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ON THE RADAR: Regulations affecting data management Jacob Gertel, Senior Project Manager Legal & Compliance SIX Financial Information
Today’s focus: laws, regulations & directives relevant for you
UCITS PIP / PRIP EUSD SNB-Reporting Taxable Securities PEP-Check Final
Withholding Tax
UK-Tax French Tax Regulations
Germany Tax reporting FinGrep
Danish tax types for
investment trusts
Belgium withholding tax
Japan restriction on
foreign ownership
Canada Tax saving plans
SEC Rule 22-C-2 IRS Reporting US various reg. OECD Reputation Risk
Data Solvency II
FATCA MiFID AIFMD FTT LEI
2000 2005 2010 2015
SNAPSHOT
Regulations keep evolving and mounting up over time
MiFID I MiFID II
US Withholding Tax FATCA
AIFMD French & Italian FTT
Final Withholding Tax (UK / AT)
FTT
Solvency II
LEI
DESCRIPTION AND FOCUS
MiFID / FIDLEG
• Stringent consumer protection rules • Continuous monitoring of − Risk level of the client portfolio − Match to risk appetite − Product suitability
CLIENT IMPLICATIONS • Higher value services, offering fact-based advice • Always respect the pre-defined risk tolerance/appetite • Clients being active in investment decisions expect: − A risk “safety net” from the bank − Risk advice from the advisor
• Pro-active risk management and advice in time of crisis
TIMELINE
• MiFID II into national law in 2016 (planned)
• FIDLEG in consultation
AFFECTED CLIENTS / USERS • Wealth managers
• Private bankers
• Other banks that put focus on wealth management
OUR SERVICE
Sophisticated portfolio risk assessment with ImpaQt
• Achieve regulatory compliance (MiFID / FIDLEG) • Risk models, all required data delivered as service • Empower the advisors to perform on-going risk
monitoring • Ensure investment suitability and proper
documentation for clients
+
DESCRIPTION AND FOCUS Alternative Investment Fund Managers Directive (AIFMD)
• EU Directive issued by the ESMA (European Securities and Markets Authority)
• Goal is to ensure transparency of non-UCITS funds by providing EU ‘passport’ for fund managers and funds after registration with an EU regulator
• Impact EU and non-EU funds – FINMA has cooperative agreement with the EU is the areas of exchange of information and supervision
CLIENT IMPLICATIONS
• Flagging of AIFMD compliant funds • Instrument classification based on the ESMA directives
for proper fund registration and reporting obligations
6
TIMELINE
• Registration to be completed until 22 July 2014 (registration open since 24 Feb 2014)
AFFECTED CLIENTS / USERS • Fund management companies and
fund managers
• Asset managers and fund custodians
OUR SERVICE
Ongoing instrument classification and KIIDS
• Issuer Level – flagging the issuers having the EU Passport based on the information published by ESMA
• Instrument Level – categorization of the instruments according to Annex VII (Table of enumerated reporting fields values) of AIFMD.
• KIIDs (similar to PIB/PRIIPs) explain financial products to investors in a clear and simple manner
• Includes risk and opportunities, and allows to compare alternative investment products more easily
REFERENCE DATA CLASSIFICATION
KIIDs
DESCRIPTION AND FOCUS
Financial Transaction Tax (FTT)
• The Financial Transaction Tax is a tax on financial transactions.
• The EU intends to implement the tax in the following 11 countries: - Austria, Belgium, France, Germany, Greece, Italy,
Portugal, Slovakia, Slovenia, Spain and Estonia • The planned tax might affect financial transactions
related to equities, derivatives and HFT with different tax rates.
• The EU is working on the directives and intends to publish them in 2014.
CLIENT IMPLICATIONS • Identify, withhold and report of the financial
instruments eligible for the FTT
8
TIMELINE
• France introduced it on 1.8.2012 • Italy as of 1.3.2013 • Rest EU in 2016 (TBC)
AFFECTED CLIENTS / USERS • All financial institutions worldwide
OUR SERVICE
Detailed tax classification and rate
SIX will populate the data on VDF Tax / Reporting message FSD
Country: Italy (525) Current Taxes Withholding tax (14) Liable/ applicable (1) Dividend (3) 01.01.2012 --- Tax resident (2): 20 % (4)
Financial transaction tax (high frequency trading) (55)
Liable/ applicable (1) Transaction (4) 01.03.2013 --- Applies to all (3): 0.02 % (4)
Financial transaction tax (generally applicable) (51)
Liable/ applicable (1) Transaction (4) 01.01.2014 --- Applies to all (3): 0.2 % (4)
Financial transaction tax (regulated market or MTF) (53)
Liable/ applicable (1) Transaction (4) 01.01.2014 --- Applies to all (3): 0.1 % (4)
EXAMPLE: Italian FTT - Valor: 928195 A2A SpA
DESCRIPTION AND FOCUS
Legal Entity Identifier (LEI) and other Identifiers • G-20 committed to mitigate systematic risk within financial
markets and to provide more transparency to the OTC market. • LEI is a 20 digit alphanumeric code that is designed to uniquely
identify a legal entity that engages in a financial transaction • LEI is supported by an ISO standard (ISO 17442) and within
scope are legal entities, subsidiaries and fund structures • Central Operating Unit (COU) will be the principal operational
arm of the global LEI system. • Local implementation will be conducted through Local
Operating Units (LOUs)
CLIENT IMPLICATIONS • Usage of the LEI is mandatory for regulatory reporting under
Dodd–Frank and EMIR to identify counterparties
10
TIMELINE
• April 2014: 13 pre-LOUs have endorsed status
AFFECTED CLIENTS / USERS • Any financial institution that trades
in OTC Derivatives and/or ET Derivatives either for themselves or on behalf of their clients
• Any financial institution that is required to be compliant with the following regulations: Dodd-Frank, EMIR, HKMA (Hong Kong), Monetary Authority of Singapore, AIFMD, MiFID II/MiFIR, Solvency II, COREP (Common Reporting)
OUR SERVICE
Enriched LEI linked to other identifiers and reference data
• Provides the solution to the challenge of integrating pre-LEI/LEI into your entity master
• Comprehensive LEI mapping providing a pass through into existing client services
• Solves the problem of manual mapping Pre-LEI/LEIs from multiple LOUs
• Automatically updated in the database when changes occur due to corporate actions
• LEI mapped to GK institution code at entity level
Thank you for your time. Jacob Gertel, Senior Project Manager Legal & Compliance SIX Financial Information
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