance and representatives of the Dutch Banking Association (NVB), the Federation of the Dutch Pension Funds and the Dutch Association of Insurers discussed the consequences of the coronavirus outbreak for the Dutch economy and the financial sector.

    The strong starting position of the Dutch banking sector allows DNB to temporarily give banks additional leeway to continue business lending and absorb potential losses. In view of current developments, DNB considers this a prudent approach and has decided to take the following measures:

    • The systemic buffers will be lowered, from its current 3% of global risk-weighted exposures to 2.5% for ING, 2% for Rabobank and 1.5% for ABN Amro.
    • The introduction of a floor for mortgage loan risk weighting will be postponed.

    These measures will remain in force as long as necessary. Once the situation is back to normal, DNB will compensate the systemic buffers reduction by gradually increasing the countercyclical capital buffer to 2% of Dutch risk-weighted exposures.

  • DNB announces postponement for reporting period of annual statements of pension funds due to COVID-19

  • On 26 March 2020,  the De Nederlandsche Bank (DNB)  announced the postponement for reporting period of annual statements of pension funds due to Coronavirus.

    The coronavirus outbreak has major consequences for the Dutch economy and poses major operational challenges. In view of the operational challenges facing the COVID-19 developments, DNB gives an additional 3 months for reporting all annual statements, until 30 September 2020.

  • DNB maintains countercyclical capital buffer at 0%

  • On 26 March 2020, the De Nederlandsche Bank (DNB) announced the maintenance of  the countercyclical capital buffer at 0%. 

    Based on these developments, DNB is currently leaving the countercyclical capital buffer percentage at zero percent . DNB's recent decision to lower system buffers has no impact on this decision. However, DNB has communicated that the countercyclical capital buffer will eventually be built up to two percent.

  • AFM supervises liquidity in asset management

  • On 30 March 2020, the AFM announced that managers of investment institutions and ucits it supervises, will inform the AFM and investors directly, if they make use of specific instruments for the benefit of the liquidity, to suspend redemption or repayment of rights of participation or if they delay the calculation of net asset value (NAV).

  • Financial supervision

    DNB publishes Newsletter Pensions March 2020

  • On 6 March 2020, the De Nederlandsche Bank (DNB) published its newsletter for Pensions March 2020.

    The newsletter summarizes all recent regulatory updates of the two first weeks of March 2020. In this issue: Statistical substantiation of collective value transfer; Retrospect Pension Seminar; The status of Q & As of DNB; Barriers and dilemmas in consolidation; New MT members Pension fund supervision; COVID-19 continuity plans; Publication Guideline Wwft and Sw; Update iForum; Brexit.

  • DNB publishes Newsletter Insurance March 2020

  • On 6 March 2020, the De Nederlandsche Bank (DNB) published it's newsletter for  Insurance March 2020.

    In this issue: Continuity plans COVID-19; New version of Digital Supervision Counter; IForum Update: Get started together.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    AFM conducts European research into liquidity risk management among UCITS managers

  • On 12 March 2020, the Autoriteit Financiële Markten (AFM) announced it was conducting an European research into liquidity risk management among UCITS managers.

    In 2020, the Netherlands Authority for the Financial Markets (AFM) will conduct a European investigation into the management of liquidity risks among managers of collective investment schemes for securities (UCITS). The investigation is coordinated by European regulator ESMA.

    • Quantitative research and analyses
      The research consists of two phases. The AFM first requests quantitative data from a large majority of Dutch UCITS managers. This provides the AFM with an overview of the liquidity risks of UCITS. The AFM then focuses on a sample of UCITS managers and UCITS for more in-depth analyzes.
    • Investigation by all European national supervisors
      European supervisor ESMA coordinates the investigation. All European national supervisors conduct the investigation (a so-called common supervisory action or CSA) simultaneously and in coordination with each other. They are currently also doing this in a survey among investment firms into the suitability test in investment advice and asset management.
    • Consistent supervision and investor protection
      The research has two objectives. First, it increases the consistency of supervision in Europe of liquidity risk management. It also helps protect investors in Europe.
  • SWITZERLAND

    COVID-19 Regulatory Measures

    Der Bundesrat approves deactivation of countercyclical capital buffer in the context of the COVID-19 epidemic

  • On 27 March 2020, the Federal Council approved the proposal of the Swiss National Bank (SNB) to deactivate the countercyclical capital buffer with immediate effect. This measure gives banks more flexibility in granting credits designed to cushion the economic impact of the coronavirus pandemic.

