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1 irishfunds.ie
Irish Funds Tokyo Seminar 2017
Sponsored by: 20 October 2017
2 irishfunds.ie
Welcome Address
H.E. Ms. Anne Barrington Ambassador of Ireland to Japan
3 irishfunds.ie
Opening Remarks
Mr. Toshihiro Iwasaki Chairman of the Investment Trusts Association, Japan
irishfunds.ie
Industry Update and Key Developments
Tara Doyle Chairperson, Irish Funds Head of Asset Management, Matheson
irishfunds.ie
Who/what we are….
• industry association for all aspects of regulated cross border funds in Ireland – representative function – promotional function
• 123 member firms, located both in and outside Ireland
• key link to the authorities & policy makers in Ireland and beyond
• the industry’s representative in Europe and globally
• a platform for collaboration, information sharing and driving
outcomes & improvement
irishfunds.ie
The Irish funds industry
• supports managers from all over the world
• full range of services for Irish domiciled funds as well as providing expert services for funds domiciled outside of Ireland
• solutions are provided to managers across the full spectrum of investment strategies
Fund Manager
Irish Administered
Funds
Irish Domiciled Funds
UCITS
AIFs
Non Domiciled Funds
irishfunds.ie
What does the industry in Ireland provide?
• EU Single Market Access: product & service
passports
• Investor Access: European Market and beyond
• Service Excellence
• Low Costs
• Low Tax Environment
• Regulatory Environment
• Commitment from Government
• Infrastructure : language/legal/telecommunications
7th IMD WORLD
COMPETITIVENESS 2016 YEARBOOK
1st FLEXIBILITY AND ADAPTABILITY
OF PEOPLE
1st IN EUROPE FOR COMPLETION OF
3RD LEVEL EDUCATION
irishfunds.ie
Why Ireland? Distribution and investor support
Global Distribution of Irish UCITS
• broad mix of institutional and retail clients served
• 30 languages supported
• 23 currencies supported
Source: Lipper, PwC & Irish Funds, 2015
irishfunds.ie
The Irish funds industry: a snapshot
irishfunds.ie
Total Assets Under Administration – Split between Irish & Non Irish Funds
434 584 728 807 646 748 964 1,055 759 1,344 1,664 1,899 2,085 2,231
636 838 965
1,394 1,398 1,443
1,883 1,886 2,199
2,722
3,375
3,806 4,095
4,251
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 June-17
EUR
Bill
ion
Total Assets Under Administration
Net Assets Domiciled Net Assets Non Domiciled
irishfunds.ie
Irish Domiciled Assets
• UCITS represent 75% of Irish Domiciled Assets
• 86 UCITS Man Cos
• 156 AIFMs Registered or Authorised
• 597 AIFMs operating in Ireland on cross border basis
• 364 ICAVs established (since 18 March 2015)
irishfunds.ie
Growth of Largest European Fund Domiciles
Source: EFAMA Statistics
2012 2013 2014 2015 2016 Europe 113 123 142 158 178 Luxembourg 114 125 148 167 177 Ireland 116 127 157 180 198 France 109 110 114 121 129 Germany 113 124 140 153 166 UK 117 135 159 179 177
-
50
100
150
200
250
% G
row
th
116 127 157
180 198
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Irish Domiciled Funds – Net Sales
-30.0
20.0
70.0
120.0
170.0
Dec-13 Dec-14 Dec-15 Dec-16 YTD June 2017
Net Sales into Irish funds by type € Bn Equity Funds
Bond Funds
Balanced Funds
Money Market Funds AIF
Net sales for YTD June 2017 have already surpassed the total for 2016 – which itself was a record year
98,463 85,465
135,668 114,706
139,416 161,500
0 20,000 40,000 60,000 80,000
100,000 120,000 140,000 160,000 180,000
2012 2013 2014 2015 2016 YTD June 2017
EUR
Mn
Net Sales - Total Domiciled Funds
Net Sales - Total Domiciled Funds
irishfunds.ie
ETFs - An Irish Success
Ireland as a Domicile for European ETFs Total Assets of European ETFs - €Bn
Source: Irish Funds, June 2017
Ireland €310bn
Rest of Europe €248bn
56% 44%
€41bn
€3bn
Net Sales into All European ETFs 2016 €Bn
Ireland
Rest of Europe
93%
7%
irishfunds.ie
UK Referendum & “Brexit” • The outcome was a surprise to most
• Things which are certain/clear: － Ireland remains a committed member of the EU － Irish domiciled funds’ access to the EU single market unchanged － UK remains a member of the EU for the foreseeable future
• Big questions to which there are not yet clear answers － UK’s status at the end of the process? － When will the process start? － How long will the process last?
