Mike Gordon

Luxembourg is strongly enthusiastic about the prospects of the new Eltif 2.0 regime as experts here point to untapped demand for such a product in Europe. While acknowledging the oft-mentioned concerns about the lack of liquidity for retail investors, there was optimism at a recent investment event hosted by Clifford Chance that solutions could be found. Investors though would have to be open-minded, and some in-built tensions need to be addressed.

Luxembourg management companies are drawing attention to the increasing reporting burden that often lands on their shoulders when European level regulation, such as the cross-border fund distribution directive, is passed. These requirements, they argue, often simply serve to placate national authorities over their lost jurisdiction. “It’s creating an additional burden on the investment fund manager,” said Chloé Piquet, a senior manager in regulatory services at Deloitte.

There’s a battle raging just out of view on Europe’s financial markets. It’s a fight between data originators – largely but not only the stock exchanges – and the data users – who could be anyone active on the markets  – over the proposed “consolidated tape” which aims to improve access to trading data. Selling access has become “probably one of their biggest cash cows,” said a representative for Europe’s asset management sector, commenting on the position of the stock exchanges.

The announcement that some 500 Microsoft Exchange servers “need immediate attention”, issued by Luxembourg’s cybersecurity agencies last week, has been echoed by financial regulator the CSSF. A noted international cybersecurity expert linked this to the difficulty in finding top cybersecurity talents in Luxembourg. “The struggle that people in Luxembourg have, certainly clients that we’re talking to, that want to work with us, but don’t yet, is that they can’t find the skill sets,” said George Ralph (photo) of Richard Fleishmann and Associates.

With the endorsement of almost all European stock exchanges, the “consolidated tape” recently booked significant progress. Hurdles remains however, as representatives of stock exchanges and asset managers remain at loggerheads. “Europe risks missing the boat on this entire issue of really getting market structure right,” FESE’s director general Rainer Riess told Investment Officer.

Luxembourg’s permissive environment for inducements and an acceptance of non-independent investment advice will make a good test case for the EU’s upcoming retail investment strategy. A fight is brewing over “kickbacks” as the European Commission finalises its effort to encourage Europeans to increase the level of their assets placed in investments.

Chief executives of Luxembourg firms are more worried about the long-term prospects for their businesses than their counterparts in other countries, according to a new survey presented on Wednesday by consultancy firm PwC.

The survey showed that only 51 percent of Luxembourg CEOs believe that their company will be economically viable for more than ten years if it continues running on the current path, compared to 59 percent of global CEOs.

Communication technology continues its rapid development, but it’s inevitably affected by the world that it serves, so it must contend with concerns about sustainability and the impact of the economic situation, as well as the legal context. The emergence of ChatGPT as a new form of artificial intelligence might promise much, but it may misuse others’ content, Deloitte argues in its outlook for Telecoms, Media and Technology, or TMT.

Private assets might have dropped significantly in value since the “good years” of 2020 and 2021, but despite a bad year in 2022, they’re still outperforming public market returns by quite a margin, explained Schroders Capital’s chief investment officer Nils Rode at his firm’s private assets 2021 outlook this week.  History shows that private assets investors could have a strong year in 2023 despite the bad overall macroeconomic conditions, he argued.

The European Investment Bank has issued its first natively digital bond denominated in British pounds. The EIB raised 50 million with the bond, which has a duration of two years and bears a floating rate of interest.

BNP Paribas, HSBC and RBC Capital Markets are the joint lead managers. The syndicate was advised by Allen & Overy. EIB was advised by Clifford Chance.