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Regulatory Round-up


AML: Fourth Anti-Money Laundering Directive

In our October e-zine we reported on the European Commission’s proposal to bring forward the transposition date of the Fourth EU Anti-Money Laundering Directive (EU 2015/849) (AMLD4), to 1 January 2017. A compromise proposal from the EU Council Presidency on 28 October 2016 suggests that both 4AMLD and the proposed amendment (referred to as 5AMLD) be transposed together by 26 June 2017.

Central Bank of Ireland

On 4 November 2016, the Central Bank published the sixth edition of its Markets Update series. It includes: updates on the Central Bank’s new Transparency Rules; a number of ESMA and EBA updates regarding MiFIR and MiFID II, corporate governance, and CRD IV/CRR.

View Markets Update here


On 28 October 2016, the European Banking Authority and the European Securities and Markets Authority launched a consultation on Guidelines on the Assessment of the Suitability of the Members of Management Body and Key Function Holders (“Guidelines”). The draft Guidelines aim at further improving and harmonising suitability assessments within the EU financial sectors and so ensure sound governance arrangements in financial institutions. The draft Guidelines:

  • Provide common criteria to assess the individual and collective knowledge, skills and experience of members of the management body as well as the good repute, honesty and integrity, and independence of mind of members of the management body
  • Require members of the management body to commit sufficient time to perform their duties and specify how the number of directorships held by members of the management body should be counted, for significant institutions
  • Set out how different aspects of diversity, educational and professional background, age, gender and geographical provenance should be taken into account in the recruitment process
  • Highlight the importance of induction and training to ensure the initial and ongoing suitability of members of the management body, and call for institutions to establish training policies and to allocate appropriate financial and human resources to induction and training

The consultation closes on 28 January 2017

The following consultations have now closed:

  • European Commission’s consultation on cross-border investment fund distribution
  • IOSCO’s consultation on good practices for the termination of investment funds
  • Central Bank of Ireland’s Discussion Paper on the Payment of Commission to Intermediaries


UCITS: Guidelines on Sound Remuneration Policies

On 14 October 2016, ESMA published Guidelines on sound remuneration practices under the UCITS Directive and Guidelines on sound remuneration practice under AIFMD. The Guidelines apply from 1 January 2017. National Competent Authorities (NCAs) must notify ESMA whether they comply or intend to comply with the Guidelines, with reasons for non-compliance, within two months. ESMA will publish a compliance table based on the responses from the NCAs.

See our detailed article here


On 12 October 2016, ESMA published an updated version of its UCITS Q&A. The Q&As have been amended to include information about:

  • The meaning of a “regulated market” under the UCITS Directive. New Q3a confirms that a Multi-lateral Facility is a regulated market for the purposes of the UCITS framework, provided it meets the requirements set out in Article 50(1)(b).
  • Translation requirements relating to remuneration disclosure. New Q7: providing that in the case of cross border distribution the information on the remuneration policy that must be made available on a website (pursuant to UCITS V) should be translated at the option of the UCITS into one of the following languages:
    • The official language, or one of the official languages, of the UCITS host Member State
    • A language approved by the competent authorities of that Member State
    • A language customary in the sphere of international finance

Therefore the information does not need to be translated into the same language as the KIID has been translated into and falls within the category of information or other documents other than the KIID per Article 94(1)(c) of the UCITS Directive.

  • Collateral management: New Q6o, which confirms that where a UCITS invests cash collateral in short-term money market funds, this investment should be treated in the same way as any other investment made by the UCITS in units of other UCITS or other collective investment undertakings and should be compliant with all the requirements of the UCITS Directive. Therefore, it must be included when calculating the 10% limit.
  • There is also a new section on reporting under Securities Financing Transactions Regulation (SFTR) which confirms that the information to be included in the periodic reports of UCITS and AIFs pursuant to the SFTR should be included in the next annual or half-yearly report to be published after 13 January 2017 and which may relate to a reporting period beginning before that date. Therefore 2016 financials may be in scope.

Benchmarks Regulation

On 10 November 2016, the European Securities and Markets Authority (ESMA) finalised its technical advice to the European Commission on some of the key aspects of the future rules for benchmarks.

Specifically, ESMA provided advice on:

  • How benchmarks’ reference values can be calculated by using data reporting structures under existing EU rules. ESMA recommends that data collected from current and forthcoming reporting structures under EMIR, MiFID II, UCITS and the AIFMD (Alternative Investment Fund is used to calculate the reference value of benchmarks.
  • Some of the criteria for deciding when third country benchmarks can be endorsed for use in the European Union (EU).
  • What constitutes making a benchmark figure available to the public.

The European Commission will prepare the final rules for benchmarks which should enter into force by 1 January 2018. A second Final Report dedicated to the technical standards under the Benchmarks Regulation is planned to be published by 1 April 2017.

Contributed by Audrey Giles