MIFID II AND THE IMPACT ON ASSET MANAGEMENT

Transcription

1 MIFID II AND THE IMPACT ON ASSET MANAGEMENT WHERE DOES BNPP AM STAND? FOR PROFESSIONAL INVESTORS MARKETING COMMUNICATION VINCENT MOREAU London, 2 October 2017

2 The clock is ticking: only 3 months to go Level 1 texts Level 2 texts Local texts Further guidelines? From 2009 EU Commission April 2014 EU Parliament April 2014 June 2017 EU regulator (ESMA) July 2017 Local Regulators January 2018 Entry into force Prepares MiFID II Directive Votes MiFID II Directive Defines Technical Standards detailing MIFID II Transpose MIFID II in local law Further guidelines in the coming years? BNPP AM will be ready by the end of this year The project will continue in 2018 as some regulatory issues remain unclear Product governance: negative target market Client transparency: transaction costs disclosures Reporting: clarifications on regulatory reporting 2

3 MiFID II key changes for BNPP AM Investor protection Transparency - MiFID II main changes - Identification and follow-up of client targeted by a fund Stricter rules on inducements to avoid conflict of interest (ban for discretionary portfolio management and independent advice) Creation/update of no-rebate shares Clearer complaint management process Full transparency on products costs Enhanced reporting on mandates Extension of transaction reporting to all instruments Transparency on brokers used (top 5 brokers/instrument) Market execution Governance Reinforced best selection and best execution policy and control Research budget transparency Electronic execution of OTC derivatives Reinforced staff s knowledge and experience Increased board requirements Remuneration policy validated by the board after Compliance advice Storage of all communications / meetings with clients 3

4 BNPP AM assumptions & project status 02/10/2017 4

5 Investor protection - BNPP AM status - - BNPP AM approach - Product Governance Prototype ready, being validated Target Market shared in Nov. European Fund and Asset Management Association (EFAMA) template Time horizon: linked to product s volatility Negative target market: no view so far Investor protection Shares classes Distributor s status No-rebate shares ready by Nov. for France, Luxembourg and being defined for Belgium Distributors status requested in Q4 during client reviews No-rebate shares access limited to mandates & Independent advice Most distributors should be non-independent Distributors to contact BNPP AM to get access to no-rebate shares 5

6 Transparency - BNPP AM status - - BNPP AM approach - Costs & Charges Beta test ongoing Ready end of year to comply with MiFID and PRIIPs Transactions: PRIIPslike approach, standard transaction costs grid at asset class level ransparency Data Exchange Raw data being produced, databases being updated Shared by Nov. Industry standards (EMT for MiFID and EPT for PRIIPs) endorsed, no bespoke template produced Reporting to mandates Performance reporting globally compliant Cost & charges reporting being developed Reporting produced for all mandates Approach consistent with fund management 6

7 Questions? 7

8 Inducements and no rebate shares Parvest Best Selection Europe (Distribution share) Target market: high-level status o Target market prototype prepared Discussions ongoing with peers to fine-tune the approach o Provided end of Q4 to clients o All vanilla strategies may be provided to basic investors o More complex strategies would be reserved to informed investors: absolute return, loan, commodities, structured (question mark on AIFs) 8

9 Inducements and no rebate shares No rebate shares creation and conversion process Eligibility to the no rebate share (Privilege share) These shares may only be acquired by: Managers (DPM) OR Distributors specifically authorised by the board which provide only fee-based independent advisory services as defined by MiFID, with respect to distributors that are incorporated in the European Economic Area OR Clients with more than EUR 3 million per sub-fund 1 Specific situations (e.g. Non-independent advisor with inducement) managed through specific SICAV s board resolution) Timeframe for prospectus update Jun. 17 Flexi I Sept-Oct. 17 Easy + L1 Oct.-Nov. 17 Parvest Prospectus updates through 2017 Sept-Oct. 17 French & Belgium FCPs To be defined 40 creations 275 updates 10 creations Share classes & inducements: high-level status o No-rebate shares ongoing in France and Luxembourg No-rebate offer available by the end of November o BNPP AM wording for the no-rebate share consistent and protective vs. wording from other players o The conversion from Classic shares to Privilege shares is a tricky question: o French-law funds: specific Legal and operational difficulties o Discussion ongoing at French market place level 9

10 AGENDA Level 1 texts Level 2 texts Local texts Further guidelines? From 2009 EU Commission April 2014 EU Parliament April 2014 June 2017 EU regulator (ESMA) July 2017 Local Regulators January 2018 Entry into force Prepares MiFID II Directive Votes MiFID II Directive Defines Technical Standards detailing MIFID II Transpose MIFID II in local law Further guidelines in the coming years? BNPP AM will be ready by the end of this year The project will continue in 2018 as some regulatory issues remain unclear Product governance: negative target market Client transparency: transaction costs disclosures Reporting: clarifications on regulatory reporting 10

11 Disclaimer BNP PARIBAS ASSET MANAGEMENT UK Limited, the investment company, is authorised and regulated by the Financial Conduct Authority. Registered in England No: , registered office: 5 Aldermanbury Square, London, England, EC2V 7BP, United Kingdom. This material is produced for information purposes only and does not constitute: an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or investment advice. This material makes reference to certain financial instruments authorised and regulated in their jurisdiction(s) of incorporation. No action has been taken which would permit the public offering of the financial instrument(s) in any other jurisdiction, except as indicated in the most recent prospectus and the Key Investor Information Document (K IID) of the relevant financial instrument(s) where such action would be required, in particular, in the United States, to US persons (as such term is defined in Regulation S of the United States Securities Act of 1933). Prior to any subscription in a country in which such financial instrument(s) is/are registered, investors should verify any legal constraints or restrictions there may be in connection with the subscription, purchase, possession or sale of the financial instrument(s). Investors considering subscribing to the financial instrument(s) should read carefully the most recent prospectus and Key Investor Information Document (K IID) and consult the financial instrument(s ) most recent financial reports. These documents are available on the website. Opinions included in this material constitute the judgement of the investment management company at the time specified and may be subject to change without notice. The investment management company is not obliged to update or alter the information or opinions contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the financial instrument(s) in order to make an independent determination of the suitability and consequences of an investment therein, if permitted. Please note that different types of investments, if contained within this material, involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or profitable for an investor s investment portfolio. Gi ven the economic and market risks, there can be no assurance that the financial instrument(s) will achieve its/their investment objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the financial instrument(s) and material market and economic conditions, including interest rates, market terms and general market conditions. The different strategies applied to financial instruments may have a significant effect on the results presented in this material. Past performance is not a guide to future performance and the value of the investments in financial instrument(s) may go down as well as up. Investors may not get back the amount they originally invested. The performance data, as applicable, reflected in this material, do not take into account the commissions, costs incurred on the issue and redemption and taxes. This document is directed only at person(s) who have professional experience in matters relating to investments ( relevant persons ). Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Conduct Authority. Any person who is not a relevant person should not act or rely on this document or any of its contents. All information referred to in the present document is available on 11

12 Please follow us at #LondonExpertsDays BNP PARIBAS ASSET MANAGEMENT 14, rue Bergère Paris bnpparibas-am.com