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Global Registration Services – Market Update Q3 2020 – Finance and Banking – Worldwide

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United Kingdom

UK FCA Reopen the TPR

Further to our client update on 7 July
20201,the UK FCA re-opened the notification
window for the Temporary Permissions Regime (“TPR”) on 30
September 2020.

Firms that had not previously notified the FCA of their
intention to use the TPR can now do so; fund managers can also
update their previously submitted notifications before the end of
the transition period on 31 December.

Any firms and fund managers that intend to update their
previously submitted TPR notification should notify the FCA no
later than 9 December 2020, with all updated and
new notifications to be submitted by 30 December 2020.


European Commission Issue Communication on Readiness at the End
of the Transition Period between the UK and the EU

On 9 July 2020, the European Commission issued a
communication2 on readiness at the end of the Brexit
transition period on 31 December 2020. The communication is of
particular significance to the financial services industry at
Section B1 (pp.12 – 15) of the communication, where key
points around EU and UK equivalence are discussed, and the
Commission outlines those specific areas where an equivalence
decision will not be taken in the short or medium term.

The Commission has also identified that the central clearing
counterparties of derivatives may present a financial stability
risk and to address this, they are considering an adoption of a
time-limited equivalence decision for the UK in this area.

ESMA Letter on AIFMD Reform

On 18 August 2020, ESMA published a letter3 sent to
the European Commission on the upcoming review of the Alternative
Investment Fund Managers Directive (“AIFMD”), which sets
out its recommendations across a range of different areas. This
review is part of the wider action plan on the cross border
distribution of investment funds under the Capital Markets Union
(“CMU”), which is due to come into effect in August 2021.
See also our client update of 14 June 20194.

Some of the key points from a distribution perspective

(a) Provision of local facilities: removing the requirement to
appoint a local agent when marketing an AIF or UCITS fund in
certain member states and granting authority to certain management
entities and / or third parties to provide these facilities, on the
condition that these facilities are provided in the official
language (or one of the official languages) of the relevant member

(b) Pre-marketing: A definition of “pre-marketing”
will be introduced to enable EU AIFMs to test market interest
before establishing an AIF or registering it under Article 31 or
Article 32 of AIFMD.

(c) Harmonisation of the AIFMD and UCITS Regimes and harmonised
reporting for UCITS funds.

(d) Harmonisation of supervision regarding cross-border

(e) AIFMD reporting regime and data use.

(f) Definitions of “semi-professional investors”,
“AIFs” and “reverse solicitation”, in addition
to the definition of “negligence” regarding external
valuer liability under AIFMD.

(g) Clarification on the power of Member States to apply
additional requirements under their national law to sub-threshold


AMF on New Rules Impacting the Marketing of Non-French ESG
UCITS Funds Passported for Sale in France

Further to our client update on 31 July 20205, the
AMF published their updated position6 with regard to the
new rules governing information required from collective investment
schemes incorporating non-financial approaches. The main points to
note include the following:

(a) All non-French UCITS funds with ESG strategies registered
for marketing in France prior to 11 March 2020 are required to
update their marketing documentation by 10 March 2021.

(b) All non-French UCITS funds with ESG strategies registered
for marketing in France between 11 March 2020 and 27 July 2020 had
until 30 September 2020 to update their marketing

(c) The new rules regarding marketing documentation come into
immediate effect for any non-French UCITS fund with ESG strategies
that apply for approval to market in France going forward.

It is important to note that anything more than “concise
information”, as defined in the updated position, in the
marketing documentation will prompt the AMF to consider the UCITS
fund in question to be making the non-financial criterion a central
component of its communication, which therefore will result in the
full application of the French rules.

It is possible to include language in the KIID without prompting
the full application of the rules however this language must only
be contained in the ‘Other Information’ section of the KIID
and the language is deemed to be concise information.


CONSOB Communication on the Brexit Transition Period

On 23 July 2020, CONSOB published a communication7
outlining the conditions and requirements for any British
investment firms providing services and undertaking activities in
Italy to remain eligible to do so after the Brexit transition
period expires on 31 December 2020. From 1 January 2021 onwards,
British investment firms providing operating in Italy will be
subject to Article 28 of the Consolidated Law on Finance (TUF) and
Articles 25 – 31 of CONSOB Regulation no. 20307/2018.