• Questions we are being asked by managers - how can they work with Ireland to retain access to the EU in providing?: － Direct portfolio management services － Funds
• Our members are helping managers and providing solutions
irishfunds.ie
Three interdependent themes
Distribution Management
Models (‘Delegation’)
Growth
OVER 2,000 IRISH
FUNDS SOLD TO UK INVESTORS1
€613 bn2 IN IRISH FUND ASSETS MANAGED BY
170+ UK FIRMS IN IRELAND2
Continuity in UK investor access to EU/Irish funds
Continuity in UK firm
management of Irish funds
Increase Ireland’s growth trajectory as an
international asset management centre
SOURCE: 1-Lipper IM Dec 2015 2-Monterrey Ireland Fund Report 2016
Current context Target outcome
irishfunds.ie
Structuring options: Management models
MiFID Firm
Super ManCo w/ Add-on Authorisations (‘v2’)
Super ManCo w/ Delegates (‘v1)
SMIC • Simple option for single umbrella fund
• ‘v1’: widely used standard model w/ delegation option
• ‘v2’: ‘add-ons’ enable management w/out MiFID manager as delegate, including mandates
• Wider range of permissions available
DEFINITIONS:
• ‘MiFID Firm’: Investment firms authorised under Markets in Financial Instruments Directive (2007, to be replaced by MiFID 2 / MiFIR in January 2018) • ‘Super ManCo’: authorised to provide services to UCITS and AIFs w/ the option of add-on authorisations for segregated mandates • ‘SMIC’: Self-Managed Investment Company
Global Asset
Managers
Regional Asset
Managers
Management Models
(‘Delegation’)
irishfunds.ie
Other developments………. • Updating of Ireland’s Investment Limited Partnership Legislation
－ Legislative amendments approved by Irish Government / drafts person has been appointed.
－ Will provide additional scope for private equity and real asset funds.
• Loan Origination － We continue to engage with the CBI and Public sector with a view to
enhancing the current Loan Origination offering.
• Tax Transparency － OECD has awarded Ireland the highest international rating on tax
transparency and exchange of information.
• EU Cross Border Distribution － Consultation on Cross Border Distribution submitted 2016 and follow-
up questionnaire completed 2017. － We have subsequently met with the European Commission.
irishfunds.ie
Other developments………. • Pan European Personal Pension Plan (PEPP)
－ Industry white paper published on PEPP. － We have subsequently met with the European Commission.
• Financial Action Task Force (FATF) Mutual Evaluation Report (MER) of Ireland － FATF’s assessment of Irelands anti-money laundering and counter
terrorist financing concluded that “Ireland has a sound and substantially effective regime to tackle money laundering and terrorist financing….” In addition the Report highlights “National coordination mechanisms… and the Private Sector Consultative Forum (PSCF) were fruitful in broadening the understanding of its ML and TF risks across all relevant agencies and with the private sector.”
• CBI engagement re Exchange Traded Funds (ETF) － Responded to Central Bank of Ireland (CBI) ETF discussion paper
and engaged with the CBI throughout the process.
