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FCA discussion paper on dealing commission
The FCA has published a discussion paper on the use of dealing commission
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Euro shorts 11.07.14 including France clarifies marketing regime for AIFs in France & European Commission updates EMIR FAQS

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Euro shorts 11.07.14 including France clarifies marketing regime for AIFs in France & European Commission updates EMIR FAQS

  1. 1. Welcome to Euro Shorts, a short briefing on some of the week’s developments in the financial services industry in Europe. If you would like to discuss any of the points we raise below, please contact me or one of our other lawyers. Claire Cummings 020 7585 1406 claire.cummings@cummingslaw.com www.cummingslaw.com France clarifies marketing regime for AIFs in France The AMF, the French Securities Regulator, has issued guidance (DOC-2014-03) on the procedures for marketing shares and units of AIFs in France. In doing so, the AMF brings welcome clarity to the French position with respect to the marketing of AIFs, in particular under the AIFMD. In publishing its guidance, the AMF has sought to issue a consolidated document covering the marketing of various types of funds in various situations. European Commission updates EMIR FAQs The European Commission has updated its FAQs on EMIR this week. The Commission has included a new section IV relating to EU CCPs. The section contains one question relating to whether non-EU clearing members of EU CCPs providing services to clients are subject to the segregation requirements in Article 39 of EMIR. The Commission confirms that under Article 39(5), clearing members must offer their clients, at least, the choice between omnibus client segregation and individual client segregation and inform them of the costs and level of protection associated with each option. The references to clearing members in Article 39 are not limited to EU clearing members, so all clearing members of EU CCPs are required to comply.
  2. 2. FCA discussion paper on dealing commission The FCA has published a discussion paper on the use of dealing commission regime for investment managers. The paper (DP14/3) reports on the FCA’s review as to how the use of dealing commission, in particular for the purpose of research, currently functions and concludes that the findings of the review support the case for structural change. The review found that while some investment managers have improved their governance over how they purchase research with dealing commissions, there are still too few firms applying sufficient rigour in assessing the value of the research services they use and there is a lack of price transparency in the market for research due to the way the market has evolved, and the bundled supply of execution and research services by brokers makes price discovery difficult. Overall, the FCA concludes that unbundling research from dealing commissions would be the most effective option. Responses are requested by 10 October 2014. MiFID II fears During a meeting chaired by ESMA in Paris this week, concerns have apparently been raised by attendees that MiFID II could cause serious problems for banks, brokers and other market participants in the run up to the January 2017 implementation. The ESMA hearing covered market structure issues, investor protection and commodity derivatives. Potential issues highlighted by participants included problems with attempting to apply level one MiFID II principles to non-equity asset classes such as fixed income, FX and OTC transactions, a possible lack of distinction between retail and institutional investors, issues with the rules that should apply to trading algorithms, and anxiety about whether ESMA will allow sufficient time for market participants to prepare. Doubts increase for eurozone recovery this year According to reports, Germany’s faltering economy has cast further doubt over the eurozone’s prospects for recovery this year. Other Member States, such as France, also show little prospect of a strong rebound. There are concerns that the region faces permanent slow growth and no price inflation, as Germany’s economy is not growing strongly enough to sustain a recovery across the eurozone as a whole. Britain, on the other hand, has underlined its robust recovery, according to June figures, with the strongest quarterly growth in four years. There is a wider debate across the EU about whether to shift the policy focus towards spending and away from spending cuts and austerity, with Italy’s PM leading a drive for greater flexibility in the face of Germany’s focus on
  3. 3. thrift. Cayman Islands enacts FATCA regulations The Cayman Islands government has issued Regulations seeking to implement the provisions of the FATCA IGAs entered into between the Cayman Islands and each of the U.S. and the UK. The majority of affected Cayman Islands financial institutions have until the end of 2014 to register with the IRS for their Global Intermediary Identification Numbers ("GIIN"), although they are being encouraged to submit GIIN registrations sooner rather than later. Keler added as CCP under EMIR The European Securities and Markets Authority (ESMA) has updated its list of central counterparties (CCPs) with the addition of Keler CCP, the Hungarian clearing house. With the authorisation of Keler CCP, there are now nine CCPs authorised under EMIR. Cummings Tel: + 44 20 7585 1406 Mob: + 44 7734 057 327 www.cummingslaw.com 11 July 2014

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