Prepared for an alternative future IV

www.pwc.ch/asset_management Prepared for an alternative future IV Zurich

Agenda 16:30 Welcome and Introduction Dieter Wirth, Asset Management Leader, Switzerland 16:35 Tax issues with regard to on-shoring Benjamin De Zordi, Asset Management Tax. Zurich 16.50 New rules for Swiss AIFMs and AIF distribution: an update Dr. Günther Dobrauz, Regulatory & Compliance Services - Asset Management, Zurich 17.10 The Channel Islands and UK perspective, including RDR Mary Bruen, Channel Islands 17.40 Challenges & chances: panel discussion Moderated by Jean-Sébastien Lassonde, Asset Management Assurance, Switzerland 18.00 Apéro

Considerations for securities dealing

Benjamin De Zordi Contents 01. Securities Transfer Tax 02. Income taxes 03. VAT

Section 1 Considerations for securities dealing Tax issues with regard to on-shoring Increased risk of becoming a Swiss securities dealer (see next slide). Shift of management functions will shift profits (i.e. taxes) to Switzerland. Changes in VAT practice might lead to a denial of input tax refund. 4

Management Section 1 Considerations for securities dealing Securities Transfer Tax (1/2) Manager as a Securities Dealer off-shore Switzerland Caused by the new regulation, the Manager might qualify as a Securities Dealer Off-shore Manager Fund Management Swiss Manager Securities Dealer? Until now Swiss based companies often only carried out advisory functions whereas management activities were carried out off-shore. Such foreign managers have not been subject to Swiss Securities Transfer tax. If the management decisions are taken within Switzerland, the Federal Tax Administration might qualify the Swiss Manager as a Securities Dealer. Manager would be subject to Swiss Securities Transfer Tax. 5

Section 1 Considerations for securities dealing Securities Transfer Tax (2/2) Tax consequences if manager qualifies as an intermediary Activity Counterparty is exempt Counterparty is not exempt Fund buys / sells domestic target Fund buys / sells foreign target No securities transfer tax No securities transfer tax 0.75 per mille of transaction value 1.5 per mille of transaction value Domestic fund issues shares No securities transfer tax No securities transfer tax Foreign fund issues shares No securities transfer tax 1.5 per mille of funds received Redemption of fund shares No securities transfer tax No securities transfer tax 6

Management Section 1 Considerations for securities dealing Income taxes Substance allocation of profits off-shore Switzerland Regulation can cause a shift of substance to Switzerland Off-shore Manager Substance Management Swiss Manager FINMA regulation requires that certain management functions are carried out within Switzerland. Fund This may require a shift of substance to Switzerland. More profit needs to be allocated to the Swiss company (e.g. cost plus taxation will hardly be accepted). 7

Section 1 Considerations for securities dealing VAT (1/2) Changes which may impact the taxation of asset managers Impact of on-shoring VAT treatment of management services carried out in Switzerland becomes more important. Impact of changes in VAT / CISA law and practice CISA will not distinguish anymore between public and non-public distribution. All distribution services will become exempt from VAT. VAT law states that management services provided to funds according to CISA are exempt from VAT. Currently, management services provided to foreign funds is taxable (but 0% taxed because provided abroad). The Federal Tax Administration is currently evaluating a change in practice, that services to foreign funds might become tax exempt and input VAT refund would be denied. 8

Section 1 Considerations for securities dealing VAT (2/2) Summary of tax treatment Services Today New (as from 1 March 2013) Distribution Public Exempt Non-Public Taxable Management services to domestic funds Exempt Distribution always exempt from VAT Exempt Management services to foreign funds Taxable (full input VAT refund) Exempt / Taxable? (potential change in practice) 9

New rules for Swiss AIFMs and AIF distribution: an update

Dr. Günther Dobrauz Contents 01. Key points 02. New licencing regimes 03. New transparency and disclosure rules 04. Modified catalogue of qualified investors 05. New distribution rules 06. Single investor funds