    The countercyclical capital buffer strengthens banking sector resilience in the event of corrections resulting from imbalances on the mortgage and real estate markets. At the same time, it helps to prevent these markets from overheating. It requires banks to hold additional capital for residential mortgage loans. In view of the exceptional situation caused by the coronavirus pandemic, the SNB submitted a proposal to the Federal Council requesting the immediate deactivation of the countercyclical capital buffer. The Federal Council approved this proposal at its meeting on 27 March 2020.

    This measure will give banks more flexibility in their lending activities, allowing them to better meet the credit and liquidity needs of households and businesses. It complements the package of measures announced by the Federal Council to cushion the economic impact of the coronavirus pandemic.

    Deactivation can take place because the threatened recession is likely to reduce overheating in the Swiss mortgage and real estate markets. In addition, it is important that the banks' lending activities comply with the Swiss Bankers Association guidelines on minimum requirements in mortgage lending, as well as the recently adjusted guidelines on residential investment property. Furthermore, the Federal Council supports the recommendations on distributions and bonuses made by the SNB and FINMA.

  • Derivative Financial Instruments (Derivatives)

    FINMA publishes Guidance 01/2020: Financial Market Infrastructure Act and Ordinance on derivatives trading

  • On 20 March 2020, the Eidgenössische Finanzmarktaufsicht (FINMA) published a Guidance 01/2020 concerning Financial Market Infrastructure Act and Ordinance on derivatives trading.

    On 5 March 2019 the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) issued a joint statement on the final implementation phases of the international framework for initial and variation margin for non-centrally cleared OTC derivatives. This statement is intended to support timely and smooth implementation of this framework. As a full member of BCBS and IOSCO, FINMA participated in the work that led to the statement.

    FINMA supports the statement from BCBS/IOSCO and declares that the interpretation contained therein applies to Swiss supervisory law (cf. Art. 131 para. 3, 100b para. 1 FMIO [SR 958.11]): derivatives contracts that have not previously been subject to a clearing obligation should not be subject to such an obligation even if fallback clauses are introduced.

  • Financial market infrastructure

    Switzerland announces the modernization of the commercial register will take effect on January 1, 2021

  • On 3 March 2020, Switzerland announced the modernization of the commercial register will take effect on January 1, 2021.

    The new provisions on the commercial register will come into force on January 1, 2021, as decided by the Federal Council at its meeting of March 6, 2020. This is a necessary modernization to that the commercial register continues to guarantee legal certainty and the fluidity of business relations. 

    It will be accompanied by a drop in emoluments favorable to the economic sector. As for the provisions of the Code of Obligations and the Ordinance on the Commercial Register establishing a central database of people, they will come into force on April 1, 2020 so that it is possible to continue the implementation of this database. 

    The reform of the law of the commercial register will allow the AVS number to be systematically used there to identify natural persons. Companies will also benefit from reductions, in particular the abolition of the obligation to provide a Stampa declaration and the removal of part of the formal requirements when transferring shares in a limited liability company between companies.

  • Financial reporting

    FINMA updates Data collection for Asset Managers and fund managers within the LPCC

  • On 17 March 2020,  the Eidgenössische Finanzmarktaufsicht (FINMA) updated the  Data collection for Asset Managers and fund managers within the Collective Investment Schemes Act (LPCC). 

    The document describes:

    •  General financial data
    • Data on administered Swiss collective investment schemes, managed assets (Asset Management)
    • Data on advisory mandates for Swiss and foreign collective investments
    • Data concerning individual asset management
    • Swiss and foreign institutions (excluding collective investments).
  • FINMA publishes reports on Data collection for SCmPC and SICAVs within the meaning of the LPPC

  • On 17 March 2020, the Eidgenössische Finanzmarktaufsicht (FINMA) published reports on Data collection for SCmPC and SICAVs within the meaning of the Collective Investment Schemes Act (LPCC).

