SCANNING 6

CACEIS European Regulatory Watch Newsletter

6

2014 December No.6

EUROPE AIFMD - ESMA “Call for evidence” on AIFMD passport and third country AIFMs AIFMD - ESMA publishes updates to Q&A on the AIFMD Regulation EMIR - ESMA Q&A on implementation of the Regulation (EU) No 648/2012 EMIR - European Commission first "equivalence" decisions for central counterparty regulatory regimes EMIR - Review of the technical standards on reporting under Article 9 of EMIR Miscellaneous - EU Council and Parliament publish proposals for Regulation on Money Market Funds Miscellaneous - EU adopts transparency rules for investment products (PRIIPs) Miscellaneous - ESAs issue discussion paper concerning EU Regulation on Key Information Documents (KIDs) for Packaged Retail and Insurance-based Investment Products (PRIIPs) LUXEMBOURG Tax Administration to continue with its tax ruling practice VAT Authorities announce amended VAT rates OECD - Common Reporting Standard – Luxembourg as an early Adopter

FRANCE Modifications of conditions of admission to trading of the UCITS and AIFs and of the depositary regime applicable to the securitization instruments Securitization instruments covered by the common provisions of AIF SWITZERLAND FEDERAL FINANCIAL SERVICES ACT (FFSA) - Enforcement of Clients' Rights WORLD OTC Derivatives - IOSCO updates Information Repository for Central Clearing Requirements for OTC Derivatives OTC Derivatives - Report of the OTC Derivatives Regulators Group (ODRG) to G20 Leaders on Cross- Border Implementation Issues OTC Derivatives - EFAMA responses to BCBS-IOSCO consultation report on the initial policy proposals on Risk Mitigation Standards for Non-centrally Cleared Over-the- counter (OTC) Derivatives OTC Derivatives - IOSCO Report of Key Preliminary Findings to the G20 Leader’s Summit

OTC Derivatives - IOSCO consults on Post-Trade Transparency in the Credit Default Swaps Market

...

? W hat’s in there

?

W hat’s next

B ackground

What’s next? ESMA will examine the questions and answers in order to identify if there is a need to convert some of the material into ESMA guidelines. In that case, the procedures provided for by Article 16 of the ESMA Regulation will be applied (“Guidelines and Recom- mendations”). EMIR - ESMA Q&A on implementation of the Regulation (EU) No 648/2012 Background Adopted on 4 July 2012 by the European Parliament and the Council, Regulation (EU) No 648/2012 en- tered into force on 16 August 2012 and lays down requirements on OTC derivatives, central counter- parties and trade repositories ("EMIR"). Most of the obligations under this regulation needed further specification by means of regulatory techni- cal standards developed by ESMA. They were pub- lished in the Official Journal of the European Union ("OJEU") on 23 February 2013 and entered into force on 15 March 2013. What’s in there? On 24 October 2014, ESMA issued an updated Q&A on the implementation of EMIR (the "Q&A"). Amendments were made only in the section TR - Trade Repositories: « No 4: Reporting of outstanding positions following the entry into force of EMIR (Backloading);

EUROPE AIFMD - ESMA “Call for evidence” on AIFMD passport and third country AIFMs Background In accordance with Articles 36 and 42 of the Direc- tive 2011/61/EU on Alternative Investment Fund Managers (“AIFMD”), non-EU AIFMs and non-EU AIFs managed by EU AIFMs are subject to the na- tional private placement regime of each of the Member States where the AIFs are marketed or managed. However, the AIFMD makes provision for the passport to be potentially extended in future. Within three months of receipt of positive advice and an opinion from ESMA and taking into account the criteria of Article 67(2) and the objectives of the AIFMD, the Commission should adopt a delegated act specifying the date when the rules set out in Ar- ticle 35 and Articles 37 to 41 of the AIFMD become applicable in all Member States. As a consequence, the EU passport would be extended to non-EU AIFs and non-EU AIFMs. What’s in there? On 7 November 2014, the European Securities and Markets Authority (“ESMA”) has launched a call for evidence on the AIFMD. In addition to the input that ESMA receives from the EU national competent au- thorities (“NCAs”), ESMA has launched this call for evidence in order to receive information from the EU and the non-EU stakeholders about the issues mentioned in Article 67 of the AIFMD.