Section 2 New rules for Swiss AIFMs and AIF distribution: an update Indirect AIFMD transposition by partial CISA revision Key points CISA revision attempts to align the Swiss legal framework with EU standards to ensure continued access of Swiss managers and service providers to the EU harmonised market and to close perceived gaps in investor protection in Switzerland. Partially revised CISA and CISO entered into force 1 March 2013. Some elements of the new qualified investor classification system(1) will only become effective with a delay(2). Under the revised law the FINMA licencing regime for managers of collective investment schemes has been expanded to also include the management of foreign AIFs and Swiss branches of foreign asset managers unless de minimis rules apply. The Swiss regime for the placement of AIFs in Switzerland has been brought closer in line with MiFID standards by narrowing the definition of qualified investor and introducing additional qualitative requirements on product and distributor level with further significant changes expected in the near future. Note 1: Art. 10 (3) lit. a, Art. 10 (3bis) and Art. 10 (3ter) CISA) and the new point of sale diligence/duty to minute provisions for distribution (Art. 24 (3) CISA and Art. 34a CISO Note 2: 1 June 2013 and 1 January 2014 respectively 12

Section 2 New rules for Swiss AIFMs and AIF distribution: an update New licencing regimes (1/3) Asset Managers Under the revised CISA branches of foreign asset managers and managers of all foreign investment funds will require licencing unless: these funds are exclusively open to qualified investors; and these funds do not in aggregation exceeded CHF 100m AuM (open-ended and including leverage) or CHF 500m (no leverage and closed ended) (de minimis); or investors are exclusively member firms belonging to the same group as the Swissbased asset manager. Capital requirements for AIFMs remain at CHF 200k, CHF 500k is required if fund business for foreign collective investment schemes is also conducted. Asset managers who fall under new licencing regime must contact FINMA by 31 August 2013 and file an application within 2 years. 13

Section 2 New rules for Swiss AIFMs and AIF distribution: an update New licencing regimes (2/3) Branches and consolidated supervision Branches of foreign AIFMs must and can obtain licencing if they: are in toto (head office and branch) subject to adequate supervision at their domicile; have adequate financial resources, qualified personnel and organisational infrastructure to operate a branch in Switzerland; they are not entirely controlled from Switzerland or the majority of their business is conducted from Switzerland; all general requirements with the exception of capital requirements are complied with, and if cooperation between FINMA and competent authority is in place. FINMA may require adequate consolidated (group) supervision of asset managers who are part of a financial group or conglomerate if this is required by international standards. 14

Section 2 New rules for Swiss AIFMs and AIF distribution: an update New licencing regimes (3/3) Distributors and Representatives Distributors of foreign collective investment schemes intended for distribution to qualified investors (unless exclusively to supervised financial intermediaries and insurance companies) require licencing unless they are: adequately supervised by their home regulator; licenced for such activity; and have concluded a written distribution agreement with a Swiss representative. Representatives of foreign collective investment schemes intended for distribution to qualified investors (unless exclusively to supervised financial intermediaries and insurance companies) require licencing. Representatives of foreign collective investment schemes as well as distributors now requiring licencing must contact FINMA by 31 August 2013 and file an application within 2 years. Banks, securities dealers, insurance companies and asset managers of collective investment schemes require an additional representative licence file by end 02/14. 15

Section 2 New rules for Swiss AIFMs and AIF distribution: an update New transparency and disclosure rules Incentivisation of distribution chain Following the CISA revision: All commissions and other benefits paid to distributors must be disclosed to investors in full; All commissions received by fund management companies and asset managers when acquiring investment funds managed by them on behalf of their clients must be disclosed. Recording /minuting In all instances of distribution activity (i.e., not if placement with supervised financial intermediaries and insurance companies) it will be required to record determined investors requirements and reasons for investment recommendations in writing. Such minutes (protocols) have to be delivered to investors. Actual form and content of minutes will be determined via self-regulatory bodies recognised by FINMA. 16