    The documents list the pieces of information to provide to the authority.

  • UNITED KINGDOM

    Benchmarks Regulation (BMR)

    FCA publishes Statement on how the FCA would announce LIBOR contractual triggers

  • On 11 March 2020, the Financial Conduct Authority (FCA) published its Statement on how the FCA would announce LIBOR contractual triggers. The FCA explains how we will make the relevant announcements if required, so that these statements are clear, unambiguous, and notice is given at the same time to all market participants.

    Due to the agreement that the FCA has with LIBOR panel banks to remain on the LIBOR panels until end-2021, the FCA does not expect LIBOR to cease or become non-representative before end-2021. Markets need to be prepared, however, for potential announcements that some or all LIBOR settings will cease after end-2021, or the FCA finds that they are no longer going to be representative, after end-2021. These announcements may be necessary because the FCA is given notice of the departure of panel banks.

    Announcements could be made before end-2021, even if the cessation or loss of representative status would not occur until the panel banks had left at the end-2021 or another applicable date of panel bank departure thereafter. For both scenarios, the announcement will:

    • be made via the Regulatory News Service of the FCA, at the same time as, or very shortly followed by, a posting of a fuller statement on the FCA's website
    • be clear that it is being made in the awareness that it will engage certain contractual triggers that are activated by pre-cessation or cessation announcements made by us
    • be clear about the LIBOR currencies and tenors it relates to
    • include the date of cessation, or, if applicable, date from which the relevant LIBOR settings are not going to be representative.
  • Brexit

    FCA updates on the temporary permissions regime for inbound passporting EEA firms and funds

  • On 24 March 2020, the Financial Conduct Authority (FCA) updated on the temporary permissions regime for inbound passporting EEA firms and funds.

    The window for firms and fund managers to notify the FCA that they want to use the TPR is currently closed. Firms and fund managers that have already submitted a notification need take no further action at this stage.

    The FCA will confirm its plans for reopening the notification window later this year, which will allow additional notifications to be made by firms and fund managers before the end of the transition period. The FCA expects there will also be an opportunity for fund managers to update their previously submitted notifications, if necessary.

  • COVID-19 Regulatory Measures

    FCA publishes Statement on COVID-19 (coronavirus)

  • On 6 March 2020, the Financial Conduct Authority (FCA) published a statement on COVID-19 (coronavirus), in conjunction with the Bank of England and HM Treasury.

    The FCA expects all firms:

    • to have contingency plans in place to deal with major events. Alongside the Bank of England, the FCA is actively reviewing the contingency plans of a wide range of firms. This includes assessments of operational risks, the ability of firms to continue to operate effectively and the steps firms are taking to serve and support their customers.
    • to take all reasonable steps to meet their regulatory obligations. For example, the FCA expects firms to be able to enter orders and transactions promptly into the relevant systems, use recorded lines when trading and give staff access to the compliance support they need. If firms are able to meet these standards and undertake these activities from backup sites or with staff working from home, the FCA has no objection to this.
  • FCA requests a delay to the forthcoming announcement of preliminary financial accounts

  • On  21 March 2020, the Financial Conduct Authority (FCA) published a letter, in which the FCA strongly requests all listed companies observe a moratorium on the publication of preliminary financial statements for at least two weeks. The FCA notes that:

    • The practice of issuing preliminary financial statements is common among UK-listed companies but is not required by either the Listing Rules or the Transparency Directive. Rather, the requirement is that companies publish full audited financial statements within four months of the financial year end. 
    • It is common to publish preliminary financial statements considerably earlier than the four months permitted for the filing of full financial statements.
    • A package of measures was confirmed that it aims at ensuring companies take the necessary time in these uncertain times to prepare appropriate disclosures and address current practical challenges and the three bodies intend to announce details shortly.
    • The Market Abuse Regulation remains in full force and listed companies are still required to announce inside information to the market as soon as possible unless a valid reason to delay disclosure under the regulation exists.

