Scanning No.1

ALFI Guidelines on Operational Risk Management within UCITS Background The Law of December 17, 2010 and CSSF Re- gulation 10-4 have brought attention to the re- quirement for management companies managing UCITS and Self-Managed UCITS SICAV to have in place adequate risk management processes. On 17 April 2012, ALFI has issued its “Best practic- es proposals for the organisation of the risk func- tion of a UCITS” (available here). What’s in there? On 9 May 2014, ALFI published guidelines on op- erational risk management within UCITS. The doc- ument shall be seen as a set of best practices pro- posals for the management of operational risk. The ALFI guidelines consist in the following sections: « Highlight of the key sources of legal and regu- latory guidance in relation to risk management; and « A set of best practices regarding: - The identification of all relevant operational risks to which UCITS are or may be exposed; - The measurement and management of these identified operational risks; - The reporting with regard to these risks and re- lated information to senior management and the Board by the risk management function. What’s next? N/A THE GUIDELINES ARE AVAILABLE HERE.

2013 annual report Asset management key messages Background The CSSF issues on an annual basis a consolidat- ed report providing statistics on the Luxembourg financial industry and information on its supervi- sory practice. What’s in there? The CSSF 2013 annual report was published on 9 May 2014. THE CSSF ANNUAL REPORT IS AVAILABLE HERE. SWITZERLAND Revision of the FINMA Collective Schemes Ordinance (CISO-FINMA) Background The Collective Investment Schemes Act (CISA) and the Collective Investment Schemes Ordinance (CISO) were partially revised and came into force on 1st March 2013 with the effect to render the re- vision of the CISO-FINMA necessary. Indeed, they contain new requirements for the management, custody and distribution of collective schemes with the consequence to change the legal basis for the CISO-FINMA. What’s in there? The CISO-FINMA’s revision aims in particular to strengthen investor’s protection and to maintain EU market access in light of new national and in- ternational standards, and in this respect, tends to simplify and modernize the rules it prescribes. Risk calculation of derivative financial instruments will now, in line with EU regulations, exclude the calculation of risks according to three different risk categories, market, credit and currency risks. The new draft of the Ordinance also sets out new general requirements on the quality, administra- tion and custody of securities accepted by collec- tive investment schemes and the requirements for the independent risk management of the fund management companies, SICAVs and asset man-

agers. The mode of calculating the "de minimis threshold" for asset managers and the require- ments on professional liability insurance will also be set forth in the future Ordinance. Finally, due to the introduction of the provision about master feeder structures in the CISO, the new CISO-FINMA will provide regulations on this matter. What’s next? The consultation opened by the FINMA about the CISO-FINMA’s revision ended on 19th May 2014, deadline for communicating a potential position paper. A summarizing report of the taking parties’ positions will be published in a few months. Pre- liminary publication of the final version is sched- uled for October 2014 and the entry into force of the revised CISO-FINMA should take place on 1 st January 2015.

TAX IRS FAQ update Background

The purpose of the “IRS FATCA - FAQ General” is to provide answers to a set of questions occurring concerning the implementation of FATCA. Other FATCA FAQs are available for the FATCA Reg- istration System and the FATCA FFI List. What’s in there? On the 1 st May 2014, the IRS updated its FATCA FAQs. Questions have been added to the sections for responsible officers and registration, and a new section has been added addressing questions relat- ed to branches and disregarded entities. In particu- lar, the IRS provides answers and explanations to: « The scope and qualification required for a Re- sponsible Officer according to the specific status of the Foreign Financial Institution (FFI). « How certifications in Part IV of the FATCA Regis- tration apply to Financial Institutions treated as reporting Model 1 FFIs. « The impact of completing Part IV of the FATCA Registration on the different FATCA classifica- tions. « Registration requirements of Disregarded Enti- ties (DEs) and branches located in Model 1 IGA countries, non-IGA countries and Model 2 coun- tries. « The change in registration requirements of a DE in a Model 1 IGA jurisdiction whose laws disre- gard US tax classification elections.

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