• Consultation paper on CIS Liquidity Risk Management － Response provided to the International Organization of Securities
Commission (IOSCO) Consultation paper.
irishfunds.ie
Conclusion
• EU Member & Strategically Positioned +
• International Hub for Globally Distributed Investment Funds +
• Unrivalled Experience and Expertise in the Widest Range of Fund Structures
21 irishfunds.ie
Alternative investments in Europe – some tax consideration
Kenji Nakamura PwC Tax Japan
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Agenda
Section 1：General tax treatments in investing countries
Section 2：General tax treatments in Japan
Section 3：Factors to be considered for structuring
Section 4：Fund of funds
irishfunds.ie
General tax treatments in investing countries
• Income
(rent, dividend, interest, etc.)
• Capital gain
Ireland Fund Seminar 2017/10/20
Fund vehicle
Real properties PE
infrastructure
Investors
return
Rent, dividend, capital gain, etc.
Japan
Foreign countries
irishfunds.ie
• Foreign dividend exclusion
rules
• CFC rules
• Foreign tax credit
General tax treatments in Japan
2017/10/20
Fund vehicle
Real properties PE
infrastructure
Investors
return
Rent, dividend, capital gain, etc.
Japan
Foreign countries
Ireland Fund Seminar
irishfunds.ie
• Taxation of fund vehicle
• Timing of income recognition by investor
• Applicability of foreign tax credit to investor
• Eligibility of tax treaty of investing country
• Tax filing obligation in investing country
• Holding ratio in fund vehicle
• Category of investment
Factors to be considered for structuring
2017/10/20
Fund vehicle
Real properties PE
infrastructure
Investors
return
Rent, dividend, capital gain, etc.
Japan
Foreign countries
Ireland Fund Seminar
irishfunds.ie
Main fund Sub fund
corporate
corporate/pass through
Blocked
pass through
corporate
Blocked
pass through not blocked
Fund of funds
investor
Sub Fund
Investment (RE)
Main Fund
Investment (PE)
Investment (others)
Sub Fund
Sub Fund
Corporate or
pass through Corporate
or pass through
CFC rules? Income recognition? Tax treaty?
2017/10/20 Ireland Fund Seminar
27 irishfunds.ie
Peter Callaghan Executive Director – Joint COO/ CFO SuMi TRUST - Global Asset Services
Global Regulations Landscape Update from a Service Providers Perspective
irishfunds.ie
Outline
1. MiFID II
2. FATCA/ CRS
3. General Data Protection Regulations
4. Anti Money Laundering Update
5. Central Bank of Ireland Focus
irishfunds.ie
MiFID II • Markets in Financial Instruments Directive is EU framework for
regulating firms servicing clients linked to financial instruments and venues where instruments traded.
• The European Commission introduced MiFID II to address issues they identified from 2008 financial crisis, growth of algorithmic trading and lessons learnt re MiFID I.
• Transposed into Irish law on 10 August 2017 and effective date is 3 January 2018. MiFID II comprises:
– The Directive (MiFID – 2014/65/EU) – The Markets in Financial Instruments Regulation (MiFIR – 2014/600/EU)
• The core objectives for the revised framework are: – strengthen investor protection – reduce risks of a disorderly market – reduce systemic risks – increase efficiency of financial markets and reduce unnecessary costs for
participants.
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MiFID II Third Country/ Safe Harbour Considerations – Key for Non-EU Managers • Under MiFID I – investment firms were prohibited from operating in Ireland
without Central Bank approval. An investment firm was not regarded as operating in Ireland (safe harbour) where:
– Head / Registered Office outside EU – No branch in Ireland – Not providing investment services to Irish individuals.
• The maintenance of the safe harbour is key for the industry and it was confirmed in July 2017 by Department of Finance – albeit with a tightening of criteria.
