European Fund Distribution
Link’n Learn
Leading Business Advisors
Contacts
Aisling Costello
Senior Manager – Investment Management Advisory
Deloitte & Touche Ireland
T: +353 1 417 2834
Markus Schwamborn
Senior Manager– Outsourced Solutions
Deloitte Luxembourg
T: +352 451 452 735
Marc Escher
Director– FSI Investment Management
Deloitte Switzerland
T: +41 58 279 70 38
Agenda
2. UCITS - KID v KIID
1. Market overview
3. European Long Term Investment Fund
4. AIFMD distribution –ESMA’s call for evidence
5. Swiss funds distribution
6. Q&A
7. Food for thought
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Market Overview
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Market overview
(*) Including funds of funds.
The information presented in this report was compiled by EFAMA and the Investment Company Institute
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Market overview
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Net Sales of Investment Funds(EUR billions)
Market overview
USA Europe (1) World (2)
2014 2014 2014
Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total
Equity 46 14 2 26 88 27 24 14 -3 61 92 48 24 44 207
Bond 29 37 11 17 93 61 56 47 25 -10 34
12
191
-5
187
30
471
69
21
71
39
271
112 -
49 81
60
301
79
67 72
49
223
63
115 52
61
220
323
154
276
209
1,015
Money Market -61 -52 33 98 18 14 -22 13
Balanced / Mixed 13 13 10 5 41 45 55 52
Other (3) 16 23 20 21 80 2 12 3
Long-Term (4) 104 87 43 68 302 135 152 116 68
Total 42 35 76 166 320 148 126 130 58 463 292 252 290 335 1,169
1. For Austria, Bulgaria, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Liechtenstein,
Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and UK.
2. 44 countries reported in 2014:Q4; 42 in 2013:Q4, 2014:Q1 and 2014:Q2. Assets of reporting countries represented 95 percent of all
countries at the end of 2014:Q4.
3. Including net sales of funds of funds.
4. Total excluding Money Market Funds
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UCITS - KID v KIID
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Definition
Packaged
Retail and
Insurance-
based
Investment
Products
Financial product offering
investment opportunities to retail
investors where the return offered
[..] is exposed to the performance
of reference values of one or
more assets not directly
purchased by the investor.
Retail packaged structured
products intercede between the
investor and the markets
through a process of “packaging”,
wrapping or bundling together
assets so as to create different
exposures, provide different
product features, or achieve
different cost structures as
compared with direct holding.
10 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
PRIIPs intercede between the investor and the markets
P R I I P s
Products with
capital and/or
return guarantees
All investment
funds, whether
closed ended or
open ended
Structured deposits (but
not deposits linked
solely to interest rates).
Derivative
instruments
Certain
pension
products
UCITS
SPVs,
holding
companies
Unit-linked
life insurance
Asset Management Banking Insurance
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Eureka!
Need for the creation
of a level playing field
across industries
& increased investor
protection
Similar products
Similar investors
Different rules
Mis-selling
KID
Key Information Document
Increased powers for EIOPA on insurance-based products
Requirements on complaints handling and cross-border
redress procedures
Harmonized administrative penalties
Different
industries
12 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
The timeline for PRIIPs
2014 2015 2016 2017 2018 2019
Entry into force
of PRIIPs
regulation
29 Dec 2014
Regulation and RTS will
become applicable from
31 Dec 2016 to all PRIIPs
except UCITS
Adoption of final version
voted in EU Parliament 15
April 2014
Review or Regulation after
4 years
Exemption period for UCITS
31 Dec 2019
No retroactive
impact
+2 years +4 years +5 years
Publication of Discussion
Paper 17 Nov 2014
Add. technical Discussion Paper
on complex aspects (spring 2015)
draft RTS on Art. 10 & 13
31 December 2015
draft RTS on Art. 8
31 March 2016
Consultation Paper on draft
complex RTS (autumn 2015)
Consultation Papers for
RTS under Art. 10 and 13
(Q2 2015)
Consumer testing
13 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Products out of scope
PRIIPs
• Non-life insurance products as listed in Annex I of Directive
2009/138/EC (“Solvency II”);
• Life insurance contracts where the benefits under the contract are
payable only on death or in respect of incapacity due to injury,
sickness or infirmity;
• Deposits other than structured deposits as defined in Article 4 of
Directive 2004/39/EC (“MiFID”)
• Securities referred to in points (b) to (g),(i) and (j) of Article 1 (2) of
Directive 2003/71/EC (“Prospectus Directive”)
• Pension products which, under national law, are recognised as
having the primary purpose of providing the investor with an income
in retirement, and which entitle the investor to certain benefits;
• Officially recognised occupational pension schemes falling under
the scope of Directive 2003/41/EC (“Occupational Pension Funds
Directive*) or Directive 2009/138/EC;
• Individual pension products for which a financial contribution from
the employer is required by national law and where the employer or
the employee has no choice as to the pension product or provider
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PRIIPs - KID
Key features of the regulation
What are
the impacts
on
your products?
