AIFM DIRECTIVE: ESMA CONSULTATION PAPER
|
|
- Shanon Miller
- 8 years ago
- Views:
Transcription
1 AIFM DIRECTIVE: ESMA CONSULTATION PAPER On 13th July ESMA published its consultation on the implementation measures for the Alternative Investment Fund Managers Directive (AIFMD). The AIFM Directive aims at establishing common requirements governing the authorisation and supervision of Alternative Investment Fund Managers (AIFMs) in order to provide a coherent approach to the related risks and their impact on investors and markets in the European Union. The Directive is designed to cover AIFMs managing all types of funds that are not covered by the UCITS Directive 2009/65/EC. It is not intended to regulate Alternative Investment Funds (AIFs) themselves. The Directive outlines: Operating conditions for AIFMs (including duty of care, remuneration, conflict of interest management, initial capital and own funds, risk management and liquidity management). Organisational requirements (valuation of assets, delegation to third parties, appointment of depositary). Transparency requirements (annual reports, disclosure to investors, reporting obligations to competent authorities). AIFMs managing specific types of AIFs (leveraged funds, funds acquiring non-listed companies including asset stripping rules). Marketing arrangements rules. In a speech by Sheila Nicoll, Director of Conduct Policy at the FSA 1 she highlighted the big issues in regards to the consultation document as being depositaries, leverage, transparency, risk management, valuation and capital/prudential framework. Lockton Comment: As insurance brokers, we would like to take the opportunity to respond and comment on: Risk management & formal risk management frameworks including commenting on Box 6 where ESMA has provided a description of potential professional negligence risks. Our views on how Professional Indemnity insurance (PII) can be used to cover against potential liability risks arising from professional negligence. This includes outlining the steps AIFMs would need to go through and commentary on Box 9 in the ESMA consultation paper p33. ESMA Consultation Question Q9 and Q15. Our thoughts to consider for 2013 PII insurance placements. 1
2 Risk Management - Private Equity and formal risk management frameworks The Directive clearly places operational risk management framework as an important tool to ensure consistency of approach and clear identification of the risks faced and created by the AIFM and its investors. This requirement is in line with other regulated sectors of the financial industry and it is of no surprise that the overall approach taken to the draft advice on general operating conditions has been to align the requirements as much as possible with the existing provisions in the UCITS Directive and Markets in Financial Instruments Directive (MiFID) 2 Part of the common requirements is the requirement of Internal Capital Adequacy Asset Protection (ICAAP). Article 9, Initial Capital and own funds 3 of the AIFM Directive requires: That Member States shall require that an AIFM which is an internally managed AIF has an Initial capital of at least EUR300,000 and where the value of the portfolios of AIFs managed by the AIFM exceeds EUR250million, the AIFM shall provide an additional amount of own funds. That additional amount of own funds shall be equal to 0,02 % of the amount by which the value of the portfolios of the AIFM exceeds EUR 250million but the required total of the initial capital and the additional amount shall not, however, exceed EUR10million. Using Professional Indemnity insurance (PII) to cover against potential liability risks arising from professional negligence. Article 9, section 7 of the AIFM Directive goes on to states: To cover potential professional liability risks resulting from activities AIFMs may carry out pursuant to this Directive, both internally managed AIFs and external AIFMs shall either: a) have additional own funds which are appropriate to cover potential liability risks arising from professional negligence; or b) hold a professional indemnity insurance against liability arising from professional negligence which is appropriate to the risks covered. Lockton comment: The steps under the AIFM directive for using PII to cover professional negligence liability risks include: Step 1: Step 2: Step 3: Step 4: Step5: Risk Identification: to specify the risks which must be covered (an important output from the risk management framework) Confirm additional amount of own funds required for ICAAP to cover potential professional liability risks resulting from activities AIFMs may carry out pursuant to this Directive To work out whether the AIFM wants to use their own funds or buy PII to cover potential professional liability risks resulting from activities AIFMs may carry out pursuant to the Directive To validate that the PII insurance is fit for purpose or if not, confirm appropriateness of the additional own funds To have a procedure in place to update PII in line with ongoing adjustments. 2 Introduction and background point 7. General operating conditions pg 9 ESMA Consultation paper 3 Article 9, section 1 & 3
3 Step 1: Risk Identification The Directive wants to ensure that the risks associated with each investment position of the AIF and their overall effect on the AIF s portfolio can be accurately identified, measured and monitored at any time through stress testing procedures 4. This concerns mainly due diligence requirements and implementing the appropriate risk management systems. Part of the appropriate risk management system requires the implementation of appropriate internal control mechanisms for operational risks and this should include the identification of professional liability risk. ESMA has provided a description of potential risks in Box 6 5 : 1. The AIFM must be able to cover the potential liabilities arising from professional negligence. 2. The potential liabilities risks to be covered are the risk of losses arising from the activities of the AIFM for which the AIFM has legal responsibility. Those particularly a) Risks in relation to fraud Losses due to dishonest, fraudulent or malicious acts by relevant persons. b) Risks in relation to investors, products, and business practices: Losses arising from a negligent failure to meet a professional obligation to specific investors and clients. Those risks particularly include i. negligent loss of documents evidencing title of assets of the AIF ii. misrepresentations and misleading statements made to the AIF or its investors by the AIFM or relevant persons iii. negligent acts, errors or omissions by the AIFM resulting in a breach of: a. obligations according to law and regulatory framework b. duty of skill and care to the AIF when carrying out its professional activities c. obligations of confidentiality d. AIF rules or instruments of incorporation e. terms of its appointment by the AIF iv. improper valuation of assets and calculation of unit/share prices c) Risks in relation to business disruption, system failures, process management: Losses arising from negligent failure resulting in or not adequate prohibiting the disruption of business or system failures, from failed transaction processing or process management 4 Article 15, 3(b) 5 Pg 33 ESMA Consultation paper