    This statement does not apply to Alternative Investment Market (AIM) companies. The FCA also published a FAQ regarding this announcement.

  • BoE publishes Market Notice - Activation of the Contingent Term Repo Facility

  • On 24 March 2020, the Bank of England (BoE) launches Contingent Term Repo Facility, a temporary enhancement to its sterling liquidity insurance facilities.

    This step is designed to help alleviate frictions observed in money markets in recent weeks, both globally and domestically, as a result of the economic shock caused by the outbreak of COVID-19.   The CTRF is a flexible liquidity insurance tool that allows participants to borrow central bank reserves (cash) in exchange for other, less liquid assets (collateral).  

    The Bank’s liquidity insurance facilities support financial market functioning by providing market participants with predictable and reliable sources of liquidity.  The Bank’s liquidity insurance facilities support financial stability by reducing the cost of disruption to critical financial services.

    Holding additional CTRF operations over the next two weeks complements the Bank’s existing liquidity facilities.  The CTRF will run alongside the Bank’s regular sterling market operations - the Indexed Long-Term Repo (CTRF) and Discount Window Facility (DWF).  The Bank is also able to lend in all major currencies through its participation in the central bank swapline network.  

  • FCA publishes statement on the impact of the coronavirus on firms’ LIBOR transition plans

  • On 25 March 2020, Financial Conduct Authority (FCA) published its statement on the impact of the coronavirus on firms’ LIBOR transition plans, in particular:

    • The central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed and should remain the target date for all firms to meet.
    • Alongside other international authorities, the Bank of England, FCA and Working Group will continue to monitor and assess the impact on transition timelines, and will update the market as soon as possible.
  • FCA publishes Joint statement on series of actions to ensure information continues to flow to investors and support the continued functioning of the UK’s capital markets

  • On 26 March 2020, the Financial Conduct Authority (FCA) informed that, in response to the current situation of COVID-19, the Financial Conduct Authority (FCA), Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) provide a series of actions to ensure information continues to flow to investors and support the continued functioning of the UK’s capital markets. This includes:

    • A statement by the FCA allowing listed companies an extra 2 months to publish their audited annual financial reports. Further measures to allow companies and auditors to focus on the delivery of information to investors and the capital markets include:
      (i) Delaying the filing of accounts by companies
      (ii) Postponement of auditor tenders.
      (iii) Postponement of audit partner rotation.
      (iv) Reduction of FRC demands on companies and audit firms.
      (v) Extension of reporting deadlines for public sector bodies.
    • Guidance from the FRC for companies preparing financial statements in the current uncertain environment, complemented by guidance from the PRA. To  maintain  effective decision making in the interests of the company, their workforce and other business partners, the FRC encourages Boards to:
      (i) Develop and implement mitigating actions and processes to ensure that they continue to operate an effective control environment: in particular, addressing any key reporting and other controls on which they have placed reliance historically, but which may not prove effective in the current environment.
      (ii) Consider how they will secure reliable and relevant information, on a continuing basis, in order to manage their future operations and those of their workforce and suppliers, including the flow of financial information from significant subsidiary, joint venture and associate group entities.
      (iii) Pay attention to capital maintenance, ensuring that sufficient reserves are available when the dividend is made, not just proposed.
    • Guidance from the FRC for audit firms seeking to overcome challenges in obtaining audit evidence.
  • PRA publishes Statement on VAR back-testing exceptions temporary approach

  • On 30 March 2020, the Prudential Regulation Authority (PRA) published its Statement on Temporary approach to VAR back-testing exceptions to mitigate the possibility of excessively pro-cyclical market risk capital requirements. 

    The PRA is aware that the exceptional levels of market volatility over the past few weeks have led to an elevated level of VAR back-testing exceptions across the industry. In order to mitigate the possibility of excessively pro-cyclical market risk capital requirements through the automatic application of a higher VAR multiplier (ie mc and ms, as defined in CRR Article 366), the PRA will allow firms – on a temporary basis – to offset increases due to new exceptions through a commensurate reduction in risks-not-in-VAR (RNIV) capital requirements. 