EBA, EIOPA and ESMA shall develop draft regulatory standards specifying
1) the details of the presentation and the content of each of the elements of
information in the KID, the methodology underpinning the presentation of
risk and reward and the methodology for the calculation of costs,
including the specifications of summary indicators
2) the conditions for a revision of the information contained in the KID
3) the conditions for the provision of the KID
The KID shall be provided by the person advising or selling the PRIIP:
1) on paper (default in face-to-face offerings);
2) using a durable medium other than paper;
3) by means of a website.
In cases 2) & 3) investor can request paper copy free of charge
The PRIIP manufacturer shall publish the KID on its website before the
PRIIP is made available to retail investors. Information in the KID is pre-
contractual and shall be accurate, fair, clear and not misleading.
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PRIIPs
Key features of the regulation
What are
the impacts
on
your products?
Without prejudice to the supervisory powers of competent authorities and the
right of Member States to provide for and impose criminal sanctions,
Member States shall lay down rules establishing appropriate
administrative sanctions and measures applicable to situations which
constitute a breach of the provisions of this Regulation and shall take all
necessary measures to ensure that they are implemented. Those sanctions
and measures shall be effective, proportionate and dissuasive.
Administrative penalties and other administrative measures :
• Marketing prohibition/suspension
• Public disclosure
• New KID to be published
• Administrative fines of EUR 5 million or up to 3% of the total annual
turnover or up to twice the amount of the profits gained or losses avoided
because of the breach for a legal person
• Up to EUR 700k or up to twice the amount of the profits gained or losses
avoided because of the breach for a natural person
A decision, against which there is no appeal, imposing an administrative
sanction or measure for breaches shall be published by competent
authorities on their official website without undue delay after the person
sanctioned is informed of that decision.
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approach
The KID dissected
• “What is this product?
Type of PRIIP, objectives, consumer type to whom PRIIP is intended to be marketed,
information on insurance benefits, the term of the PRIIP
• “What are the risks and what could I get in return?”
Brief description of the risk-reward profile, containing: a summary risk indicator with
supplementary explanations; possible maximum loss of invested capital; performance
scenarios; conditions for returns or performance caps; impact of tax legislation
• “What happens if [name of the PRIIP manufacturer] is unable to pay out?”
Brief description of whether the related loss is covered by a compensation or guarantee
scheme, if so, which risks are covered and which not
• “What are the costs?”
Costs associated with an investment in the PRIIP, comprising direct and indirect costs,
one-off and recurring costs with summary cost indicators and aggregate costs; an
indication of additional costs charged by advisors, distributors etc. must be included
• “How long should I hold it and can I take money out early?”
Applicable cooling off or cancellation period, minimum holding period, disinvestments
before maturity, consequences of cashing in early
• “How can I complain?”
How and to whom complains can be made
• “Other relevant information”
Brief indication of any additional information documents, excluding marketing material
• Reviews of the contents of the KID shall be made regularly and revised versions shall be
made available promptly.
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A simple upgrade ?
UCITS KIID vs PRIIPs KID Illustrative
Key changes about form
1. Question style headings
Key Information Document
This document provides you with key information about this investment product. It is not marketing
material. The information is required by law to help you understand the nature, risks, costs, potential
gains and losses of this product to help you compare it with other products.
(i) the type of the PRIIP;
(ii) its objectives and the means for achieving them, in particular whether the
objectives are achieved by means of direct or indirect exposure to the
underlying investment assets, incl. a description of the underlying instruments,
or reference values incl. a specification of the of the markets the PRIIP invests
in, incl. where applicable, specific environmental or social objectives the
products targets, as well as how the return is determined.
