CACEIS NEWS 38 EN

No. 38 - June 2014 - caceis news 5

Amundi is increasing its international presence

Guillaume Abel, Global Head of Marketing & Communication, Amundi

presence in Eastern Europe and

to market funds internationally. We have also used cross-border master-feeder structures, particu- larly by creating Luxembourg mas- ter funds and French feeder funds. This has the advantage of retaining funds' track records. We made the positive decision to use our Luxembourg platform for European distribution because of Amundi's long-standing presence in Luxembourg. How does CACEIS support you in these operations, and more generally in international fund distribution? CACEIS is a long-standing, high- quality partner in custody, fund ad- ministration and depositary bank- ing in all markets in which we want to increase our fund distribution. We have worked with CACEIS to set up a European centralising transfer agent system, enabling us to give our clients a single entry point for placing their orders and monitoring our fund liabilities. CACEIS has high-performance systems that give us a consolidat- ed view of our entire distribution network and fee calculations. This is a key commercial advantage, helping us to supervise the remu- neration and performance of our distributors, but also to adjust our strategy excluding all US investors, or en- gaging in the full registering and reporting process on their US ac- counts (“Reporting FFI” status). A number of promoters have already started reviewing their distribution strategies in order to limit FATCA's impact on their operations. For all of them, it is critical to be able to reassure their investors that the fund does not create any expo- sure to the 30% withholding tax on their US income. In July 2011, together with theDodd- Frank reform, the extra-territorial scope of the Investment Advisor Act was extended. Currently, for most EU asset managers, accepting US investors within the funds that they manage or advise may cause them to become subject to US rules and to be regulated by the SEC, which would then overlap with the regula- tions and supervision already appli- cable to them in Europe. Paradoxically, while AIMFD aims to harmonise rules and strategies, FATCA and the threat of overlap- ping regulations force the smallest asset managers to restrict their target market further, and the largest asset

suited to local requirements. For distributors and investors, the Amundi brand is synonymous with quality and a long-term view and market presence. We are raising - teractive communication methods, using social networks, websites and blogs to get information to our clients more quickly. What are the advantages of fund mergers and cross-border master-feeder structures under UCITS IV? Amundi has seized opportunities arising under UCITS IV to stream- line its fund ranges and to meet its international growth objectives. In 2013, we started cross-border fund mergers, folding France-based funds into Luxembourg-based funds - in fund size and the UCITS brand image, both of which are appreci- ated by investors and make it easier

Is the international fund distri- bution a major growth driver for Amundi? Yes, Amundi has a strategy to in- crease its cross-border fund distri- bution, and its international client base. We have asset management markets in Europe (Paris, London, Milan) and Asia (Japan, Hong Kong and Singapore). We recently took control of Smith Breeden in

the USA to offer asset management expertise in US dollar-denominat- ed products to clients based in Europe, Asia and the Middle East. Amundi's international market- ing efforts to develop new markets are focused on institutional cli- ents and third-party distributors. Christian Pellis, Global Head of External Distribution, has organ- ised the external distribution along geographical lines, aiming to meet

client needs effectively by being as close to them as possible. As a result, Amundi is increasing its

“web 2.0” interactive communication methods, using social networks, websites and blogs to get information to our clients more quickly.

New regulations have a major impact on distribution strategies

With AIMFD and FATCA taking full effect, and in view of forthcoming MIFID II, asset managers have to reconsider certain aspects of their distribution strategy.

sational and prudential standards. Although some are deciding to take the plunge and upgrade their organi- outsourcing solutions. They afford expert solutions without making in- vestments that would be dispropor- tionate in view of their strategy. Some asset managers in third coun- tries are taking a more wait-and-see approach. They can delay, making almost no changes, by using the re- mote marketing possibilities avail- able under local private placement regimes, although these are likely to disappear shortly. Eventually, the question for them is whether or not to withdraw from the European MIFID II AND PRODUCER- INVESTOR RELATIONS MIFID II, which is due to become applicable in 2016, raises many is- sues that are worth anticipating, as part of a fund distribution strategy. The extended range of professionals covered by MIFID II and the inclu- sion of sophisticated UCITS in the create additional responsibilities and costs for actors involved in the distribution of funds. The directive will also affect the growth prospects.

ta kool ot ekil srehto ,yadot snoitas remuneration structures of certain distributors. MIFID II forbids the payment of retrocession fees to in- vestment companies that market funds as part of an “independent” advisory service. To maintain re- lations with these intermediaries, alternative remuneration methods must be found, as is already happen- ing in the Netherlands and UK. This could lead to the creation of special classes of investor and, more gener- ally, is creating new challenges in - terparty quality. Another aspect of MIFID II con- cerns the opening-up of the EU market to third-country distribu- tors, provided that they can show an “equivalent” status. Some third- country distributors and/or produc- ers could consider carrying out cer- tain sales activities in the European authorisation or even establishing a permanent presence in Europe, pro- vided that they only distribute prod- ucts to professional investors and eligible counterparties.

F or asset managers with estab- lished positions in the UCITS market, little additional effort anAIMFD passport for their alterna- tive products. The “Super ManCo” concept and the AIMFD passport make the European market acces- sible at limited cost. These manag- ers' usual service providers offer SANDRINE LECLERCQ, Counsel, Baker & McKenzie

consistent services for regulatory reporting, distribution support, risk management and depositary control.

VARIOUS STRATEGIC APPROACHES TO AIMFD

FATCA AND US CLIENTS STRATEGY

For more specialised asset manag- ers, AIMFD raises the question of the operational model they should adopt to comply with new organi-

Asset managers must now choose between taking the radical step of

tnemges ot yllaitnetop sreganam

their strategy