28 Amendments of Daniel HANNAN related to 2009/0064(COD)
Amendment 34 #
Proposal for a directive
Recital 12
Recital 12
(12) It is necessary to ensure that AIFM operate subject to robust governance controls. AIFM should be managed and organised so as to minimise conflicts of interest. Recent developments underline the crucial need to separate asset safe- keeping and management functions, and segregate investor assets from those of the manager. To this end, the AIFM has to appoint a depositary and entrust it with the booking ofensure that a separate depositary is appointed to provide depository functions with respect to AIF. The depositary will be responsible for ensuring that investor money is booked correctly in segregated accounts, for the safe-keeping of financial instruments, including the holding in custody of financial instruments that can be kept, and the verification of whether the AIF or the AIFM on behalf of the AIF has obtained ownership of all other assets. When ensuring that investor money on ais booked in segregated accounts, the safe-keeping of financial instruments and the verification of whether the AIF or the AIFM on behalf of the AIF has obtained ownership of all other assets. including where this is done by a person other than the depositary, the depositary should at least ensure that appropriate and rigorous processes for segregation are in place and routinely observed. The holding of assets could be delegated to a third party, which in its turn could delegate this function. The depositary and third parties may maintain a common segregated account for multiple AIF. A depositary should act honestly, fairly, professionally, independently and in the interests of the AIF or, where the AIF is not an undertaking, the investors of the AIF. These requirements should however be seen in the context of the whole relationship between the depositary and the AIF. They should not, for example, prevent a depositary from doing business in its own name but on behalf of the AIF where that is required by the very nature of the transaction and where the AIF is in agreement. A depositary may in some cases act as a finance provider or otherwise as a counterparty to the AIF, and may under these circumstances use assets of the AIF as collateral or in other ways provide services to the AIF which could cause the depositary to incur credit risk to the AIF. Acts that a depositary may undertake as a consequence of such arrangements with an AIF should not be deemed contrary to the interests of the AIF or, where the AIF is not an undertaking, the investors of the AIF. Where an AIF transfers full ownership of financial instruments or funds to a depositary for the purpose of securing or otherwise covering present or future, actual or contingent or prospective obligations, such financial instruments or funds should likewise no longer be regarded as belonging to the AIF. The requirement for the depositary to act honestly, fairly, professionally, independently and in the interests of the AIF or, where the AIF is not an undertaking, the investors of the AIF, includes a requirement to consider the appropriateness of any such transfer arrangements, including the extent to which the relevant financial instruments or funds are transferred in an amount which corresponds to the obligations in respect of which the transfer is made. The duties of the AIFM to act honestly, with due skill, care and diligence, fairly and in the best interests of the AIF it manages also include this requirement.
Amendment 43 #
Proposal for a directive
Recital 20
Recital 20
(20) It is appropriate to allow the AIFM to delegate administrative taskthe performance of their functions to an entityies established in a third country provided that necessary safeguards are in placies and to appoint an independent valuator established in a third country, in accordance with this Directive. Similarly, a depositary may delegate its depositary tasks in respect of AIF domiciled in a third country to a depositary domiciled in thata third country, provided that the legislation of that third country ensures a level of protection of investor interests which is equivalent to that in the Community. Under certain conditions, it should also be possible for the AIFM to appoint an independent valuator established in a third country in accordance with this Directive.
Amendment 45 #
Proposal for a directive
Recital 27
Recital 27
Amendment 50 #
Proposal for a directive
Recital 28
Recital 28
Amendment 93 #
Proposal for a directive
Article 10 – paragraph 2 – subparagraph 1 a (new)
Article 10 – paragraph 2 – subparagraph 1 a (new)
The AIFM shall set up and implement sound remuneration policies and practices that are consistent with effective risk management and long-term value creation.
Amendment 94 #
Proposal for a directive
Article 10 – paragraph 2 – subparagraph 1 b (new)
Article 10 – paragraph 2 – subparagraph 1 b (new)
The AIFM shall inform Member States’ competent authorities about the characteristics of its remuneration policies and practices.
Amendment 95 #
Proposal for a directive
Article 10 – paragraph 2 – subparagraph 1 c (new)
Article 10 – paragraph 2 – subparagraph 1 c (new)
Member States’ competent authorities may react and take appropriate corrective measures to offset risks that may result in the failure of an AIFM to implement sound remuneration policies and practices.
