SCANNING 3

SECTION 4 - NOTIFICATION OF AIFMs (NEW SECTION)

registered in the name of the AIF with the issuer itself or its agent, in the name of the AIF or the AIFM acting on behalf of the AIF. SECTION 7- LEVERAGE (NEW SECTION) Debt raised at the level of any financial structure controlled by a private equity AIF so as to finance the acquisition of non-listed companies shall be included in the calculation of the AIF exposure where those structures are controlled by the AIF and specifically set up to directly or indirectly in- crease the exposure at the level of the AIF. How- ever, any debt raised at the level of the non-listed company shall not be included when calculating the AIFM exposure. What’s next? The ESMA Q&A is updated from time to time. AIFMD - Publication of official translations of ESMA’s guidelines on AIFMD reporting obligations Background On 1 October 2014, ESMA published final guidelines on the AIFMD reporting obligations for alternative investment fund managers. These guidelines have been revised once in November 2013, setting out the final principles of the AIFMD reporting to competent national authorities. What’s in there? Competent national authorities now have two months as from the 8 th of August 2014 to notify ESMA whether they comply or intent to comply with the reporting guidelines by implementing them into their respective national supervisory practices. The official translations of the AIFMD reporting guidelines are AVAILABLE HERE . CSDR - Adoption by Council Background The Commission proposal was issued on 7 March 2012. On 18 December 2013, the European Parliament THE Q&A IS AVAILABLE HERE.

(“the Parliament”) and the Council reached an agreement on a Regulation for more stability, effi- ciency and safety of settlement and CSDs. On 26 February 2014, the Permanent Represent- atives Committee, on behalf of the Council of the European Union, confirmed the agreement with the Parliament. The European Parliament adopted the text on 15 April, in accordance with political agreement reached in trilogue. What’s in there? On 23 July, the Council formally adopted the CSDR, the final text of which was published by the Council on 16 July. As a reminder, the CSDR introduces an obligation of dematerialisation for most securities, harmonised settlement periods for most transactions in such securities, settlement discipline measures and com- mon rules for central securities depositories (CSDs). It is an important complement to EMIR in terms of the post-trade environment for securities trading. What’s next? The regulation will enter into force shortly after pub- lication in the OJEU (the publication of the new rules in the OJEU is foreseen for the third quarter of 2014). Council agrees on a general approach on ELTIFs-Regulation Background ELTIFs are EU-AIFs managed by EU authorised AIFMs that do not offer regular redemption before the end of the vehicle’s life and invest in long-term assets. ELTIFs benefit from an EU passport and may be mar- keted to retail investors across the EU. On 26 June 2013, the Commission issued a Proposal for a regulation of the European Parliament and of the Council on European long-term investment funds (“the Regulation” - AVAILABLE HERE ). The Regula- tion shall ensure that uniform requirements apply to the investment and operating conditions of ELTIFs. On 17 April 2014, the European Parliament in plena- ry adopted amendments to the Commission’s pro- posal ( AVAILABLE HERE – a note from the General Secretariat of the Council to the Permanent Repre- sentatives Committee on the outcome of the Parlia- ment’s first reading is AVAILABLE HERE ). On 24 April 2014, the Presidency of the Council issued a first compromise proposal ( AVAILABLE HERE ). THE TEXT OF THE REGULATION AS ADOPTED BY THE COUNCIL IS AVAILABLE HERE.

An EU AIFM should be able to get authorised to manage AIFs in a host Member State (as per the passport principle) even if it has not identified any existing AIF in that Member State. In that case, the notification should include a reference to the type of strategy of the AIFs that the AIFM intends to manage in the host Member State to ensure compliance with the provisions of article 33 (2-b) AIFMD. The competent authorities in a Member State other than the home Member State of the AIFM should accept AIFM passport notifications for the activities of AIFM authorised under article 6 (4) AIFMD (MiFID services). This rule derives from ar- ticle 92 of Directive 2014/65/EU (MiFID II), which modifies the provisions of the AIFMD. Although Mi- FID II should not apply before 3 July 2015, ESMA recommends to Member States to accept passport notifications before that date. SECTION 5 - MIFID SERVICES UNDER ARTICLE 6(4) AIFMD (NEW SECTION) The cash flow monitoring duties of the depositary apply to any cash account opened in accordance with Article 21 (11) AIFMD, but do not apply on a look-through basis to cash accounts opened in the name of companies in which the AIF/AIFM holds investments. It should not be possible for the depositary to del- egate its cash flow reconciliation duties to a third party. In this regard, delegation is only permitted in relation to technical/administrative functions. Within the cash monitoring duties of a depositary, “close of business day” should be determined ac- cording to the jurisdiction where the depositary is established. The obligation to verify that the AIFM/AIF complies with applicable laws and regulations does not re- late to the laws and regulations of entities that do not have any direct relation with the AIF/AIFM’s instructions to the depositary. Derivative contracts, even if they contain a netting clause shall be considered as other assets and are thus subject to ownership verification and record- keeping. The duty of the depositary involves, inter alia, looking at the contract to assess what the AIF/ AIFM is entitled to. Holdings in collective investment undertakings are to be considered as other assets to the extent that, in accordance with national laws, they can only be « Carrying out of the AIFM’s instructions « Safekeeping of “other assets” SECTION 6 - DEPOSITARIES (NEW SECTION) « Cash flow monitoring

Scanning - September 2014 - page 3