4 Lockton Comment: In relation to Box 6: 1 The most frequently alleged liability arising from investors resulting from professional negligence include: Breach of fiduciary duty Breach of contract Securities fraud In addition, professional service risks for private equity firms include allegations of breach of duty of skill and care to the portfolio companies and/or their creditors. 2 In reference to 2(a): Exposure to Third Party Fraud can be insured The insurance will have to recognise that the AIF is a third party Fraud committed by key persons is generally not insured except for defence cost and more commonly under a Directors and Officers policy. First party fraud would normally be covered under a crime policy. In reference to 2(b): Losses arising from a negligent failure to meet a professional obligation to specific investors and clients in relation to investors, products, and business practices can be insured In reference to 2(b)(i): Negligent loss of documents is often included under a crime policy or a PI policy. Care would need to be taken to explicitly include this cover under the PII. Note: cover for loss of documents is often covered by way of a carve-back to the property damage exclusion. In reference to 2(b)(ii): Where misrepresentation and/or misleading statements made to the AIF or its investors are made by a relevant person(s) - consideration needs to be given as to the document the misrepresentations or misleading statements were made in cover for this risk is often covered under a prospectus liability extension under a Directors and Officers policy (where the relevant person would be legally liable for the misrepresentation or misleading statement). Care would need to be given in regards to allocation clauses in the insurance policy and confirmation cover is granted under the PII policy. In reference to 2(c): Exposure to losses arising from negligence failure resulting in or not adequately prohibiting the disrupting of business or system failures, from failed transaction processing or process management can be insured. Consultation Questions asked by ESMA: Q9: The risk to be covered according to paragraph 2 (b)(iv) of Box 6 (the improper valuation) would also include valuation performed by an appointed external valuer. Do you consider this as feasible and practicable? We would assume it is common market practice to have valuations signed-off by an auditor however it is unclear whether this would be deemed an appointed external valuer. However, if a claim for negligence against the AIFM involved improper valuation preformed by an appointed external valuer, then the insurer will reserve their rights to subrogate against the external valuer in the name of the AIFM.
5 Step 2: Calculation on amount required to cover potential professional liability risks resulting from activities AIFMs may carry out pursuant to this Directive ESMA has been requested to advise on methods for calculating the respective amounts of additional own funds or the coverage of the professional indemnity insurance. Suggestions received from interested parties on how to calculate the amount required to cover potential professional liability risks included using the Insurance Mediation Directive 6 or Article 7 of Directive 2006/49/EC 7, however, ESMA has decided to use neither as a starting point because none of these provisions include a calculation method but rather set fixed amounts in figures. ESMA has suggested 8 : On the calculation of additional own funds, the advice provides two options: the first is based on the variable assets under management (AuM), while the second also takes into account the variable income. The second option is therefore partially based on the approach taken in Annex X Directive Part /48/EC i.e. the Basic Indicator Approach, and includes the assumption that liability risks may not only rise with the value of the AIF s portfolios but also with the income of the AIFM. Accordingly, the additional own funds should be calculated as: Option 1: X AuM Option 2: x AuM x relevant net income Step 3: To work out whether you want to use your own funds or buy PII to cover potential professional liability risks resulting from activities AIFMs may carry out pursuant to this Directive Insurance has proved itself as an effective risk transfer mechanism. In fact, it could be argued, that the insurance industry historically has played its part of being an important stabilizer to the global financial system and economy especially where risk is transmitted to the insurance sector from another financial sector or when assisting economies recover from natural disasters (such as hurricanes, earthquakes and of late tsunamis) via indemnification of individual policyholders. Many EU Directives and other regulatory authorities require Professional indemnity insurance to safeguard financial stability so it is a valid and recognised method to replace capital adequacy requirements. 6 Insurance Mediation Directive: Insurance and reinsurance intermediaries shall hold professional indemnity insurance covering the whole territory of the Community or some other comparable guarantee against liability arising from professional negligence, for at least EUR applying to each claim and in aggregate EUR 1,500,000 per year for all claims 7 Article 7 of Directive 2006/49/EC: Coverage for the firms referred to in Article 3(1)(b)(iii) shall take one of the following forms: (a) initial capital of EUR ; (b) professional indemnity insurance covering the whole territory of the Community or some other comparable guarantee against liability arising from professional negligence, representing at least EUR applying to each claim and in aggregate EUR per year for all claims; or (c) a combination of initial capital and professional indemnity insurance in a form resulting in a level of coverage equivalent to that referred to in points (a) or (b). 8 P37 ESMA consultation paper
6 Step 4: To validate that the PII insurance is fit for purpose or if not, confirm appropriateness of the additional own funds Your insurance broker can assist in validating the insurance and confirme this via the Statement of Demands and Needs statement letter 9 provided to the insured. The process is threefold: 1 PII policy complies with the stipulated requirements. 2 PII coverage limit complies with the stipulated amounts (per claim and in the aggregate). 3 PII policy is reviewed at least once a year or in the event of a change which affects compliance. ESMA stipulates in Box 9, that the PII insurance must comply with the following terms: 1 As an alternative to the requirements in Box 8 paragraph 1 regarding additional funds, the AIFM may take out and maintain at all times professional indemnity insurance complying with the following requirements: a) Must have an initial term of no less than one year; b) Must be wide enough in cover to include the liabilities of the AIFM and relevant persons 10 ; (care needs to be given to definition of relevant person (c)) c) There are no exclusions regarding liability risks listed in Box 1; d) Any defined excess is covered by own funds e) The insurance is taken out by a regulated firm which has sufficient financial strength with regard to claims paying ability f) The insurance is provided by a third party entity The amount of coverage has two requirements: 2 COVERAGE OF THE INSURANCE PER CLAIM The minimum should at least be the higher of either: a) 0.75% of the amount by which the value of the portfolios of the AIFM exceeds 250million up to a maximum of 20million b) 2million 9 Required by the FSA as part of being a UK regulated insurance intermediary given to the customer (the AIFM) prior to the conclusion of the contract detailing the underlying reasons for any advice given to the customer on the policy. 10 relevant person means any of the following: a) A director, partner or equivalent, or a manager of the AIFM b) An employee of the AIFM, as well as any other natural person whose services are placed at the disposal and under the control of the AIFM and who is involved in the services of collective portfolio management by the AIFM c) A natural or legal person who is directly involved in the provision of services to the AIFM under a delegation arrangement to third parties for the purpose of the provision of collective portfolio management by the AIFM.
