Fund News
Issue 112 - March 2014

Investment Fund Regulatory and Tax developments in selected jurisdictions


This month developments from:

European Union

Agreement between European Parliament and Council on UCITS V

On 25 February the negotiators of the Council and the European Parliament reached an agreement on the UCITS V Directive. The next legislative step will be the formal approval of the European Parliament and of the EU national governments. The text should enter into force before the Parliamentary elections in May 2014. The following is the outcome of the key debated topics. Read more

ESMA issues Final Reports on EuSEF and EuVECA

On 11 February 2014 the European Securities and Markets Authority (“ESMA”) issued two Final Reports, the first (ESMA/2014/160) regarding European venture capital funds (“EuVECA”) and the second (ESMA/2014/161) regarding European social entrepreneurship funds (“EuSEF”). Each report constitutes a draft Commission Regulation setting out implementing technical standards regarding the format of notification according to Regulation EU 345/2013 on EuVECA and to Regulation EU 346/2013 on EuSEF respectively. Read more

ESMA updated the Q&A on the application of AIFMD

On 17 February ESMA published an update of the Questions and Answers on the AIFMD. The Q&A clarifies the following points. Read more

ESMA updated AIFMD MoUs signed by EU authorities

On 20 February 2014, ESMA published an updated version of the table showing the state of play of AIFMD Memoranda of Understanding (“MoUs”) signed by EU national supervisors with non-EU regulators worldwide. As a reminder, the AIFMD MoUs allow the exchange of information between EU and non-EU supervisors thus enabling non-EU fund managers to market alternative funds within the European Union. The update of the AIFMD MoUs is available at the following web link:


IMA sets out its recommendations on the use of dealing commission to pay for investment research

On 18 February, in the light of the debate from the Financial Conduct Authority (“FCA”) initiated at the Asset Management Conference (30 October 2013 – Fund News issue 108) and the subsequent FCA consultation paper (“CP 13/17”) of 25 November 2013 on use of dealing commission, responses to which were due by 25 February 2014 (Fund News issue 109), the Investment Management Association (“IMA”) has published a paper: “The Use of Dealing Commission for the Purchase of Investment Research”. Read more


MiFID: Luxembourg’s Supervisory Authority of the Financial Sector (“CSSF”) issues Circular 14/585 implementing ESMA’s Guidelines on Remuneration

The European Securities and Markets Authority (“ESMA”) issued Guidelines on policies and practice regarding remuneration in October 2013 and the CSSF Circular 14/585 issued on 25 February 2014 implements these guidelines into Luxembourg law by adding an Annex V to the CSSF Circular 07/ 307. The ESMA guidelines, address the issues of: i) conflicts of interest; and ii) benefits, and are in particular related to Chapters 7 and 8 of CSSF Circular 07/ 307. Read more

CSSF updates FAQ on AIFMD

On 20 February the CSSF has published the 5th version of their Frequently Asked Questions (“FAQ”) document concerning the AIFM law in Luxembourg. The CSSF added topics regarding the valuation of the AIF’s assets and transaction costs. Read more


Revenue Commissioners publish updated FATCA guidance

On 7 February 2014 the Irish Revenue Commissioners (“the Revenue”) published updated draft FATCA guidance (dated January 2014) which provides guidance to ‘Reporting Financial Institutions’ on how to comply with their obligations under the Financial Account Reporting Regulations 2014 but which does not have the force of law. The updated guidance supersedes the Revenue’s previous guidance from May 2013. Chapter 5 contains guidance on the identification and reporting of interests in collective investment undertakings and other entities. Read more

CBI publishes first EMIR Q&A – taking a different approach from the FCA on FX Forwards

The Central Bank of Ireland (“CBI”) has produced an EMIR Q&A document in which it is taking a different approach to that taken by the UK’s Financial Conduct Authority (“FCA”) regarding FX forwards carried out for commercial rather than investment purposes. The CBI views such trades as falling within the scope of EMIR whereas the FCA’s view is that they fall outside the scope of EMIR. Read more

