Regulations affecting data management

Transcription

1 ON THE RADAR: Regulations affecting data management Arno Wilhelm, Head RD Product Management, SIX Financial Information

2 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

3 SNAPSHOT Regulations keep evolving and mounting up over time Solvency II LEI French & Italian FTT AIFMD FTT Final Withholding Tax (UK / AT) US Withholding Tax MiFID I FATCA MiFID II

4 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

5 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

6 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 is part of the directive 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 CLIENT IMPLICATIONS Flagging of AIFMD compliant funds Instrument classification based on the ESMA directives for proper fund registration 6

7 OUR SERVICE Ongoing instrument classification and KIIDS REFERENCE DATA CLASSIFICATION 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

8 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 countries: - Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, Spain and Estonia The planned tax might affect financial transactions related to equities and derivatives with different tax rates. The EU is working on the directives and intends to publish them in TIMELINE France introduced it on Italy as of Rest EU in 2016 (TBC) AFFECTED CLIENTS / USERS All financial institutions worldwide CLIENT IMPLICATIONS Identify the country specific transaction tax for each security and derivative 8

9 OUR SERVICE Detailed tax classification and rate SIX will populate the data on VDF Tax / Reporting message FSD EXAMPLE: Italian FTT - Valor: A2A SpA Country: Italy (525) Current Taxes Withholding tax (14) Liable/ applicable (1) Dividend (3) Tax resident (2): 20 % (4) Financial transaction tax (high frequency trading) (55) Liable/ applicable (1) Transaction (4) Applies to all (3): 0.02 % (4) Financial transaction tax (generally applicable) (51) Liable/ applicable (1) Transaction (4) Applies to all (3): 0.2 % (4) Financial transaction tax (regulated market or MTF) (53) Liable/ applicable (1) Transaction (4) Applies to all (3): 0.1 % (4)

10 FTT implementation status by Regulators/Jurisdictions Regulator / Jurisdiction Scope (Highlights) Implemented / Expected tax rate Effective / expected implementation date SIX implementation / situation EU Directive applies to 11 member countries Equity, bonds, derivatives Transactions between financial institutions at least one party located in the EU Shares: 0.1% Bonds :0.1% Derivatives : 0.01% Possibly 2016 still in political process Under monitoring, final directive expected in 2014 Italy Sale of shares and other participating instruments issued by Italian companies Transactions in derivatives, unless EU or EEA white listed Gov. bonds Shares: 0.12%, OTC 0.22%, HFT 0.02% Derivatives: different rates, up to EUR 200 Equities- 1. March 2013 Derivatives 1. Sep List of out-of-scope Instruments published on Spain Purchase of certain Spanish equities Certain high-freq. Trading operations on equities Acquisition of credit default swaps on EU sovereign debt when the beneficiary is not the debt holder Unknown yet Open part of the EU 11 FTT countries Under monitoring Portugal Buy sell transactions of financial instruments like equities, bonds, money market inst., units or shares in funds, St. Products, high freq. Trading (HFT) Exempt are issue of securities, transactions with financial institutions, central banks General rate: 0.3% HFT: up to 0.1% Derivatives: 0.3% Open part of the EU 11 FTT countries Under monitoring 10

11 FTT implementation status by Regulators/Jurisdictions Regulator / Jurisdiction Scope (Highlights) Implemented / Expected tax rate Effective / expected implementation date SIX implementation / situation Hungary A transaction tax on transfers involving client s account, bank account, securities account, payment operations undertaken in relation to the financial transaction, loan repayments, fees The service providers have to be registered or having a branch in Hungary Securities transactions are excluded 0.2% of the amount of the transaction, leaving the HUF 6,000 per transaction cap in place 1 January 2013 For the moment not in our scope. Under monitoring for further developments US Equity, bonds Execution or clearing in the US involving US person Equity: 0.5 % Bonds: 0.1% Derivatives: 0.005% January 2013 Under monitoring France Listed equities issued by listed companies that are headquartered in France, and whose market capitalization exceeds 1 billion on 1 January of the year during which the transfer occurs In-scope transactions include those completed on a regulated market or OTC Equity: 0.2% Effective since 1 August 2012 Data provided on VDF Message FSD South Africa SST (Securities Transfer Tax): In-scope: all shares of SA companies (listed worldwide) and foreign companies listed on JSE 0.25% on any transfer of a security (paid by the buyer) 1 July 2008 Data available as of August

12 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 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) 12

13 OUR SERVICE Enriched LEI linked to other identifiers and reference data Provides the solution to the challenge of integrating pre-lei/lei into your securities and 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 and instrument level identifiers

14 Thank you for your time.