7 3 INSURANCE FOR CLAIMS IN THE AGGREGATE PER YEAR The minimum should at least equal the maximum of: a) 1% of the amount by which the value of the portfolio of the AIFM exceeds 250million, up to a maximum of 25million b) 2.5million c) The amount calculated for the additional own funds amount (Box 8) 4 The AIFM should review the policy and its compliance with the requirements at least once a year and in the event of any change which affects compliance of the policy with the requirements. Lockton Comment: In relation to Box 9: 1 In consideration of 1(b): cover for the relevant persons should only be extended to where the liabilities attach to the AIFM - especially where the legal person is a third party appointed by the AIFM or AIF for the purpose of the provision of collective portfolio management by the AIFM (refer to definition of relevant person c)) In consideration of 1(c) - We would recommend 1(c) be deleted considering the following: Exclusions re those liability risks listed in Box 1 is this meant to be Box 6? All insurance policies have exclusions so care would need to be given to defined the risks in Box 6 to make sure the insurance policy could be deemed as meeting the requirements. In the UK, cover for loss arising from fraud or dishonesty of an Insured Person (where a judgment has been established against them) is not able to be insured. There are also crimes which are uninsurable by law. It is worth noting most insurance policies will state that headings are descriptive only, therefore: exclusionary conditions are not always found in the exclusion section of the policy wording they can be found in a definition or conditions. In consideration of 1(e): the market practice for insurer security rating is: A-
8 Consultation Questions asked by ESMA: Q15: Would you consider it more appropriate to set lower minimum amounts for single claims, but higher amounts for claims in aggregate per year for AIFs with many investors (e.g. requiring paragraph 2 of Box 9 only for AIFs with fewer than 30 investors)? Where there are more than 30 investors, the amount in paragraph 3 (b) would be increased e.g. to 3.5 m, while for more than 100 investors, the amount in paragraph 3 (b)would be increased e.g. to 4 m. Firstly, let s consider whether there is a need for a requirement to set a limit per claim and also for claims in aggregate per year. Currently in the UK, most AIFM s PI insurance is based on each and every claim (eec) and in the aggregate basis. So for example, a policy with a limit of liability of say, 5million, can be exhausted by either having one claim of 5mil, or as many claims up to the value of 5million. Cover is not available for unlimited small claims. From our experience, the claim notification risk profile of AIFMs tends to be low frequency and low severity however it is worth noting that: 1 Notification of circumstances that potentially may lead to a claims have increased significantly following the financial crisis. 2 Unrelated claims are not common for AIFMs - one allegation of a wrongful act which would include a professional negligence claim, would typically cause several claim notifications from different investors. All insurance policies include the definition of a claim whereby related or continuous or repeated or causally connected wrongful acts are deemed to be a single wrongful act/claim. The impact this has is to change the potential nature of one individual claim (being made up of many claimants) from being one of low impact to one of high severity and potentially catastrophic for the AIFM. Secondly, we do not think it logical to have number of investors as the criteria for set amounts required. Numbers of investors into the fund, in our experience, have little impact to the risk and increase of exposure to professional indemnity claims. This categorisation is simply not required as a factor. We would recommend deleting section 2 and incorporating this in 3 to read per claim and in the aggregate
9 Step 5: To have a procedure in place to update PII in line with ongoing adjustments An annual review of the PII programme (or immediately in the event of a change which affects compliance) should be included in the risk management framework. Conclusion: Thoughts to consider for 2013 policy placements: Ensure that your policy covers the risks know your policy. Consider ring fencing the limit to allow transparency in allocating the cost of the insurance as a fund expense (discuss this with LPs). Investigate what PII are similar PE firms buying at the moment? Consider whether you need to change what you buy to use PII as a supplement for capital adequacy replacement. Understand how PII relates to your indemnification provision in the LPA or equivalent? Please contact Danyalle Brinsmead for further clarification or questions concerning this document. Contact details: Danyalle Brinsmead Phone: Mobile: Danyalle.Brinsmead@uk.lockton.com Disclaimer: The information provided in this document is intended for use as a guideline and is not intended as, nor does it constitute, legal or professional advice.
AIMA NOTE. Analysis of divergences between the EU Commission s draft regulation implementing the AIFMD and the ESMA advice
AIMA NOTE Analysis of divergences between the EU Commission s draft regulation implementing the AIFMD and the ESMA advice April 2012 Analysis of divergences between the EU Commission s draft regulation
More informationInvestment Management & Funds Practice. AIFMD Client Memorandum
Investment Management & Funds Practice AIFMD Client Memorandum April 2012 INDEX PARAGRAPH PAGE 1 INTRODUCTION... 1 2 HOW DO YOU IDENTIFY THE AIFM?... 1 3 IS THE AIFMD APPLICABLE TO YOU?... 2 3.1 Scope
More information2013 No. 0000 FINANCIAL SERVICES AND MARKETS. The Alternative Investment Fund Managers Regulations 2013
Draft Regulations laid before Parliament under paragraphs 2 and 2A(3)(a) of Schedule 2 to the European Communities Act 1972, for approval by resolution of each House of Parliament. DRAFT STATUTORY INSTRUMENTS
More informationPreparing to become a Hedge Fund/Open-ended Fund AIFM. May 2013. March2013. Preparing to become an AIFM 1
Preparing to become a Hedge Fund/Open-ended Fund AIFM May 2013 March2013 Preparing to become an AIFM 1 Complying with AIFMD We are pleased that the text of the implementing measures has been published.