    The PRA’s temporary approach is relevant to firms experiencing an elevated level of VAR back-testing exceptions. This approach will be reviewed by the PRA after 6 months.

  • BoE informs on the Extension of the Contingent Term Repo Facility (CTRF)

  • On 30 March 2020, the Bank of England (BoE) announced that it will continue to offer the Contingent Term Repo Facility (CTRF) on a weekly basis through April 2020. 

    3-month term CTRF operations will continue to run weekly until 30 April. In addition, beginning this week there will also be a 1-month term CTRF operation each week, with the final operation scheduled on 1 May.

    The Bank will continue to monitor market conditions carefully and the operation of the CTRF remains under review.  The Bank stands ready to take additional action if necessary.

  • PRA publishes statement on deposit takers’ approach to dividend payments, share buybacks and cash bonuses in response to COVID-19

  • On 31 March 2020, Prudential Regulation Authority (PRA) published its statement on deposit takers’ approach to dividend payments, share buybacks and cash bonuses in response to COVID-19.

    The PRA welcomes the decisions by the boards of the large UK banks to suspend dividends and buybacks on ordinary shares until the end of 2020, and to cancel payments of any outstanding 2019 dividends in response to a request from the PRA.

    The PRA also expects banks not to pay any cash bonuses to senior staff, including all material risk takers, and is confident that bank boards are already considering and will take any appropriate further actions with regard to the accrual, payment and vesting of variable remuneration over coming months.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    UK Government consults on new equivalent regimes for UCITS and money market funds

  • BACKGROUND

    On 11 March 2020, Her Majesty's Treasury (HM Treasury) Department of the Government of the UK launched a consultation on the proposal for a more streamlined regime to simplify the process for allowing investment funds set up overseas to be marketed in the UK (so-called overseas funds regime or OFR).

    After the end of Brexit’s transition period, funds will have to gain permanent market access into the UK.


    WHAT'S NEW?

    Considering the operational challenge for both funds and the UK Financial Conduct Authority (FCA), the proposed regime intends to establish a more appropriate basis by introducing two new regimes based on the principle of equivalence:

    1) To recognize overseas retail funds, including European Undertakings for Collective Investment in Transferable Securities (EU UCITS):

    - A degree of flexibility: grant equivalence for retail funds to an overseas country if it judges that the outcome of “equivalent investor protection” is at least met.

    - UCITS management passport: It is possible for retail funds to be managed in a different country to that in which it is domiciled, for example via the UCITS management passport. The government proposes that such arrangements may be acceptable.

    - Register with the FCA to gain recognition: Retail funds from a country with an equivalence determination, and which fall within the specified category of funds, will need to register, which ordinarily take two months, following receipt of a completed registration form, to either confirm, or provide reasons why the fund is not eligible.

    2) To provide market access for money market funds (MMFs):

    - Condition: equivalence will be granted to a country is that regulatory regime must be at least equivalent to the regulations that apply to UK MMFs.

    - The market access granted to MMFs will depend on whether the MMF intends to market to retail or professional clients:

    *MMFs that are structured as retail funds (such as UCITS) and wish to market to both retail and professional clients, or

    *Overseas MMFs from a country with an equivalence determination that wish to market to professional clients. 

    It is worth noting that retail investment funds that are not covered by the OFR will still be able to apply for recognition on an individual basis under section 272 of the of the Financial Services and Markets Act 2000 (FSMA).


    WHAT'S NEXT?

    All interested parties should send comments for this consultation by 11 May 2020.

    Asset management firms are requested to respond to the questions set out in Chapter 8 relating to the structure of the market and their own business operations.

    The government will analyze responses to this consultation and bring forward a Financial Services Bill, which will include this new overseas funds regime.

  • INTERNATIONAL

    COVID-19 Regulatory Measures

    BIS announces deferral of Basel III implementation to increase operational capacity of banks and supervisors to respond to COVID-19

  • BACKGROUND

    On 27 March 2020, the Bank of International Settlement (BIS) announced the deferral of Basel III implementation to increase operational capacity of banks and supervisors to respond to COVID-19. 