CBI publishes first edition of UCITS Q&A

On 4 February 2014 the Central Bank of Ireland (“CBI”) published the first edition of a UCITS Questions & Answers document, mirroring the Q&A document that it published for the AIFMD. Like the AIFMD Q&A, the UCITS Q&A is designed to provide guidance and reduce uncertainty on regulatory requirements, however, it is not a requirement in assessing compliance with regulatory requirements. Read more

CBI publishes 7th Edition of AIFMD Q&A

On 4 February 2014, the Central Bank of Ireland (“CBI”) published a seventh edition of the AIFMD Q&A amending its previous answer on the AIFMD passport. The CBI had previously advised that, with the exception of UCITS management companies, the additional services of Article 6(4) of the AIFMD did not benefit from the AIFMD passport. However, it has updated its previous advice in the light of the recent agreement to amend Article 33 of the AIFMD, as part of the agreement reached on MiFID II. Read more

CBI letter on Irish UCITS Man Co managing non-Irish UCITS

The Central Bank of Ireland (“CBI”) has written to industry to specify that where an Irish UCITS management company (“UCITS Man Co”) is appointed to a non-Irish UCITS fund and the Irish management company proposes to delegate functions relating to non-Irish UCITS funds to a non-Irish depositary, it will seek confirmation from the home regulator of the UCITS that these arrangements meet local regulatory requirements. The CBI will consider each proposal on its merits to ensure that adequate separation of functions and conflicts of interests are in place.

CBI letter on classification of indices for UCITS

The Central Bank of Ireland (“CBI”) has written to industry to specify that there should be no distinction between ‘indices’ and ‘financial indices’ for the purpose of applying the ESMA Guidelines on ETFs and other UCITS issues and that it has not changed its policy regarding the review of indices since the publication of ESMA’s Guidelines.

AML and authorisation of ‘Trust & Company Service Providers’

New Regulations have been enacted which transfer the power to authorise certain ‘Trust & Company Service Providers’ (“TCSPs”) for anti-money laundering purposes from the Minister of Justice and Equality to the Central Bank of Ireland. However, the Regulations will only apply to TCSPs which are ‘designated persons’ and subsidiaries of a credit institution or a financial institution. TCSPs which do not fulfil these criteria will continue to be authorised by the Department of Justice and Equality. Read more

Key dates reminder

Read more


Proposed Conduct of Business Rules

The Malta Financial Services Authority (“the MFSA”) issued a consultation document, with a deadline of 14 March 2014, on the proposed Conduct of Business Rules for the enhanced protection of customers in investment services. Some of the recommendations will impact customers in the wider area of financial services. Read more


An updated Q & A document with regards to AIFMD was released by the Malta Financial Services Authority (“the MFSA”) on 14 February 2014. This was released to aid existing fund managers finalise the self-assessment questionnaire for submission by the deadline of 31 March 2014, as well as guide to prospective fund managers looking to establish in Malta. Read more


The intergovernmental agreement (“IGA”) between Malta and the United States has now been signed. By adopting the Model I IGA, Maltese financial institutions will be reporting directly to the Maltese tax authorities. Registered financial institutions may be exempted from withholding US tax on payments made to US shareholders, as well as on tax being withheld on income derived from US Investments.