More information(Legislative acts) DIRECTIVES
1.7.2011 Official Journal of the European Union L 174/1 I (Legislative acts) DIRECTIVES DIRECTIVE 2011/61/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 8 June 2011 on Alternative Investment Fund
More informationNavigating the Regulatory Maze. AIFMD Impact on Service Providers
www.pwc.com Navigating the Regulatory Maze Navigating the Regulatory Maze AIFMD Impact on Service Providers January 2011 AIFMD Impact on Service Providers The Alternative Investment Fund Managers Directive
More informationPROVISIONAL REQUEST TO CESR FOR TECHNICAL ADVICE
Ref. Ares(2010)892960-02/12/2010 PROVISIONAL REQUEST TO CESR FOR TECHNICAL ADVICE ON POSSIBLE LEVEL 2 MEASURES CONCERNING THE FUTURE DIRECTIVE ON ALTERNATIVE INVESTMENT FUND MANAGERS Table of Contents
More informationEUROPEAN CENTRAL BANK
19.2.2013 Official Journal of the European Union C 47/1 III (Preparatory acts) EUROPEAN CENTRAL BANK OPINION OF THE EUROPEAN CENTRAL BANK of 24 May 2012 on a draft Commission delegated regulation supplementing
More informationAct on the Management of Alternative Investment Funds
FINANSTILSYNET Norway Translation March 2015 This translation is for information purposes only. Legal authenticity remains with the official Norwegian version as published in Norsk Lovtidend. Act on the
More information2013 No. 1773 FINANCIAL SERVICES AND MARKETS. The Alternative Investment Fund Managers Regulations 2013
S T A T U T O R Y I N S T R U M E N T S 2013 No. 1773 FINANCIAL SERVICES AND MARKETS The Alternative Investment Fund Managers Regulations 2013 Made - - - - 16th July 2013 Coming into force - - 22nd July
More informationSTATUTORY INSTRUMENTS. S.I. No. 257 of 2013 EUROPEAN UNION (ALTERNATIVE INVESTMENT FUND MANAGERS) REGULATIONS 2013
STATUTORY INSTRUMENTS. S.I. No. 257 of 2013 EUROPEAN UNION (ALTERNATIVE INVESTMENT FUND MANAGERS) REGULATIONS 2013 2 [257] S.I. No. 257 of 2013 EUROPEAN UNION (ALTERNATIVE INVESTMENT FUND MANAGERS) REGULATIONS
More informationDisclosure and Reporting Requirements Under the Alternative Investment Fund Managers Directive
Disclosure and Reporting Requirements Under the Alternative Investment Fund Managers Directive Edward Black, Senior Principal Consultant ACA Compliance (Europe) Limited Sally McCarthy, Senior Principal
More informationThe directive on alternative investment fund managers
The directive on alternative investment fund managers financial institutions ENERGY infrastructure AND COMMODITIES Transport technology Briefing December 2010 Summary With the approval of the EU Parliament
More informationNovember 2011. Alternative Investment Fund Managers Directive (AIFMD) Frequently Asked Questions (FAQs)
November 2011 Alternative Investment Fund Managers Directive (AIFMD) Frequently Asked Questions (FAQs) Contents Scope In a nutshell, what is the AIFMD? 3 Who is subject to the AIFMD? 3 Can an Alternative
More informationAlternative Investment Fund Managers Directive ( AIFMD ): An Overview and Analysis
ViewPoint May 2011 Alternative Investment Fund Managers Directive ( AIFMD ): An Overview and Analysis Introduction The Alternative Investment Fund Managers Directive ( AIFMD or Directive ) is the most
More informationAgainst this background, would like to emphasise the following points:
Frankfurt am Main, 31 August 2012 BVI s Position Paper on the Commission s Proposal for a Directive of the European Parliament and of the Council amending the Directive 2009/65/EC (UCITS V) BVI 1 welcomes
More informationCOMMISSION DELEGATED REGULATION (EU) No /.. of 19.12.2012
EUROPEAN COMMISSION Brussels, 19.12.2012 C(2012) 8370 final COMMISSION DELEGATED REGULATION (EU) No /.. of 19.12.2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with
More informationAlternative Investment Fund Managers Directive. Survival Kit March 2013
Alternative Investment Fund Managers Directive. Survival Kit March 2013 Outline. Origin, timeline & scope 2 Determination of the AIFM 10 EU Passport/Private Placement 14 AIFM Directive s provisions (level
More informationRisk Management under the Alternative Investment Fund Managers Directive ( AIFMD )
guidelines Risk Management under the Alternative Investment Fund Managers Directive ( AIFMD ) in association with table of contents I. Introduction 4 General Aspects of Risk Management Function for an
More informationBriefing Note: The European Venture Capital Fund and European Social Entrepreneurship Fund Regulations
Briefing Note: The European Venture Capital Fund and European Social Entrepreneurship Fund Introduction The European Venture Capital Fund ( EuVECA ) regulation and the ( EuSEF ) regulation (collectively,
More informationAIFMD Disclosure Document for Schroder European Real Estate Investment Trust plc
AIFMD Disclosure Document for Schroder European Real Estate Investment Trust plc Dated: 6 November 2015 Article 23(1) and (2) of the Directive 2011/61/EU of the European Parliament and of the Council of
More informationTHE CROATIAN PARLIAMENT DECISION PROMULGATING THE ALTERNATIVE INVESTMENT FUNDS ACT
THE CROATIAN PARLIAMENT Pursuant to Article 89 of the Constitution of the Republic of Croatia, I hereby pass the DECISION PROMULGATING THE ALTERNATIVE INVESTMENT FUNDS ACT I hereby promulgate the Alternative
More informationOutsourcing by UK-based Fund Managers: Identifying and Applying the Rules
Outsourcing by UK-based Fund Managers: Identifying and Applying the Rules Amanda Lewis, Partner and Rosali Pretorius, Partner, Dentons 1 October 2014 UK-based fund managers must comply with increasingly
More informationThe Alternative Investment Fund Managers Directive ( AIFMD )
The Alternative Investment Fund Managers Directive ( AIFMD ) The alternative investment funds industry is shortly to be subject to European authorisation and conduct of business requirements for the first
More informationPolicy options for implementing the Alternative Investment Fund Managers Directive
Policy options for implementing the Alternative Investment Fund Managers Directive March 2012 Policy options for implementing the Alternative Investment Fund Managers Directive March 2012 Official versions