Amendment 130 #
Proposal for a directive
Article 17 – paragraph 1 – introductory wording
Article 17 – paragraph 1 – introductory wording
For each AIF established in the Community which it manages, the AIFM shall ensure that a depositary is appointed to fulfil, where relevant, the following taskdepositary functions:
Amendment 131 #
Proposal for a directive
Article 17 – paragraph 1 – point a
Article 17 – paragraph 1 – point a
(a) receiveensure that all payments made by or on behalf of investors wupon then subscribingption of units or shares of an AIF managed by the AIFM and book themall payments received by or for the benefit of investors upon the repurchase of shares or units of such an AIF have been correctly booked on behalf of the AIFM in a segregated accounts, including where those payments are made or received by a person other than the depositary;
Amendment 132 #
Proposal for a directive
Article 17 – paragraph 1 – point b
Article 17 – paragraph 1 – point b
(b) safe-keep any financial instruments which belong to the AIF, namely: (i) hold in custody all financial instruments that can be kept and make adequate arrangements so as to safeguard the AIF's ownership rights, especially in the event of the depositary's insolvency, including arrangements to ensure that those financial instruments are registered in the depositary's books within segregated accounts or a common segregated account for multiple AIF, so that in the event of the depositary's default they can be clearly identified as separate from the assets of the depositary; (ii) maintain the records necessary to verify the ownership of financial instruments that cannot be kept on the basis of the information provided by the AIFM and external evidence of transactions made, and arrange for records to be kept of services and transactions undertaken by it which shall be sufficient to enable the competent authority of the AIFM’s home Member State to monitor the AIFM’s compliance with its obligations under this subparagraph;
Amendment 133 #
Proposal for a directive
Article 17 – paragraph 1 – point c
Article 17 – paragraph 1 – point c
(c) verify whether the AIF or the AIFM on behalf of the AIF has obtained the ownership ofolds an ownership interest in all other assets the AIF invests in, based on internal and external evidence of ownership.
Amendment 134 #
Proposal for a directive
Article 17 – paragraph 1 a (new)
Article 17 – paragraph 1 a (new)
1a. In addition to the tasks referred to in paragraph 1, the depositary shall, where relevant, ensure that: (a) the sale, issue, re-purchase, redemption and cancellation of shares or units of the AIF are carried out in accordance with the applicable national law and the AIF rules or instruments of incorporation; (b) the value of the shares or units of the AIF is calculated in accordance with the applicable national law and the AIF rules or instruments of incorporation; (c) in transactions involving the AIF’s assets any consideration is remitted to it within the usual time limits; (d) no AIFM instructions to the depositary which conflict with the applicable national law or the AIF rules or instruments of incorporation are carried out; (e) an AIF’s income is applied in accordance with the applicable national law and the AIF rules.
Amendment 135 #
Proposal for a directive
Article 17 – paragraph 2 – subparagraph 2
Article 17 – paragraph 2 – subparagraph 2
Amendment 136 #
Proposal for a directive
Article 17 – paragraph 3
Article 17 – paragraph 3
3. The depositary shall be either: (a) a credit institution having its registered office in the Community and be authorised in accordance with Directive 2006/48/EC of the European Parliament and Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast); or (b) an investment firm authorised in accordance with Directive 2004/39/EC and which provides the ancillary service of safe-keeping and administration of financial instruments for the account of clients in accordance with Section B(1) of Annex I to that Directive, having its registered office in the Community; or (c) a person subject to prudential regulation and ongoing supervision and which can furnish sufficient financial and professional guarantees to be able to effectively perform the relevant depositary functions and meet the commitments inherent in those functions. In addition to the provisions laid down in points (a), (b) and (c) of the first subparagraph, for AIF which exclusively or predominantly hold immovable property and/or transferable securities as defined by point 18(a) of Article 4(1) of Directive 2004/39/EC and whose investment strategy mainly involves holding such immovable property and transferable securities for the medium or long term, the depositary may be a person which carries out depositary functions as part of professional or business activities in respect of which it is subject to mandatory professional registration recognised by law or to legal or regulatory provisions or rules of professional conduct and which can furnish sufficient financial and professional guarantees to be able to effectively perform the relevant depositary functions and meet the commitments inherent in those functions. Member States shall determine which of the categories of institutions referred to this paragraph are eligible to be depositaries.
Amendment 139 #
Proposal for a directive
Article 17 – paragraph 4
Article 17 – paragraph 4
4. DThe depositaries may delegate their tasks to other depositariesy may delegate to third parties the tasks referred to in this Article. The third party may in turn sub-delegate those tasks. The depositary shall exercise all due skill, care and diligence in the selection, appointment and periodic review of any third party as referred to in this paragraph. In the case of loss of financial instruments held by a sub-custodian, the depositary may, on a contractual basis, discharge itself of its liability under paragraph 5 if it can prove that it has fulfilled its obligations pursuant to this Directive. The depositary must take the necessary steps to ensure that financial instruments which it holds with a sub-custodian are identifiable separately from financial instruments belonging to the depositary and from financial instruments belonging to that sub-custodian, by means of differently titled accounts on the books of the depositary or sub-custodian or other measures that achieve the same level of protection. Financial instruments held by a sub-custodian may be registered in its books in one or more segregated accounts for multiple AIF.
Amendment 143 #
Proposal for a directive
Article 17 – paragraph 5 – subparagraph 1
Article 17 – paragraph 5 – subparagraph 1
The depositary shall be liable to the AIFM and the investors of the AIF for any losses suffered by them as a result of its unjustifiable failure to perform its obligations pursuant to this Directive or its improper performance of them.