In order to issue a positive advice, ESMA should be convinced that “no significant obstacle regarding investor protection, market disruption, competition and the monitoring of systemic risk” impede the ap- plication of the passport to the extended marketing. Against this background, ESMA assesses aspects such as investor protection, risk of market disrup- tion and distortion of competition as well as mon- itoring of systemic risk in the non-EU country. The advice will distinguish between non-EU countries, applying the criteria set out in Article 67 (4) of the AIFMD on a case-by-case basis. THE CALL FOR EVIDENCE IS AVAILABLE HERE What’s next? ESMA will consider all responses received by 8 Jan- uary 2015 and expects to deliver the opinion and the advice to the Commission by 22 July 2015. AIFMD - ESMA publishes updates to Q&A on the AIFMD reporting Regulation Background The Alternative Fund Managers Directive (“AIFMD”) imposes harmonised conditions and requirements on the structure and operation of Alternative Invest- ment Fund Managers (“AIFMs”), in return for which authorised AIFMs can, for the first time, avail of a passport to market alternative investment funds (“AIFs”) to professional investors across the EU, and to manage AIFs domiciled in Member States other than the AIFM’s home Member State. What’s in there? On 11 November 2014, ESMA published its sixth Q&A (ESMA/2014/1357) on the AIFMD. The latest version provides a brief update on the reporting obligations to national competent authorities under Articles 3, 24 and 42 (Section III). It also adds a new section on the calculation of the total value of assets under management (Section VIII). THE Q&A DOCUMENT IS AVAILABLE HERE.

No 10: Codes;

«

« No 19: Reporting to TRs: UTI generation; « No 20: Reporting to TRs: Empty fields;

« No 24: Reporting to TRs: Buy/Sell indicator for swaps;

« No 37: Access to Data by the authorities;

« No 38: Trades terminated before reporting deadline; « No 39: Block trades and allocations. This Q&A provides responses to questions in rela- tion to the practical application of EMIR.

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What’s next? THE EU PRESS RELEASE ON FIRST

The document aims to promote common supervi- sory approaches and practices in the application of EMIR. REGULATION NO 648/2012 IS AVAILABLE HERE. THE Q&A ISSUED BY ESMA IS AVAILABLE HERE. What’s next? The Q&A will be updated from time to time. ESMA will periodically review the Q&A to see if there is a need to convert some of the material into ESMA guidelines and recommendations.

market practice or other necessary regulatory requirements. Detailed changes and the actual proposals of the new Table of fields are further described in Annex- es IV and V of the Consultation Paper. THE CONSULTATION PAPER IS AVAILABLE HERE What’s next? ESMA will consider all comments received by 13 February 2015 and draft a Final Report. The Final Report will be submitted to the European Commission. The Commission has three months to decide whether to endorse ESMA‘s draft regulatory and implementing technical standards.   Miscellaneous - EU Council and Parliament publish proposals for Regulation on Money Market Funds Background On 4 September 2013, the European Commission published a proposal for a regulation of the Europe- an Parliament and of the Council on Money Market Funds (the “Regulation”). The Regulation was established on the back of various reports and recommendations issued since 2011 by institutions such as the Financial Stability Board (“FSB”), the European Systemic Risk Board (“ERSB”), the International Organisation of Securi- ties Commissions (“IOSCO”) and ESMA on money market funds (“MMF”), specifically in the context of shadow banking. In November 2012, the European Parliament adopted a resolution inviting the Com- mission to submit a proposal on Shadow Banking, but with a particular focus on the issue of MMF.

"EQUIVALENCE" DECISIONS FOR CENTRAL COUNTERPARTY REGULATORY REGIMES IS AVAILABLE HERE.

EMIR - Review of the technical standards on reporting under Article 9 of EMIR Background Article 9 of Regulation (EU) No 648/2012 of the Eu- ropean Parliament and of the Council of 4 July 2012 on OTC Derivatives, CCPs and Trade Repositories (“EMIR”) requires ESMA to develop draft regulato- ry (“RTS”) and implementing technical standards (“ITS”) in relation to the application of the reporting obligation for counterparties and CCPs. ESMA delivered its Final Report on 27 September 2012, three months after the publication of EMIR. The standards were endorsed, published and en- tered into force. The RTS supplementing EMIR were published in the Official Journal of the EU (“OJ EU”) on 23 February 2013 and entered into force on 15 March 2013. The ITS were published in the OJ EU on 21 December 2012 and entered into force on 10 January with effect from 15 March 2013 as well, since they depend on the RTS. Since the entry into force of the standards ESMA has worked on ensuring the consistent application of EMIR and its RTS and ITS. To enhance the quality of trade reports, ESMA has elaborated and consist- ently updated a set of Q&As on EMIR implementa- tion. As the solutions provided thereof are already expected to be followed by market participants, ESMA now proposes transforming some of these Q&As into Technical Standards to ensure a consist- ent and harmonised way of reporting. What’s in there? On 10 November 2014, ESMA published a consulta- tion paper containing Q&A with a view to reviewing technical standards on reporting under Article 9 of EMIR. This Consultation Paper introduces three categories of changes to the current Technical Standards: « Clarifications of data fields, their description or both; « Adaptations of existing fields to the reporting logic prescribed in existing Q&As or to reflect specific ways of populating them; « Introductions of new fields and values to reflect