More informationBVI s position on the Consultative Document of the Basel Committee on Banking Supervision: Capital requirements for banks equity investments in funds
Frankfurt am Main, 4 October 2014 BVI s position on the Consultative Document of the Basel Committee on Banking Supervision: Capital requirements for banks equity investments in funds BVI 1 gladly takes
More informationFund Management Companies Guidance
2015 Fund Management Companies - Guidance Fund Management Companies Guidance November 2015 1 Contents Part I. Delegate Oversight 2 Part II. Organisational Effectiveness 24 Part III. Directors Time Commitments
More informationRegulation for Establishing the Internal Control System of an Investment Management Company
Unofficial translation Riga, 11 November 2011 Regulation No. 246 (Minutes No. 43 of the meeting of the Board of the Financial and Capital Market Commission, item 8) Regulation for Establishing the Internal
More informationHow To Know Your Insurance Policy And How To Get Paid Out Of It
Directors and Officers Indemnity - a practical guide Richard Packman Director Heritage Insurance Limited Directors Duties what should I be doing? Directors Exposures where am I exposed? Insurance Protection
More informationAIMA GUIDANCE NOTE. AIFMD own funds required in respect of professional indemnity policy exclusions
AIMA GUIDANCE NOTE AIFMD own funds required in respect of professional indemnity policy exclusions November 2013 IMPORTANT While AIMA has used all reasonable efforts to produce this Guidance, neither AIMA,
More informationInvestment Funds sourcebook. Chapter 3. Requirements for alternative investment fund managers
Investment Funds sourcebook Chapter equirements for alternative investment fund FUND : equirements for Section.7 : isk management.7 isk management.7.1 Application This section applies to a full-scope UK
More informationMALTA TYPES OF COLLECTIVE INVESTMENT SCHEMES
MALTA TYPES OF COLLECTIVE INVESTMENT SCHEMES The Investment Services Act (Chapter 370 of the Laws of Malta) ( ISA ) defines the term collective investment scheme as follows: "collective investment scheme"
More informationAIFMD Article 23 Supplemental Disclosure
AIFMD Article 23 Supplemental Disclosure Alternative Investment Fund Managers Directive The EU Alternative Investment Fund Managers Directive (Directive 2011/61/EU) (the "AIFMD") entered into force on
More informationFINANCIAL LINES & VENTURE CAPITAL INSURANCE FAQS
FINANCIAL LINES ACE elite PRIVATE EQUITY & VENTURE CAPITAL INSURANCE FAQS 1 The new elite wording is a package policy comprising: Directors & Officers Liability Insurance (D&O) Outside Directors Liability
More informationAlternative Investment Fund Managers Directive. What does this mean for your business?
Alternative Investment Fund Managers Directive What does this mean for your business? Background to the Alternative Investment Fund Managers Directive (AIFMD) The Alternative Investment Fund Managers (AIFM)
More informationCAIA Ireland Educational Workshop. 9 th October 2015. Driving the Governance Agenda in Alternatives
CAIA Ireland Educational Workshop 9 th October 2015 Driving the Governance Agenda in Alternatives Dr Margaret Cullen CEO Certified Investment Fund Director Institute Overview 1. Agency Problem 2. Conflicts
More informationReal Estate in Europe. Update on regulatory developments. Ad Buisman
Real Estate in Europe Update on regulatory developments Ad Buisman Update on regulatory development May 22, 2012 Page 2 Key regulations that will impact the real estate funds industry Regulations that
More informationAlternative Investment Fund Managers Directive. Survival Kit. November 2011
Alternative Investment Fund Managers Directive Survival Kit November 2011 Outline > Origin, timeline & scope > Determination of AIFM > EU Passport / Private Placement > Level 1 & Level 2 measures > Operating
More informationOption Table - Directive on Statutory Audits of Annual and Consolidated Accounts
Option Table - Directive on Statutory Audits of Annual and Consolidated Accounts The purpose of this document is to highlight the changes in the options available to Member States and Competent Authorities
More informationPublic consultation on the possibility for an investment fund to originate loans
Public consultation on the possibility for an investment fund to originate loans The purpose of this consultation is to gather the opinions of all interested parties about the possibility for French investment
More informationRisk management within AIFMD for private equity and real estate funds. Sylvain Crépin Senior Manager Capital Markets/Financial Risk Deloitte
Risk management within AIFMD for private equity and real estate funds Xavier Zaegel Partner Capital Markets/Financial Risk Deloitte Sylvain Crépin Senior Manager Capital Markets/Financial Risk Deloitte
More informationAuthorisation Requirements and Standards for Debt Management Firms
2013 Authorisation Requirements and Standards for Debt Management Firms 2 Contents Authorisation Requirements and Standards for Debt Management Firms Contents Chapter Part A: Authorisation Requirements
More informationQuestions and Answers Application of the AIFMD
Questions and Answers Application of the AIFMD 30 September 2014 ESMA/2014/1194 Date: 30 September 2014 ESMA/2014/1194 Contents Section I: Remuneration 5 Section II: Notifications of AIFs 7 Section III:
More informationRisk mitigation requirements for daily valuation a. The use of the term outstanding contracts under Article 11(2) of EMIR;
The European Securities and Markets Association (ESMA) 103 Rue de Grenelle Paris 75007 France Attention: Rodrigo Buenaventura/Fabrizio Planta 12 March 2013 Dear Sirs, The Alternative Investment Management
More informationAMF Instruction Authorisation procedure for investment management companies, disclosure obligations and passporting DOC-2008-03
AMF Instruction Authorisation procedure for investment management companies, disclosure obligations and passporting DOC-2008-03 References: Articles 311-1 to 311-3, 311-7, 311-7-1, 313-53-1, 316-3 to 316-5,
More informationAIFMD means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers, as amended.
