Annual Report - paperJam

1.
Financial markets regulations
Pre-trade and Trade
In terms of day-to-day business, banks in 2010
were emerging from the great turbulences that
they had experienced in the previous years.
At the EU Commission level, however, things
worked a little bit differently. Indeed, after a
rather quiet period, the arrival of a new Internal
Market Commissioner marked a steep change
in the policy stance from the beginning.
In fact, 2010 served as a year of reflection and
preparation for the work to come over the next
years, with the exception of the finalisation of
the vote on the Alternative Investment Fund
Managers Directive (AIFM), which was adopted
by the European Parliament in autumn.
The AIFM and UCITS V
With regards to the AIFM, the complex discussions
between Member States on two issues are
worth reminding: on the one hand, the passport
for non-EU funds or managers and, on the other,
the rules on the depositary functions. The EU
Commission released the draft directive in April
2009, and a year later the major part was finalised
with some important, and most welcome,
changes across the board; specifically regarding
depositary activities. Another six months were
needed to complete the rules on the passport.
Concerning depositaries, the closer the possibilities
of control of assets by the depositary, the
bigger its duties and responsabilities. A difference
is made between safe keeping of assets (in the
safe keep of the depositary or its sub-custodians)
and oversight when financial instruments are not
held in the traditional value chain (i.e. for derivatives
and other contract-based instruments or
real estate properties). The bad news for the industry
is the “reverse of burden of proof” regarding
responsibilities, meaning that depositaries will
have to demonstrate that they did not fail in their
duties in case a loss of assets arises.
8 January 2010
Launch of “Is it true what they say about Luxembourg?”,
a promotional film project consisting of 10 films introducing
subjects ranging from finance to tourism in Luxembourg
with the aim to counter wide-spread clichés.
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