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MArCh 2011 n o. 25 www.caceis.com
CACEIS publishes a new guide : “Making the most of UCITS IV, a flexible approach by Management Company profile”
Philippe Lebeau, head of Investor relations at Comgest, speaker at CACEIS’s breakfast seminar
bruno de pampelonne
Interview: Bruno de Pampelonne, CEO of Tikehau Investment Management
assets under administration
assets under custody
CACEIS, first Depositary Bank and Fund Administrator in Europe
Figures as at December 31, 2010
UCITS IV : what are the challenges and the opportunities for asset management companies?
A compliant and secure environment
on the structuring of their business and their products. Once our teams have a thorough understanding of clients’ business development objectives in terms of distribution, our fund structuring function is able to provide practical guidance on the best way to achieve these objectives. The advice given by our specialists covers areas such as the selection of the optimal domicile for investment products and the most appropriate structures within those domiciles for distributing investment products to clients’ target markets. The same regulatory watch function that enables us to provide structuring advice also keeps CaCeIS staff and our clients updated on the latest developments in national and international legislation. It ensures that all the group’s internal procedures and clients’ and investment products remain fully compliant with legislation such as MiFID, aIFMD and the incoming UCITS IV directive. For example, with the UCITS IV directive, due in July 2011, all clients likely to be impacted have been kept updated with the latest information as and when the contents are agreed upon. This information also serves to help CaCeIS design a number of specific services, such as a Key Investor Information Document creation service, to ensure our clients’ transition to the new regime is as smooth as possible. Our compliance division, which covers CaCeIS’s worldwide operations, establishes and monitors the effectiveness of compliance controls throughout our organisation in order to provide a strong level of protection for our clients against unnecessary levels of financial and non-financial risk. By checking that new clients meet our risk criteria, implementing a host of automated controls in our secure systems and submitting our processes to in-depth third-party audits, we can guarantee financial security for our clients and uphold the best interests of the end-investor. Once a business case has been accepted and integrated into CaCeIS’s infrastructure, it is subject to permanent compliance controls which monitor that it remains in full compliance with the local and international regulations it is subject to. This includes tasks ranging from filing reports with financial authorities to verifying that statutory investment limits are respected. The group’s dedicated fund structuring function demonstrates CaCeIS’s resolute commitment to assisting clients in meeting their business development objectives in the most efficient manner possible. and our specialised compliance division acts as CaCeIS’s principal focus for guaranteeing a secure environment for the group, our staff and our clients. These elements, together with the financial security derived from our strong results and high equity level, illustrate the robustness of our group. CaCeIS is delivering the quality of support and the financial security which add significant value to clients’ business, and make us a front ranking player in the global asset servicing industry ■
The UCITS IV Directive, which comes into effect on July 1st, 2011, is expected to make UCITS-compliant funds more competitive internationally and presents asset management companies with opportunities for growth. p.2
An offer in response to Solvency II requirements
With its Solvency II offer, CaCeIS is adapting to the needs of institutional investors, helping them to optimise their regulatory capital burden and risk analysis. p.4
Local expertise combined with global sales coverage
Our sales managers talk about their ongoing commitment to client satisfaction and the quality of CaCeIS’s international offering. p.5
Sylvie philippot, Deputy Chief Executive Officer
What impact will the Dodd-Frank and FATCA reforms have on European asset management companies?
s a leading asset servicing provider, CaCeIS has an important part to play in the legal life of its clients’ business and their products. Our regulatory watch teams work across our global network of offices to gather information on the latest regulatory developments at a local and international level. Much of the information is obtained through our active participation in the working groups tasked with defining the new legislation, so being at its source, CaCeIS is able to make service enhancements quickly and efficiently, while designing new services should new opportunities arise. Having a wealth of information on worldwide jurisdictions at our fingertips puts us in the perfect position to add value to our clients’ business by providing practical advice
In 2011, the european fund industry will be impacted not only by numerous european regulatory changes (aIFM, UCITS IV, eMIR, etc.), but also, with effect from July 2011, by the Dodd-Frank and FaTCa US reforms which could have a significant impact on management companies having direct or indirect business relations with the United States. p.6
16 - 17 March 2011
As France’s largest meeting of the community of asset managers and institutional investors, the Forum Gi 2011 aims to promote the exchange of ideas and sharing of best practices to enable institutions to improve their financial efficiency and risk control while reducing operational costs.
On March 17th, Carine ECHELARD, Deputy Managing Director, Bank and Fund Administration, CACEIS, France, spoke on the new roles and responsibilities within the context of Solvency II and new services designed for institutional investors.