CONSOB is recommending that those firms wishing to continue
operating in Italy as a third country firm or by transferring their
business to an Italian investment firm submit an application for
authorisation to CONSOB as soon as possible. Those firms that
intend to transfer their activities to an EU investment firm are
required to complete this transfer by 31 December 2020 and, where
necessary, complete the passport notification process into

Further details are outlined in the communication and all
authorisation applications and communications regarding Brexit
should be notified to [email protected]

CONSOB Resolution on UCITS Distribution in Italy

On 22 September 2020, CONSOB published a resolution8
amending Article 34 of the Issuers Regulation no. 11971, which will
come into effect at the end of October 2020. Article 34 has been
amended to state that where past performance is disclosed in UCITS
marketing material provided to retail investors in Italy, these
performances must be compared with the reference index or the
return target that is identified in the prospectus for the UCITS.
In the event that these performances are not tracking a reference
index or a return target is not identified in the UCITS prospectus,
it will not be necessary to disclose additional information other
than past performances, noting that a clear indication must be
included in the past performance section that the performances are
not tracking any index or other parameter.


CNMV Consultation on the Regulation and Control of Financial
Products Marketing

On 20 July 2020, the CNMV published a draft circular9
for public consultation on the regulation and control in relation
to the marketing of investment services and products by investment
firms. The circular contains proposed rules on the procedures and
controls that firms should adhere to, including information on the
content and format of promotional material. There is also
information on the criteria that the CNMV has been applying in its
supervisory capacity to firms on marketing of their funds.


Updated Reporting Guidelines for Fixed Income Funds

On 15 September 2020, the Swedish Investment Fund Association
published updated reporting guidelines10 for fixed
income funds. These funds are already required to disclose the
measurement duration in their financial reports and following this
recent update, they are now required to disclose the measurement
Duration Times Spread or “DTS”. A standardised way of
presenting credit ratings, for those who wish to, has also been
included in the update.

It should be noted that although these guidelines go further
than the EU regulation and are part of the self-regulation
maintained by the association, they are generally considered
‘good practice’ in Swedish law.


FinSa and FinIa Developments

Further to our client update on 23 April
201911,the Swiss Federal Department of Finances
have approved the first Ombudsman’s Offices in line with new
Swiss Regulations – the Federal Act on Financial Services Act
(“FinSa”) and Federal Act on Financial Institutions
(“FinIa”) – which came into effect on 1 January
2020. The new Ombudsman’s Offices were approved on 24 June 2020
after which Swiss-registered firms that provide financial services
directly to Swiss investors have a six month transitional period to
affiliate with an Ombudsman’s Office. This expires on 24
December 2020.

Where the management company or distributor of a
Swiss-registered fund is providing a financial service in
Switzerland directly to investors, the fund is required to
affiliate with an Ombudsman’s Office, and these funds should
contact their Swiss Representative to arrange for the affiliation
to be completed before the deadline to ensure continued marketing
in compliance with the new regulation.

On 7 July 2020, the Swiss Financial Market Supervisory
Authority, FINMA, approved the first Register of Advisors under
Article 31 of FinSA. Client advisors of Swiss-registered firms also
have a six month transitional period to apply for inclusion on this
register which expires on 31 January 2021.

South Africa

FSCA Regulatory Fees for Foreign Collective Investment

On 19 August 2020, the FSCA published its revised
levies12 for 2020 for foreign collective investment

The levies are payable in four quarterly instalments on or
before 31 July, 30 September, 31 December and 31 March of the
relevant levy year. The variable sum is calculated based on
provided statistics, which is to be submitted to the FSCA within 30
days after the end of the preceding quarter.

The applicable levies are as follows:

  • Per umbrella fund – ZAR
  • Per sub-fund – ZAR 6,477
  • Variable based on net assets under
    management on behalf of South African investors – 0.00031231% of
    the net assets under management.

