ESMA: Speech Verena Ross – Cross-border Distribution Conference / Luxemburg 12 February 2019

ESMA: Speech Verena Ross – Cross-border Distribution Conference / Luxemburg 12 February 2019

15:39 13 mai in Non classifié(e)
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Interesting Keynote Address by Verena Ross at the 7th Annual Cross-Border Distribution Conference in Luxembourg, 12 February 2019.

Main items:

  • Investment funds and systemic risks

Concerns about the risks posed by the so-called ‘liquidity mismatch’
FSB and ESRB 2 main areas of concern : leverage and liquidity
EU Alternate Investment Funds (AIF): 5 trillion of asses under management: liquidity mismatch needs further analysis for real estate funds
EU Investment funds liquidity management is robust
Guidance will be developed by ESMA on practices to be followed by managers for the stress testing of liquidity in individual AIFs and UCTS (minimum standards)
ETFs liquidity is now on the “radar screen” (regulators to assess any potential risk that could accompany the development of this market)

  • Costs and performance

ESMA first annual statistical report on costs and performance of retail investment products (Jan 2019)
For UCITS : retail fees are nearly twice as high as fees for institutional investors
Passive equity funds constantly outperform active equity funds
According to MiFID II and PRIIPs, there should be no cost , whether explicit or implicit, that can escape disclosure

  • Brexit

Supervisory convergence prevented possible regulatory arbitrage situations
Efficient functioning of the Supervisory Coordination Network, with national regulators still fully responsible for authorisation decisions
ESMA and European securities regulators have agreed MOUs with the FCA and with the Bank of England (CCPs and CSDs), which would only take effect in the event of a no-deal Brexit scenario:

See dedicated Brexit page of the ESMA web-site: https://www.esma.europa.eu/convergence/brexit