Section 2 New rules for Swiss AIFMs and AIF distribution: an update Modified catalogue of Qualified Investors HNWIs who have opted in and are able to prove that at the time of investment into an AIF they either Have assets of at least CHF 500k, and Have sufficient knowledge to asset the investment s risk based on education and professional experience or based on comparable experience in the financial sector; or Have assets of at least CHF 5 Mio. which may also comprise real estate of up to a maximum of CHF 2 Mio net value (market value net debt). Discretionary asset management clients of regulated financial intermediaries who have not opted out. Discretionary asset management clients of regulated financial intermediaries who have not opted out and where the asset manager is: In his capacity as financial intermediary governed by the Anti-Money Laundering Act; Bound by an industry body code of conduct recognised by FINMA as minimum standard; and The discretionary asset management agreement similarly complies with the guidelines of an industry body recognised by FINMA as minimum standard. Qualified investors Regulated financial intermediaries Banks Securities dealers Fund management companies Asset managers of collective investment schemes Central banks Representatives of foreign collective investment schemes Swiss corporate investment vehicles (SICAVs, SICAFs, Swiss LPs). Regulated insurance institutions. Companies with professional treasury operations. Public entities and retirement benefits institutions with professional treasury operations. 17

Section 2 New rules for Swiss AIFMs and AIF distribution: an update New distribution rules All distribution of foreign collective investment schemes to qualified investors requires nomination of a Swiss representative and paying agent on behalf of the AIF and a distributor s licence, unless: marketing of foreign AIFs only to regulated financial intermediaries and insurance companies; or acquisition of AIFs based on reverse solicitation; acquisition in the course of a discretionary asset management agreement with regulated financial intermediary or IAM on behalf of the client; or acquisition in the course of an investment advisory mandated based on a longterm, written advisory agreement with a regulated financial intermediary and/or independent asset manager. No distributor s licence is required for the distribution of Swiss AIFs to Swiss qualified investors. The product if not offered to the public, does not require authorisation by FINMA, but adequate product supervision. 18

Section 2 New rules for Swiss AIFMs and AIF distribution: an update Single investor funds & Custodian Single investor funds New single investor fund rules at the level of CISA (Art. 7). Where previously only life insurers where eligible investors now all types of insurance companies are permitted. Public entities and retirement benefits institutions with professional treasury operations are now permitted as investors. Investment decisions may be delegated by fund management company or SICAV (in part or fully) to the single investor. FINMA may waive single investor s duty to be subject to recognised supervision. Custodian Overall responsibility of custodians has been further detailed and made more thorough by the CISA revision. Custodianship of assets increasingly becomes a critical topic also with regard to Private Equity structures and when trying to realise onshore AIFs for hedge fund strategies. 19

The Channel Islands and UK perspective

Mary Bruen Contents 01. Setting the scene 02. AIFMD readiness 03. Structuring decisions

Section 3 The Channel Islands and UK perspective Setting the scene why the CI? The CI route significant levels of funds to other finance centres (inc London) - $332.5bn in Q2 2009 per the Foot Report Proven track record a mature funds industry with seasoned alternative fund service providers. A regulatory framework that has evolved specifically for the alternative asset classes and has been independently verified as being robust and effective. High standards of regulation & stability with a range of regulatory regimes for alternative fund 1,216 investors offering different levels of 200 1,162 regulation. Quality service provision. Strong corporate governance. Fast track capability. Political stability. A tax neutral environment - allowing investors to be taxed wherever appropriate depending on their own specific circumstances. FUNDS IN GUERNSEY THE FACTS & STATS 1,114 REGULATED FUNDS NAV FUNDS +101 % 2006-2011 Dec -08 Dec -09 Dec -10 Dec -11 TOTAL NAV (BILLIONS) 261 200 Dec- 08 261.5bn NET ASSET VALUE NUMBER OF FUNDS +23 % 2006-2011 Dec- 09 Dec- 10 Dec- 11 NUMBER OF FUNDS 1,216 1,162 INNOVATION Self-certification Qualifying Investor Funds (QIFs) enable very short authorisation times. A parallel streamlined consent process for registered funds has also been introduced. WORLD NO. 2 Global financial Centres Index Guernsey ranked the No.2 offshore finance sector THE BEST NO. 1 in Non UK Listings 22