More than ever. More particularly. project management. funds originally distributed nationally are increasingly being distributed internationally. this brochure examines the Management Company’s objectives and the possible strategies to reach them.000 50. However. order gateway and mirroring servicing.000 3.000 5.000 10. It will be necessary to assess the tax implications of each transaction.525 Number of registrations 30. Making the switch to IV KIID successfully and inIV the UCITS UCITS Management accordance with the regulation presents our Master-Feeder Company Structures € € clients with a major challenge. ▷ Rationalisation of products and services due to cross-border mergers.000 60. either to achieve growth or rationalisation. depending on the country in which the management company is based and where the funds are domiciled. Management companies will probably use a combination of the optional solutions on offer. which has been exported far beyond europe. investors’ appetite for locallybased or foreign funds. ▷ The costs linked to sales development and rationalisation of the products distributed throughout the options opened by UCITS IV.907 5.000 at the end of 2010.000 ten years earlier (Source: PwC luxembourg. we are obviously more than willing to discuss any other scenario that interests you. as we have seen in the UK. ▷ The tax issues relating to the lack of harmonisation of tax rules between different Member States. another significant indicator is the number of funds registering outside their country of domicile: more than 60. UCITS funds enjoy an internationally recognised brand image. others are new entrants to the UCITS world. We have analysed the many different schemes possible and have chosen to only present the most credible or most common scenarios.). CaCeIS is the partner of choice in UCITS IV (re-) structuring projects. our offer has been enriched with additional services to Management Companies. master-feeder structures and the management company passport.000 1. worldwide. Our Business Development Managers & engineers.000 2001 2002 Ireland 2003 UK 2004 France 2005 2006 2007 Other 2008 2009 Q32010 0 Luxembourg Germany Number of funds Source : Lipper Hindsight and PwC. Ucits iv is expected to strengthen cross-border distribUtion The european investment fund industry benefits from the excellent reputation of the UCITS brand which has been exported beyond its borders. Taking advantage of its historical presence in the major domestic and international fund centers in europe and more recently of its strategic establishment in Hong Kong.No. Therefore. Passport ▷ Probable increase in cross-border distribution through the simplification of the funds’ notification procedure.000 4. In France. CaCeIS can offer a complete oversight and risk management infrastructure. Product manager lthough UCITS IV is essentially only an improvement of the existing directive as management companies can already distribute their funds throughThe 5 tools introduced by UCITS IV out europe. distributed in at least three countries.caceis. we have judged it appropriate to cover these points since they are at the forefront of fund distribution strategies today. in place Key Investor Information Document of the simplified prospectus.2 caceis news . such as registration and post-registration services. We have also enlarged the scope of our existing fund structuring. including the funds’ countries of domicile). CaCeIS has developed an expertise in fund distribution throughout the years and already provides many clients with a broad range of fund distribution support services. but are simply UCITS-related.000 40. Number of funds . international growth represents a genuine springboard for growth and UCITS IV is expected to encourage this trend. In this brochure. in order to allow clients to take full advantage of this new regulation. Moreover.000 20. 2011. They will however have to take five key factors into consideration before taking a position: ▷ The management company’s existing organisation. taking into account the new challenges introduced by UCITS IV. This is a docu(KIID) ment that must be produced for each unit UCITS IV class and will have to be translated into the € language(s) of every country in which the fund is distributed. we have segmented fund sponsors into five main profiles according to their current situation and their business development strategies. viewed independently. tion in the deadline from two months to 10 days. and well-organised distribution.750 4. each asset management group has its own story and the reader may find it useful to adopt certain parts of other profiles. ▷ The regulatory and legal aspects. luxembourg is number one when it comes to cross-border distribution. followed by Ireland with 14%. UFg-lFP and Mandarine gestion are successfully leading the way ■ a nathalie collot. They offer all the guarantees that investors seek: security and transparency. Its proUCITS Procedure UCITS IV € duction will tie up significant human and € Mergers technical resources. 2011. legal and Fund Structuring experts remain at your disposal for further information and assistance ■ The “Making the most of UCITS IV – A flexible approach by Management Company profile” guide is available on www. Some of these fund sponsors are already intensive UCITS users. distribution networks. from designing solutions to implementing best-suited operations. and will represent a cost € for asset management companies. etc.529 4. which comes into effect on July 1st. The latest figures available indicate that in 2010. Furthermore. This represents growth of more than 30% over five years and 140% over ten years.000 3. In anticipation of the new UCITS IV requirements and expected trends in the fund industry. holdings and trailer fee management through an integrated package registered under the name of Prime Ta®. Product Managers. 31 December 2010 CACEIS publishes a new guide entitled “Making the most of UCITS IV – A flexible approach by Management Company profile” In its new publication. accounting for 75%. it will inevitably have an impact on the european investment fund industry: ▷ Compulsory switch to the KIID. as it is a ‘live’ document UCITS IV UCITS IV Notification it will have to be updated regularly.000 7.000 7. which includes a fully-fledged UCITS compliant Management Company.260 2. some considerations are not directly linked to new UCITS IV topics. as compared to just over 20. October 2010.000 0 3. ‘Benchmark your global fund distribution’).March 2011 PrOduCTS ANd SErvICES UCITS IV: What are the challenges and the opportunities for asset management companies? The UCITS IV Directive. 25 .com. For many asset management companies. is expected to make UCITS-compliant funds more competitive internationally and presents asset management companies with opportunities for growth. needs and objectives. depending on its local or international profile.000 6. both for the fund and for investors. ▷ The marketing aspects (risk of losing existing investors.366 7. to asia and latin america in particular. liquidity in terms of being able to sell units or shares in the funds held.000 funds were marketed across international borders (i. the management company passport and cross-border master-feeder structures. However. players such as Carmignac.875 5. For each defined profile.170 6. The brochure also highlights some major implementation considerations and points of attention. almost 8.804 8. Rothschild gestion.e. Five key Factors to consider The strength of UCITS IV resides principally in the different possible combinations of the resources made available rather than the various tools. its range of funds and investors. with a reduc- Number of true cross-border funds registered 70. We have notably developed a modular offer with regard to the Key Investor Information Document (KIID). We are convinced that no one-size-fitsall solution exists and have designed an offer made up of flexible servicing blocks that may be combined in order to perfectly fit with each client’s specific situation. However. depending on the countries of distribution. reporting and risk management modules. which will probably hamper cross-border mergers.441 7. CaCeIS sets out the business development and restructuring opportunities for asset management companies under the forthcoming UCITS IV regime as of July 1st.