EMIR - European Commission first

"equivalence" decisions for

central counterparty regulatory regimes Background On 4 July 2012, Regulation (EU) No 648/2012 on OTC derivatives, central counterparties ("CCPs") and trade repositories ("EMIR") was adopted. On 30 October 2014 the European Commission adopted its first "equivalence" decisions for the regulatory regimes of CCPs in Australia, Hong Kong, Japan and Singapore. A CCP established outside of the European Union may provide clearing services to EU clearing mem- bers and trading venues where it has been recog- nised in accordance with the conditions set out in Article 25 of EMIR. CCPs that have been recognised under the EMIR process will also obtain qualifying CCP ("QCCP") status across the European Union under Regulation (EU) No 575/2013 ("CRR"). Finally, CCPs that have been recognised under EMIR may be used by EU counterparties in order to satisfy their mandatory clearing obligations under EU law. What’s in there? The CCPs from one of these third countries will be able to obtain recognition in the EU, and can therefore be used by market participants to clear standardised OTC derivatives as required by EU legislation but will still be subject solely to the reg- ulation and supervision of their respective home jurisdictions. According to Vice-President Michel Barnier, this development demonstrates that the EU is willing to defer to the regulatory frameworks of third coun- tries if their objectives are in line with EU rules.

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Miscellaneous - EU adopts transparency rules for investment products (PRIIPs) Background Retail investors often face confusing and com- plex information about packaged retail and insur- ance-based investment products (“PRIIPs”). This creates a situation in which retail investors are not completely able to assess or compare correctly risks and cost of products. On 24 October 2014 the Regulation of the Euro- pean Parliament and of the Council on key infor- mation documents for packaged retail and insur- ance-based investment products (PRIIPs) aimed at improving market transparency for retail investors was published and is available here. What’s in there? On 10 November 2014 the Council published a press release explaining the objectives and the con- tent of this Regulation which is part of a package of measures that have been adopted in order to boost consumer trust in financial markets. This Regulation requires key information docu- ments for PRIIPs which have to be compliant with format and content requirements to maximise un- derstanding of the information and therefore aim at increasing the security for retail investors. Key information documents should indicate: The press release also provides an overview of products not falling into the scope of application, such as non-life insurance products or officially recognised pension schemes. Undertakings for collective investment in transfer- able securities (“UCITS”) will not be subject to the Regulation for five years.They are already subject to key information requirements under other EU rules (Directive 2009/65/EC). As part of the review of the Regulation, the Commission will assess whether the five-year transition for UCITS should be extended. « The nature and features of the product; « Whether it is possible to lose capital; « The costs and risk profile of the product; « Relevant performance information.

What’s in there? On 10 November 2014, the Presidency of the Coun- cil of the European Union published a compromise text on the proposal relating to the Regulation on Money Market Funds. In addition, the proposal of the EU Parliament published on 26 November 2014. A number of amendments have been put forward by both the EU Council and Parliament, some of which are in direct contrast with one another. The key amendments proposed in the texts are compared in the table below.

What’s next? A final, agreed text remains outstanding and fur- ther amendments are to be expected. A draft re- port on the Regulation is expected from the ECON Committee in early December 2014, with a vote on the Committee-approved report expected in early spring 2015. The EU Parliament is due to vote on the Proposed Regulation again in March 2015.

THE COMPRISE TEXT OF THE EU COUNCIL IS AVAILABLE HERE.

THE DRAFT REPORT OF THE EU PARLIAMENT IS AVAILABLE HERE.