(iii) intended types of investors in simple terms incl. ability to bear investment
loss and investment horizon;
(iv) Where PRIIP offers insurance benefits, details of those benefits, incl.
circumstances that would trigger them;;
(v) the term of the PRIIP (if known)
• Performance scenarios
• Conditions for returns to
investors / performance caps
• Statement on impact of tax
legislation
• Summary risk indicator + narrative
explanation of indicator;
• max. loss; additional commitments &
obligations? Capital guarantee
included?
Comprehension Alert: You are about to
purchase a product that is not simple and
may be difficult to understand.
Investment product name
Investment product manufacturer / Holder of legal liability for the
document (name and address)
What is this investment?
What are the risks and what might I get back in return?
Name of PRIIP
PRIIP manufacturer / Holder of legal liability for the document (name and
address) / Competent authority / Date of document
What is this product?
What are the risks and what could I get in return?
2. Risk and reward section
tbc
Page 1
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A simple upgrade ?
UCITS KIID vs PRIIPs KID Illustrative
What happens if the PRIIP manufacturer is unable to pay out?
Cooling off or cancellation period, minimum holding period, possibility to
disinvest, consequences of cashing in, before maturity, investment horizon of
the underlying assets
Other relevant information
Brief description of whether the related loss is covered by an investor
compensation scheme or guarantee scheme and if so, which scheme it is,
name of the guarantor and which risks are covered by the scheme and which
are not.
What are the costs?
Total direct and indirect costs, incl. one-off and recurring costs, presented by
means of summary indicators of these costs and total aggregate costs
expressed in monetary and percentage terms to show the compound effects of
the total costs on investments;
Clear indication that advisors, distributors or any other person advising on or
selling PRIIP will provide information detailing any cost of distribution that is
not already included in the costs specified above.
How long should I hold it and can I take money out early?
Any additional information except marketing material
How can I complain?
How and to whom
Key changes about form
1. Question style headings
Page 2
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A simple upgrade ?
UCITS KIID vs PRIIPs KID Illustrative
Key Information Document
This document provides you with key information about this investment product. It is not marketing
material. The information is required by law to help you understand the nature, risks, costs, potential
gains and losses of this product to help you compare it with other products.
(i) the type of the PRIIP;
(ii) its objectives and the means for achieving them, in particular whether the
objectives are achieved by means of direct or indirect exposure to the
underlying investment assets, incl. a description of the underlying instruments,
or reference values incl. a specification of the of the markets the PRIIP invests
in, incl. where applicable, specific environmental or social objectives the
products targets, as well as how the return is determined.
(iii) intended types of investors in simple terms incl. ability to bear investment
loss and investment horizon;
(iv) Where PRIIP offers insurance benefits, details of those benefits, incl.
circumstances that would trigger them;;
(v) the term of the PRIIP (if known)
• Performance scenarios
• Conditions for returns to
investors / performance caps
• Statement on impact of tax
legislation
• Summary risk indicator + narrative
explanation of indicator;
• max. loss; additional commitments &
obligations? Capital guarantee
included?
Comprehension Alert: You are about to
purchase a product that is not simple and
may be difficult to understand.
Investment product name
Investment product manufacturer / Holder of legal liability for the
document (name and address)
What is this investment?
What are the risks and what might I get back in return?
Name of PRIIP
PRIIP manufacturer / Holder of legal liability for the document (name and
address) / Competent authority / Date of document
What is this product?
What are the risks and what could I get in return?
Key changes about substance
1. New Comprehension Alert
Comprehension Alert: You are about to
purchase a product that is not simple and
may be difficult to understand.
2. Updated content..
3. …and new content
Page 1
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A simple upgrade ?
UCITS KIID vs PRIIPs KID Illustrative
Competent authority
Key changes about substance
What happens if the PRIIP manufacturer is unable to pay out?
Cooling off or cancellation period, minimum holding period, possibility to
disinvest, consequences of cashing in, before maturity, investment horizon of
the underlying assets
Other relevant information
Brief description of whether the related loss is covered by an investor
compensation scheme or guarantee scheme and if so, which scheme it is,
name of the guarantor and which risks are covered by the scheme and which
are not.