This setup aims to cut the time between the collection cut-off time and the scheduled time for publication of net asset values. earliest possible processing oF inFormation CaCeIS also uses its presence in asia. This calculation method may cause some fairly different equity funds to be classed in the same risk category. Product manager philippe lebeau. Another change is the support provided by players such as CACEIS in enabling orders to be easily tracked. This involves a lot of work and therefore requires the support of a partner such as CACEIS although we are relatively in favour of this clear and synthetic 2-page document. comgest is enlarging its international coverage. Company research is performed in Paris and Asia. UCITS IV is expected to increase management companies’ expectations in terms of consistent fund administration services. notably those governing custodians’ responsibilities. Comgest opened an office in Singapore. this possibility seemed attractive to us but in view of the Madoff case. wherever the funds are domiciled. In 2010. For example. philippe lebeau. regardless of where their funds are domiciled. our Hong Kong branch is the point of contact for managers and distributors based in asia. institutional investors appreciate the regulatory aspects of French funds. Even if France is growing.CACEIS CLIENTS ABOUT COmgesT Founded in 1985. The third reason for which we find cross-border mergers less attractive is the protectionist tax legislation in certain jurisdictions. Three years ago. inflows reached € 2. he highlighted the new challenges and opportunities for the asset management companies in the context of the cross-border distribution and the regulatory changes: uCITS Iv but also the advent of MiFId II and particularly the bonuses structure. Nonetheless.caceis news 3 Closer geographical access to asset managers and distributors Within the context of UCITS IV and the continued development of cross-border distribution. emerging markets sometimes demonstrate volatility that is comparable to – if not lower than – that of developed countries despite the fact that they are more risky in structural terms ■ Belgium France Germany Ireland Luxembourg Netherlands Switzerland FUND ADMINISTRATION PLATFORM . how will comgest be managing this change? In theory. orDerS rePorTING NAV FAST DATA FAST NAV FAST REPORT FAST AUDIT . This service also helps asset management companies to overcome obstacles such as administrative and operational problems.7bn is in French domiciled funds ranking Comgest fourth in recognition of its competitive offering. of course. Luxembourgish and Irish. and drafting a “golden copy” of the data). Comgest. For CaCeIS. CACEIS has been providing cross-border fund distribution support services to Comgest for the past two years. which will be the Group’s fifth asset management company after Paris. any foreign funds that do not publish their KIId by July 1st. for example) and cross-border fund mergers (having the same rules so as to ensure equal treatment of unitholders). 25 . This will also facilitate processes relating to master-feeder structures (having the same valuation rules for a luxembourg master fund and its French feeder fund. previously the main obstacle to crossborder distribution. our Hong Kong office performs certain tasks (such as obtaining and monitoring transactions. ▷ More complex management of distribution networks and trailer fee calculation. hong Kong. fulfils these requirements. We currently market three progressively-built fund ranges: French. CaCeIS has a structure that is particularly suited to providing support to its international clients. which will be used for calculating net asset values in europe the following morning. however. obtaining. In practice. head of Investor relations. Comgest has opened a new office in Singapore to develop international distribution. latin america.6bn of which €1. the Middle east and. COMGEST is considering only one possibility of a cross-border merger. For example. we may review our position if the MiFId directive prevents us from providing information on our five-year track record. if we take the case of Germany where this measure applies immediately for German funds. the Key investor information document (Kiid) is replacing the simplified prospectus on July 1st. sUpport at all stages oF cross-border distribUtion With the development of cross-border distribution. also. out of a range of 20 funds. asset management companies are confronted with new requirements: ▷ Regulatory and tax requirements to be complied with in the different countries of distribution. asia ■ nathalie collot. thereby compensating for the lack of register keeping in France. 2011. a eUropean FUnd administration platForm CaCeIS meets these requirements through its european fund administration platform. international asset management group with assets under management of over €16bn. dublin and Tokyo. lastly.PrOduCTS ANd SErvICES No. head of inveStor relationS at comgeSt. business processes and reporting. We are thus able to supply net asset values as soon as possible (during opening hours in asia) and to fulfil the requirements of certain distribution platforms in asia. there is a one-year time limit for existing funds to become compliant. 2011. as part of the development of cross-border fund distribution. Comgest is an independent. to support clients in their sales development and global organisation. this offering constitutes a key development designed to help its clients to grow their businesses in europe. when our european offices are closed at night. CaCeIS’s cross-border fund distribution support offering. control mechanisms and reporting. europe and the USa to exploit the differences between time zones by processing Iceland information as soon as possible and providing its clients with the best possible service. This model relies on centralised receipt of transactions and a single central price database as well as harmonised pricing policy. which offers management companies a single point of entry for a global view of the activity managed together with consistent services. in order to assist CaCeIS clients in their business in asia. This approach allows management companies and promoters to circumvent time differences and overcome cultural differences and language barriers. So. prime ta®. COMGEST has therefore decided to start working on this large-scale project in advance in order to be ready on July 1st. 2011 “New challenges and opportunities for cross-border fund distribution”. Managers will therefore probably want to receive the same fund administration services irrespective of the fund’s country of domicile. The uCITS Iv directive makes cross-border fund mergers possible. packaged under the Prime Ta® brand. selecting and monitoring prices. does this COMGEST possibility interest you? In early February 2011. ▷ Identification of distributors and consolidation of assets under management on an international scale. and the ucitS iv directive renders it possible to head of Investor relations. with dublin implementing the different management strategies via an umbrella fund. carry out cross-border fund mergers. One wonders though if the risk assessment scale based solely on historical volatility will be sufficiently clear for investors. will suffer the effects of a distortion of competition. asian and US offices. it reduces operational risks. CaCeIS favours local contact with both managers and distributors through its european. speaker at CACEIS’s breakfast seminar of March 22nd. 2011. SpeaKer at caceiS’S breaKfaSt Seminar Philippe Lebeau.March 2011 .