COMMISSION PROPOSAL

EU PARLIAMENT DRAFT REPORT

EU COUNCIL COMPROMISE

CNAV

CNAV MMF

Retail CNAV MMF

« Retail and small professional CNAV MMF

«

« EU public debt CNAV MMF

No buffer

«

NAV Buffer & Liquidity

3% buffer

« Buffer for EU public debt CNAV MMF (unclear)

Liquidity fees and gates

«

Liquidity fees and gates

«

« Conditions to invest in securitization (10%)

« OTC derivatives not allowed

« Conditions to invest in securitization (10%) Repurchase agreements allowed under certain conditions Units or shares of MMF Possible subject to conditions « «

Eligible assets

Repurchase agreements not allowed

«

External support

Possible subject to conditions

Possible, but restricted and subject to EU approval

Liquidity Requirements

10% daily, 20% weekly

15% daily, 30% weekly 10% daily, 20% weekly

Amortised cost

Allowed

MMI of 60 days maturity maximum

Allowed

Reporting/ transparency

Reporting to NCA

Extensive transparency for investors

Reporting to NCA

Rating

Internal rating system Internal rating system to be approved by NCA and ESMA

Internal rating system

Supervision

ESMA dedicated unit

FOR MORE DETAIL THE COUNCIL PRESS RELEASE IS AVAILABLE HERE.

Timing

6 months

3 months

12 months

DIRECTIVE 2009/65/EC IS AVAILABLE HERE.

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What’s next? The new requirements will be applicable two years after entry into force of the Regulation and a review will be carried out after four years to take into ac- count market developments. Miscellaneous - ESAs issue discussion paper concerning EU Regulation on Key Information Documents (KIDs) for Packaged Retail and Insurance-based Investment Products (PRIIPs) Background The PRIIPs Regulation was introduced to improve the quality and comparability of information provid- ed to retail investors in the European Union (EU) on often complex investment products. On 24 October 2014, the European Council issued the final text of the EU Regulation on Key Information Documents (KIDs) for Packaged Retail and Insurance-based Investment Products (PRIIPs) and formally adopted this text on 10 November 2014. It will be published in the Official Journal and come into force 20 days after the publishing date. The provisions of the Regulation will become effective two years after it comes into force. The European Supervisory Authorities (“ESAs” – ESMA, EBA and EIOPA) were mandated under the PRIIPS Regulation to produce the level 2 implement- ing Regulatory Technical Standards (“RTS”) with re- spect to specific areas of the KID. The ESAs have now issued a discussion paper to gather the views and feedback of stakeholders in preparation of the draft RTS (the discussion paper"). What’s in there? The Discussion Paper focuses on the different sec- tions of the KID that need to be covered in the RTS, as well as some other pertinent issues. The RTS will contain detailed rules on the content and presentation of the Key Information Documents

LUXEMBOURG Tax Administration to continue with its tax ruling practice Background Following the so-called "Lux Leaks" episode, it was rumored in the press that the Luxembourg Tax Au- thorities (LTA) had suspended its tax ruling practice until further notice. What’s in there? In a newsletter issued on 19 November 2014, the authorities of Luxembourg clearly stated that Lux- embourg will continue with its tax ruling practice. Meetings with taxpayers and their representatives, as well as the submission of advanced tax agree- ments (ATAs), will proceed on a regular and unin- terrupted basis. In its statement, the LTA highlighted that general discussions which do not have a concrete subject will not be accepted. What’s next? As of 1 January 2015, a tax rulings Commission will be established. The Commission will endeavour to further develop the ruling process with the objective of providing taxpayers with a more uniform inter- pretation of the tax laws and to ensure legal certain- ty in the national and international economic affairs.

(KIDs), including calculation methodologies and presentation templates necessary for a summa- ry risk indicator, performance scenarios, and cost disclosures. Both the content and presentational approaches presented for discussion in the paper relate to the following topics:

Chapter 2: Risk; Chapter 3 Return; Chapter 4: Costs;

«

«

«

« Chapter 5: Other sections;

« Chapter 6: Derogation for KID longer than 2 pages; « Chapter 7: Review, revision and republication of the KID; « Chapter 8: Timing of delivery to retail investor;

« Chapter 9: Template of the KID. What’s next?

The ESAs welcome comments on this Discussion Paper on Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs). The feedback received from stakeholders on the Discussion Paper will be used in preparing the draft RTS. A consultation on the draft RTS, set- ting out the ESAs conclusions, will follow in the au- tumn of 2015.

The ESAs also plan a more technical Discussion Pa- per in the spring of 2015.

The deadline for the submission of comments is 17 February 2015.

THE DISCUSSION PAPER IS AVAILABLE HERE.

THE FULL TEXT OF THE PRIIPS REGULATION IS AVAILABLE HERE.

THE LTA NEWSLETTER CAN BE VIEWED HERE.