Glossary Accounting Period means the annual accounting period for the Company ending on 31 December in each calendar year. The first annual accounting period will end on 31 December 2015. Acts means the
More informationSystem of Governance
CEIOPS-DOC-29/09 CEIOPS Advice for Level 2 Implementing Measures on Solvency II: System of Governance (former Consultation Paper 33) October 2009 CEIOPS e.v. Westhafenplatz 1-60327 Frankfurt Germany Tel.
More informationEFAMA response to the Commission s Call for Evidence on Directive 1997/9/EC on Investor-Compensation Schemes
EFAMA response to the Commission s Call for Evidence on Directive 1997/9/EC on Investor-Compensation Schemes EFAMA s Register ID number: 3373670692-24 Introduction EFAMA 1 is grateful to the European Commission
More informationSetting up a Gibraltar Asset Management Company
Setting up a Gibraltar Asset Management Company 1. Why choose Gibraltar as a jurisdiction in which to set up an asset management company Gibraltar is within the European Union Regulated in accordance with
More informationAIFM Directive. Briefing. The impact on non-eu fund managers of non-eu funds. Introduction. Overview of the AIFMD
AIFM Directive FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION PHARMACEUTICALS AND LIFE SCIENCES Briefing August 2012 The impact on non-eu fund
More informationHOW TO SET UP A GIBRALTAR EXPERIENCED INVESTOR FUND
HOW TO SET UP A GIBRALTAR EXPERIENCED INVESTOR FUND [2 nd Edition, June 2013] When taking the decision to establish an Experienced Investor Fund ( EIF ) in Gibraltar, various matters require consideration.
More informationDelegations will find attached a new compromise proposal by the Presidency with regard to the above-mentioned Commission proposal.
COUNCIL OF THE EUROPEAN UNION Brussels, 1 February 2010 5918/10 EF 11 ECOFIN 56 CODEC 76 NOTE from: to: Subject: Presidency Delegations Proposal for a Directive of the European Parliament and of the Council
More informationSTANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED
This document is issued by Standard Life Investments Property Income Trust Limited (the "Company") and is made available by Standard Life Investments (Corporate Funds) Limited (the AIFM ) solely in order
More informationOfficial Journal of the European Union REGULATIONS
24.3.2016 L 78/11 REGULATIONS COMMISSION DELEGATED REGULATION (EU) 2016/438 of 17 December 2015 supplementing Directive 2009/65/EC of the European Parliament and of the Council with regard to obligations
More informationMapping of outsourcing requirements
Mapping of outsourcing requirements Following comments received during the first round of consultation, CEBS and the Committee of European Securities Regulators (CESR) have worked closely together to ensure
More informationPART I GENERAL. Chapter 1. General provisions. Section 1. General scope of application of the Act
1(49) Unofficial translation Amendments up to 258/2013 included 746/2012 Issued in Helsinki on 14 December 2012 Securities Markets Act Pursuant to the decision of Parliament, the following is enacted:
More informationINSURANCE ACT 2008 CORPORATE GOVERNANCE CODE OF PRACTICE FOR REGULATED INSURANCE ENTITIES
SD 0880/10 INSURANCE ACT 2008 CORPORATE GOVERNANCE CODE OF PRACTICE FOR REGULATED INSURANCE ENTITIES Laid before Tynwald 16 November 2010 Coming into operation 1 October 2010 The Supervisor, after consulting
More informationAssessing and purchasing the appropriate level of cover: a guide to top-up or excess layer insurance:
Assessing and purchasing the appropriate level of cover: a guide to top-up or excess layer insurance: July 2015 2015 The Law Society. All rights reserved. Contents Introduction... 3 Status of this guide...
