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
AIFMD: EMIR publishes passporting opinion
ESMA has published its advice relating to the extension of the AIFMD passport to non-EEA
AIFMs and its opinion on the functioning of the passport for EU AIFMs and the national private
placement regimes (NPPRs). In preparing its advice, ESMA assessed six jurisdictions: Guernsey,
Hong Kong, Jersey, Singapore, Switzerland and the US. It concludes that there are no obstacles to
extending the passport to Guernsey and Jersey, and no obstacles relating to Switzerland once
certain amendments have been made to the Federal Act on Stock Exchanges and Securities
Trading. However, ESMA said it could not recommend giving a passport to hedge funds from the
US because it risked creating uneven competition. There were also "significant" obstacles
regarding investor protection and monitoring systemic risk. With regard to its opinion, ESMA
makes the following points: (i) the delay in the implementation of the AIFMD, together with the
delay in transposition in some member states, make a definitive assessment difficult and therefore
recommends preparation of a further opinion on the functioning of the passport and the
functioning of the NPPR regime after a longer period of implementation in all Member States; (ii)
greater convergence is required in the definition of ‘marketing’ and marketing rules in general;
and (iii) there is insufficient evidence to indicate any major issues raised by the NPPRs. ESMA
suggests that institutions may wish to consider waiting until it has delivered positive advice on a
sufficient number of third countries before introducing the passport to avoid any adverse market
impact that a decision to extend the passport to only a few non-EU countries might have.
Cayman draft bills create regimes to opt-in to AIFMD reporting
The Cayman Island’s government has published two draft bills which create regimes to allow
managers to opt-in to reporting consistent with the AIFMD requirements. The bills will make
changes to both the Mutual Funds Law (MFL) and Securities Investment Business Law (SIBL).
The regimes will regulate both EU connected funds and EU connected managers which are
consistent with the AIFMD, which will give funds and managers based on the Cayman Islands the

2. option to elect an extra layer of regulation that is consistent with relevant requirements of
AIFMD. The regimes are due to come into law during August 2015.
AIFMD Annex IV reporting
The FCA has published Q&As containing information on reporting under Annex IV of the
AIFMD. The aim of the Q&As is to make it easier for firms to submit accurate, consistent and
complete data and they are relevant to full-scope UK AIFMs, small authorised UK AIFMs, small
registered UK AIFMs, above-threshold non-EEA AIFMS and small non-EEA AIFMs marketing
in the UK under the national private placement regime (NPPR). The Q&As: (i) cover aspects of
transparency reporting where questions have been misinterpreted by some AIFMs; (ii) identify
where AIFMs have provided inconsistent responses to connected questions; and (iii) provide
further information on the general use and functionality of GABRIEL.
OTC derivatives reform
The Financial Stability Board has published its ninth report on progress made by standard-setting
bodies, national and regional authorities and market participants towards meeting the G20
commitments for reforms to global OTC derivatives markets. The report finds that
implementation of the reforms is well underway, with the foundational authority needed to give
effect to the full range of these reforms in most FSB member jurisdictions. The report notes that:
(i) implementation of reforms is most advanced for trade reporting and for higher capital
requirements for non-centrally cleared derivatives; (ii) there has been further incremental progress
to promote central clearing of standardised OTC derivatives; (iii) few jurisdictions have
regulatory frameworks in place to promote execution of standardised contracts on organised
trading platforms; and (iv) most jurisdictions are only in the early phases of implementing the
joint IOSCO and BCBS framework for margin requirements for non-centrally cleared derivatives.
Code of conduct in FX markets
The BIS has announced that the Foreign Exchange Working Group (FXWG) has been established
to strengthen code of conduct standards and principles in the FX markets. The FXWG has
commenced two workstreams, namely: (i) drafting a new single global code of conduct by
harmonising common elements of existing FX codes, as well as drafting new principles for those
areas not adequately covered in existing codes; and (ii) developing proposals to promote and
incentivise adherence to the new single global code of conduct. The target date for finalising the
code, as well as the proposals to ensure greater adherence, is May 2017.
REMIT and approval of first RRMs
The Agency for the Cooperation of Energy Regulators (ACER) has approved the first five third-
party registered reporting mechanisms (RRMs) under the Regulation on wholesale energy market
integrity and transparency (REMIT). RRMs can report records of transactions and orders to trade,
as well as fundamental data, on behalf of market participants directly to ACER. ACER’s press
release also includes details on how to report trades and orders, and invites stakeholders to a
public workshop on REMIT implementation on 8 September 2015, in the light of REMIT
reporting starting on 7 October 2015.

3. IMF on Greek bailout
The IMF will not join a new bailout program for Greece until conditions for debt sustainability,
including debt relief and economic reforms, are clearly assured. According to reports, the IMF
can only support a financial rescue program "that is comprehensive" and as detailed plans for debt
relief would not come for some months under current arrangements, the IMF would not be able to
commit to join in funding the new bailout until then. The statement came as representatives of
Greece's official creditors, the IMF, European Commission, European Central Bank and the
European Stability Mechanism, began meetings to prepare the proposed new €86 billion bailout
programme.
Cummings
Tel: + 44 20 7585 1406
Mob: + 44 7734 057 327
www.cummingslaw.com
31 July 2015