provision of the data required to produce regulatory reports should suffice as they have already developed internal equity capital calculation models. Its expertise in this area is recognised (ISO 9001 and SaS 70 certifications). These clients may also request information for SCr (Solvency Capital required) calculation or a global outsourced Solvency II solution. and technical experience of regulatory reporting such as that required under Basel II. compliance.5% confidence level for one year. stress testing) will produce customised reports for clients. var calculation. determined according to a 99. To meet this objective. they require information on the market risks borne by their assets. as well as the quality and size of its database of financial instruments. In order to meet these objectives. helping them to optimise their regulatory capital burden and risk analysis. stress testing. What are the various solutions available? Solutions must be adapted to individual client profiles. An industrial process. audit) ▷ Rely on a strong governance ▷ Put in place the ORSA ▷ Be able to capture the effects of diversification of risk ▷ Extend the depth of control ▷ Develop a risk management strategy (up to the notion of risk appetite) Issues of the pillar 3 ▷ Understand reporting requirements. as leading European fund administrator. the group carried out a market survey involving some 15 clients. This economic model. 2011.4 caceis news . Solvency Capital Required (SCR) and Minimum Capital Required (MCR) are calculated according to a standard formula or a full or partial internal model. All of these clients therefore seek accurate. which includes transfer of data. Product manager intervieW With abdallah el malaKi. Smaller players are also interested in this service. based on sharing and experience in customised reporting (Basel II in particular). These measures will be submitted to the european Parliament in June 2011. and depending on their individual profiles. and appeal to the appropriate contributors ▷ Develop the process and systems required to produce reporting both internal as external: implement and automate reporting ▷ Develop and maintain a management system of the data to produce the reporting according to the calendar imposed by the regulator of data – the major challenge of the directive – must be permanently guaranteed. acquired via numerous institutional clients. from other service providers) and transmit fully transparent data are the main functional and technical qualities of its Solvency II offering. This new offering has been developed by experts who have knowledge of the markets. Certain clients ask their principal service provider to amalgamate financial information received from various asset holders. The third pillar states the obligations in terms of the information that needs to be provided to the supervisory authorities and the public for better transparency. aSSociate partner. In the second pillar. making the setting up of a risk management body compulsory. sound data for clients. stress testing). The aim of the directive is to develop internal organisation and assessment models to manage risks and guarantee solvency. CACEIS. exhaustiveness and relevance. SCR calculation and Solvency II (pillar 3) reporting. ▷ A global outsourcing solution. actuarial science/finance. qualitative measures are introduced. certified SAS 70 and ISO 9001. notably fully transparent inventories and parts of the Quantitative Reporting Template (QRT). The first sets out the quantitative financial requirements. In addition to these technical and functional qualities. The directive is based on three pillars. means that CACEIS’s clients do not have to make any significant investments ■ . enabling three service levels (adapted to their different profiles) to be rolled out to help them meet the Solvency II requirements: ▷ Provision of the financial and accounting data necessary for insurers.cSc Agenda 15/03/2011 Publication of the final QIS 5 report by the EIOPA 19/05/2011 ACP conference regarding QIS 5 results for the French market June 2011 EC proposal for level 2 measures 31/12/2011 EIOPA drafts binding technical standards 01/01/2013 Implementation What do companies faced with the new Solvency ii prudential regulations require? Compliance with regulations and more efficient risk management are the main issues facing insurance companies and mutual insurance companies. The results have just been published in March 2011 by the new european Insurance and Occupational Pensions authority (eIOPa) created on January 1st. Enjeux transverses Transverse issues ▷ Assess gaps between current management practices risk and capital allocation and the requirements of Solvency II ▷ To implement Solvency II in a coordinated manner within a given time and in a non-stabilized regulatory universe ▷ Construct a device risk management consistent and appropriate to the size of the company (proportionality principle) ▷ Ensure consistency of the inputs and outputs O n January 1st. This service is subject to the receipt of liabilities data. clients want more in-depth reporting on their assets in order to precisely understand and assess the risks involved for assets comprising underlying or hybrid instruments. The considerable size of its database as well as its capacity to integrate multisource inventories (namely. consistent reports are produced. which has to be approved by the supervisory authority. which presupposes that information on liabilities is transmitted. 2013.No. and in-depth reporting. companies also have requirements in terms of fair value and market risk indicator calculations (var. CaCeIS assessed the full extent of the issues facing institutional investors as a result of the regulatory reform. the companies concerned took part in the fifth and last Quantitative Impact Study (QIS 5) on equity capital requirements. ▷ Calculation of sub-aggregates for market SCR and counterparty SCR: teams with experience in calculating risk indicators (VaR. guarantees that secure. The european Commission will define the parameters of the standard formula for calculating equity capital requirements on the basis of these results. CaCeIS is adapting to the needs of institutional investors. In 2010. They will provide clients with tailored procedures enabling them to better manage risk and comply with the directive ■ muriel attia. In this case. 25 . On top of this. good-quality investment data from their service providers. Quality Issues of du pilier 11 Enjeux the pillar ▷ Develop models and tools for the required calculations ▷ Put in place the tools of allocation of capital “in sync” with the requirements in terms of risk management ▷ Understand the high sensitivity factors for the results of the calculations of SCR ▷ Contribute to the calculations of risk appetite and ORSA Issues of the pillar 2 ▷ Rethink the management of risks in terms of the “key features” (risk. The directive provides for the use of the fair value assessment of all balance sheet items. each european insurance company is now required to respect regulatory capital requirements. the prudential regime defined under Solvency II will apply to insurance companies. What are the major advantages of the caceiS offering? In response to the considerable need for good-quality. an oFFering that stands oUt dUe to the qUality oF data Very early on. CACEIS can contribute to compiling the regulatory reports. For large entities. CaCeIS relies on its internal governance procedures focused on accuracy. is able to offer a considerably large database. based on financial assessment of all the risks involved. maJor regUlatory change Prudential insurance regulations are undergoing major changes due to the new su- pervisory requirements. Clients benefit from the expertise of the leading european fund administrator in the area of valuation. In preparation for its implementation.March 2011 PrOduCTS ANd SErvICES What are the main challenges of the directive? Pillar 1 Quantitative requirements Pillar 2 Qualitative requirements Pillar 3 Reportinq to supervisors and market information An offer in response to Solvency II requirements With its Solvency II offer. mutual insurance companies and provident institutions in europe.