Section 3 The Channel Islands and UK perspective AIFMD ready? 1 From 22 July -Private placement becomes a regulated activity and as a result Managers will have to comply with the Directives minimum provisions plus any additional provisions that MS elect to apply. CI access will be limited to private placement or reverse solicitation until the 3 rd country passport comes on line (post July 2015). 3 July 2013 Directive Implemented Market access Not FATF Blacklisted Both Jersey and Guernsey are highly regarded in terms of their regulatory standards and are not on the FATF blacklist. October 2015 3 rd Country passport? AIFMD ready? 2017 AIFMD II 2 Jersey and Guernsey are on ESMA's priority list of Third Countries in terms of agreeing a standard form of Cooperation Agreement. ESMA is expected to start signing agreements in May 2013 no agreements signed to date. 4 Cooperation agreements 2018 End of Private Placement? Transparency Requirements Transparency rules will apply for all funds and managers marketing to EU. Impact on annual report, disclosures to investors pre and post investment and reporting to competent authorities. For PE compliance with anti asset stripping provisions. 5 Market structure Dual approach beyond July 2013: Opt in regime fully compliant with the Directive (passport post July 2015) Private placement regime incorporates the transparency requirements. CI Funds which are not to be marketed into the EU will remain unaffected. 6 Operational readiness LBE s If LBE AIFM role will default to Europe. Final level 2 is more principled based leeway given to MS re interpretation. Distinction between individual & collective portfolio management. CI have a history of providing appropriate substance. Real substance will be required. 23

Section 3 The Channel Islands and UK perspective Status of MS implementation? MS have the ability to change their private placement access requirements. Member State UK/ Ireland/ Luxembourg CI Application CI AIFM and CI AIF e.g. Jersey/Guernsey GP/Manager with substance Jersey/Guernsey LP Marketing to professional investors The UK, Ireland and Luxembourg have stated they will make no changes to their private placement regimes so that non-eu AIFs can continue to access their markets uninhibited. Minimum requirements under the Directive will apply. France N/A The CI s only access to the French market will be via reverse solicitation. Germany US CI AIFM and CI AIF e.g. Jersey/Guernsey GP/Manager with substance Jersey/Guernsey LP Depositary Opt-in regime CI AIFM and CI AIF e.g. Jersey/Guernsey GP/Manager Jersey/Guernsey LP 1 year grace if already marketing to German investors Representative required in Germany Depositary requirements for funds marketing to institutional investors Full compliance with AIFMD for all other investors No changes required to access US investors See appendix for an overview of the UK process for privately placing under AIFMD 24

Section 3 The Channel Islands and UK perspective Potential structure (I) Adviser (UK) or Adviser (UK) External AIFM can be AIFM for > 1 AIF AIFM (CI) e.g. Jersey GP Jersey GP AIFM (CI) e.g. Jersey Ltd AIF (CI) e.g. Jersey LP Branch (CISA - CH) AIF (CI) e.g. Jersey LP Branch (CISA - CH) Benefits Remain outside the full provisions of the EU AIFMD (remuneration provisions, leverage requirements), benefitting from private placement and reverse solicitation possibilities and tax structuring options. 25

Section 3 The Channel Islands and UK perspective Potential structure (II) Holding (CH) Adviser (UK) or Holding (CH) Jersey Manager is a LBE Adviser (UK) AIFM (CI) e.g. Jersey GP AIF (CI) e.g. Jersey LP AM - CISA (CH) Manager (CI) AIF (CI) AIFM/CISA (CH) Benefits Remain outside the full provisions of the EU AIFMD (remuneration provisions, leverage requirements), benefitting from private placement and reverse solicitation possibilities and tax structuring options. 26

Section 3 The Channel Islands and UK perspective Potential structure (III) Adviser (CH) or Jersey Manager is a LBE Adviser & AIFM (CH) Adviser (UK) Adviser (UK) AIFM (CI) e.g. Jersey GP Manager (CI) AIF (CI) e.g. Jersey LP AIF (CI) Benefits Remain outside the full provisions of the EU AIFMD (remuneration provisions, leverage requirements), benefitting from private placement and reverse solicitation possibilities and tax structuring options. 27

Section 3 The Channel Islands and UK perspective Potential structure (IV) Adviser (CH) AIFM (CI) Holding (CH) AM - SEC (US) or Adviser (CH) Manager (CI) Jersey Manager is a LBE Holding (CH) AIFM-SEC (US) AIF (CI) Alternatively Jersey Corporates can be internally managed AIF (CI) Benefits Remain outside the full provisions of the EU AIFMD (remuneration provisions, leverage requirements), benefitting from private placement and reverse solicitation possibilities and tax structuring options. 28