• Portfolio management is a MiFiD service. ‘Third Country’ investment managers can act for Irish UCITs/ AIFs under delegation provided i) it is regulated in home jurisdiction to undertake portfolio management ii) MOU in place between the supervisory authorities iii) investment manager pre-cleared with CBI.
irishfunds.ie
MiFID II Other Key Points 1. Inducements:
General prohibition on MiFID firms providing PM/ IA services from accepting fees/ commissions etc from third parties re those services.
2. Investment Research: General prohibition on MiFID firms providing PM/ IA services from receiving investment research in respect of those services at the cost of the client (unbundle research costs from execution costs).
3. Cost Disclosures: MiFID firms must provide clients/ prospects with detailed information on costs/ charges for their services and the investment product – upfront and on ongoing basis for as long as services continue.
irishfunds.ie
FATCA/ CRS FATCA • Year 3 of FATCA reporting – and it is full scope reporting and no longer
phased. • Now firmly established and part of BAU.
CRS • Common Reporting Standard is the standard for ‘automatic exchange of
information’ (AEOI) developed by the OECD. • Sadly it is in addition to FATCA. It is replacing UK CDOT reporting
which is being phased out. • Year 1 of CRS reporting. • Reportable investors under CRS are individuals/ entities not resident in
fund domicile – unless they are exempt, such as: – Entities listed on established markets – Government Organisation – Central Bank – International Organisation – Financial Institution
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FATCA/ CRS
CRS - continued • CRS reporting being phased in over two years.
• In 2017 (based on calendar year 2016) - CRS reporting covers i) new investors that year and ii) pre-existing individual investors with balance > USD1 million (31/12/15).
• For 2018 all reportable investors in scope including any investor that had a holding in a fund as at 31/12/16.
• No withholding under CRS, penalties and sanctions are imposed by the relevant jurisdiction e.g. Under CRS legislation in the Cayman Islands providing false self certification may result in a $50,000 fine for entities and a $20,000 fine for individuals.
irishfunds.ie
FATCA/ CRS
Some practical points: • Updated Guidance notes released by Cayman BVI and Ireland in
recent months. Whilst CRS a ‘common standard’ not all tax authorities are interpreting the same way so important to be aware of nuances and get professional advice on areas of ambiguity.
• There were technical challenges with some tax authority websites and some registration and reporting deadlines were pushed out. This will regularise itself going forward – so don’t assume deadlines will shift.
• Funds and their appointed service providers should expect to be reviewed by their relevant tax authorities in respect of FATCA/ CRS adherence. Focus will not just be on reporting but systems/ controls and documented policies & procedures etc.
irishfunds.ie
General Data Protection Regulations(GDPR)
Background • Comes into force 25 May 2018 replacing the existing data
protection framework. We are in the transition period.
• The last EU data protection directive was in 1995 and the world has changed significantly since then – in particular with technological evolution and consumer online purchasing/ communication behaviours.
• GDPR is a regulation so comes into force in all EU states on the relevant date unlike directives which have to be enabled by legislation in each state (which can result in inconsistency of application).
• The principles of protecting data are core to the fund industry under existing framework and practices – GDPR formalises certain key aspects and is quite prescriptive in approach.
irishfunds.ie
General Data Protection Regulations(GDPR)
Key Points • Privacy by design is a core theme of GDPR. System design must
formally address GDPR requirements from the outset and in a formalised manner (privacy by design).
• Applies to any organisation which processes personal data of data subjects in EU – and data processors/ controllers in EU.
• Formal Data Protection Impact Assessments required where high risk data processing required.
• Threshold for individual consent has been increased. Must be clear, informed, given freely and unambiguous. Individuals have a clear right to be forgotten. They also have enhanced rights for submitting access requests.
• Breaches must be reported to relevant authority within 72 hours. If high risk data then subjects must be informed without delay.
irishfunds.ie
General Data Protection Regulations(GDPR)
Key Points • Some entities will require a Data Protection Officer under GDPR
– who has onerous responsibilities and rights.
• Significant uplift in fines/ enforcement: – Fines of up to €10million or 2% of total worldwide annual turnover
(greater number) for serious breaches. – Fines of up to €20million or 4% of total worldwide annual turnover
(greater number) for very serious breaches. – Right to sue even where damage to data subject insignificant.