recently selected CaCeIS as custodian for its dedicated funds. Such investments are only possible via securitised debt funds. Why did you choose CACEIS? We like their open-mindedness and creativity. Today.com . During the RFP process – in which more than ten candidates competed – UBP concentrated on five essential qualities: flexibility. CACEIS is there to support your business worldwide.PrOduCTS ANd SErvICES No. we became the first general management company to receive aMF approval to manage this type of product. right from the start. Our clients thereby testify to the relevance of our flexible product offering in all markets. He is also President of eDHeC alumni. this asset class often provides a more attractive risk profile than bonds. member of eDHeC’s Board of Directors. Securitised debt funds provide access to assets that are not always easily available to the traditional investor. bank loans. TIM manages assets of €400 million for a diversified client base located in France and in europe. this is an active management instrument with excellent potential. and the resourcefulness of their teams. Is it time to outsource your middle-office? If you want to focus on investment management. Head of Regional Coverage. meeting their potential future client regularly and demonstrating the availability and expertise that finally convinced UBP to work with CaCeIS. decided to place its luxembourg (E7bn) and French (E550m) funds with CaCeIS last October. TIM provides asset-by-asset analysis. Moreover. Tikehau Investment Management (TIM). Why do securitised debt funds attract both issuers and investors? For banks. your comprehensive securities servicing partner. He was also Country Head for the group in France since 2003. structured products) at a time when other independent management companies were mainly focused on equity management. Securitised debt funds complement our area of expertise. UBP’s medium-term objective is to develop a partnership with CaCeIS throughout Continental europe. receivables. a major Swiss asset management bank. then you should consider an outsourcing solution. they are an alternative source of financing in a context of increasingly strict equity requirements under Basel III. More than twenty people were involved in this RFP. Head of Regional Coverage. CaCeIS stood out from its german competitors for the quality of its property fund management expertise and the flexibility of its model. In april 1993. he joined goldman Sachs International Corp in london. easily adaptable to the specific characteristics of each client. and give your business a significant competitive advantage. This client therefore recognises both the quality of our responses to its RFP and that of our custodian services that it already uses. nonetheless.caceis news 5 Local expertise combined with global sales coverage Our sales managers talk about their ongoing commitment to client satisfaction and the quality of CaCeIS’s international offering. he joined Merrill lynch Finance in Paris as Managing Director in charge of the fixed income activity. From planning and launch to monitoring and expansion. avoid the uncertainty of variable costs and raise your operational efficiency. Philippe Bens ■ intervieW bruno de pampelonne. selected CaCeIS as custodian and depositary for its securitised funds Te FaRe and TSS2. He then joined Crédit Suisse First Boston in order to start their Paris operation. technology. 25 . CACEIS. and member of the International advisory Board of the eDHeC Risk Institute. In March 2009. we deliver comprehensive cross-border distribution support via our Prime TA service.com Find out how your funds can benefit from our global asset servicing www. team expertise. Patrick Lemuet Union Bancaire Privée (UBP). as it appreciated the fact that CaCeIS understands its original approach in terms of investments and positioning. This commercial success. a benchmark for all private banks in Switzerland and across the world. For investors.caceis. another example of the rewarding partnerships we build with our clients is groupama asset Management. which has appointed CaCeIS Bank luxembourg as custodian bank. one of France’s leading providers of supplementary insurance and pension plans. of which he became Managing Director in charge of equity and Debt sales and trading from 1990 to 1993. Ireland. as an example. we do not use securitised debt funds as true securitisation instruments. notably when interest rates rise.caceis. Head of Regional Coverage. Our combined understanding of financial industry developments and our clients’ strategies makes us very familiar with their needs. CACEIS. ceo of tikehau investment management Bruno de Pampelonne started his career at Credit lyonnais in 1983 in the US. Find out how your funds can benefit from our global asset servicing www. since loans are generally granted at variable rates. We believe that CaCeIS particularly stood out with regard to the last point. an independent asset management philippe benS. France Colas another example: CaCeIS Fastnet Suisse recently signed a contract with private bank edmond de Rothschild. Can you tell us a little bit about Tikehau Investment Management (TIM)? We created Tikehau Investment Management (TIM) in 2007 with the aim of specialising in european debt in all its forms (bonds. central administration and transfer agent for its new luxembourg umbrella SICaV g Fund. CACEIS’s comprehensive Prime MO service can help you achieve these goals. In 1985.March 2011 . reactivity. company specialising in european debt. You manage securitised debt funds: what strategy do you use for this type of product? For us. Our contacts there are always prepared to consider the possibility of developing services that correspond precisely to our requirements ■ patricK lemuet. Our aim is to trade in the bank loan segment (bank loans to businesses) and this vehicle allows us to invest in these markets without being a credit institution. Benelux and Nordic Countries he aPICIl group. France T france colaS. your comprehensive securities servicing partner. which entrusted it with the management of its property SICaV (CHF200m). paves the way to a bright future for CaCeIS. Switzerland PRIME TA® PRIME Mo® Enhance your cross-border distribution capabilities Through our strategically located offices in Luxembourg. global coverage. and team expertise. where he was an executive Director at the Proprietary european trading desk in the mid 80s. hong Kong and North America.
