Equities - DVFA

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activities of the commissions
Financial Market Regulation_
Panel on Financial Market Regulation
In 2010, the focus of legislation and regulation was on investment advisory business.
Below is an overview of the most important measures:
u Documentation requirement
Since 1 January 2010, investment advisors have been subject to more extensive requirements
in relation to the documentation of investment advisory meetings with private
clients. The documentation must contain a record of the advisory meeting, in particular
the reason for the meeting and its duration, the customer’s information and his expectations,
as well as the recommendations made and the key reasons for these. In this
context, BaFin published a letter in November 2010, specifying that this documentation
requirement also applies to prospective clients and irrespective of whether a transaction
results from the advisory meeting. Additionally, meetings with potential new clients, which
did not lead to an investment advisory meeting, must also be documented.
u AIFM Directive
At EU level, the AIFM Directive was adopted by the European Parliament in November
2010. This directive regulates managers of alternative investment funds, though the
scope of applicability is broadly defined. It encompasses open and closed-ended funds
that are currently not covered by regulation or fall under the UCITS Directive. After entry
into force, national legislatures have two years within which to implement the rules. At
the same time, details will need to be clarified via implementing provisions at EU level.
u MiFID-Review
In December, the EU Commission launched a consultation on review of the MiFID. The
key elements are:
� Expanding the scope of the MiFID to investment services and activities not currently
covered
� Expanding the MiFID transparency rules to further financial instruments (bonds and
OTC derivatives)
� Strengthening of investor protection
The legislative drafts are due to be prepared in spring 2011.