• GDPR necessitates changes to fund documentation and relevant agreements.
So its coming – and if it applies to your organisation – critical that assessments completed and roles, responsibilities clearly defined, understood and implemented.
irishfunds.ie
Anti Money Laundering Update FATF Review • During 2016 the Financial Action Task Force (FATF) conducted an
assessment of Ireland’s anti-money laundering and counter-terrorist financing (AML/CFT) systems. On 7 September 2017 FATF published their Mutual Evaluation Report which concluded that “Ireland has a sound and substantially effective regime to tackle money laundering and terrorist financing….” The report is fresh so being worked through - but the overall conclusion from an Irish Funds perspective is important.
• In addition the Report highlights “National coordination mechanisms.……and the Private Sector Consultative Forum (PSCF) were fruitful in broadening the understanding of its Money Laundering (ML) and Terrorist Financing (TF) risks across all relevant agencies and with the private sector.” IF is an active member of the PSCF.
Report available at: http://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-ireland-2017.html
irishfunds.ie
Anti Money Laundering Update Fourth EU Anti-Money Laundering Directive • Fourth AML Directive came into force on 26 June 2015 and is due to be
transposed into Irish Law later this year.
• Greater emphasis on risk based approach in relation to addressing ML and TF risks.
Risk Based Approach • Risk based approach has been around for a while but now much more
pronounced and entities must consider risks of ML/TF across each business relationship and transactions.
• Entities must then implement enhanced and focussed policies, systems, controls and processes to mitigate these risks.
• Pre 4th AMLD, Simplified Due Diligence could be applied for certain categories of customers/ investors – under 4th AMLD, such general provisions no longer apply and must be considered at customer/ transactions level.
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Anti Money Laundering Update
Politically Exposed Persons (PEPs) • Foreign and domestic PEPs now covered. Previously only foreign
PEPs were automatically subjected to the enhanced requirements.
Beneficial Ownership • Requirement to identify ultimate beneficial owners. Ireland has
implemented certain aspects whereby Irish Corporate Entities required to obtain, hold and file certain information on their beneficial ownership. This is an ongoing and evolving initiative.
irishfunds.ie
Central Bank of Ireland Focus
• CBI still very focussed on cyber risk and IT risk management. Guidance issued in 2016 and is an area of focus for the industry and the Regulator.
• CBI issued guidance on fund administration outsourcing and there were a lot of interactions with the industry on this topic over the last year.
• The anniversary of Investor Money Regulations has passed – and all service providers require an Investor Money Examination by external auditor which is filed with CBI.
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Click to edit Master title style (36)
PETER CALLAGHAN EXECUTIVE DIRECTOR: JOINT COO/ CFO SUMI TRUST GLOBAL ASSET SERVICES
Block 5 Harcourt Centre, Harcourt Road, Dublin 2, Ireland Tel: + 353 1 603 9975 [email protected]
Disclaimer: The material contained in this document is for marketing, general information and reference purposes only and is not intended to provide legal, tax, accounting, investment, financial or other professional advice on any matter, and is not to be used as such. Further, this document is not intended to be, and should not be taken as, a definitive statement of either industry views or operational practice. The contents of this document may not be comprehensive or up-to-date, and neither Irish Funds, nor any of its member firms, shall be responsible for updating any information contained within this document.
43 irishfunds.ie
Panel Discussion: MiFID II Discussion of commission unbundling Naoki Kubo PricewaterhouseCoopers Aarata LLC / Partner
Commission Unbundling
Third party
(Broker)
Client (Institutional
investor)
Non-monetary benefit (analyst report)
Asset management fees
When providing portfolio management, the investment firm shall not accept and retain fees, commissions or any monetary or non-monetary benefits paid or provided by any third party in relation to the provision of the service to clients. (Research) • direct payments by the
investment firm out of its own resources
• payments from a separate payment account (agreeing the research charge with their clients)
Investment firm (Asset manager)
Outsourcing
outsourcing
Investment firm (Asset manager)
• Initial due diligence
• Written agreement
• On-going monitoring
Investment firm (Asset manager)
• Authorised or registered in its home country • Cooperation agreement
- Investment firms shall remain fully responsible for discharging all of their obligations under MiFID II.
