Bovill briefing: Making AIFMD business as usual - Annex IV reporting - October 2014
description
Transcript of Bovill briefing: Making AIFMD business as usual - Annex IV reporting - October 2014
Making AIFMD business as usual
Ashley Kovas, Head of Funds
Donal Martin, Consultant
9 October 2014
2
What we’re looking at today
• The AIFMD deadline has passed
• What the FCA want
• What does compliance involve?
• Some detailed areas to consider
• Annex IV reporting
3
The AIFMD deadline has passed
• New applicants:
AIFM must comply from the date of authorisation
• Transitionals:
AIFMs who applied for VoPs should have complied from the date of
approval or 22 July – whichever was first.
… and the FCA are likely to be checking up on implementation
4
What the FCA want
Business model and strategy
• How you make your money
Culture
• Leadership, strategy, decision-making and challenge, controls, performance
management and reward
Front-line business processes
• From product development to complaints handling
Systems and controls
• Reinforce the right culture and business practices
Governance
• The role of the people responsible for running the firm
5
What does compliance involve?
For all AIFMs
• Authorisation and registration
• Reporting
• To regulator
• To customers
• Annual report
For full scope AIFMs
In addition, you need to have policies
and procedures for:
• Risk management
• Valuation
• Conflict of interest
• Liquidity management
• Delegation
• Investor disclosure
• Due diligence
• Remuneration
• Leverage
6
Risk management
Full scope AIFMs need:
• A permanent risk management function
• Risk management policies and procedures
• Published risk profile
• Regular review of risk management systems
• Reports to the Board
For each AIF it manages the AIFM must:
• Identify all relevant risks
• Establish risk limits for the AIF taking account of all relevant risks
7
Valuation
Full scope AIFMs need the following procedures:
• Proper and independent valuation
• Net asset value
• Disclosure of valuation
8
External valuers
• Who are they?
• Appointment process
• Written guarantees obtained from the external valuer
• Exchange of information
• Ongoing due diligence
9
Assets under management
For each AIF the AIFM needs to:
• Identify portfolio of assets
• Value each asset
• Include all assets acquired through leverage
• Convert derivative positions
10
Assets under management – examples
Interest rate swaps
• Notional contract value of the swap
Contracts for differences
• Price difference the owner of the CFD has to pay
So again, AUM is likely to be larger
Convertible bonds (embedded derivatives)
• number reference shares x market value of reference shares x the delta
number of contracts x
market value of
the reference
instrument
Annex IV reporting
12
Who is caught?
• Full-scope UK AIFM
• Small authorised UK AIFM
• Small registered UK AIFM
• Third country AIFMs
13
What does Annex IV reporting involve?
Transparency…
• reporting about you
• reporting about your funds
14
Why do you need to do this?
It’s part of the FCA’s strategy
• Regulatory reporting is part of the FCA’s supervision strategy and transparency
information is a key element of this.
It helps the financial system
• Information is used to protect and enhance the integrity of the financial system
and secure consumer protection.
You have to!
• Managers are required under the Directive to report information (transparency
information) to the FCA or other NCA(s).
15
What does the FCA need?
Two reports submitted electronically via GABRIEL :
AIF001 – Manager Report
• AIFM specific information
• FRN is used to identify each AIFM
AIF002 – Fund Transparency Report
• AIF specific information
• PRN used to identify each AIF
16
Reporting obligations – quarterly
AIFM Reporting period
end
Submission date
Full Scope AIFM
• AUM exceeds €1 billion
Or
• AUM of one or more AIFs
exceeds €500m
SUP 16.18.4(3)(b)
SUP 16.18.4(3)(c)
As at:
• 31 March
• 30 June
• 30 September
• 31 December
SUP 16.18.5R(3)
30 April
31 July
31 October
31 January
17
Reporting obligations – half-yearly
AIFM Reporting period
end
Submission date
Full Scope UK AIFM
• AUM exceed either €100 million
OR
• AUM exceeds €500 million
(unleveraged and no redemption
rights for 5 years)
BUT
• AUM is less than €1 billion.
SUP 16.18.4(3)(a)
As at:
• 30 June
• 31 December
SUP 16.8.5R(2)
31 July
31 January
18
Reporting obligations – annually
AIFM Reporting period
end
Submission date
Full Scope UK AIFM:
• unleveraged AIF which invests
in non-listed companies and
issuers in order to acquire
control
SUP 16.18.4(3)(d)
As at:
• 31 December
SUP 16.18.6R
SUP 16.18.7D
31 January
Sub-threshold AIFMs
• small authorised AIFMs
• small registered AIFMs
SUP 16.18.6R
SUP 16.18.7D
19
Helping you with Annex IV reporting
For less complex structures or lower assets under management
• You can input to direct to GABRIEL
• We can advise and help with data input
20
Helping you with Annex IV reporting
For more complex structures or higher assets under management
• We can handle reporting on your behalf
• We can advise and help at each step
Simplified reporting template
Validation, error check and audit
trail to minimize errors
Generates and submits xml filing
straight to NCA
Capable of multi-jurisdictional
and multi currency filings
21
How it works
• Bovill templates issued to you
• We advise on technical queries and help complete templates
• We validate your completed template through the system
• We work through queries and return form for your approval
• We submit direct to the necessary NCAs
22
Making AIFMD business as usual
• AIFMD should be part of every day business
• Take time to do the correct calculations
• Understand what you need to report, how and when
23
If you’re stuck
• Speak to your Bovill contact
• Have a drink with us after the briefing
• Give us a call +44 20 7620 8440
www.bovill.com
www.bovill.com