Section 3 The Channel Islands and UK perspective Structuring - where to establish the AIFM (1/2)? 3 types of scenarios to consider 1. An AIFM located in EU/EEA 2. An AIFM off-shore 3. An AIFM in EU/EEA and in Non-EU/off-shore These scenarios may be assessed based on following criteria (not exhaustive) according to their level of importance Investors Level of adequacy with investor needs & demands (e.g. location) Continuity of service New prospects Reputation, recognition, visibility Operational efficiency Infrastructure Depositary Interaction with third parties - expertise Flexibility, resilience Key talent location Regulatory Flexibility offered by local regulator on AIFMD transposition Influence capability toward regulators Future direction of regulations Tax Tax pressure for investors and managers VAT 29

Section 3 The Channel Islands and UK perspective Structuring - where to establish the AIFM (2/2)? Scenario Pros Cons 1. An AIFM located in EU/EEA 2. An AIFM off-shore 3. An AIFM in EU/EEA and in Non- EU/offshore Secures access to EU investors across Member States AIFMD Brand attractive/necessary for certain investors Lower cost attractive to investors in current challenging market conditions Limited changes to current business/operations Improves substance from a tax perspective Secures grandfathering for Non-EU funds no longer marketing Ensures market access in difficult jurisdictions whilst creating a lower cost model for investors focused on returns. Provides ability to secure grandfathering for existing closed funds Expensive Imposes strict additional ongoing compliance and operational requirements. The most onerous include capital, depositaries, risk management and remuneration. Taxation Investors perception No AIF passport until 2015 Complexity of marketing rules Viability of PPRs after 2018? Regulatory cooperation agreement Political pressure Relocation of key talents More costly More complex and less efficient 30

Retail Distribution Review (RDR) and impact

Mary Bruen Contents 01. UK RDR Regime changing the landscape? 02. The rest of Europe RDR, MiFID 03. Impacts of new regulatory changes

Section 4 Retail Distribution Review (RDR) and impact UK RDR Regime changing the landscape? The industry s approach to the RDR suggests some organisations may be better placed to capitalise on post-2012 opportunities. Whilst compliance has dominated the industry response, even the RDR capitalisers have planned for post-rdr (Day 2) programmes. consumer research shows there is a willingness to pay for key post- RDR value proposition components. FSA minimum requirements Requirement gap 25% : RDR laggards Significantly delayed in deciding on approach towards post-2012 Delayed in determining their post-2012 approach. Explored various options including possible exit of the industry, divestiture of parts of the value chain and/or outsourcing. Forced to take only a compliance-driven approach as the December 2012 timeline drew closer. Few wealth managers Majority of private banks Some wealth management organisations, particularly with a high Cost /Income ratio (c.80%) Prepared Some small for an IFAs/wealth alternative management future IV 50% : RDR box-tickers Compliance-driven approach Viewed RDR primarily from the point of regulatory compliance. RDR activity was limited to creating a mechanism for charging advice fees, determining independent vs. restricted status and getting advisors qualified to Level 4. Very limited focus on their post-2012 strategy, client proposition and commercial model. Majority of wealth managers and highstreet banks Few life companies particularly those primarily focused on workplace savings as their distribution channel Majority of asset managers Majority of IFAs Selected private banks 25% : RDR capitalisers Strategic/transformation approach Viewed RDR more as a competitive opportunity rather than just as a compliance initiative. Adopted a strategic, business-wide approach to RDR and determined their post-2012 strategy and commercial model. Undertook a transformation programme of change to address RDR, Suitability and other customerfocused regulation for transforming their business and operating model. Significant effort undertaken including rigorous customer testing activities to develop post-2012 customer value propositions for advice and products. Some firms formed strategic alliances and joint venture partnerships across the value-chain for both cost reduction and revenue growth in a post- RDR environment. Some life companies and a number of midtier bancassurers Some wealth managers and high-street banks Select private banks Some vertically integrated asset managers and wealth managers 32

