EUROPE: ESMA 2014 Work Programme – Plans for investment funds

Friday October 4 2013

The European Securities and Markets Authority (ESMA) has released a Work Programme for 2014 which includes details of the Authority’s plans in the area of investment funds. According to the Programme, ESMA’s focus in 2014 in the investment funds area will be divided between on-going work on key elements of the Alternative Investment Fund Managers Directive (AIFMD) framework, work in the area of Undertakings for Collective Investment in Transferable Securities Directive (UCITS) and additional activity arising from the Regulations on European Venture Capital Funds (VC), European Social Entrepreneur-ship Funds (EuSEFs) and Money Market Funds.

Regarding AIFMD, ESMA will strive to ensure the proper functioning of the third country chapter of the Directive. This includes a role in the assessment of the legislative frameworks for depositaries in non-EU jurisdictions and the preparation of the report on the switching-on of the passport for non-EU AIFMs, which must be delivered to the European Commission by July 2015. Beyond the provisions that are specific to non-EU entities, in 2014 ESMA will start receiving a wide range of information from National Competent Authorities (NCAs) on the activities of alternative investment fund managers. ESMA will monitor this information for the purposes of systemic risk oversight and in order to carry out certain specific tasks foreseen by the legislation, such as with respect to leverage.

On UCITS, ESMA expects to provide input on the delegated acts, technical standards and guidelines that may be required under the UCITS V Directive.

The Regulations on European Venture Capital Funds and European Social Entrepreneurship Funds published earlier this year foresee a number of delegated acts and technical standards that are likely to lead to new tasks for ESMA. In particular, ESMA would expect to provide advice to the European Commission on the types of conflict of interest to be identified and managed by managers of venture capital and social entrepreneurship funds. In addition, both Regulations require the establishment of a public database of entities by ESMA. ESMA will be able to build on its existing work to create registers under the UCITS Directive and AIFMD.

Finally, ESMA has noted that it will continue its work to promote supervisory convergence in the area of investment funds. This will include maintaining existing documents (such as on the Guidelines on ETFs and other UCITS issues), drafting new guidelines and recommendations, and drafting opinions addressed to NCAs.

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