or that have any US-based operations. as a result. It could thus make registration compulsory for all companies that have more than $25 million of assets under management attributable to “US investors”. although. Three pillars of the act are likely to have an impact on the fund industry: ▷ Investment Advisor Act With effect from July 2011 the act changes the Securities and exchange Commission Regulation Timeline uCITS IV MiFID II uCITS V MAY MARCH 2011 APRIl 2011 MAY 2011 junE 2011 01/07/2011 junE julY julY 2011 APRIl uCITS IV SolVEnCY II . 25 . Implementation rules to be issued by the SeC should provide the necessary clarifications as to the exact scope of available exemptions. for reasons of transparency. To that end. Moreover. will be required to register with the SeC in order to continue to do business in the United States. ▷ The application of transparency to investment funds: to date investment funds have generally been considered as the end beneficiary of income paid to them. They require Foreign Financial Intermediaries (FFIs) to identify their “US accounts” in accordance with new standards and impose specific reporting obligations vis-à-vis the US tax authorities (IRS). certain “investment advisors” (including asset management companies). UCITS IV. as the reform is currently worded. which is currently under discussion and which is intended to make OTC derivative transactions more reliable. asset management companies that are “affiliated” with US banks would be prevented from engaging in repurchase agreements or security lending transactions on behalf of client accounts managed by them with other entities of their group. SeC registration entails in particular an obligation to comply with specific governance rules. The FaTCa includes a transitional period up to 2012 to enable the various parties concerned to comply with the rules. For Dodd-Frank in particular. This constraint is likely to apply to both direct and delegated mandates of asset management companies. The regulations include numerous toughening measures. discussions are ongoing in order to obtain agreement from the SeC on the exclusion of UCITS from the scope of “Private Funds”. etc. the eligibility criteria of clearing houses and where the reporting responsibility lies are just some of the many points on which we are still waiting for SeC clarification. one of which concerns in particular asset management companies of Hedge Funds and Private equity Funds. These rules converge with the provisions of the european eMIR directive. the new rules will make it compulsory for them to identify accounts by underlying investor. However. however. ▷ Volcker rule This regulation consists of various parts. insofar as possible. in particular because of the absence of rules of cooperation with the european Union. but also. such entities could be prevented from carrying on all or part of their US-related Hedge Fund or Private equity management activities. eMIR. CaCeIS’s teams are currently endeavouring to anticipate the consequences of these reforms. US-source income will be subject to a 30% withholding tax. However. In the event of failure to comply with these obligations. investment funds will also become FFIs. it will be necessary to identify the number of US investors in all funds considered as “Private Funds”.). which are currently considered as single investors. French and european authorities are currently doing lobbying in order to ensure the proportionality of the effects of these reforms and the operability of the new rules. in particular: ▷ The extension of the scope of US-source income which must be reported. However. with effect from July 2011. Furthermore. ▷ OTC derivatives The reform concerns OTC derivative transactions which are either concluded with a US counterparty or which are traded on US exchanges and cleared in the United States. on the grounds that the distribution methods of UCITS do generally not enable them to control the status of investors effectively. Its aim in particular is to put in place the necessary means to monitor systemic risk more closely. notably social legislation provisions. Such inspections could contravene european rules. These regulations are intended to combat tax evasion by US tax-payers. which are currently registration exempted.JanUary 2013 FaTCa (Foreign account Tax Compliance act) refers to the new generation of US Qualified Intermediary (QI) regulations. given the scope of the reform. the scope of application is still uncertain: the status of eligible US counterparties. which are “affiliated” with entities carrying on banking business in the United States. limit conflicts of interest in the financial sector and make markets more transparent. numerous asset management companies which are currently registration exempted could be required to register with the SeC. In extreme cases. in the future. the mandatory appointment of a Compliance Officer and the right for the SeC to carry out on-site inspections. the type of instruments concerned. it seems increasingly doubtful that the announced implementation schedule will be respected. they are readily available to provide guidance to clients in this area ■ Sandrine leclercq Group General Counsel the dodd-Frank act The Dodd-Frank act has been enacted in response to the objectives determined at the g20 in 2008. directly responsible for disclosing financial information on their investors to the IRS. by the Dodd-Frank and FaTCa US reforms which could have a significant impact on management companies having direct or indirect business relations with the United States. as a result. the european fund industry will be impacted not only by numerous european regulatory changes (aIFM. the reform requires such contracts to be cleared through a clearing house and makes it compulsory for them to be collateralised and reported to central trade repositories. In practice. Fatca .March 2011 rEGuLATION What impact will the Dodd-Frank and FATCA reforms have on European asset management companies? In 2011.6 caceis news . it is advisable to start making the necessary preparations now. or whose clients include more than 15 US investors. we fear that any clarifying measures will be adopted at the last minute. One of the major changes introduced by the act concerns the status of UCIs.No. by participating in local working groups and lobbying actions. Similarly. (SeC) compulsory registration rules. It is difficult to assess the exact impact of these reforms until the relevant implementing measures have been unveiled by the SeC (DoddFrank) and the IRS (FaTCa).
