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European Fund Distribution

Link’n Learn

Leading Business Advisors

Contacts

Aisling Costello

Senior Manager – Investment Management Advisory

Deloitte & Touche Ireland

E: [email protected]

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

mailto:[email protected]

mailto:[email protected]

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

4 Link’n Learn – European Fund Distribution © 2015 Deloitte & Touche

Market Overview


Market overview

(*) Including funds of funds.

The information presented in this report was compiled by EFAMA and the Investment Company Institute


Market overview


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


UCITS - KID v KIID


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.


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


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


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


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


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.


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.


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.


A simple upgrade ?

UCITS KIID vs PRIIPs KID Illustrative

Key changes about form

1. Question style headings


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


A simple upgrade ?


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


A simple upgrade ?



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?




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




2. Updated content..

3. …and new content

Page 1


A simple upgrade ?


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


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.


European Long Term Investment Fund


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


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’


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 -


AIFMD distribution –ESMA’s call for evidence


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


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.


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


Swiss funds distribution regime


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.


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.


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.


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


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


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


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.


Deadline & extension 2 / 2

Extension of the Deadline:

• SFAMA Transparency Guideline: new 31 August 2015


Next steps for investment funds and administrators


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


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)

http://edge.media-server.com/m/p/s4mr9tof

http://edge.media-server.com/m/p/nbr3bf6n

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