United Kingdom (and EU regulation)

The CMU, supervisory convergence and asset management

The European Securities and Markets Authority (ESMA) has published a speech given by its Executive Director, Verena Ross. The speech is entitled The Capital Markets Union, supervisory convergence and asset management.

Key points from the speech include:

on asset segregation ESMA is assessing in more detail the different segregation models that can be envisaged and their pros and cons. Throughout this work ESMA is paying close attention to the legal provisions on segregation in the Alternative Investment Fund Managers Directive (AIFMD) and is considering the extent to which omnibus accounts can be used. At this stage ESMA has not made a final decision on the most appropriate instrument for the outcome of this work – it may be guidelines, an opinion to Member State competent authorities or a recommendation to the EU institutions on possible legislative change. In any case, ESMA expects to issue something by the end of the year;
another topic that ESMA is aiming to further its supervisory convergence objectives relates to the powers to limit leverage under the AIFMD. Mrs Ross notes that the powers are drawn rather broadly and that stakeholders are interested to know in more detail in what circumstances the powers might be used and on what basis. Mrs Ross states that ESMA has therefore decided to develop more detailed guidance on this.

In the final part of her speech Mrs Ross provides an update on two ESMA workstreams, the UCITS remuneration guidelines and the advice on the AIFMD passport.

In relation to the AIFMD passport, Mrs Ross states that ESMA’s assessments of non-EU countries has continued since it submitted the first advice to the EU institutions last July. In line with feedback that ESMA received from the European Commission in January, it has been looking at six new countries (Australia, Japan, Canada, Cayman Islands, Bermuda and Isle of Man). ESMA has also been working to finalise its views on the three countries covered in its first advice for which it did not provide definitive assessments – Hong Kong, Singapore and the United States.

View The Capital Markets Union, supervisory convergence and asset management, 18 May 2016