2011. germany January 2011 HFMweek “neWCITS uncovered” Barry McGloin.naude@caceis. This document is printed on Cyclus paper. eFaMa). Global Head of Distribution Services.com .printer: gRaPH’IMPRIM certified Imprim’vert®. CaCeIS. CaCeIS January 2011 Funds Europe “alternative Investment in luxembourg” Pierre Cimino. and climbing. CeO. Laurent Majchrzak. Business Development Director. they are demanding new services to foster growth and facilitate the international distribution of the funds for them. Co-Head CaCeIS. experience and outlook” 11 . CaCeIS “The Newcits decision tree and trading strategies” 28 . CaCeIS : Plenary session on June.. Paris Introduction Jean-Pierre Michalowski. CaCeIS. 25 . nordic ecolabel and ecolabel européen .munier-bbn.com publishing director: Régine Besnier-Docet . 2011. relayed to the european Central Bank. A global player in asset servicing.March 2011 .. CACEIS Between UCITS IV and MiFID II. The participants raised various points currently under discussion in working groups (alFI. Business Development Director. including on costs. your comprehensive asset servicing partner. participated in the panel “T2S .how should the funds industry react to latest developments?” The objective was to present the opportunities offered by T2S for the settlement of the shares in UCITS and exchanges of views on the contribution of the implementation of the lUXCSD in luxembourg. distributors and banks to exchange ideas on the challenges of cross-border fund distribution. COMGEST CACEIS’s solutions to support your development Laurent Majchrzak.caceis. Offering leading value in investor services demands constant evolution. Dominique amphonesinh .. all of the customers require an effective processing of subscription/redemption of UCITS and reporting consolidated levels of distribution at a competitive cost. ore than 220 people attended this event to reflect on strategic and technical issues from regulatory changes. Yveline Herfeld. which this document may contain. CaCeIS ■ .Welche auswirkung werden die neuen Regularien haben ?” Holger Sepp.. in his presentation entitled “Inside global Transfer agency: Just how big is the Ta business & exploring different business models”. Deputy CEO. Chief Risk and Compliance Officer. CaCeIS February 2011 Funds Europe “eDHeC / CaCeIS research chair” Jean-Marc Eyssautier. new post-trade infrastructures and the development of the distribution of funds beyond the borders of europe. europe and america offers local expertise and provides registration.caceis. Business Development Manager. CaCeIS. Head of Investor Relations.rating www. www. weaknesses. 22nd. CaCeIS photos credit: Yves Maisonneuve. at the abbaye de neumunster in luxembourg. CaCeIS : “Best Practice in Fund Operations and administration : Rethinking your functional set-up to improve efficiency in the framework of UCITS IV & AIFM” 21 .number iSSn: 1952-6695 For further information on our products and services. certified Blaue engel.editor: Philippe naudé + 33 1 57 78 10 68 philippe. opportunities & threats of different scenarios: New thinking in creating competitive advantage in distribution” ■ IN ThE PrESS January 2011 Portfolio Platform “Custody & administration . an asset manager view Philippe Lebeau. general Counsel. Business Development Manager. CaCeIS cannot be held responsible for any inaccuracies or errors of interpretation. please contact your Business Development Manager/This newsletter has been produced by CaCeIS.30 June Fund Forum International Monaco François Marion. post-registration and distribution support ■ M Breakfast seminar on March.com Custody-Depositary/Trustee Fund Administration Corporate Trust S&P AA. Head of Public affairs. and in north america “luxembourg asset Servicing roundtable” Barry McGloin. CaCeIS thanks to its locations in asia.EvENTS No. Responsible for CaCeIS entities in luxembourg and affiliates. described the different expectations of asset management companies and distributors. CaCeIS “UCITS IV and AIFM rethinking your functional set up to improve efficiency” 5 . In recent years. organised by CaCeIS at the Bristol hotel. the transparency of information and the treatment of distribution restrictions in some countries. facts. At CACEIS. Head of Business assistance. This Conference allows asset management companies. 28th “How to facilitate distribution model in the current fragmented regulatory environment. Product Manager.13 May Skybridge Alternative Conference Las Vegas 12 May AFTI Paris Eric Derobert.com . CaCeIS : “Private Equity investments for institutional investors. Yves Collinet. 100% recycled fiber.6 April BAI Alternative Investor Conference Frankfurt Heike Findeisen. To meet these needs.caceis news 7 New challenges and opportunities for cross-border fund distribution CACEIS at the International Transfer Agency Summit (ITAS) in Luxembourg The 10th edition of the ITaS luxembourg took place on February 16-17. Business Development Manager. our strategy of sustained growth is helping customers meet competitive challenges on a global scale.design: Sylvie Revest. according to their profiles and to their transfer agent. Strengths. global Head of Distribution Services. CaCeIS “OPCVM” 23 May Effiziente Fonds Services Wiesbaden Heike Findeisen. CACEIS. CACEIS and Nathalie Collot. CACEIS ■ CONFErENCES Q2 2011 28 March -1 April Fund Forum Asia Hong Kong Sandrine Leclercq. www.23 June Global Alternative Investment Management Monaco Barry McGloin. Find out how our highly adapted investor services can keep you a leap ahead.
