Author:Alunda Edmonds

1
EUROPE: ELTIF 2.0 Regime Goes Live in Ireland
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Europe: ESMA Publishes Long-Awaited Final Report on ELTIF 2.0 Regulatory Technical Standards
3
United States: What’s in a Name?  SEC Proposes Amendments to Fund Names Rule & ESG Disclosure Requirements
4
United States: Private Funds and SEC Crypto Regulation
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United States: Being a SPAC is No Fun(d): SEC Proposes “Safe Harbor” Exclusion for SPACs
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United States: To be Continued (or not)
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Europe: Welcome New Clarity on the Phasing in of EU ESG Disclosure Requirements
8
Europe: From Russia With FUD: Settlement of Credit Derivatives Transactions Referencing Entities Under Western Sanctions and Kremlin Capital Controls
9
Europe: Divergence Between UK and EU Priips Disclosures Set to Add Complexity for Managers    
10
Europe: Pressure Grows on UK Regulated Firms to Manage Cryptoasset-Related Risk

EUROPE: ELTIF 2.0 Regime Goes Live in Ireland

By: Gayle Bowen and Shane Geraghty

After much anticipation, the new ELTIF 2.0 regime has gone live in Ireland. The Central Bank has, this morning, issued a feedback statement outlining how its new regime will work. Key points include the following:

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Europe: ESMA Publishes Long-Awaited Final Report on ELTIF 2.0 Regulatory Technical Standards

By: Gayle Bowen and Shane Geraghty

On 19 December, the European Securities and Markets Authority (ESMA) published its final report setting out draft Regulatory Technical Standards under the amended European Long-Term Investment Funds Regulation.

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United States: What’s in a Name?  SEC Proposes Amendments to Fund Names Rule & ESG Disclosure Requirements

By: Clair Pagnano

In a significant departure from the SEC’s long-standing position on the use of fund names, the SEC is proposing amendments to Rule 35d-1 that would expand the Names Rule to include terms denoting strategies, thereby subjecting funds that use the terms “Growth,” “Value,” and funds that use ESG-related terms in the fund’s name to the rule. It would also prohibit funds from using ESG-related terms in their names if ESG factors are considered to the same extent as other screening factors in the management of the fund (so-called “integration” funds). These and other key aspects of the proposed rule include:

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United States: Private Funds and SEC Crypto Regulation

By: Rob Weiss

Fund sponsors continue to search for ways to get their investors exposure to cryptocurrencies.

For sponsors able to offer registered fund products, exchange-traded products (ETPs) are attractive: available to retail investors, highly liquid, and without a fixed term, ETPs check several boxes for sponsors and investors alike. However, while the SEC has authorized listing of ETPs that trade in bitcoin futures regulated by the CFTC, the SEC has not authorized listing of ETPs that trade directly in spot cryptocurrency. We recently wrote an article on this point, which can be accessed here.

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United States: Being a SPAC is No Fun(d): SEC Proposes “Safe Harbor” Exclusion for SPACs

By: C. Todd Gibson

Last year, a number of lawsuits were filed against SPACs and their sponsors challenging (in part) their status under the U.S. Investment Company Act of 1940 (“1940 Act”) arguing that SPACs are essentially unregistered investment companies.   A brief filed by two professors supported this notion on the basis that SPACs typically hold government securities until a target company is acquired (and thus, such SPACs are investment companies required to be registered).  In an unusual move to provide SPAC market participants with some comfort on this issue, a number of law firms joined together refuting this position in a joint public statement outlining legal practioners’ historic view that SPACs are not investment companies.

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United States: To be Continued (or not)

By: Yasho Lahiri

Continuation funds exist because closed-end funds are better suited to a perfect world than an imperfect one.

In a perfect world, as a closed-end fund nears the end of its term, the few remaining portfolio companies the fund owns are ready for sale at attractive prices.  The sales happen.  Proceeds from the sales wind their way through the fund waterfall to grateful limited partners and successful sponsors.  The fund is wound up just as its term comes to an end.

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Europe: Welcome New Clarity on the Phasing in of EU ESG Disclosure Requirements

By: Philipp Riedl

Revised guidance from the European Supervisory Authorities (ESAs) contains much-needed information on the extent to which affected firms should be anticipating detailed Regulatory Technical Standards (RTS) that are not expected to be effective until 1 January 2023. The German regulator BaFin issued an accompanying statement on 30 March 2022. The key information is:

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Europe: From Russia With FUD: Settlement of Credit Derivatives Transactions Referencing Entities Under Western Sanctions and Kremlin Capital Controls

By: Anthony R.G. Nolan and Kenneth Holston

Russia’s war against Ukraine has led in record time to the implementation of extensive anti-Russian sanctions by the United States, the European Union, and the United Kingdom, among others. Those initiatives in turn have led to the imposition of extensive capital controls within Russia. The combined effect of Western sanctions and Russian countermeasures threaten the liquidity and creditworthiness of Russian debt obligations. Although the Russian Federation avoided defaulting on a coupon payment on its dollar bonds on March 16, it subsequently announced that it will satisfy its obligations under rubles a dollar bond coming due on April 4 by making payment of principal and interest in rubles.

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Europe: Divergence Between UK and EU Priips Disclosures Set to Add Complexity for Managers    

By: Andrew Massey

On 25 March 2022, the FCA confirmed new requirements for the key information document (KID) required for package retail and insurance-based investment products (PRIIPs) in the UK: policy statement 22/2.  Investment funds are generally categorised as PRIIPs, although UK UCITS and UK non-UCITS retail schemes are exempted from the PRIIPs KID requirement until 31 December 2026. 

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Europe: Pressure Grows on UK Regulated Firms to Manage Cryptoasset-Related Risk

By: Kai Zhang

On 24 March 2022, the FCA issued a notice reminding firms with cryptoassets exposures of its expectations on certain risks.  The key themes are:

  • Avoiding consumer confusion: As cryptoassets are generally not regulated, the FCA expects firms involved in cryptoassets to ensure that consumers understand the distinction between their regulated business and unregulated business (i.e. relating to cryptoassets).
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