What are the costs?
Total direct and indirect costs, incl. one-off and recurring costs, presented by
means of summary indicators of these costs and total aggregate costs
expressed in monetary and percentage terms to show the compound effects of
the total costs on investments;
Clear indication that advisors, distributors or any other person advising on or
selling PRIIP will provide information detailing any cost of distribution that is
not already included in the costs specified above.
How long should I hold it and can I take money out early?
Any additional information except marketing material
How can I complain?
How and to whom
1. New Comprehension Alert
2. Updated content..
3. …and new content
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Our feeling for the fund industry…
… based on known information available today and in the absence of any draft of the level 2
technical guidelines, we do not foresee major issues in adapting the UCITS KIID into a PRIIPs KID
for funds.
This is an evolution rather than a revolution.
The challenges, broadly speaking, are likely to
remain the same as for the UCITS KIID: strong data
management and product life cycle integration. Some
adjustment will be necessary but no major change is
anticipated for (solid) KIID platforms.
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European Long Term Investment Fund
23 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
European Long Term Investment Fund
ELTIF
TIMELINE
July
2012
June
European
Commission
published a
legislative
proposal for
a Regulation
on European
Long-Term
Investment
Funds
2014
March April
European
Parliament
published
revised text
of ELTIF
Regulation
2015
Dec
Council
confirms
agree-
ment with
European
Parlia-
ment
2013
March
Long-term
financing:
European
Commission
adopted
Green paper
and
launched
consultation
on long-term
financing of
EU economy
April Q2
ELTIF
Text is
expected to
be
published in
the Official
Journal. It
will enter
into force
20 days
later.
Council of
the EU
published
text on 20
March,
which it
appeared to
adopt in
April 2015
March
European
Parliament:
Adopted text
of ELTIF
Regulation
COREPER
invited to
suggest
Council of EU
approves
European
Parliament's
position on
ELTIF
Regulation
Council of
the EU
Presidency
compromise
proposal on
ELTIF
Regulation
European
Commission
consulted on
potential
UCITS
measures
End
2015
ELTIF
Regulati
on
expecte
d to
apply
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A quick glance
Background to the ELTIF
European Commission
adopted a green paper
on the long-term
financing of the
European economy on
25 March 2013
Discussing the ELTIF in
June 2013, Michel
Barnier, Internal Market
and Services
Commissioner,
explained
• improve the supply of long-term financing
• improve and diversify the system of financial intermediation for long-term
investment in Europe
• confirmed the need for measures on investment funds.
‘We need to secure long-term financing for Europe's real economy. Currently
financing is often scarce and where it exists, too focused on short-term goals.
The ELTIF is an investment vehicle that will allow professional investors and
individuals to invest long-term in European non-listed companies and in long-
term assets such as real estate and infrastructure projects.
Making ELTIFs available to all types of investors across the European
Union is vital to maximise the pool of capital available to European
companies.
I hope that creating a new EU investment brand will gain the confidence of
investors and companies alike’
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Key
features
Transparency
Distribution
& investors
Diversity
Liquidity
BackgroundOpportunity
Structure
Eligible
investments
Details of ELTIF's long-term
nature.
AIFMD & Prospectus
Directive requirements
Prominent descriptions of
eligible assets & warning of
illiquidity.
All costs attached to the
fund.
KID (if retail investors)
At least 70% must be invested in
‘eligible assets’, including equity/
debt/loans or infrastructure
projects issued to QPUs. This
limit is disapplied during a start-
up period of 5 years to build up
this portfolio, and also during the
end of the life of the fund when
positions are being closed
Up to 30% can be invested in the
assets referred to in Article 50(1)
of Directive 2009/65/EC of the
European Parliament and of the
Council (UCITS)
AIFMD Marketing passport
investors can transfer their interests in the
secondary market
Minimum investment - €10,000
Retail & Professional investors
Hybrid product – like a UCITS it can be passported
to retail investors across the EU; like an AIF it can
invest in property
Max 10% of capital can be
invested in a single qualifying
portfolio undertaking (20%, if the
aggregate value of assets held by
the ELTIF in QPUs in which it
invests more than 15% is capped
at 40% of the value of its capital.)
