Investment Fund Regulatory and Tax developments in selected jurisdictions

European Union

UCITS V update – ECON Committee draft report

On 9 November 2012 the European Parliament's ECON Committee published a draft report on the Commission’s proposal to amend the UCITS Directive (“UCITS V”) in the areas of custody, liability, remuneration and sanctions. The draft report contains a number of amendments to the draft UCITS Directive. Read more

UCITS V update – Council compromise text

On 16 November 2012 the Council of the European Union released the first Cypriot Presidency compromise text on the UCITS V proposal. The document contains new provisions. Read more

ESMA opinion on UCITS portfolio investments

On 20 November 2012 the European Securities and Markets Authority (“ESMA”) issued an Opinion on Article 50(2)(a) of the UCITS Directive 2009/65/EC that deals with the types of portfolio investments that are eligible for the ‘other 10%’ bucket.  According to ESMA, article 50(2)(a) refers only to investments in transferable securities and money market instruments and not to units or shares of collective investment undertakings. Read more

Advisory services can constitute exempt VAT management – the GfBk opinion

The Advocate General’s (“AG”) Opinion in the GfBk case has been released.  It raises a number of interesting points around the scope of the fund management exemption, the extent to which VAT interpretations ought to follow definitions drawn from other areas of law and regulation, as well as some potentially instructive notes on how EU exemptions ought to be applied in practice.  A full Court of Justice of the European Union (“CJEU”) Judgment is expected within a few months. Read more

UK

FSA commences consultation on implementing the AIFMD

On 14 November 2012 the Financial Services Authority (“FSA”) issued a Consultation Paper (‘CP12/32’) on the proposed rules and guidance for transposing the Alternative Investment Fund Managers Directive (“AIFMD”) into UK law.  It is the first of two instalments and takes important policy positions on a wide variety of areas that will impact how the Directive applies in the UK to managers of traditional investment funds, hedge funds, investment trusts, private equity, infrastructure and real estate.  The second instalment is expected to be published in Q1 2013 and will explain in more detail the AIFMD’s ‘regulatory perimeter’, clarifying which firms will need to seek authorisation as an AIFM, and reflecting that areas will need to be clarified after the EU level 2 technical provisions are released. Read more

Ireland

Central Bank consultation on implementing the AIFMD

The Central Bank of Ireland has issued consultation paper 60 on how it proposes to implement the Alternative Investment Fund Managers Directive (“AIFMD”).  The consultation paper, which is 307 pages, sets out in detail how the Central Bank proposes to amend its current rules by replacing them with a single ‘AIF Handbook’. Read more

Proposed changes to the regulatory reporting obligations of Irish funds

In June 2012, the Central Bank of Ireland issued consultation paper 59 (“CP 59”) proposing changes to the regulatory reporting requirements for Irish funds.  The Central Bank has now published a Feedback Statement on the submissions it received on CP 59.  While it has made some specific changes, in general the Central Bank intends to proceed as set out in the consultation paper. Read more

Dear CEO letter on Anti-Money Laundering (“AML”)

In the last year, the Central Bank of Ireland has carried out a range of inspections to monitor compliance by financial services firms with their AML obligations.  As a result, the Central Bank issued, in October, a letter to all Irish regulated firms, including funds, fund administrators and custodians.  In this letter the Central Bank provides an overview of its key findings and asks firms to consider these findings in the context of their own AML control environment.  The “Dear CEO” letter is available on the Central Bank’s website:
https://www.centralbank.ie/regulation/processes/enforcement/
documents/ dear%20ceo%20aml-ctf%20letter.pdf

Luxembourg

CSSF press release on UCITS portfolio investments

On 23 November 2012 the Commission de Surveillance du Secteur Financier (“CSSF”) issued a Press Release to draw to the attention of Luxembourg UCITS to the ESMA Opinion on the eligibility of instruments under article 41(2)a) of the law of 2010 on Undertakings for Collective Investment.  Luxembourg UCITS will have until 31 December 2013 to liquidate any current non-compliant fund holdings, and are not permitted to make any new investments in non-compliant funds.  The one page Press Release is available, in French, via the following link:
http://www.cssf.lu/

Tax Treaty Updates; Macedonia; Laos; Mongolia and Jersey

Double Tax Treaty with Macedonia

The treaty with Macedonia was signed on 15 May 2012 and has been ratified on 6 November 2012.  The details are now available and the treaty generally follows the OECD Model Convention (2008).  Read more

Aberdeen E-Alerts

The latest Aberdeen E-Alert issue 2012-16 focusing on withholding tax reclaims based on the Aberdeen case law discusses the administrative practice in the Netherlands in relation to the extended period of five years for filing reclaims.

The full alert is available here:
http://www.kpmg.com/lu/en/issuesandinsights/articles
publications/pages/ aberdeene-alert-issue2012-16.aspx

International

FSB consultation on Shadow Banking

On 18 November the Financial Stability Board (“FSB”) published for public consultation a set of recommendations to strengthen oversight and regulation of shadow banking.  The FSB has focused on the following five areas:

• to mitigate the spill-over effect between the regular banking system and the shadow banking system; 
• to reduce the susceptibility of money market funds (“MMFs”) to ‘runs’;
• to assess and mitigate systemic risks posed by other shadow banking entities;
• to assess and align the incentives associated with securitisation; and
• to dampen risks and pro-cyclical incentives associated with secured financing contracts such as repos, and securities lending that may exacerbate funding strains in times of ‘runs’. Read more