- The relationship and obligations of the investment firm towards its clients under MiFID II is not altered.
- The outsourcing arrangement must not result in the MiFID investment firm breaching its MiFID obligations.
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Overview of markets and update in relation to distribution
Shane Geraghty Partner, Dillon Eustace
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Ireland as a global leader in Investment Funds
• Ireland continues to be a global leader for investment funds and financial
services
• To 31 July, 2017, 221 UCITS funds and 182 AIFs have been launched in
Ireland.
• Largest inflows during 2017 over both Q1 and Q2 2017 from Bond funds
• Equity holdings of all funds amounted to €926.5bn at end-June, increasing
by €19.4bn from Q1 2017.
• Between the end of December, 2016 and March, 2017, Exchange Traded
Funds added €27bn in net asset value and accounted for 18% of the total
net asset value of Irish resident investment funds * ALL FIGURES SOURCE – CENTRAL BANK OF IRELAND
irishfunds.ie
Ireland as a global leader in Investment Funds
• Hedge funds in Q1 2017 saw a growth of 4% in total assets driven by
investor inflows
• Real Estate funds say an increase in total assets of 9% in Q1 (mainly
through investor inflows) and 11.3% in Q2 (in net purchases of property)
• ICAV has become the main form of corporate vehicle used for Irish AIFs
and UCITS funds (364 ICAVs established since 2015)
• UCITS continue to represent the largest number of funds in Ireland
• Central Bank Fund Management Company Guidance (CP86)
• Growing interest in L-QIAIF from US based loan managers
• Long awaited update of the Investment Limited Partnership structure
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European Market Trends (UCITS)
• Irish UCITS funds attracted €68bn in net inflows
• Irish UCITS ETFs registered the largest net inflows during Q2 2017 of €15.5bn
• European UCITS Funds attracted €377bn in net new money during H1 2017
• Net sales of equity (€35bn), multi-asset (€38bn) and bonds (€93bn) in Q2 2017 continued to grow and exceeded Q1 amounts
• Q2 2017, UCITS net assets have increased 5.9% since the end of 2016 and reached over €9tn
• Number of UCITS funds established increased to 31,281 to the end of Q2 2017
• 61.6% of all fund assets within the EU (52.5% of all funds established)
*ALL FIGURES SOURCE – EFAMA Q2 QUARTERLY STATISTICAL RELEASE
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European Market Trends (AIFS)
• Irish AIFs attracted the €22bn in net inflows during Q2 2017
• Net sales of long-term (€75bn), equity (€7bn), multi-asset (€14bn), bonds (€10bn) and ‘Other’ AIFs (€39bn) in Q2 2017
• Q2 2017, AIF net assets have increased 0.6% in Q2 and reached over €5.7tn
• Real Estate AIFs experienced the largest asset growth (0.9%)
• Institutional AIFs recorded net sales of €46bn in Q2 2017 (higher than both Q1 2017 and Q4 2016)
• Number of AIFs established at the end of Q2 2017 was 28,239
• 38.4% of all funds assets within the EU (47.5% of all funds established)
*SOURCE – EFAMA Q2 QUARTERLY STATISTICAL RELEASE
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Global Distribution of Irish Funds
Global Distribution of Irish UCITS
• broad mix of institutional and retail clients served
• 30 languages supported
• 23 currencies supported
Source: Lipper, PwC & Irish Funds, 2015
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Fund Distribution in Europe
• UCITS passport
• AIFMD passport
• National Private Placement Rules
• Reverse Solicitation
• AIFMD Passport for non-EU AIFMs
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Fund Distribution
• Number of Irish Funds registered for sale keeps increasing (end of 2016)
• Top 5 Jurisdictions
- UK: 2,447 - Germany: 2,141 - France: 1,992 - Netherlands: 1,710 - Switzerland: 1,689
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Fund Distribution – Future Developments
• Impact of MiFID II on:
