Investment Management Update

In this issue: Investment Association consultation on disclosure; AIFMD - FCA updates NPPR notification forms; and EuVECAs and EuSEFs - developments.

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27.03.2017 - Investment Association consultation on disclosure

The Investment Association has published a technical consultation paper on a new code for enhanced disclosure of charges and transaction costs.

The aim of the Code is to develop a consistent and comprehensive framework to allow fund and asset managers to deliver underlying charges and transaction cost information using standard definitions.  The Code also aims to promote accountability of asset managers to their clients through enhanced transparency and to facilitate a full understanding by clients of all the charges and costs incurred in the investment of their money.

The consultation is in two parts. Part One sets out the context for the Code, and provides some more detail on the development process. Part Two sets out the text of the new Code, which is the subject of this consultation.

The paper is open for responses until 19 May and the Investment Association aims to provide a feedback statement and a final set of proposals in the third quarter of 2017.  The Association will be proposing to the FCA that the finalised Code be recognised in its Conduct of Business Rules.

27.03.2017 - AIFMD - FCA updates NPPR notification forms

The FCA has updated the notification forms to be used by AIFMs wanting to market AIFs in the UK under the national private placement regime (NPPR).  These are:

  • the Article 36 notification form (for full-scope UK and EEA AIFMs wanting to market non-EEA AIFs in the UK);
  • the Article 42 notification form (for above-threshold non-EEA AIFMs wanting to market any AIF in the UK); and
  • the Small Third Country notification form (for sub-threshold non-EEA AIFMs wanting to market any AIF in the UK).

The new forms are available on the NPPR page of the FCA website.  AIFMs should ensure they use these new forms; notifications made using previous versions of these forms will be rejected.

30.03.2017 - EuVECAs and EuSEFs - developments

In a recent press release from the European Parliament, the Economic and Monetary Affairs Committee MEPs has called for European venture capital funds (EuVECAs) and European social entrepreneurship funds (EuSEFs) to be made more attractive for investors.

MEPs have supported the Commission proposal to:

  • allow all managers authorised as Alternative Investment Fund Managers to set up and manage EuVECA and EuSEF funds;
  • extend the range of companies that can be invested in by EuVECA to “small mid-caps” (unlisted companies with up to 499 employees); and
  • make cross border marketing of the funds easier and cheaper.

Additionally, MEPs have adopted the following amendments to the Commission proposal:

  • broadening the definition of positive social impact of the qualifying investment from “social impact on marginalised and vulnerable groups” to “services and goods generating social return”;
  • lowering the minimum investment in EuSEF from €100,000 to €50,000 to assist smaller investors;
  • setting an initial capital requirement for both types of funds at €30,000; and
  • setting an own funds requirement of at least one eighth of the fixed costs from the preceding year.