More informationJuly 2014. Handbook of Prudential Requirements for Investment Intermediaries. Page 0 of 12 Page 0 of 12
July 2014 Handbook of Prudential Requirements for Investment Intermediaries Page 0 of 12 Page 0 of 12 Handbook of Prudential Requirements for Investment Intermediaries Contents Table of Contents Introduction
More informationSelected EU Regulatory Developments. Lugano Fund Forum, 23rd November 2015 Delphine Calonne, Senior Legal Counsel SFAMA
Selected EU Regulatory Developments Lugano Fund Forum, 23rd November 2015 Delphine Calonne, Senior Legal Counsel SFAMA Table of contents I. EMIR / FMIA II. MiFID II III. AIFMD IV. UCITS V EMIR / FMIA Why
More informationGuide to buying professional indemnity insurance
Guide to buying professional indemnity insurance The Law Society has collaborated with the British Insurance Brokers Association and Association of British Insurers to provide you with this Guide to Buying
More informationUCITS IV: Management Companies, and passports. February 2011
February 2011 This briefing paper sets out the new provisions which will apply to UCITS Management Companies, explains how the passport is now designed to work, and summarises the changes made to the long
More informationUCITS NOTICES UCITS NOTICES
2013 UCITS NOTICES UCITS NOTICES Undertakings for Collective Investment in Transferable Securities authorised under European Communities (Undertakings for Collective Investment in Transferable Securities)
More informationList of provisions for consumer protection
List of provisions for consumer protection Type of provision Lending platforms Equity and/or Debt platforms Maximum amount of investment for 40.000 Euro 20.000 Euro consumers on the platform Maximum frequency
More informationA guide to top-up or excess layer insurance:
A guide to top-up or excess layer insurance: March 2013 2013 The Law Society. All rights reserved. Contents Introduction... 3 Status of this guide... 3 Factors to consider in choosing an appropriate level
More informationwww.carnegroup.com AIFMD Guide for Asset Managers Knowledge Expertise Experience By Carne - the AIFMD experts
www.carnegroup.com AIFMD Guide for Asset Managers Knowledge By Carne - the AIFMD experts Expertise Experience 1 2 www.carnegroup.com www.carnegroup.com Contents Page 1 Preface 3 2 Overview of the AIFM
More informationList of the general good provisions applicable to insurance and reinsurance intermediaries FEBRUARY 2011
List of the general good provisions applicable to insurance and reinsurance intermediaries FEBRUARY 2011 The general good provisions have been listed in compliance with the conditions envisaged by the
More informationCGU PROFESSIONAL RISKS
CGU PROFESSIONAL RISKS BUSINESS PROTECTION MANAGEMENT LIABILITY INSURANCE Summary of significant changes Business Insurance Policy (CGU BPML 11-15) Replacing Lumley Policy Policy General Definitions Authority
More informationProfessional Indemnity Insurance Glossary of Terms
Professional Indemnity Insurance Glossary of Terms Index Aggregation of claims Automatic reinstatement Average provision Cancellation Civil liability Claim Claims made Consumer protection legislation Continuous
More information3.1 Application and Purpose 3.2 The qualifying conditions for paying compensation 3.3 Insurance
Compensation COMP Contents Compensation COMP INTO A INTO 1A Introduction 1A Foreword COMP INTO B INTO 1B Introduction 1B Foreword COMP 1 Introduction and Overview 1.1 Application, Introduction, and Purpose
More informationBefore turning to detailed remarks on the questions for consultation, we would like to draw EBA s attention to our key issues and concerns.
Frankfurt am Main 16 August 2013 BVI s position on the Draft Regulatory Technical Standards on the determination of the overall exposure to a client or a group of connected clients in respect of transactions
More informationExchange traded fund, UCITS, Alternative Investment directive, financial stability, systemic risk.
The regulatory regime of Exchange traded funds in the European Union Eddy Wymeersch University of Gent Exchange traded funds have become an essential part of our financial landscape: they stand globally
More informationStatement of Guidance: Outsourcing All Regulated Entities
Statement of Guidance: Outsourcing All Regulated Entities 1. STATEMENT OF OBJECTIVES 1.1. 1.2. 1.3. 1.4. This Statement of Guidance ( Guidance ) is intended to provide guidance to regulated entities on
More informationFinal Draft Guidelines
EBA/GL/2015/04 20 May 2015 Final Draft Guidelines on factual circumstances amounting to a material threat to financial stability and on the elements related to the effectiveness of the sale of business
More informationThe top 10 things every alternative investment fund manager needs to know about professional indemnity insurance under the Alternative Investment
The top 1 things every alternative investment fund manager needs to know about professional indemnity insurance under the Alternative Investment Fund Managers Directive December 213 Why should I read this?