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FRANCE Modifications of conditions of admission to trading of UCITS and AIFs and of the depositary regime applicable to securitization instruments Background On November 6 th was published in the Official Jour- nal of the French Republic (“JORF”) the Order of October 28th 2014 approving amendments made to the Books III and IV of the General Regulation of the French Financial Markets Authority (the “RG AMF”). These amendments relate to (i) modalities of admission to trading of the UCITS and AIFs and (ii) to modifications of the Depositary Regime applica- ble to securitization instruments covered by Article L.214-167 of the Financial and Monetary Code (“the CMF”). What’s in there? AMENDMENTS OF RGAMF – BOOK IV REGARDING MODALITIES OF ADMISSION TO TRADING OF UCITS AND AIFS Rules introduced by Articles 411-133 (UCITS) and 421-27-1 (AIF) of the CMF provide that manage- ment companies shall give to the public specific and prior information regarding the admission to trading of UCITS and AIFs. Content of these information will be defined in a future instruction. Regime of information also applies to foreign funds (UCITS and AIFs) marketed in France by negotiation at net asset value. Provisions about marketing of AIFs (negotiation at net asset value) and UCITS (co- tation of index funds) are currently included in the general provisions regarding the AIFs – provisions regarding cotation of index funds were previously included into the specific measures applicable to funds open to non-professional clients. MODIFICATIONS REGARDING THE DEPOSI- TARY REGIME APPLICABLE TO SECURITIZATION INSTRUMENTS Chapter II of Book III of the RG AMF regarding the custodian introduces securitization instruments.

amongst tax authorities of relevant data in relation to financial assets. The CRS is based on the US For- eign Accounting Tax Compliance Act (“FATCA”) and in particular on the FATCA Intergovernmental Agree- ment Model. Ultimately, the CRS aims at facilitating the au- tomatic exchange of information of account information from financial institutions between governments. What’s in there? On 14 October 2014, the Luxembourg Finance Min- ister signed the amended European Council’s draft Directive 2011/16/EU on administrative cooperation in the field of taxation to implement the CRS. This amended Directive will increase the scope of the mandatory automatic exchange of information between EU tax administrations and signature by Luxembourg’s at this stage underlines its willing- ness to be one of the early adopter of CRS. The updated Directive includes the exchange of in- formation linked to account balances, interest, div- idend, capital gains and all types of income derived from financial assets (derivatives, investment funds, insurance products, etc.). While the entry into force of this Directive is envisaged for 1 January 2016, the first reporting will take place in 2017. What’s next? The current EU Savings Directive automatic ex- change of information on interest income is ex- pected to be implemented in Luxembourg as from 1 January 2015. However, it seems that it will be replaced as from 1 January 2016 by the automatic exchange of infor- mation based on the updated Directive on adminis- trative cooperation and the CRS.

VAT Authorities announce amended VAT rates Background On 15 October 2015, a draft law amending the Lux- embourg VAT law was published in the context of the budget law for 2015. What’s in there? The current reduced, intermediary and standard VAT rates will be increased by 2 percentage points to become 8%, 14% and 17% respectively as from 1 January 2015. The super reduced rate of 3% will not be increased but its application in terms of scope will be revised. What’s next? The Luxembourg VAT Authorities have published a newsletter on their website which includes guide- lines regarding the increase of the VAT rates. Broadly speaking, the Luxembourg VAT Authorities indicate that there would be no specific transitional rules (except essentially for the letting of dwellings) and the normal VAT rules around chargeable events and tax point will apply. OECD - Common Reporting Standard – Luxembourg as an early adopter Background The OECD’s Common Reporting Standard (“CRS”) was officially published on 21 July 2014 and seeks to establish a global methodology for the sharing THE NEWSLETTER IS AVAILABLE HERE.

THE FULL TEXT OF THE AMENDING DIRECTIVE CAN BE VIEWED HERE.

THE OECD COMMON REPORTING STANDARD IS AVAILABLE HERE.

