SCANNING 3

What’s next? The revised Guidelines will apply as from 1 October 2014. However, existing structures benefit from a 12 months grandfathering period for full compliance.

THE REVISED GUIDELINES ARE AVAILABLE HERE.

European Commission

ESMA updates its guidelines on ETFs and other UCITS issues Background

publishes overview/ planning of Level 2 legislative measures in financial services Background N/A What’s in there? On 10 July 2014, the European Commission pub- lished an overview/planning table concerning Level 2 legislative measures in the area of financial ser- vices. The table provides an overview of Level 2 legisla- tive measures, both those in preparation and those adopted. The table has been put together by the Eu- ropean Commission’s Internal Market and Services Directorate General and includes in particular the following directives and regulations:

What’s next? The proposal is scheduled to be reviewed by the ECON Committee of the European Parliament in September 2014.

THE OPINION IS AVAILABLE HERE.

UCITS V Directive finally adopted by Council Background The draft UCITS V Directive has been under legisla- tive review for the past two years. The text amends Directive 2009/65/EC on undertak- ings for collective investment in transferable securi- ties (“UCITS”) as regards remuneration of staff, the regulatory framework applying to UCITS depositaries and the sanctions regime. The Commission proposal was issued on 3 July 2012. On 15 April 2014, the European Parliament adopted its final position. What’s in there? The Directive was adopted by the Council on 23 July 2014. What’s next? The Directive will enter into force 20 days after its publication in the OJEU. Member States will have 18 months to transpose the Directive into national law. Depositories will be giv- en an additional 24 months after that transposition deadline. More details on the content of the UCITS V Directive will be available on the next Scanning publication. THE PRESS RELEASE OF THE COUNCIL IS AVAILABLE HERE. THE TEXT OF THE DIRECTIVE AS ADOPTED BY THE COUNCIL IS AVAILABLE HERE.

On 18 December 2012, ESMA published guidelines on ETFs and other UCITS issues ( THE "GUIDELINES" - AVAILABLE HERE ). The Guidelines applied to UCITS management com- panies and self-managed SICAV as from 18 February 2013. Paragraph 43 e of the Guidelines sets forth the col- lateral diversification criteria to be complied with by UCITS entering into OTC financial derivative transac- tions and efficient portfolio management techniques. What’s in there? On 1 August 2014, ESMA issued a revised version of the Guidelines. Paragraph 43 e of the Guidelines was completed by a new subparagraph laying down the derogative rules under which a UCITS may be fully collateralised in different transferable securities and money mar- ket instruments issued or guaranteed by a Member State, one or more of its local authorities, a third country, or a public international body to which one or more Member States belong. In this case, compliance with the following must be ensured: « The UCITS should receive securities from at least 6 different issues; and « Securities from any single issue should not account for more than 30% of the UCITS’ net asset value; « The prospectus must be updated accordingly. Under the provision of the new paragraph 48 of the revised Guidelines, the UCITS annual report must in- clude information on: « The identity of an issuer from whom the UCITS re- ceived a collateral which exceeded 20% of the NAV; « Whether the UCITS has been fully collateralised in securities issued or guaranteed by a Member State.

CRR/CRD IV, MiFID II/MiFIR,

«

«

« UCITS IV/V and AIFMD,

EMIR,

«

« MAD/MAR (Market Abuse),

« Short Selling & CDS,

« Money Market Funds. In each case the information in the table includes:

« Details of the Level 1 legislative acts;

« Details of the Level 2 legislative measures in preparation or adopted;

« The legal instrument in question;

« The year in which the Commission plans to adopt the Level 2 legislative measure or, for published measures, the “COM” or Official Journal of the EU reference; « A link to the relevant Commission policy website. What’s next? The table will be updated on a regular basis.

THE EUROPEAN COMMISSION TABLE IS AVAILABLE HERE.

Scanning - September 2014 - page 7