Max 10% of capital in units of a
single ELTIF, EuVECA or EuSEF.
• AIF only, Authorised AIFM only, Regulated fund
• Closed ended (may include redemption rights)
• Up to 30% of the capital of the ELTIF can be used to purchase eligible
investment assets. Not available for loan funding
• Cannot be a partnership (if retail)
• Umbrella funds
• non-financial unlisted entities
established to invest in infrastructure,
property, ships, aircraft, rolling stock,
real assets, loans
• Real assets must be valued at least €10m
• listed small and medium enterprises
• ELTIFS, EUVECAs, EUSEFs
• Excludes: funds, financial undertakings,
organised trading facilities and listed
entities
Infrastructure transaction volumes at between
€100 - €150 billion a year
€1,500 to €2,000 billion will be needed to finance
infrastructure project needs in Europe up to
2020. Approved channel for EIB funding.
UCITS VI
stand-alone fund product regulated by AIFMD
ELTIF – key features -
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AIFMD distribution –ESMA’s call for evidence
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AIFMD - Scope & Distribution Options
EU AIFM + EU AIF (Article 32)
Marketing in the EU only possible
via marketing passport
EU AIFM + Non-EU AIF (Article 36)
Marketing to EU state only possible
via notification to host state regulator
Non-EU AIFM + Non-EU AIF (Article 42)
Marketing to EU state only possible via
notification to host state regulator
• AIFMD does not regulate the product (i.e. the AIF) but the AIFM
• AIFMD does not grant a distribution passport to the AIF but the AIFM
• Investment policy as such does not qualify an investment fund as AIF; rather all investment funds that do not qualify as UCITS, are de facto AIFs
Scope
• Professional investors
• Alternative Investment Fund Manager
(AIFM)
- EU AIFM managing and marketing EU
or non-EU AIF
- Non-EU AIFM managing EU AIF
- Non-EU AIFM marketing EU or non-EU
AIF within the Union
• Alternative Investment Funds
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EU AIFM & EU AIF
EU AIFM & Non-EU AIF
Non-EU AIFM & EU AIF
Non-EU AIFM & Non-EU AIF
AIFMD - timeline for Marketing in the EU
22 July 2013 2014 2015 2016 2017 2018 2019
Deadline for
implementatio
n of AIFMD in
Member
States
Grandfathering
provisions re.
delay to apply
for AIFM licence
ESMA decision on
availability of the EU
passport for non-EU
AIFM and non-EU AIF
ESMA decision on
abolishment of
national placement
regimes
* Passport anticipated end 2015 / early 2016 depending on ESMA opinion to be issued in July 2015
** Member States may decide at their own discretion to end National Placement regimes anytime prior to 2018
EU Passport
EU Passport*
EU Passport*
EU Passport*
National Placement **
National Placement **
The AIFM Directive foresees different timelines for making an EU distribution passport available, and
for ending EU National Placement regimes **.
• Prior to 2018, marketing in the EU via either an EU passport or National Placement Regimes is, in
principle, possible.
• After 2018, only marketing through an EU passport will be possible.
29 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
AIFMD - ESMA Call for evidenceAIFMD passport & third country AIFMs
22 July 20158 January 2015 October 2015
Call for evidence published
• ESMA/2014/1340 on AIFMD
passport and third country
AIFMs
Deadline for responses
• Over 45 responses received
• 15 from companies
• 30 from associations and
regulators
ESMA to publish official
opinion and advice on the
functioning of
• the EU passport under
AIFMD (i.e. Article 32
AIFMD)
• the marketing of non-EU
AIFs by EU AIFMs in the EU
(i.e Article 36 AIFMD)
• the management and/or
marketing of AIFs by non-
EU AIFMs in the EU (i.e
Article 42 AIFMD)
Having received a positive
opinion from ESMA
• Commission shall adopt
delegated act specifying the
date when rules set out in
Articles 35, 37 and 41* will
become applicable in all
Member States
• If ESMA is late or issues any
objections, the Commission
will effectively delay the
introduction of Articles 35,37
and 41.