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SWITZERLAND FEDERAL FINANCIAL SERVICES ACT (FFSA) - Enforcement of Clients' Rights Background With the Federal Financial Services Act, also known as “FIDLEG” (hereinafter “FFSA”) which is planned to enter into force in 2017 and constitutes the Swiss Regulator’s response to MiFID II, client protection is to be strengthened through various measures ap- plicable to the Swiss and foreign financial services providers acting in Switzerland. Indeed, the im- provement of legal protection is a key objective of the preliminary draft for the FFSA, hence it contains an own chapter dedicated to the private enforce- ment of rights (Title 4 of the FFSA consultation draft, i.e. art. 72-116). What’s in there? The FFSA explanatory report identifies significant lacks in the current law with regards to the private enforcement of clients’ rights. Namely: « Injured clients can often not prove the financial service providers’ breach of duties; « Furthermore, it shows a structural discrepancy with regards to the costs of proceedings and the connected financial risks; « Finally, there are currently no instruments in place for collective compensation which would allow for a common judicial handling of various similar claims. In order to cover those deficits, the preliminary draft proposes the following measures: « New rules concerning the disclosure obligation, i.e. to provide the client with documents created by the financial service providers; « Dual reversal of the burden of proof, the client does no longer bear solely the burden of proof; « Reinforcement of the mediation body (ombuds- man system without decision authority), where the financial services providers have an obliga- tion to participate; « Introduction of two alternative solutions for dis- putes against financial service providers, either a permanent arbitral tribunal or a litigation fund sponsored by financial service providers; « Introduction of two dedicated instruments of col- lective recovery, either the representative action by interest groups, or collective settlement pro- ceedings.

The securitization vehicles that do not meet the characteristics of the “anti-bypassing” decree (see below) and submitted to provisions of Article L 214- 167 of the CMF must have a custodian meeting the requirements of a UCITS custodian (new writing of Article 323-1 A of the CMF). ORDER OF OCTOBER 28TH 2014 Securitization instruments covered by the common provisions of AIF Background In accordance with Article L.214-24 I and II of the CMF, securitization instruments are considered as AIFs. However, according to Article L.214-167 of the CMF, common provisions applicable to AIFs do not apply to securitization instruments, in particular with respect to the following instruments: « Securitization instruments establishing one or several securitization transactions, « Instruments issuing debt securities within the framework of a commercial paper backed to assets. What’s in there? On November 16th, 2014 was published in the JORF the n° 2014-1366 Decree of November 14 th 2014 issued pursuant to Article L.214-167 II of the CMF. This Decree aims at preventing “bypassing” of the AIFM Directive by funds taking the form of « Funds of lending to the economy,

securitization instruments, then benefiting from the exemption of AIFs' specific provisions, while adopting identical investment strategies as AIFs - which are subject by nature to all the AIFM Di- rective requirements. AIFs common rules apply to securitization instru- ments which are exposed, in a proportion superior to 50% of the assets of the instrument, to the fol- lowing risks: « Any other asset which does not constitute an in- surance or credit risk exposure as long as these titles or assets are discretionarily managed by the management company, or take the form of financial agreements which are discretionarily concluded, managed or canceled by the manage- ment company. For calculation of the 50% percentage, considera- tion is given to the direct or indirect exposures of the securitization instruments, including any third entity. « Financial titles; However, are not taken into account for the cal- culation: « Temporary and accessory purchase and detention of liquid assets and of parts or shares of monetary short-term UCITS or AIFs; « Any financial agreement concluded for hedging purposes. What’s next? This text entered into force the day after its pub- lication and applies to securitization instruments created as from this date. It also applies to securiti- zation instruments whose rules or status have been modified to proceed to substantial changes in their investment strategy as from this date. « Temporary detention of debts;

DECREE N 2014-1366 OF NOVEMBER 14TH, 2014

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Those measures will lead to far-reaching conse- quences for financial services providers, by en- forcing their internal rules, documents and advisory processes in order to protect themselves against abusive or not justified claims. They will also en- sure high quality protection towards the investors through a wider range of legal measures increasing their protection. What’s next? The consultation period opened by the Swiss Fed- eral Council has ended on October 17th, 2014. The FFSA will considerably change the landscape of the Swiss financial industry, namely the financial ser- vices providers may have to review their internal organization, services offering, internal rules and processes in order to comply with these new meas- ures required by the FFSA. WORLD OTC DERIVATIVES - IOSCO updates Information Repository for

IOSCO first made the repository public in August 2014. What’s in there? On 28 October 2014, IOSCO released an update of its information repository for central clearing requirements for OTC derivatives, which provides regulators and market participants with consoli- dated information on the clearing requirements of different jurisdictions. THE INFORMATION REPOSITORY IS AVAILABLE HERE. What’s next? The information in the repository will be updated quarterly. IOSCO welcomes suggestions from the public on how to improve the information repository and on other areas that should be covered. OTC DERIVATIVES

