Latest ICMA developments
14 August 2020 The ICMA Legal & Documentation Committee and the ICMA European Repo and Collateral Council submitted a response to the EBA’s consultation paper on draft RTS on the contractual recognition of stay powers under Article 71a(5) of Directive 2014/59/EU (BRRD) expressing concerns with certain elements of EBA’s proposed RTS and urging EBA to consider further alignment with the FSB’s Principles for Cross Border Effectiveness of Resolution Actions.
20 August 2020: AMIC published its bi-weekly COVID-19 market update podcast in which Robert Parker, Chairman of AMIC, decipher the market events of the last two weeks, in light of the S&P 500 new record high, the recent dollar weakness, central banks' policy outlook and institutional investors' positioning.
Coming up next
25 August 2020: AMIC Sustainable Finance Working Group will meet to finalise its response to the ESAs consultation on ESG Disclosure.
27 August 2020: AMIC Sustainable Finance Working Group will meet to finalise its response to the ESMA consultation on draft guidance to address leverage risks in AIFs
ICMA Asset Management and Investors Council (AMIC) Regulatory Update
19 August ESMA recommends priority topics in AIFMD review
ESMA has written to the European Commission (Commission) highlighting areas to consider during the forthcoming review of the Alternative Investment Fund Managers Directive (AIFMD). ESMA's letter includes recommendations for changes in 19 areas including harmonising the AIFMD and UCITS regimes; delegation and substance; liquidity management tools; leverage; the AIFMD reporting regime and data use; and the harmonisation of supervision of cross-border entities. Many of the recommendations made also require consideration of changes to the UCITS legislative framework.
14 August EIOPA adopts implementation measures for the Pan-European Personal Pension product
EIOPA adopted the draft Regulatory and Implementing Technical Standards and advice on Delegated Acts for the design and delivery of the Pan-European Personal Pension product (PEPP). These legal proposals, yet to be endorsed by the European Commission, deal with pre-contractual and annual information documents for consumers, the cost cap of the basic PEPP, criteria for sound and robust investment strategies and risk mitigation techniques (i.e. life-cycle) and the cooperation between EIOPA and national competent authorities. The PEPP is a CMU flagship initiative which has for objective to unlock the potential of the European personal pension market.
Liquidity in equity markets
11 August IOSCO examines the evolution of liquidity provision in equity securities markets
The Board of the International Organization of Securities Commissions (IOSCO) has published a report that explores how liquidity provision has evolved in equity securities markets in recent years. The report, titled Liquidity Provision in the Secondary Markets for Equity Securities, identifies some of the key elements of market making programs that may help promote the provision of liquidity, strengthen investor confidence and foster fair and efficient markets.
7 August CSSF: UCITS can no longer invest in loans
The CSSF published the new approach on 7 August 2020 through an update of its FAQ on the Luxembourg law of 17 December 2010 on undertakings for collective investment. The CSSF states that loans cannot qualify neither as money market instruments nor as transferable securities within the meaning of applicable law and CESR guidelines concerning eligible assets for investment by UCITS (CESR being the predecessor of ESMA). UCITS invested in loans have to disinvest from those positions by 31 December 2020, taking into account the best interests of investors. In addition, the prospectuses of those UCITS, offering the possibility to invest in loans, have to be updated, by 31 March 2021 at the latest, in order to no longer provide for the possibility for such investments.