7 November 2014
* Article 35 – Conditions for marketing in the Union with a passport of a non-EU AIF managed by an EU AIF
• Will eventually replace Article 36 notifications
Article 37 - Authorisation of non-EU AIFMs intending to manage EU AIFs and/or market AIFs managed by them in the Union in accordance with Article 39 or 40
• Article 39 - Conditions for the marketing in the Union with a passport of EU AIFs managed by a non-EU AIFM
• Article 40 - Conditions for the marketing in the Union with a passport of non-EU AIFs managed by a non-EU AIFM
• Articles 39 & 40 will eventually replace Article 42 notifications
Article 41 - Conditions for managing AIFs established in Member States other than the Member State of reference by non-EU AIFMs
30 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Swiss funds distribution regime
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Distribution in Switzerland
The following are not deemed to be distribution:
a. the provision of information and the subscription of collective investment schemes at the instigation of or at the
own initiative of investors, especially in the context of investment advisory agreements or for execution-only
transactions;
b. the provision of information and the subscription of collective investment schemes based on a written
discretionary management agreement with financial intermediaries as defined in Article 10 paragraph 3 letter a;
c. the provision of information and the subscription of collective investment schemes based on a written
discretionary management agreement with an independent asset manager which:
1. in its capacity as a financial intermediary is governed by Article 2 Paragraph 3e of the Anti-Money
Laundering Act of 10 October 1997,
2. is governed by the code of conduct issued by a specific industry body, such code of conduct being
recognised as the minimum standard by the Swiss Financial Market Supervisory Authority (FINMA),
3. the discretionary management agreement complies with the standards of a specific industry body, such
standards being recognized as the minimum standard by FINMA;
d. the publication of prices, net asset values and tax data by regulated financial intermediaries;
e. the offering of stock option schemes in the form of collective investment schemes to employees.
32 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Definition of Qualified Investor
Qualified investors pursuant to this Act specifically include:
a) regulated financial intermediaries such as banks, securities traders, fund management companies and asset
managers of collective investment schemes, as well as central banks;
b) regulated insurance institutions;
c) public entities and retirement benefits institutions with professional treasury operations;
d) companies with professional treasury operations;
High-net-worth individuals may declare in writing that they wish to be deemed qualified investors. In addition, the
Federal Council may make such persons' suitability as qualified investors dependent on certain conditions,
specifically technical qualifications.
Investors who have concluded a written discretionary management agreement as defined above in ciph. a) and
page before ciph. c) are deemed qualified investors unless they have declared in writing that they do not wish to
be deemed as such.
33 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Retail Investors / Qualified Investors
Requirement for Distribution
1. Prior to distributing foreign collective investment schemes in or from Switzerland to non-qualified investors this must be
approved by FINMA. The representative shall submit the relevant binding documents such as sales prospectus, articles
of association and fund contract to FINMA.
Approval is granted if:
a) the collective investment scheme, fund management company or company, asset manager of the collective
investment scheme and depository are subject to public supervision intended to protect investors;
b) with regard to organization, investor rights and investment policy, the fund management company or company and
the depository are subject to regulations which are equivalent to the provisions of this Act;
c) the designation of the collective investment scheme does not provide grounds for confusion or deception;
d) a representative and a paying agent are appointed for the distribution of units in Switzerland;
e) there is an agreement on cooperation and the exchange of information between FINMA and the relevant foreign
supervisory authorities for distribution.
2. The representative and the paying agent may only end their mandate with FINMA’s prior approval.
3. The Federal Council may specify a simplified, fast-track approval procedure for foreign collective investment schemes
provided such investments have already been approved by a foreign supervisory authority, such arrangement being
reciprocal.
4. Foreign collective investment schemes which are only distributed to qualified investors do not require approval but must
meet the conditions pursuant to paragraph 2 letters c and d at all times.
34 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Duties of the Representative
The representative represents the foreign collective
investment scheme with regard to investors and FINMA.
The representative's powers of representation may not be
restricted.
The representative observes the statutory obligations to
report, publish and inform, as well as the codes of conduct
of industry bodies which have been declared to be the
minimum standard by FINMA. The representative's identity
must be disclosed in every publication.
