Global Registration Services – Market Update, Q2 2013
The Alternative Investment Fund Managers Directive 2011/61/EU ("AIFMD") – Implementation update
Austria, Denmark, France, Germany, Ireland, Luxembourg, Netherlands, Sweden, UK
· AIFMD expected to enter into force on or before 22 July 2013 (end of July 2013 for France).
Belgium, Finland, Italy, Norway, Portugal, Spain
· The AIFMD is not expected to be implemented by 22 July 2013.
France – Guide to drafting collective investment scheme marketing materials and distributing collective investment schemes
On 22 March 2013 the above publication was released by the Autorité des marchés financiers ("AMF") to assist all approved collective investment schemes marketed in France in interpreting the AMF regulation.
Switzerland – New administrative practice
Further to our Q1 market update, available here, and as a result of the new Collective Investments Schemes Act ("CISA") which entered into force in Switzerland on 1 March 2013, the Swiss Financial Market Supervisory Authority ("FINMA") have introduced certain new administrative practices relating to funds registered to market in Switzerland such as reasons for modifications made to the prospectus, and substance requirements for fund/management companies and investment managers/administrators.
UAE – Private placement exemption
In August 2012 the UAE Securities and Commodities Authority ("SCA") introduced a new regulatory framework governing the promotion of foreign investment funds to investors in the United Arab Emirates ("UAE") and the establishment, operation and promotion of domestic funds in the UAE (the "Regulation"). In March 2013 the SCA passed an amendment to the Regulation which became effective on 1 May 2013 (the "Amendment").
As a result of the Amendment the private promotion of foreign investment funds to "Qualified Investors" are exempt from receiving prior approval from the SCA. Also, some foreign funds will be able to market investment funds in the UAE on a private offering basis through a representative office, branch or other licenced intermediary with the prior approval of the SCA.
China – Revised funds law
In December 2012, the Standing Committee of the National People's Congress ("NPC") released the final revised Securities Investment Funds Law which came into effect on 1 June 2013.
The new law will regulate certain "private funds" in addition to mutual funds however private equity and venture capital funds will remain beyond the scope of the new legislation.
"Private funds" that are regulated under the new law are funds which are offered up to 200 qualified investors and which trade in publicly offered shares, bonds and fund units and other securities and derivatives approved by the China Securities Regulatory Commission ("CSRC").
China – RQFII scheme expanded
In December 2011 the Renminbi Qualified Foreign Institutional Investor ("RQFII") scheme launched in China when the Pilot Measures for Onshore Securities Investment by Fund Management Companies and Securities Companies that Qualify as RMB Qualified Foreign Institutional Investors ("2011 Measures") were formally endorsed. As a result of the success of the 2011 Measures, the local regulatory authorities further expanded the scope of the RQFII scheme, and in March 2013, the regulators issued the Pilot Measures for Onshore Securities Investment by RMB Qualified Foreign Institutional Investors ("RQFII Pilot Measures") together with relevant implementing rules which replace the previous rules.
Also from March 2013, qualified foreign institutional investors ("QFIIs") were permitted to invest in the inter-bank bond market that was already accessible by RQFIIs since the launch of the RQFII scheme, with a view to eventually integrating the two schemes. As a result of the introduction of the RQFII Pilot Measures, Hong Kong based subsidiaries of insurance companies and commercial banks incorporated in mainland China as well as financial institutions both place of incorporation and main place of business in Hong Kong are now also eligible to apply for RQFII licence.
Hong Kong - Update to FAQ on the code of unit trusts and mutual funds
During April and May 2013 the Securities and Futures Commission of Hong Kong ("SFC") updated Questions 27B (relating to offers of new share class denominated in a restricted currency) and 34A (relating to disclosure of dividend composition information to the SFC).
Hong Kong - Consultation paper on the proposed amendments to the professional investor regime and the client agreement requirements
On 15 May 2013, the SFC issued the above consultation paper. If introduced, the conduct of business between intermediaries and professional investors will be focused on in a bid to alleviate the risks of mis-selling of products.
Singapore – Amendments to the rules covering collective investment schemes and closed-ended funds in Singapore
On 1 April 2013, the Monetary Authority of Singapore ("MAS") issued the Securities and Futures (Offers of Investments) (Collective Investment Scheme) (Amendment) Regulations 2013 and the Securities and Futures (Closed-End Fund) (Excluded Arrangements) Notification 2013 (collectively, the "New Regulations").
The result is increased disclosure obligations in relation to funds registered as restricted schemes in Singapore and an "information memorandum" required to be filed in relation to the restricted schemes as part of their annual obligations with MAS through CISNet. Closed ended funds constituted on or after 1 July 2013 will be classified and regulated as collective investment schemes resulting in any offer units to accredited investors and other persons under section 305 of the Securities and Futures Act ("SFA") will have to notify MAS of such intention via CISNet.
Taiwan – New regulations on registration of offshore funds
In December 2012, the Financial Supervisory Commission of Taiwan (the "FSC") published a letter to indicate that with effect from 1 January 2013, some of the regulations relating to offshore funds registered to market in Taiwan have been amended.
· one sub fund only permitted per application, previously maximum of three sub-funds could have been submitted;
· the percentage of investments in stocks of a balanced fund must fall between 30-70% of the net asset value of the balanced fund (new limit); and
· certain types of off shore funds (set out below) may not be registered or sold in Taiwan going forward:
- fixed-income funds investing primarily in convertible bonds, and
- new types of offshore funds, such as guaranteed funds and index funds.
How Maples can help
Maples Global Registration Services ("Maples GRS") supports UCITS1 and AIFMs in their multi-market distribution strategies by providing an integrated global network of local experts coordinated by a dedicated central team supporting all legal and regulatory aspects governing the cross border marketing of investment funds on both a private placement and public offer basis.
Should you require any further information or assistance in this regard, please do not hesitate to contact a member of the Maples GRS team.
1Domiciled in Ireland and Luxembourg