Laws and Regulations

The reaction to recent European Commission proposals for AIFMD II reform from Luxembourg finance industry participants was positive. On the whole, changes have been kept to a minimum. For Luxembourg this means the alternative fund industry’s current business model does need to change, but the country will have to manage some more back-office tasks, and needs to ensure some more substance.

Goodbye to the UCITS KIID and hello to the PRIIPs KID for UCITS and retail AIFs. The European Parliament approved on Tuesday the legislation introducing the Packaged Retail Investment and Insurance-based Products Key Information Document (PRIIPs KID.

There is still no uniform European investor protection as envisaged by MiFID II, according to research conducted by Ronald Janssen of Ortec Finance and Tom Loonen of the Free University of Amsterdam in a survey of 25 European private banks. Their research shows that private banks in Europe have different approaches to the concept of Know Your Customer (KYC) and use different levels of detail in implementing it. Also, that none of the banks has a fully digitalised process.

A majority of nearly 3,000 risk managers admit that the pandemic has led to more careless due diligence checks and a more sloppy handling of the Know Your Customer (KYC) principle. In addition, 71 per cent of respondents report that cybercrime is harder to contain because of remote working.

The CSSF was pleased with how Luxembourg’s fund sector withstood the acute phase of the Covid crisis, declaring itself positive about the sector’s performance on risk and liquidity, but drawing attention to some potential weak spots, in its recently published 2020 annual report.

The U.S. Securities and Exchange Commission (SEC) is investigating DWS. The stock market watchdog is investigating an accusation that the German asset manager falsely made certain sustainability claims.

Goldman Sachs has struck a tremendous blow with its takeover of NN Investment Partners, the asset management arm of Dutch insurer NN Group, which was announced a few days ago.

Financial advisors need to gauge client preferences around green and social investing, and the investment products they recommend must keep their ESG promises

Could regulatory moves be underway that will help unlock the promise around blockchain and distributed ledger technology (DLT)? Too often great new ideas and tools run into a wall of financial sector regulation before they can show their full promise.