More informationTHE CROATIAN PARLIAMENT DECISION PROMULGATING THE ACT ON INVESTMENT FUNDS WITH A PUBLIC OFFERING
THE CROATIAN PARLIAMENT Pursuant to Article 89 of the Constitution of the Republic of Croatia, I hereby pass the DECISION PROMULGATING THE ACT ON INVESTMENT FUNDS WITH A PUBLIC OFFERING I hereby promulgate
More informationReal Estate Contractors ADDENDUM QUESTIONNAIRE. Please complete, sign and return with all attachments to: Name Position Address Email Phone
Real Estate Contractors ADDENDUM QUESTIONNAIRE Please complete, sign and return with all attachments to: Name Position Address Email Phone If you have any questions regarding this form, please do not hesitate
More informationEFAMA s Submission to ESMA on Issues related to Exchange Traded Funds (ETFs)
EFAMA s Submission to ESMA on Issues related to Exchange Traded Funds (ETFs) EFAMA is the representative association for the European investment management industry. It represents through its 26 member
More informationThe Scottish Investment Trust PLC
The Scottish Investment Trust PLC INVESTOR DISCLOSURE DOCUMENT This document is issued by SIT Savings Limited (the Manager ) as alternative investment fund manager for The Scottish Investment Trust PLC
More informationGUIDELINE ON THE APPLICATION OF THE OUTSOURCING REQUIREMENTS UNDER THE FSA RULES IMPLEMENTING MIFID AND THE CRD IN THE UK
GUIDELINE ON THE APPLICATION OF THE OUTSOURCING REQUIREMENTS UNDER THE FSA RULES IMPLEMENTING MIFID AND THE CRD IN THE UK This Guideline does not purport to be a definitive guide, but is instead a non-exhaustive
More informationSupplementary Appendix Table A DESCRIPTION OF THE DIRECTIVES OF THE FINACIAL SERVICES ACTION PLAN (FSAP)
Supplementary Appendix Table A DESCRIPTION OF THE DIRECTIVES OF THE FINACIAL SERVICES ACTION PLAN (FSAP) Directive Name Directive No. Deadline Implementation of the Settlement Finality Directive 1998/26/EC
More informationThe Alternative Investment Fund Managers Directive
The Alternative Investment Fund Managers Directive European Regulation of Alternative Investment Funds Dirk A. Zetzsche Law & Business Published by: Kluwer Law International PO Box 316 2400 AH Alphen aan
More informationLuxembourg. Newsletter Q2/Q3 2014. News on MiFID II and its implementation. Regulation on key information documents for investment products
Luxembourg News on MiFID II and its implementation Regulation on key information documents for investment products Final adoption of the UCITS V directive by the EU parliament Newsletter Q2/Q3 2014 Avocats
More informationAdvocates - Legal Consultants. 1. Funds regulation in Cyprus as a tool for asset growth and investor protection
CGV CHRISTODOULOS G.VASSILIADES & CO. LLC Advocates - Legal Consultants Alternative Investment Funds: Investments in alternative asset classes, investor protection and active fundraising through Cyprus
More informationRequirements made under the Intermediaries Byelaw
Chapter 2 Requirements made under the Intermediaries Byelaw Section 1 Delegated Underwriting Registers of coverholders and registered binding authorities Part B of the Intermediaries Byelaw Format and
More informationProfessional Indemnity Insurance Guide for FCA Regulated Firms (2015)
Professional Indemnity Insurance Guide for FCA Regulated Firms (2015) Nathan Sewell, CEO of Protean Risk, answers the Top 50 questions we are regularly asked as a specialist provider of Professional Indemnity
More informationThe Hedge Fund & Investment Advisor s Guide to. D&O / E&O Insurance
The Hedge Fund & Investment Advisor s Guide to D&O / E&O Insurance Financial services companies require a special expertise in insurance product design and placement. Hedge Funds & Investment Advisors
More informationGuidelines. on the data collection exercise regarding high earners EBA/GL/2014/07. 16 July 2014
EBA/GL/2014/07 16 July 2014 Guidelines on the data collection exercise regarding high earners Contents 1. Executive summary 3 2. Background and rationale 4 3. EBA Guidelines on the data collection exercise
More informationBEAZLEY ARMOUR SIDE A DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY
BEAZLEY ARMOUR SIDE A DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY In consideration of the payment of the premium, in reliance on all statements made in the application and subject to all of the provisions
More informationOECD Guidelines for Good Practice for Insurance Claim Management
DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS OECD Guidelines for Good Practice for Insurance Claim Management These Guidelines, prepared by the OECD Insurance Committee, were adopted by the OECD Council
More informationPROPOSAL FORM: STOCKBROKERS INSURANCE IMPORTANT NOTICE PLEASE READ THE FOLLOWING ADVICE BEFORE COMPLETING THIS PROPOSAL FORM
PROPOSAL FORM: STOCKBROKERS INSURANCE IMPORTANT NOTICE PLEASE READ THE FOLLOWING ADVICE BEFORE COMPLETING THIS PROPOSAL FORM Your Professional Indemnity Insurance Policy is issued on a CLAIMS MADE basis.
More informationCompensation and insurance arrangements for AFS licensees
REGULATORY GUIDE 126 Compensation and insurance arrangements for AFS licensees March 2008 About this guide This guide is for Australian financial services (AFS) licensees and representatives, their advisers
More informationMARKETING FUNDS IN EUROPE - A PRACTICAL LOOK AT AIFMD AND OTHER REGULATORY REQUIREMENTS
MARKETING FUNDS IN EUROPE - A PRACTICAL LOOK AT AIFMD AND OTHER REGULATORY REQUIREMENTS Foreword One of the original aims of AIFMD was to harmonise the management and marketing of AIFs in the so that a
More informationProfessional Indemnity Insurance
Professional Indemnity Insurance Proposal Form for Accountants Important tices to the Applicant Your Duty of Disclosure Before you enter into a contract of general insurance with an insurer, you have a
More informationMiFID II Key aspects. I. Introduction
MiFID II Key aspects I. Introduction Yesterday the final texts of the revised Markets in Financial Instruments Directive were published in the Official Journal of the European Union. The texts consist
More informationCapital Market Services UK Limited Pillar 3 Disclosure
February 2013 Capital Market Services UK Limited Pillar 3 Disclosure Contents 1.0 Overview 2.0 Frequency and location of disclosure 3.0 Verification 4.0 Scope of application 5.1 Risk Management objectives
More informationGUIDE TO CAPTIVE INSURANCE COMPANIES IN THE CAYMAN ISLANDS
GUIDE TO CAPTIVE INSURANCE COMPANIES IN THE CAYMAN ISLANDS CONTENTS PREFACE 1 1. Cayman Islands Jurisdiction of Choice 2 2. Reasons for Establishing an Insurance Captive 3 3. Establishment and Licensing
More informationEuropean Commission Releases Proposal for Regulation of Money Market Funds 4 September 2013
European Commission Releases Proposal for Regulation of Money Market Funds 4 September 2013 Today the European Commission (EC) released a proposal for a regulation on money market funds (MMFs) established,
More informationAudit and Risk Committee Charter. 1. Membership of the Committee. 2. Administrative matters
Audit and Risk Committee Charter The Audit and Risk Committee (the Committee ) is a Committee of the Board established with the specific powers delegated to it under Clause 8.15 of the Company s Constitution
More information