1
2
35 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
SFAMA Transparency Guideline 1/3
In the documents
Charging:
Cost might be charged to the fund
Level of the cost: bands or maximum rates
possible
Use:
May be paid, without disclosing identity
Services concerned
Retail funds, changes of documents need
approval from Regulator before
distribution
On request by investor:
Obliged to answer justified enquires from
investors free of charge, provided
following conditions:
Existing investors are entitled to receive
information (former investors as well)
Parties to the fund contract: ManCo,
Custodian bank, SICAV, etc. incl. their
agents with direct relationship to
investors
Investor must assert their justified
interest, the duty to inform is restricted to
their specific investment and period of
investment
36 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
SFAMA Transparency Guideline 2/3
Retrocessions
Retrocessions: payments & other soft
commissions paid for distribution activities
Granting of retrocessions is permitted
Duty to inform regarding compensation for
distribution
Recipients of retrocessions duty to
disclose, on request actual received
amount
Retrocessions may create conflicts of
interest, request of disclosure
Rebates
Rebates are payments by ManCo etc.
directly to investors from a fee charged
to the fund with the purpose of reducing
the said fee to a contractually agreed
amount
Rebates are permitted if:
the ManCo etc. pay them from the fees
due to them (no additional charges to the
fund assets)
granted on the basis of objective criteria
all investors, who qualify on the basis of
these objective criteria and demand
rebates are also granted these within the
same timeframe and to the same extent
they are disclosed transparently in the
fund documents
37 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Deadline & extension 1 / 2
Law into force 1st March 2013
Transitional provision for the distribution of collective investment schemes:
1. Representatives of foreign collective investment schemes and distributors which are now subject to this
Act must report to FINMA no later than six months after the amendment of 28 September 2012 has come
into force.
2. They must meet the statutory requirements no later than two years after this amendment has entered into
force and apply for authorization. They may continue their activities until a decision regarding their
application has been reached.
3. Representatives distributing foreign collective investment schemes under existing law, which previously
did not require an agreement between FINMA and the relevant supervisory authority, must submit a
statement to FINMA no later than one year after this amendment has come into force to confirm that such
authorities agree to cooperate and exchange information with FINMA in order to continue to distribute
funds.
4. Foreign collective investment schemes which are distributed exclusively to qualified investors in
Switzerland must meet the conditions stipulated in Article 120 paragraph 4 and Article 123 no later than
two years after this amendment has come into force.
5. Foreign collective investment schemes which are admitted for distribution to nonqualified investors in or
from Switzerland must meet the newly introduced requirements pursuant to Article 120 paragraph 2 no
later than one year after this amendment has come into force.
38 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Deadline & extension 2 / 2
Extension of the Deadline:
• SFAMA Transparency Guideline: new 31 August 2015
39 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Next steps for investment funds and administrators
Q&A
41 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Link’n Learn webinars – May
14 May 2015
EMIR
&
SFT
Securities and markets update, including EMIR and the Proposed
Regulation on reporting and transparency of securities financing
transactions (SFT Regulation)
28 May 2015
Introduction to
investment
funds
Key Developments and Challenges
Overview of Fund Types
Overview of Investment Funds Industry
Roles and Responsibilities of Key Actors
42 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche
Impact on Foreign Portfolio Investors & Way Forward
Minimum Alternate Tax
Save the date: Deloitte India webinar
Refined perspective. Clear Direction.
In the last one month, Indian tax authorities have issued tax orders to over 60 Foreign Portfolio Investors (FPIs) demanding payment of
Minimum Alternate Tax (MAT) at 18.5% for FY 2011-12. Notices have also been issued to several other FPIs for earlier years (Indian
Statute of Limitations extends to 7 years). If MAT applies for the earlier years, long term capital gains (otherwise exempt from tax) and
short term gains (otherwise charged at 15%) would be taxable at 18.5%. The Budget proposal also means that other income such as
interest could be chargeable to MAT going forward.
Tune into the Deloitte India webinar to take an in-depth look at the controversy, recent developments and the way forward with the
subject market experts on:
Registration details:
Click here to register for the webinar at 9:30 AM CET / 4.30 PM HKT : http://edge.media-server.com/m/p/s4mr9tof
Click here to register for the webinar at 11:30 AM US EDT: http://edge.media-server.com/m/p/nbr3bf6n
Date Time
May 4, 2015 (Asia Pacific, UK and Europe) 9:30 AM – 10:30 AM (CET) /
4:30 PM to 5:30 PM (HKT)
May 4, 2015 (US) 11:30 AM – 12:30 PM (US EDT)
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