Amendment 147 #
Proposal for a directive
Article 17 – paragraph 5 – subparagraph 3
Article 17 – paragraph 5 – subparagraph 3
Liability to AIF investors may be invoked either directly or indirectly through the AIFM, depending on the legal nature of the relationship between the depositary, the AIFM and the investors. The depositary's liability shall not be affected by any delegation referred to in paragraph 4 except as provided for in that paragraph.
Amendment 151 #
Proposal for a directive
Article 17 – paragraph 5 a (new)
Article 17 – paragraph 5 a (new)
5a. The Commission shall adopt implementing measures further specifying: (a) the modalities for the safe-keeping, safeguarding, segregation and use of fund assets and record-keeping; and (b) the supervisory duties of depositaries, including the due diligence duties of depositaries and duties relating to the operation of joint sub-custody accounts; This Directive does not prevent a Member State from imposing requirements on a depositary established in that Member State in respect of its performance of the safe-keeping function.
Amendment 155 #
Proposal for a directive
Article 18 – paragraph 2
Article 18 – paragraph 2
2. In no case shall the AIFM's liability be affected by the fact that the AIFM has delegated functions to a third party, nor shall the AIFM delegate its functions to the extent that, in essence, it can no longer be considered to be the manager of the AIF and to the extent that it becomes a 'letter- box' entity.
Amendment 162 #
Proposal for a directive
Article 19 – paragraph 2 – point c a (new)
Article 19 – paragraph 2 – point c a (new)
(ca) the amounts of remuneration, split into fixed and variable remuneration, paid by a systemically important AIFM (and, where relevant, by any AIF managed by such an AIFM) to senior executives and other employees having a material impact on the firm’s risk exposure.
Amendment 173 #
Proposal for a directive
Article 20 – paragraph 1 – point a
Article 20 – paragraph 1 – point a
(a) a description of the investment strategy and objectives of the AIF, all thethe types of assets which the AIF can invest in and of the techniques it may employ and of allthe associated risks, any applicable investment restrictions, the circumstances in which the AIF may use leverage, the types and sources of leverage permitted and the associated risks and of any restrictions toin the use of leverage;
Amendment 175 #
Proposal for a directive
Article 20 – paragraph 1 – point c
Article 20 – paragraph 1 – point c
Amendment 178 #
Proposal for a directive
Article 20 – paragraph 1 – point h
Article 20 – paragraph 1 – point h
(h) a description of all fees, charges and expenses and of the maximum amounts or rates thereof which are directly or indirectly borne by investors;
Amendment 181 #
Proposal for a directive
Article 20 – paragraph 1 – point i
Article 20 – paragraph 1 – point i
(i) whenever an investor obtains a preferential treatment or the right to obtain preferential treatment, the identity of the investor and a description of that preferential treatment;
Amendment 208 #
Proposal for a directive
Article 21 – paragraph 4 a (new)
Article 21 – paragraph 4 a (new)
4a. AIFM managing one or more AIF employing leverage on a systemically significant basis shall make available to the competent authorities of its home Member State information about the overall level of leverage employed by each AIF it manages, a breakdown between leverage arising from borrowing of cash or securities and leverage embedded in financial derivatives and, where known, the extent to which their assets have been reused under leveraging arrangements. That information shall include the identity of the five largest sources of borrowed cash or securities for each of the AIF managed by the AIFM, and the amounts of leverage received from each of those entities for each of the AIF managed by the AIFM.
Amendment 209 #
Proposal for a directive
Article 21 – paragraph 4 b (new)
Article 21 – paragraph 4 b (new)
4b. Member States shall ensure that the competent authorities of the home Member State of an AIFM have access to information on the use of short selling on account of AIF managed by the AIFM for the purposes of identifying the extent to which the use of short selling contributes to the build-up of systemic risk in the financial system or risks of disorderly markets. The competent authorities of the home Member State shall also ensure that such information, aggregated in respect of all AIFM that they supervise, is made available to other competent authorities, the Committee of European Securities Regulators (CESR) established by Commission Decision 2009/77/EC of 23 January 2009 1 and the European Systemic Risk Board (ESRB) established by Regulation…/…/EC through the procedures set out in Article 46 on supervisory cooperation. ________________ 1 OJ L 25, 29.1.2009, p. 18.
Amendment 213 #
Proposal for a directive
Article 23
Article 23
AIFM managing one or more AIF employing high levels of leverage on a systematic basis shall for each such AIF: (a) disclose to investors the maximum level of leverage which the AIFM may employ on behalf of the AIF as well as any right of re-use of collateral or any guarantee granted under the leveraging arrangement; (b) quarterly disclose to investors the total amount of leverage employed by each AIF in the preceding quarter.rticle 23 deleted Disclosure to investors
Amendment 318 #
Proposal for a directive
Article 38
Article 38