In September 2013, the G20 Leaders welcomed a set of understandings reached by the ODRG princi- pals on cross-border issues relating to OTC deriva- tives reforms at the St. Petersburg Summit. What’s in there? The report consolidates for the G20 Leaders the substance of previous reports made during 2014 to the G20 Finance Ministers and Central Bank Gov- ernors and covers developments in the following areas: « ODRG reports to the G20 since the 2013 Leaders’ Summit; « Identified cross-border issues the ODRG has ad- dressed or intends to address; « Identified cross-border issues on which ODRG members continue to work to implement under- standings reached previously; and « Progress on issues identified by the ODRG as ap- propriate for other fora or bilateral engagement. The ODRG continues to develop approaches in a range of areas, such as the treatment of organised trading platforms (“OTPs”) and the implementation of the G20 trading commitment. A framework for early consultation among authorities on mandatory trading determinations continues to be subject to discussion. The ODRG, G20 Leaders, Finance Ministers and Central Bank Governors agreed that “jurisdictions and regulators should be able to defer to each other when it is justified by the quality of their respective regulatory and enforcement regimes, based on sim- ilar outcomes, in a non-discriminatory way, paying due respect to home country regulatory regimes”.

- Report of the OTC Derivatives Regulators Group (ODRG) to G20 Leaders on Cross-Border Implementation Issues Background

Central Clearing Requirements for OTC Derivatives Background

Thus, deference to foreign regimes remains im- portant.

The International Organisation of Securities Com- mission ("IOSCO") seeks to assist authorities in their rule-making and help participants comply with the relevant regulations in the OTC derivatives market. The repository sets out central clearing re- quirements on a product-by-product level, and any exemptions from them.

FOR MORE DETAILS, THIS REPORT IS AVAILABLE HERE. What’s next? The ODRG Principals remain committed to address- ing identified cross-border issues.

Jurisdictions have been implementing the G20 OTC derivatives reform agenda through legislative and regulatory action. Since 2011, the OTC Derivatives Regulators Group (“ODRG”) has sought to identify and resolve cross-border issues associated with this implementation.

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OTC DERIVATIVES - EFAMA response to BCBS – IOSCO consultation report on the initial policy proposals on Risk Mitigation Standards for Non-centrally Cleared Over- the-counter (OTC) Derivatives Background In April 2014, the International Organization of Se- curities Commissions (“IOSCO”) Board approved the mandate of the Working Group on Risk Mitiga- tion Standards for Non-centrally Cleared Over-the- counter (“OTC”) Derivatives. The working group has developed, in consultation with the Basel Com- mittee on Banking Supervision (“BCBS”) and the Committee on Payments and Market Infrastructures (“CPMI”), standards for risk mitigation techniques for non-centrally cleared OTC derivatives. On 1 September 2014, the BCBS - IOSCO con- sultation report was issued. It presents the initial policy proposals emerging from the International Organization of Securities Commissions (“IOSCO”) Working Group on Risk Mitigation Standards for Non-centrally Cleared Over-the-counter (“OTC”) Derivatives. These proposals would establish them in consultation with the BCBS and the CPMI. What’s in there? On 17 October 2014, EFAMA responded to the BCBS-IOSCO consultation report. EFAMA generally considers the initiative to be posi- tive and completely agrees with the points aiming at improving safety and transparency in the over-the- counter derivatives market. Though, EFAMA believes that the proposed stand- ards should not be binding as they are already im- plemented, in Europe, through EMIR.

What’s next? The proposals would establish the risk mitigation standards for non-centrally cleared OTC derivatives.

of this Report. For 8 FSB jurisdictions, self-assess- ments indicated measures have been implemented in all Reform Areas. In 5 jurisdictions (representing 3.36% of MMF markets worldwide), this is because measures were in force in all 8 Reform Areas before 1 October 2012. Based on the public data used by the Review Team this resulted in a coverage of almost 98% of the global MMF industry. THE REPORT IS AVAILABLE HERE. What’s next? ISOSCO will continue to review the implementation progress participating jurisdictions. IOTC DERIVATIVES - IOSCO consults on Post-Trade Transparency in the Credit Default Swaps Market Background Following the global financial crisis of 2007 – 2009, calls were made for reform in the over-the-counter (“OTC”) derivatives market. In June 2010, the G20 Leaders, having committed to an agenda of reform, agreed to accelerate the implementation of meas- ures to improve transparency. The IOSCO consultation paper on mandatory post- trade transparency in the Credit Default Swaps (“CDS”) market comes on the heels of this initia- tive. In producing this consultation paper, IOSCO analysed a large variety of market information and evidence, and consulted a wide range of academic sources in order to analyse the potential impact of post-trade transparency in the CDS market. On 10 November 2014, IOSCO issued a consultation paper in order to inform its final report on post-trade transparency in the CDS market. What’s in there? IOSCO has identified potential benefits and costs to mandatory post-trade transparency in the consulta- tion paper. As a result, IOSCO preliminarily believes that greater post-trade transparency in the CDS market, including making the price and volume of individual transactions publicly available, would be