Hong Kong

Updated SFC FAQs, Guides and

Updated FAQs on the Application Procedures for Authorisation
of Unit Trusts and Mutual Trusts under Revamped Process

On 7 August 2020, the SFC updated these FAQs as follows:

  • Question 4A has been added outlining
    the requirements for submitting documents and application fee in
    support of a new fund application and as a result, Question 14 has
    been removed;
  • Question 2 on the process of starting
    an application for authorisation has been updated; and
  • Question 4 on when the SFC will take
    up an application has been updated.

The updated FAQs are relevant for UCITS funds domiciled in
France, Ireland, Luxembourg and the Netherlands, in addition to
collective investment schemes domiciled in the UK which are
authorised as UK UCITS funds.

Updated FAQs on Post-Authorisation Compliance Issues of
SFC-Authorised Unit Trusts and Mutual Funds

On 29 September 2020, the SFC updated these FAQs as follows:

  • Question 3A of Section 3 has been
    removed as it is deemed to be obsolete in light of the other
    information provided in Question 3.

The updated FAQs are relevant for UCITS funds domiciled in
France, Ireland, Luxembourg and the Netherlands, in addition to
collective investment schemes domiciled in the UK which are
authorised as UK UCITS funds.

Updated FAQs on Revamped Post-Authorisation Process of
SFC-Authorised Unit Trusts and Mutual Funds

On 7 August 2020, the SFC updated these FAQs as follows:

  • Question 22 regarding requirements
    for submitting post-authorisation documents to the SFC has been

Please also see the following:

  • Updated Guide on practices and
    procedures for application for authorisation of unit trusts and
    mutual funds as at 7 August 2020, with key updates at Paragraph 3
    of Chapter 2, and Annex 2; and
  • Updated Information
    Checklist14 for application for authorisation of unit
    trusts and mutual funds under the revamped process.

Provision of Further Guidance to Intermediaries on
Assessment of Corporate Professional Investors

On 8 September 2020, the SFC updated these FAQs15 as

  • Question 2 has been updated to
    provide further guidance on the assessment of corporate structure
    and investment process of CPIs, particularly family trust-owned
    investment vehicles or family offices that engage investment
    professionals to manage their investments.


Proceeds of Crime (Money Laundering) and Terrorist Financing
Act Changes

On 10 July 2020, the DFC published16 amendments to
the Regulations Amending Certain Regulations Made under the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act
with the aim of harmonising domestic anti-money laundering and
counter terrorist financing regime with international

The main points to note include the following:

(a) The ‘travel rule’ will be extended to businesses
dealing in virtual currencies, by requiring them to obtain and hold
originator and beneficiary information.

(b) The definition of ‘business relationship’ will be
amended to include real estate developers, real estate brokers and
sales representatives who will be deemed to be in a business
relationship with a client after a single transaction or activity
that triggers the client identification requirements under the Act
and its associated regulations.

(c) Stronger customer due diligence requirements and beneficial
ownership requirements will be applied to certain designated
non-financial businesses and professions.

CSA Changes to the Offering Memorandum and Prospectus

On 17 September 2020, the CSA published their proposed
changes17 to the offering memorandum exemption in NI
45-106 and companion policy 45-106CP, which propose introducing new
disclosure requirements for issuers engaged in real estate
activities and issuers that are collective investment vehicles.

CSA Final Rule Amendments

On 17 September 2020, the CSA published their
amendments18 to NI 81-105 and other instruments to
prohibit the following practices:

  • The payment of trailing commissions
    by members of publicly offered mutual fund organisations to
    participating dealers who do not make a suitability determination
    in connection with the client’s purchase and ownership of
    prospectus-qualified mutual fund securities; and
  • The solicitation or acceptance of
    trailing commissions by participating dealers from publicly offered
    mutual fund organisations in connection with the securities of a
    mutual fund held in the account of a client of a participating
    dealer if that dealer was not required to make a suitability
    determination for that client for those securities.

The trailing commission bans come into effect on 1 June 2022
across Canada.




















19. Domiciled in Ireland and Luxembourg.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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