Legal and regulatory

What has ALFI undertaken this year to prepare its membership for the MiFID II implementation?

Further to the publication of the European Commission’s Delegated Regulation (EU) 2017/565 and Directive (EU) 2017/593, the ALFI MiFID working group has been finalising its draft Q&A which should be published shortly.   Of particular importance for the fund industry are the new obligations for manufacturers and distributors of financial instruments in terms of designing and distributing financial instruments, rules on inducements, costs and charges and appropriateness. Entities currently not being subject to MiFID such as fund management companies will be impacted by the directive to the extent that their products are distributed by MiFID entities.  
Regarding the obligations of manufacturers and distributors mentioned above, in particular the identification of the target market, ALFI has responded to the ESMA consultation of 5 October 2016 on product governance under MiFID II. The final report on product governance guidelines published by ESMA has been published on 2 June and reflects many of the comments made by the industry.

Finally an ad-hoc working group on investment research rules was set up to identify possible issues and impacts of the related MiFID rules on the Luxembourg fund industry.

What other important topics have been addressed in the various Legal and Regulatory working groups?

Anti-money laundering issues were high on the agenda of our dedicated working and sub-working groups. ALFI monitored the drafting process of the ESA’s joint guidelines on simplified and enhanced customer due diligence and the factors credit institutions and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions. ALFI also participated in the EFAMA Anti-money laundering Taskforce discussions on this topic. The Association is currently analysing the draft law N° 7128 implementing the 4th AML directive in Luxembourg law with a view to updating its Practices and Recommendations aimed at reducing the risk of money laundering and terrorist financing in the Luxembourg fund industry.

                         

Gast Junker, Elvinger Hoss Prussen        Hermann Beythan, Linklaters

Co-chairs of the ALFI Legal & Regulatory Technical Committee