The European Commission has published a pre-final Work Programme for 2012. The funds-related developments which the work programme addresses are:
- UCITS V: Amendment of the UCITS IV Directive as regards rules on UCITS depositary functions, on manager remuneration policy, and on administrative sanctions. The Commission has indicated that the proposed legislation will be published in the Q2 2012.
- Shadow Banking: A communication will be adopted in the second half of the year to complement and implement the G20 work stream. This follows the Financial Stability Board's (FSB) Report on Shadow Banking: Strengthening Oversight and Regulation issued on 27 October 2011, and may impact hedge funds and money market funds which may be viewed as "non-bank credit intermediation in the financial system" (ie shadow banking).
- Packaged Retail Investment Products ("PRIPS"): Legislative proposals in this area will be introduced to ensure a high and consistent level of investor protection, with a level playing field for the originators and distributors of retail investment products and increased efficiency in cross-border business. (Q1 2012)
- Third Anti Money Laundering Directive: The Commission has begun its post-implementation review of the Third Anti Money Laundering Directive and a report is planned in March 2012. The Financial Action Task Force ("FATF") is also in the process of revising its standards and should adopt new standards in February 2012. The Commission states that the EU will rapidly implement the new standards into its legislation ahead of the new round of FATF evaluations.
Continuing to Network - Update on Ireland's Double Tax Treaties
In total, Ireland has now signed comprehensive double taxation
agreements with 64 countries, of which 56 are in effect.
Ireland signed double tax treaties with Armenia and Saudi Arabia on
14 July 2011 and 19 October 2011 respectively. On 8 April 2011,
Ireland's agreement with Singapore came into force, effective
from 1 January 2011. Ireland's new agreement with Hong Kong,
which was signed on 22 June 2010, came into force on 10 February
2011 and will be effective from 1 January 2012. An updated
agreement with Germany was signed on 30 March 2011 and negotiations
for new agreements with Panama, Thailand and Uzbekistan have been
concluded and these agreements are expected to be signed shortly.
Work is also underway to negotiate new agreements with other
countries (including Argentina, Azerbaijan, Egypt, Tunisia and
Ukraine) and to update certain existing agreements (including
Ireland's agreements with Cyprus, Italy, Korea, Pakistan and
France).
Ireland's comprehensive tax treaty network continues to be an
important part of its overall attractiveness for inward investment.
For a full list of current double taxation treaties, please click here.
(This update also appeared in the Matheson Ormsby Prentice
Client Ezine: International Business Update November 2011).
EU Commission publishes CRA III Proposals
On 15 November, the EU Commission published a regulation
amending the EU Regulation on credit rating agencies
("CRAs") and a directive amending the UCITS IV Directive
and the Alternative Investment Fund Managers Directive
("AIFMD"). The key proposals in the regulation relate to
over-reliance on external credit ratings and CRAs'
transparency; sovereign debt ratings; conflicts of interest and
civil liability of CRAs. The European Securities and Markets
Authority ("ESMA") will be barred from including
references in its guidelines, recommendations and draft technical
standards that may trigger "mechanistic reliance on credit
ratings". The proposals also introduce a "rotation
rule" that, except in certain circumstances, would prevent a
CRA from issuing ratings for an issuer for more than three years,
if it is paid by the issuer for ratings. Issuers of structured
finance products would be required to obtain credit ratings from
two CRAs.
The proposed directive amending UCITS IV and AIFMD is intended to
reduce over-reliance on external ratings by funds, specifying that
fund managers should not solely or mechanistically rely on external
credit ratings for assessing the creditworthiness of fund
assets.
A copy of the proposed regulation on CRAs is available here. A copy of the proposed directive
amending UCITS IV and AIFMD is available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
