Regulatory Insights • Funds-Axis Limited

SEC Adopts Modernized Regulatory Framework for Derivatives Use

Regulatory Insights, Risk MonitoringBy Trevor Dempster 30 October 2020

On Wednesday, the Securities and Exchange Commission (SEC) approved 3 to 2, the 458 page derivative use rules aimed at enhancing the regulatory framework for derivatives in the U.S. The Investment Company Act limits the ability of registered funds and business development companies to engage in transactions that involve potential future payment obligations, including obligations under derivatives such as forwards, futures, swaps and written options. The new rules, which apply to mutual funds, exchange-traded funds (ETFs), close-end funds, as well as business development companies, will permit funds to enter into these transactions if they comply with certain conditions outlined below, which are designed to increase investor protection.

AIFMD II Consultation

Investment Compliance, Regulatory InsightsBy Trevor Dempster 26 October 2020

On 22nd October 2020, the European Commission (EC) published the much anticipated consultation on the Alternative Investment Fund Managers Directive (AIFMD).

CP86 Thematic Review and Conclusions

Investment Compliance, Regulatory InsightsBy Trevor Dempster 23 October 2020

On 20th October 2020, the Central Bank of Ireland (CBI) published a letter to all UCITS management companies, authorised Alternative Investment Fund Managers (AIFMs), self-managed UCITS investment companies and internally managed Alternative Investment Funds which are authorised AIFMs. The letter sets out the CBI’s conclusions of its thematic inspection of compliance with its Fund Management Companies Guidance, which concluded the three-part CP86 consultation process.

Further Liquidity Regulatory Scrutiny Needed

Regulatory Insights, Risk MonitoringBy Trevor Dempster 15 October 2020

Last month it was great to see a number of key liquidity developments finally enter into force, including: ESMA’s new guidelines on liquidity stress testing in UCITS and AIFs, The FCA’s new rules for certain open-ended funds investing in inherently illiquid assets; and Article 37 MMF Reporting for both Q1 and Q2.

Ignorance is not bliss – a timely reminder that derivatives ARE included!

Investment Compliance, Regulatory InsightsBy Trevor Dempster 15 October 2020

Yesterday, the Financial Conduct Authority (FCA) fined a Hong Kong hedge fund just over £870,000 for failing to disclosure its net short position in Premier Oil Plc. This is the first time the FCA has taken enforcement action for a breach of the SSR.

Canada Guidance on Effective Liquidity Risk Management for Investment Funds

Regulatory Insights, Risk MonitoringBy Trevor Dempster 24 September 2020

The Canadian Securities Administrators (CSA) has published guidance to help investment fund managers (IFMs) develop and maintain effective liquidity risk management (LRM) frameworks for investment funds.

September Liquidity Deadlines: Reminder on Funds Investing in Inherently Illiquid Assets

Regulatory Insights, Risk MonitoringBy Trevor Dempster 14 September 2020

The 30 September compliance deadline is fast approaching for a number of liquidity developments. Including: ESMA’s new guidelines on liquidity stress testing in UCITS and AIFs. The FCA’s new rules for certain open-ended funds investing in inherently illiquid assets. FCA and Bank of England survey to review the liquidity mismatch in open ended funds Article 37 MMF Reporting for both Q1 and Q2.

Assessing the Assessment of Value Reports

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 11 September 2020

It’s been almost a year since the FCA Assessment of Value rules came into force, and many firms would say that due to the FCA’s limited guidance thus far, they are still no clearer as to what a good value statement look like.

PRIIPs: What’s Been Happening?

Fund Documents, Regulatory InsightsBy Trevor Dempster 27 August 2020

Of all the new regulations we have seen over the last few years, few have been as controversial or as polarising as the KID requirements under the regulation for Packaged Retail and Insurance-based Investment Products (PRIIPs).

ESMA’s AIFMD Recommendations – A Specific Look at Delegation

Regulatory Insights, Regulatory ReportingBy Trevor Dempster 25 August 2020

As discussed in our previous blog , ESMA has written to the European Commission ahead of the EU executive’s review of the AIFMD regulation. Although ESMA has recommended a raft of potential changes, one area that appears to be garnering particular attention, is the issue of delegation and substance.

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