    The Basel Committee's oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS), has endorsed a set of measures to provide additional operational capacity for banks and supervisors to respond to the immediate financial stability priorities resulting from the impact of the coronavirus disease (COVID-19) on the global banking system.


    WHAT'S NEW?

    Changes in the implementation timeline the outstanding Basel III standards:

    • The implementation date of the Basel III standards finalized in December 2017 has been deferred by one year to 1 January 2023.
    • The accompanying transitional arrangements for the output floor has also been extended by one year to 1 January 2028.
    • The implementation date of the revised market risk framework finalized in January 2019 has been deferred by one year to 1 January 2023.
    • The implementation date of the revised Pillar 3 disclosure requirements finalized in December 2018 has been deferred by one year to 1 January 2023.

    The revised timeline is not expected to dilute the capital strength of the global banking system, but will provide banks and supervisors additional capacity to respond immediately and effectively to the impact of COVID-19.


    WHAT'S NEXT?

    The Committee will continue to closely monitor the impact of Covid-19 on banks and supervisors and respond as necessary in coordination with the Financial Stability Board and other standard-setting bodies on cross-cutting issues.

  • European Market Infrastructure Regulation (EMIR)

    ISDA publishes Operational Considerations to take concerning EMIR Refit

  • On 13 March 2020, the International Swaps and Derivatives Association (ISDA) published a document indicating Operational Considerations FCs and NFCs may need to take in order to adhere to EMIR Refit requirement concerning legal liability for reporting of entities.

    EMIR Refit was published in the Official Journal of the European Union (OJ) on 28 May 2019 (and came into force on 18 June 2019), and introduced a requirement whereby financial counterparties (FC) will be responsible and legally liable for the timely and accurate reporting of over-the counter (OTC) derivative contracts on behalf of both themselves and their non-financial counterparties (NFC) that are not subject to the clearing obligation.

    This requirement raises several operational challenges and points to be considered by both FC and NFC- entities. This document captures some of these operational considerations and potential steps FCs and NFCs may need to take (as identified by the ISDA Data and Reporting EMEA Working Group) in order to adhere to this EMIR Refit requirement.

  • CONTACTS

    This publication is produced by the Projects & Regulatory Monitoring teams as well as experts from the Legal Department and the Compliance Department of CACEIS entities, together with the closed support of the Communications Department.

    Editors
    Gaëlle Kerboeuf, CACEIS Group Legal Manager - Projects & Regulatory Monitoring
    Pauline Fieni, CACEIS Compliance - General secretary, Projects & Regulatory Monitoring

    Permanent Editorial Committee
    Gaëlle Kerboeuf, CACEIS Group Legal Manager - Projects & Regulatory Monitoring
    Pauline Fieni, CACEIS Compliance - General secretary, Projects & Regulatory Monitoring
    Corinne Brand, Group Communications Manager

    Local Expert Correspondents
    Jennifer Yeboah, Team Manager Legal (CACEIS Belgium)
    François Honnay, Head of Legal and Compliance (CACEIS Bank Belgium Branch)
    Tania Deltchev, Head of Legal (France)
    Stefan Ullrich, Head of Legal (Germany)
    Robin Donagh, Legal Advisor (Ireland)
    Razanajafy (Fara) Francois-Sim, Head of Compliance (CACEIS Ireland Limited)
    Costanza Bucci, Head of Legal & Compliance (Italy)
    Agathe Doleans, Deputy Chief Compliance Officer (Luxembourg)
    Fernand Costinha, Head of Legal (Luxembourg)
    Gérald Stadelmann, Head of Legal (Luxcellence Luxembourg)
    Mireille Mol, Legal & Compliance (Netherlands)
    Alessandra Cremonesi, Legal Fund Structuring (Switzerland)
    Samuel Zemp compliance office (CACEIS Bank Switzerland Branch) 
    Neil Coxhead, Managing Director, UK Branch & Head of Regional Coverage – Ireland, North America & UK

    Design

    CACEIS Group Communications

    Photos credit
    CACEIS, Adobe Stock

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