1% 2. However.65 14.8 394.237 1. Total assets under management (AuM) in France (€ billion) AuM in France recovered its pre-crisis level Total assets under management (AuM) in investment funds and discretionary mandates rose by 1.28 1.017 +22% 830 863 813 +25% +59% 573 485 328 444 538 566 585 704 1.2% 14.9 percent in the fourth quarter to reach €8.9% Other 10. Money market funds experienced a decline in net assets of €45 billion or 5.7 23.6 67.3% States11.200 800 400 0 Balanced Other (incl. this segment of the business accounted for almost 75 percent of the fund market at end December 2010. -40 Q1 Q2 Q3 2009 Q4 Q1 Q1 -200 Q2 Q3 2009 Q4 Q1 Q2 2010 Q3 Q4 Number of companies Number of new companies Source : AMF .0% 74.2% 9.e.Q3 2010 Brasil 5. in U. 25 .990 2.FoF) 2.March 2011 INduSTry OvErvIEW europe Source : EFAMA .6% -2.076 1.2% 2.3 AuM by fund category The positive trend in the net assets of bond.3% Belgium 2.990 billion at end December 2010.0% 0.115 1.36 trillion at the end September 2010.7 4. slightly lower than the €17.3 15.600 1.8 caceis news .3% 1.617 2. However.0 -1.5 256. the highest level recorded since the first quarter of 2008. Discretionary mandates are continuing to grow by 6%.47 17.8% 17.452 1. dollar explains this result.63 15. Reduced net withdrawals from money market funds and continued large inflows into bond funds were the driving factors behind these inflows. followed by Germany (19.5 128.4% Netherlands 1.999 1.990 billion invested in UCITS.7 6.4% Worldwide trends in assets by investment type (€ trillion) Net inflows to long-term funds (all funds excluding money market funds) increased to €190 billion in the third quarter.January 2011 Worldwide Investment Fund Assets (€ trillion) Investment fund assets worldwide stood at €17.4% 1.5% Switzerland United 7.318 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 2009 Q1 Q2 Q3 2010 Split by region of distribution .5% 9.2% 0.and equityoriented funds (equity funds.8% 0. worldwide investment fund assets increased 10.7% 0.4% 923 670 748 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source : Autorité des Marchés Financiers (AMF)/Association Française de Gestion financière (AFG) .2 percent.380 1.1% 3. Net assets of equity funds rose by 10. such as bond funds and.7% 2.5% Europe 30.FoF) Source : AFG/EFAMA/ICI Net Sales of Investment Funds (€ billion) Total inflows into investment funds amounted to €156 billion during the third quarter of 2010.0% 0.14 13.8% Japan 3.656 1.6% market share.france Luxembourg focus in the next caceis news Net assets of the European industry The combined assets of the investment fund market in Europe.9% 100. Equity Money market Bond Source : AFG Fund domicilation: market share trends in Europe 27% 18. balanced funds and “others”).6% Equity Balanced Funds of Hedge Funds Structured Funds Bonds Money Market Others ToTAl Source : AMF and estimates AFG 255.9% 0.0% 12. i.7% in 2010.1% 0.0% 0.7 279. Low short-term interest rates and banks’ substantial liquidity requirements prompted a shift towards either bank deposits or other fund categories.93 16. Fund Management Industry in Europe France remains the leading European financial management centre for investment funds.5 1338.8 198.725 1.S. for a net increase of 25.5 trillion recorded at end June 2010.3% 11.4 percent (€180 billion) and balanced funds increased by 3.S.5 percent during the quarter.6% -18.396 1.6% 25. foreign fund) 2.6% -6.4%) and the UK (16.4% 27.8 -36.532 +13% 1.6 61.1% Fra nce Ge rm any Ire lan Un d ite dK ing do m rg ly Ita ou In terms of fund domiciliation. where the financial management of investment funds is actually performed. Net outflows from money market funds reduced drastically from €194 billion in the second quarter to €34 billion in the third quarter.2 percent (€28 billion) during the quarter.36 15. the asset growth reached 13.470 -11% 1. behind Luxembourg.4% 0. which specialises in fund domiciliation and administration. Balanced Other (incl.339 +10.025 5.0% 0. Equity Money Market Bonds 8 7 6 5 United Kingdom 16. These two centres now account for 40% of all funds domiciled in Europe.199 78 63 29 26 3 4 2 170 166 253 18 794 8.0% 5. 156 84 46 Q1 Q2 2009 Q3 Q4 Q1 Q2 2010 Q3 Q4 Growing number of asset management companies (units) 80 600 500 400 300 200 100 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 0 Lux em b Net Sales of UCITS (€ billion) 220 70 60 50 70 73 82 74 1 -19 85 26 40 30 20 22 -14 Q2 2010 Q3 30 new firms still being created The number of asset management companies continued to grow in 2010.e.No. grew by 3. was offset by the drop in AuM for money market funds (down €86.6% Spain 2.0% 2.9% Germany 19.2% 12.9% Other 3.2 121.5% Luxembourg 0.242 +13.6% 3.400 2. Between end 2009 and end 2010.8% Asset Type Split .4% Australia 5.1% 1.6% Ireland 0. French funds Mandates (incl.8 percent in the fourth quarter to reach €5. slightly up compared to the €180 billion of inflows recorded in the previous quarter.6%) were affected by a drop in AuM in money market funds which suffered from very low short-term interest rates.39 15.3% Spa in 4 3 2 1 0 Q2 Q3 2009 Q4 Q1 Q2 2010 Q3 1. the market for UCITS and non-UCITS.8% 1.4 22. France 20.2 176.96 country focus . 17.February 2011 Worldwide Source : EFAMA .0% China 1.5 481.76 17. A total of 44 new firms were formed.247 15.126 9 13 963 232 31 2. indexes 24% 10 years ago.8 percent (€10 billion). The appreciation of the euro vis-à-vis the U.025 billion at end December 2010.January 2011 AuM by fund category AuM € trillion 31/12/09 31/12/10 Variation 2010 € bn % 9.242 +12% +4% 1. i.035 Share 1.7% Italy 5.362 2.9% European trends in assets by UCITS type (€ billion) Total net assets of UCITS rose by 3. net assets of bond funds slightly decreased in the fourth quarter falling 0.3 16.Q3 2010 Equity Money Market Bond Balanced Other 14% 5% 18% 23% 40% Country Austria Belgium Bulgaria Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Liechtenstein Luxembourg Netherlands Norway Poland Portugal Romania Slovaquia Slovenia Spain Sweden Switzerland Turkey United Kingdom Total UCITS Non-UCITS € billion 148 94 2 5 135 61 1.025 1. balanced funds.5% +13% +16% 1. Ireland is continuing to gain market share. France remains the leader with a 20.2% USA 47.7 billion).0% 2. to a lesser extent.3 -86. France ranks second in Europe.000 2.5% 14.267 1.114 1.59 13.566 2.185 1.447 +6% 977 862 1. Regulators are currently examining around 20 additional licence applications. whereas French-domiciled funds (-2. In terms of financial management centres.9%).3% 0.7 percent With €5.0% 0.0 -5.69 15.8% +1.2 260.655 +3. dollar terms.402 1.3% Canada 2.0% -8.2% 0.
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