Section 4 Retail Distribution Review (RDR) and impact UK RDR projects - key learning Our experience indicates that for most organisations the governance, impact assessment and implementation of pricing transparency proved to be more challenging than expected. However, this experience has provided both learning and an executive mandate for some global players focusing on evolution of future business and operating models Most of our clients have experienced similar issues and challenges: Lack of a process for dealing with the uncertainty in the regulations leads to different approaches. Many participants did not allow enough time and so have work-arounds which will need to be addressed for the UK. Underestimation of the skills and budgets required particularly governance and programme management required to manage cross functional changes to front line, products and services. Managing pricing, impact on economics and underlying commercial models a key issue for all. Need for coordinated and joined up approach vs. traditional siloed approach between front office and products and services. Many firms took a passive approach to informing the regulator, however some adopted a proactive approach including lobbying efforts. Global players taking divergent views. Some see this as a significant global opportunity to set standards and enhance value propositions for their clients. These organisations are helping their businesses to prepare for regulatory impact and support with implementation. Others see this purely as compliance to local regulation and are adopting a minimalistic country by country approach, with much depending on centre and business unit alignment around future global model/s. Some players have failed to see the need for continual monitoring of competitor and regulator responses post- December 2012 and have not built in capacity to adjust propositions and pricing, or to meet large volume of regulatory requirements expected in the near to medium term (e.g., MiFID II, Conduct Risk). 34

Section 4 Retail Distribution Review (RDR) and impact The rest of Europe: RDR, MiFID UK RDR : post 2012 Commission ends, Adviser Charging introduced Client Clarity : Independent / restricted / no advice choice Higher adviser qualifications (Level 4) required USA The SEC has proposed imposing on broker dealers the same fiduciary duty to clients that is required of investment advisers threatening commission models and delineating between independent advice and sales Spain Increased standard for independent advisors-whole of market advice and mandate fee for advice Source: Analysis NB: Some of these regulatory developments are proposals and therefore are directional and thematic, with final rules expected later Netherlands The Dutch Government has banned commissions on retail investment products from 2013 to force advisers to be more transparent with clients about costs Regulatory developments drive professionalism of advice, better customer outcomes and greater transparency, but at different rates in different territories. EU MiFID II and MiFIR potential ban on commissions for discretionary portfolios and independent advice. May restrict which products could be sold through execution only, potential restrictions on bundling products and services... Brussels pushes for European RDR UCITS VI and PRIPs Italy Commission for discretionary portfolio management already banned (MiFID launch) France Regulator supports ban on inducements for discretionary portfolio services Greater disclosure on commissions across all savings products Singapore The Private Banking Advisory group launched a Code of Conduct for private banks in Singapore The Monetary Authority of Singapore has presented recommendations related to their Financial Advisory Industry Review, which include cap on commissions, creation of an aggregator site for investment products and greater disclosure standards Sweden Leading European development of fair value pricing concept in financial services Germany New requirement for financial advisers to record and document minutes of meetings and circulate to clients Switzerland A position paper has been published covering similar requirements as MiFID and Swiss Government is preparing a proposal for a new financial services act. India The SEBI has introduced new regulations that go in force from 20 April 2013, which restrict commissions on Investment Advisory business They also have a series of broader recommendations related to investor protection Australia Future of Financial Advice (FOFA) regulation is in effect from July 2013 Key focus areas of FOFA Ban on commission on risk insurance products Addressing cost of advice clients mistrust of financial planners Complexity in the planning process Appropriateness of complex/simple advice solutions 35

Section 4 Retail Distribution Review (RDR) and impact Regulatory developments across the world are driving changes to commercial and business models 1 Market access In order to provide investment services to EU retail clients, an investment firm will need to set up a branch in the EU. The passive freedom of services in EU markets shall be harmonised. 3 Investment firms have to specify whether their advice is provided on an independent basis or not. When providing independent service, any inducements shall not be accepted. 5 Independence Market structure Markets shall be regulated, transparent and competitive. Off-market transactions are to be reduced to a minimum. Market making will be regulated in more detail. International regulatory developments 2 Investment suitability Information shall be obtained regarding the client's sophistication and experience. Where a product or service is not appropriate, the client shall be warned. Firms shall provide adequate, standardised reporting on the services provided to their clients. 4 Investment products Transparency rules will apply for all products and services and their components (e.g. retrocessions). Additional information will be needed, also for distributors of products. Ensure transparency throughout the entire customer lifecycle. 6 Operational readiness Firms shall disclose total cost of a product and its components as cash amount. Further disclosures have to be provided to client in permanent form. Other requirements are to be considered as well (e. g. Corporate Governance). 36