(i) MiFID Firms, (ii) Credit Institutions performing MiFID type services;
(iii) AIFMs and UCITS Management Companies with relevant licence extensions for individual portfolio management and investment advice
• Aim of Enhanced Investor Protection
• Product Governance Requirements
• Appropriateness Test
• Inducements
• Disclosure to investors
irishfunds.ie
Fund Distribution – Future Developments
Impact of Packaged Retail and Insurance-Based Investment Products (“PRIIPs”)
• Implementation from 1 January, 2018
• Requires production of a Key Information Document (“KID”)
• Will apply to any AIF which is offered to a retail client (as defined under MiFID II)
The PRIIPs Regulation applies to persons who:
• manufacture PRIIPs for sale to retail investors in the EU, for example, fund managers, life insurance companies, credit institutions and investment firms.
• advise on or sell PRIIPs to retail investors in the EU, for example, stockbrokers, distributors, advisers and other firms that provide advice to retail clients on funds, structured products and derivatives.
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Fund Distribution – Future Developments
Pre-Contractual: To be provided to investors in ‘good time’. PRIIPs KID contents The PRIIPs Delegated Regulations provide for a mandatory template for the PRIIPs KID, covering the texts and layout to be used.
• PRIIPs KID contents • Header • What is this product? • What are the risks & what could I get in return? • What happens if the PRIIP manufacturer is unable to pay out? • What are the costs? • How long should I hold it and can I take my money out early? • How can I complain? • Other relevant information • Comprehension alert
irishfunds.ie
Fund Distribution – Future Developments
• EU’s Capital Markets Union (“CMU”) initiative
• Remove unnecessary or disproportionate barriers to the cross-border distribution of funds
• EU Commission identified six of categories of national barriers
• 80% of UCITS and 40% of AIFs are marketed cross-border
• 33% marketed in only one EU Member State
• 33% marketed in no more than four (4) EU Member States
• CMU initiative intent on removing barriers to cross-border fund distribution
• European Commission has listed the impact assessment for possible legislative changes to UCITS and AIFMD as a priority action and will begin the impact assessment in Q1 2018
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Irish Developments
• Central Bank Fund Management Company Guidance
• Long awaited update of the Investment Limited Partnership structure
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Panel Discussion: Global Solutions for European regulations Common Contractual Funds/Transaction Funds Pat Convery Director, PwC Ireland
NOTES
• We have assumed a rate of 3% withholding in Australia instead of 30% (to account for franking). If a particular portfolio regularly receives unfranked dividends, this will impact the model and Australia may become a material market.
• The rates applied for the CCF pensions assume an entitlement for a Japanese Pension Fund to access all treaties for investments held through the CCF. Please note these rates have not been specifically confirmed and are purely for illustrative purposes only
• These figures are based on MSCI weightings of June 2017, and average dividend yield per market taken from each country specific index. These are provided for illustrative purposes only, and actual savings will vary.
Summary Statutory Rate
Cayman Fund
Irish UCITS PLC CCF
Tax Drag (in BPs) 60 60 50 7
BPs saving v Statutory Rate - 0 10 53
Withholding Tax 5,980,040 5,980,040 4,977,934 713,783
Tax Savings v Statutory Rate - - 1,002,105 5,266,257
• UCITS CCF with transparency in top 23 markets (including US) + fund level rates may give substantial savings rather than the Statutory Rate (BPs 7 v BPs 60)
62 irishfunds.ie
Closing Remarks
Mr. Masahiro Tsuchiya Senior Managing Executive Officer, SuMi TB
