AIFMD – ESMA Updates Q&As and Re-Visits View of Application of Delegation Rules

ESMA issued updated Q&As on 16 November on AIFMD including two new questions and answers on the cross-border marketing of AIFs, clarifying issues around material changes of existing notifications, and two new questions and answers on the delegation of functions by an AIFM to AIFs or third parties.

Importantly, ESMA takes the view that where an AIFM does not itself perform the functions set out in Annex I of the AIFMD, it still retains responsibility to ensure compliance of the relevant function(s) with the AIFMD, though this obligation applies to all functions stated in point 1 and point 2 of Annex I of the AIFMD (e.g. marketing of AIFs, or provision of legal services to AIFs).

This view is being challenged by various trade bodies, and we expect ESMA to revise or clarify this view.

Read the associated press release in full.

Read the updated Q&As in full.

EMIR – ESMA Issues Final Report Calling to Delay the Clearing Obligation for Financial Counterparties with a Limited Volume of Activity

ESMA issued its final report on the application on 14 November of the EMIR clearing obligation for financial counterparties with a limited volume of activity. ESMA has asked the European Commission to prolong, by two years, the phase-in for clearing for financial counterparties with a limited volume of derivatives activity – as classified in Category 3 under EMIR Delegated Regulations.

Read the associated press release in full.

Read the report in full.

MiFID II – ESMA Publishes MiFID II Q&As on Transparency and Market Structure Topics and Issues New Delegated Regulations Addressing Ancillary Activities and Commodity Derivatives

ESMA issued new Q&A on certain transparency and market structure topics on 18 November. The Q&A address data disaggregation, the mandatory tick size regime and processing of waivers from certain pre-trade transparency obligations.

Read the associated press release.

Read the Q&As: Market structures topics.

Read the Q&As: Transparency topics.

On 19 November, the European Commission issued three delegated regulations to MIFIR setting out:

(i) the regulatory technical standards (“RTS”) for determining whether a derivative subject to clearing under EMIR also has sufficient “third-party buying and selling interest”, to determine if this derivative must be traded on a regulated market:

Read regulation in full.

(ii) RTS standards on access in respect of benchmarks:

Read regulation in full.

(iii) RTS concerning the information for registration of third-country firms and the format of information to be provided to the clients:

Read regulation in full.

On 1 December, issued two delegated regulations to MIFID II setting out:

(i) the RTS for the criteria to establish when an activity is considered to be ancillary to the main business of a firm, when dealing on own account or providing investment services in commodity derivatives or emission allowance derivatives:

Read regulation in full.

(ii) the RTS for the application of position limits to commodity derivatives:

Read regulation in full.

UCITS – ESMA Updates Q&As

ESMA issued updated Q&As on the application of the UCITS Directive on the 21 November. The new Q&As include two new questions and answers on how investment limits should be applied where a UCITS wants to invest in an umbrella fund.

Read the associated press release in full.

Read the Q&As in full.