Section 4 Retail Distribution Review (RDR) and impact Retrocessions appear to have a short shelf-life Direction of travel of global regulation, combined with other product intervention proposals (e.g., MiFID II, PRIPS) are providing greater impetus to global client solutions focusing on advice. Oct 2012: Swiss Supreme Court rules asset managers have to pay retrocession's back to clients. The amount of fees to be reimbursed is estimated to be in the billions. Source: Reuters I am convinced that banning inducements will contribute to the development of a viable business model with a high level of investor trust although this will also require efforts to improve financial awareness among investors... Steven Maijoor Chair, European Securities and Markets Authority, October 2012 Firms suspected of undermining the RDR spirit through passporting or inappropriate arrangements with providers will be brought to heel, David Geale has warned... He also promised a crackdown if firms blurred the lines between advisory and discretionary business models. FT Adviser reporting David Geale s speech at the ABI conference on RDR ( 27 th November) Product intervention is fundamental to shaping the regulatory philosophy of the new organisation. Adair Turner FSA consults on FCA product intervention powers......regulation is often more effective if it steps in early to pre-empt and prevent widespread harm. We will reflect this in our supervision work when we look at how firms design and sell their products. But a key new power will mean that we can step in and ban the sale of products that pose unacceptable risks to clients for up to 12 months, without consulting first. We will also be able to ban misleading advertising. Martin Wheatley in his speech on journey to the FCA, Oct 2012 37

Challenges and chances: Panel discussion

Section 5 Challenges and chances: Panel discussion Your notes............ 39

Presenters

Section 6 Presenters Your presenters today Dieter Wirth Switzerland Asset Management Lead Switzerland Tax and Legal T: +41 58 792 4488 dieter.wirth@ch.pwc.com Dr. Günther Dobrauz Switzerland Asset Management Regulatory & Compliance T: +41 58 792 1497 guenther.dobrauz@ch.pwc.com Paul Silcock Jersey Asset Management Assurance T: +44 1534 838 3286 paul.silcock@je.pwc.com Jean-Sébastien Lassonde Switzerland Asset Management Assurance Benjamin De Zordi Switzerland Asset Management Tax and Legal Mary Bruen Jersey Asset Management Regulatory & Compliance T: +41 58 792 8146 jean.sebastien.lassonde@ch.pwc.com T: +41 58 792 44317 benjamin.de.zordi@ch.pwc.com T: +44 1534 838 251 mary.bruen@je.pwc.com 41

Appendix

Section 7 Appendix UK process for privately placing under AIFMD Register Approval Process Application fee ( ) AIFMD requirements Periodic fee ( ) Article 36 register (EU AIFMs with non-eu AIFs) Submit form in FUND Annex 1D to FCA. FCA has 20 working days from submission of complete application. 300 (per fund) Appoint independent depositary to meet Art 21.7-21.9 AIFMD requirements. Must be cooperation agreement in place with AIF s home country and that country not be on FATF non-cooperative list. 500 (per fund) Article 42 register (non-eu AIFMs) Submit form in FUND Annex 2D to FCA. FCA has 20 working days from submission of complete application. 300 (per fund) Transparency provisions (Art. 22-24 of AIFMD). Must be cooperation agreement in place with AIFM s (and AIF s, if different) home country and countries not on FATF non-cooperative list. 500 (per fund) Small third country AIFM register Submit form in FUND Annex 3D to FCA. FCA has 20 working days from submission of complete application. 300 (per fund Provide information on the main instruments in which the AIFM trades. Demonstrate the AIF only has a single AIFM which is a legal person and is a small third country AIFM. Provide information on the principal exposures and more important concentrations of the AIFs that the AIFM manages. 350 (per fund) 43

www.pwc.ch/asset_management This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers AG, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. 2013. All rights reserved. In this document, refers to PricewaterhouseCoopers AG which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.