Quarterly Funds Update | Winter 2017 | MiFID II special
Published on 2nd Mar 2017
Welcome to the latest edition of Osborne Clarke’s Quarterly Funds Update. We hope that you find it interesting. If you would like to discuss any of the content, or have a subject that you would like us to cover in a future edition, please let one of us know. Our contact details are set out below.
Best regards,
Tim Simmonds, Helen Parsonage and Oonagh Harrison
MiFID II: where are we on some of the key challenges for fund managers?
With less than a year to go until MiFID II goes live, we take this opportunity to consider four of the key challenges facing UK-based fund managers. Given the complexity and breadth of the revised regime, affected firms should be accelerating implementation projects to allow sufficient time for IT and system enhancements, as well updating policies, procedures and client documentation. This article provides an overview of the relevant requirements and confirms the approach the FCA is intending to take in order to implement MiFID II.
MiFID II: a practical consideration of the new product governance requirements
On 5 October 2016, ESMA published a consultation paper considering draft guidelines on the MiFID II product governance requirements. The aim of the guidelines is to provide greater clarity on the obligations for manufacturers and distributors, with a particular focus on the target market assessment. In this article, we consider the requirements, the FCA’s intended approach for implementation and the practical implications for fund managers and those involved in marketing funds.
MiFID II client categorisation: what do the changes mean for Local Government Pension Schemes?
Whilst MiFID II does not change the categories of client, nor the various monetary thresholds and experience levels that eligible counterparties and professional clients are required to meet, there have been some fundamental changes to how municipalities and local public authorities are able to be classified. From 3 January 2018, they are no longer permitted to be eligible counterparties or per se professional clients, so they are, in effect, deemed to be retail clients. These entities will be able to elect to be treated as elective professional clients and ‘opted up’ from retail client status. The FCA proposes to exercise the Member State discretion granted by MiFID II and adopt specific criteria for the assessment of the knowledge and expertise of municipalities and local public authorities requesting to be treated as professional clients. This article considers the application of these proposals to Local Government Pensions Schemes and the potential implications of being classified as either retail or elective professional.
FCA asset management market study: interim report
On 18 November 2016, the FCA published an interim report in relation to its asset management market study. This interim report was due to be published in the summer of 2016 but the timeline has been stretched, both due to changes at the FCA and by the volume of material that has been gathered. Whilst the study is being conducted under a competition banner, the proposed remedies go much further and are likely to have a fundamental impact on the entire industry.
Upcoming seminar: Harnessing the Power of Diversity in the Asset Management Sector
In the latest in our series of funds and alternative asset management seminars we will be co-hosting with The Association of Real Estate Funds (AREF). During this seminar, Professor Richard Crisp will be delivering a keynote speech on ‘Harnessing the Power of Diversity’.
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