Category: Investment Manager Regulation

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EUROPE: ESMA ADVOCATES MORE SPECIFIC RESTRICTIONS ON THE COSTS FUND MANAGERS MAY PASS ON TO INVESTORS
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Australia: ASIC Releases Report on Recent Greenwashing Actions
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Australia: ASIC Reports on DDO Compliance by Investment Product Issuers
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United States: SEC Adopts Amendments to Form PF and Significantly Expands Reporting Requirements
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APAC: Managed Accounts and Conflicts—Part 4: Separate Managed Accounts vs Funds-of-One

EUROPE: ESMA ADVOCATES MORE SPECIFIC RESTRICTIONS ON THE COSTS FUND MANAGERS MAY PASS ON TO INVESTORS

By Áine Ní Riain and Gayle Bowen

The European Securities and Markets Authority (ESMA) has suggested that the European Commission should clarify the costs that UCITS management companies and AIFMs may pass on to investors under existing rules that prohibit “undue costs”.  Costs for this purpose include fees payable to the manager and other fund service providers and all other one-off, recurring or transaction-related costs.  The purpose of the proposed clarification would be to provide for better convergence between the approaches of different EU member states, and a better basis for national regulators to take supervisory and enforcement actions in this area.

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Australia: ASIC Releases Report on Recent Greenwashing Actions

By Matthew Watts and Rebecca Mangos

The Australia Securities and Investment Commission (ASIC) has published a report on its regulatory interventions made between 1 July 2022 and 31 March 2023 in relation to greenwashing concerns (which can be accessed here). The report covers ASIC’s issuance of greenwashing infringement notices during the period and its observed increase in representations made by listed companies, managed funds and superannuation funds on environmental, social and governance credentials.

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Australia: ASIC Reports on DDO Compliance by Investment Product Issuers

By Kane Barnett and Bernard Sia

On 3 May 2023 the Australian Securities and Investments Commission (ASIC) released its review on compliance by investment product issuers of the Design and Distribution Obligations (DDOs). In ASIC’s view, there is still considerable room for improvement by product issuers.

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United States: SEC Adopts Amendments to Form PF and Significantly Expands Reporting Requirements

By: Pablo J. Man, Ruth E. Delaney, Matthew F. Phillips, and Gustavo De La Cruz Reynozo

On May 3, 2023, the Securities and Exchange Commission (“SEC”) approved amendments to Form PF, the confidential reporting form required to be filed by private fund advisers. The amendments expand the scope of Form PF’s disclosure obligations to require large hedge fund advisers to file new “current” reports and all private equity fund advisers to file new quarterly reports upon the occurrence of certain events. Large private equity advisers will also be required to provide new information in their annual updates.

The amended Form PF will require:

  1. Current Reporting Requirements for Large Hedge Fund Advisers. In addition to their existing quarterly filing obligations, advisers with at least $1.5 billion in assets under management (“AUM”) attributable to hedge funds will be newly required to report certain events—such as extraordinary investment losses, significant margin and default events, and large withdrawal and redemption requests—as soon as practicable, but no later than 72 hours, after they occur.
  • Quarterly Reporting for Private Equity Fund Advisers. Within 60 days of the end of each fiscal quarter, each private equity fund adviser will be required to report any completion of an advisor-led secondary transaction or investor elections to remove a fund’s general partner or to terminate a fund’s investment period during the preceding quarter.
  • Additional Reporting for Large Private Equity Fund Advisers. Advisers with $2 billion or more of private equity fund AUM will be required to disclose a range of new information in their annual updates to Form PF, including: (a) information about the implementation of general partner and limited partner clawbacks; (b) details about a fund’s investment strategies; (c) additional information about fund-level borrowings; (d) more granular information about the nature of reported events of default; (e) additional identifying information about institutions providing bridge financing; and (f) information about a fund’s greatest country exposures.

The new “current” reporting and quarterly event reporting requirements take effect six months following publication of the final rule in the Federal Register. The other amendments take effect one year following publication of the final rule in the Federal Register.

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