CISA - distribution of foreign collective investment schemes targeted at retail investors as of 1 March 2014

As of 1 March 2014, a Memorandum of Understanding (“MoU”) between the Swiss Financial Market Supervisory Authority (“FINMA”) and the respective supervisory authority of the Fund is required for the distribution of foreign collective investment schemes targeted at retail investors. This is due to the recent revision of the Swiss Collective Investment Schemes Act (“CISA”) which entered into force on 1 March 2013. Such MoUs are a prerequisite for FINMA to continue authorising the distribution of foreign collective investment schemes targeted at non-qualified investors. Read more

Asset managers of Pension Schemes’ funds require a FINMA or equivalent foreign license or an admission by Pension Schemes’ Supreme Supervisory Authority

As of 1 January 2014, Asset Managers of Swiss pension schemes are required to either be regulated by FINMA, or a foreign regulator, or they must be admitted as asset manager for pension schemes by the Pension Schemes’ Supreme Supervisory Authority. On 19 February 2014, the Pension Schemes’ Supreme Supervisory Authority issued its detailing regulations on the subject, requiring provisionally admitted managers to now file full applications for admission in accordance with the now issued detailing regulations. Read more


Implementation of the AIFM Directive in Germany – significant changes of the German Investment Tax Act (“GITA”)

Have you already considered whether your fund will continue to be within the scope of the GITA? Significant changes of the German Investment Tax Act which became effective on 24 December 2013 could change the qualification of your funds for German tax purposes. To avoid negative consequences for your investors we therefore strongly recommend a thorough analysis of relevant investment vehicles at an early stage. Read more


OTC derivatives: the Financial Stability Board (“FSB”) issues its feasibility study on approaches to aggregate OTC derivatives data

G20 Leaders agreed, as part of their commitments regarding OTC derivatives reforms, that all OTC derivatives contracts should be reported to trade repositories (“TRs”). The FSB was requested to assess whether implementation of these reforms is sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse. Read more

IOSCO consults on the review of the Code of Conduct Fundamentals for CRAs

On 10 February 2014, IOSCO published a consultation report on Code of Conduct Fundamentals for Credit Rating Agencies (“CRAs”) which proposes revisions and updates of the 2008 IOSCO Code of conduct for CRAs. This review will take into account the fact that CRAs are now supervised by national authorities and therefore align the IOSCO CRA code with the CRA registration and oversight programs that many IOSCO members have implemented in recent years, and that continue to operate as the international standard for CRA self-governance. Read more


On 13 February 2014, the OECD released its global standard for automatic exchange of financial account information. The Global Standard developed by the OECD and G20 countries in close cooperation with the EU, is part of the project known as the ‘OECD FATCA’. As the name ‘OECD FACTA’ suggests, the Global Standard is based on the Model 1 intergovernmental agreement (“IGA”) to implement the U.S. tax and reporting provisions commonly known as FATCA. The Global Standard has been endorsed by the G20 Finance Ministers and Central Bank Governors at their meeting of 22 February in Sydney, Australia. Read more

Back to top

Print Fund News

For further details on any of these topics, or for any questions or queries you may have, please get in touch with your usual KPMG contact or one of the KPMG LLP (UK) contacts listed below

Tom Brown
Tel: 020 7694 2011

Jon Mills
Tel: 020 7311 6079

Gareth Horner
Tel: 013 1527 6951

Rachel Hanger
Tel: 020 7311 5328

Nathan Hall
Tel: 020 7311 5217

Paul Bradbury
Senior Manager
Tel: 020 7694 2946

Stefano Borsi
Tel: 013 1527 6816

Colin French
Senior Manager
Tel: 013 1527 6765

Andrew Clark
Senior Manager
Tel: 020 7311 1480

KPMG in Luxembourg Contact details

Ravi Beegun
Tel. +35222 5151 6248

Georges Bock
Tel. +35222 5151 5522

Vincent Heymans
Tel. +35222 5151 7917

The electronic version of Fund News contains hyperlinks to Web sites which are independent of KPMG LLP (UK) and over which KPMG LLP (UK) has no control. To the fullest extent permitted by English law, KPMG LLP (UK) will not accept any responsibility or liability for the content of any such other Web sites or for any consequences.

Unsubscribe | Privacy | Legal

© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG LLP, 15 Canada Square, London, E14 5GL

Designed and produced by Oliver Marketing
Publication Number: OM 013748A