OTC DERIVATIVES - IOSCO: Report of Key Preliminary Findings to the G20 Leader’s Summit Background In September 2013, the G20 Leaders in St Pe- tersburg invited the International Organisation of Securities Commissions (“IOSCO”) to review and report on progress relating to money market funds (“MMFs”) regulatory reforms in late 2014. Following the G20 Leader’s Request, IOSCO con- sented to conducting a review consisting of an im- plementation progress report about the current reg- ulatory reform efforts of participating jurisdictions. What’s in there? The report was published in November 2014 and identifies progress in adopting legislation, regula- tion and other policies in relation to MMFs in the following areas: « Scope of the regulatory reform - explicit definition of MMFs in regulation and appropriate inclusion of other investment products presenting features and investment objectives similar to MMFs; « Limitations to the types of assets of, and risks tak- en by, MMFs; « Valuation practices of MMFs - addressing specific valuation issues for MMFs and their portfolios; « Liquidity management for MMFs - aimed at en- suring MMFs maintain adequate liquidity resourc- es in normal business conditions as well as in stressed market conditions; « MMFs that offer a stable Net Asset Value (NAV) - addressing the risks and issues which may affect the stability of MMFs that offer a stable NAV;

« Use of ratings by the MMF industry;

« Disclosure to investors; and

« Repos - MMF practices in relation to repurchase agreement transactions.

23 FSB members (representing almost 83% of MMF markets worldwide) and 7 non-FSB members (representing almost 15% of MMF markets world- wide) provided the responses on which this Report is based. One FSB member (Indonesia) had not provided a response at the time of the preparation

FOR DETAILS ON THE PROVIDED ANSWERS: THE EFAMA RESPONSE IS AVAILABLE HERE

THE BCBS-IOSCO CONSULTATION REPORT IS AVAILABLE HERE

Scanning - December 2014 - page 9

valuable to market participants and other market ob- servers. The consultation paper analyses the potential impact of post-trade transparency in the CDS market, expanding on the following matters: « Legislative and Regulatory Frameworks for Post-Trade Transparency; « Assessment of Potential Impacts of Post-Trade Transparency ; « Regulatory Consideration of Post-Trade Transparency. IOSCO provides preliminary conclusions and recommen- dations, and welcomes comments on the consultation paper. In particular, IOSCO welcomes a response from stakeholders to the questions identified in Part VIII of the paper. All comments should be submitted on or before 15 February 2015. THE CONSULTATION PAPER IS AVAILABLE HERE. What’s next? IOSCO will publish its final report on post-trade transpar- ency in Credit Default Swaps market after the consulta- tion period has closed. « Characteristics of the CDS Market;

Scanning This publication is produced by Legal and Compliance teams of CACEIS with the kind support of Communication teams and Group Business Development Support teams.

Editors Gaëlle Kerboeuf, Group General Counsel @ Marie-Andrée Bonnet, Compliance and Regulatory Watch Manager (France) @ Permanent Editorial Committee Gaëlle Kerboeuf, Group General Counsel Marie-Andrée Bonnet, Compliance and Regulatory Watch Manager (France) Chantal Slim, Head of Legal (CACEIS Bank France) Eliane Meziani-Landez, Head of Fund Structuring (France) Emilie Zaracki (Legal Officer) Ana Vazquez, Head of Fund Structuring and Domicile (Luxembourg) Véronique Bastin, Head of Compliance (Luxembourg) Stefan Ullrich, Head of Legal (Germany) Costanza Bucci, Legal and Compliance Manager (Italy) Mireille Mol, Legal and Compliance Manager (Netherlands) Laura Guzzi, Legal Manager (Belgium) Helen Martin, Head of Legal (Ireland) Sarah Perrier, Head of Legal and Compliance (Switzerland) Philippe Naudé, Marketing and Communication Specialist (France) Arianna Arzeni, Head of Group Business Development Support

Design Sylvie Revest, CACEIS, Communications

Photos credit Yves Maisonneuve, Yves Collinet, CACEIS, Fotolia

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