ESMA Call for Evidence on Asset Segregation18 July 2016
On 15 July ESMA issued a Call for Evidence on Asset Segregation and Custody Services. ESMA previously consulted on ‘Guidelines on Asset Segregation under the AIFMD’, with the majority of respondents, including Irish Funds, opposed to the proposed approach for increased account segregation. Since then, there has been much industry engagement with ESMA and the European Commission on the issue of asset segregation and the implementation of UCITS V has broadened the scope to include UCITS as well as AIFs. ESMA is now seeking further detailed feedback in the following areas before deciding on an approach:
- mapping of asset segregation models;
- understanding how investor protection in the event of insolvency would be ensured under the various models;
- understanding the issues linked to complexity and operational costs that arise from the current legislative framework;
- understanding the issues linked to collateral management/prime brokerage;
- understanding the issues linked to the T2S system;
- understanding the impact of segregation requirements on third countries;
- gathering views on the optimal asset segregation regime for achieving a strong level of investor protection without imposing unnecessary requirements; and
- gathering views on any uncertainties that could remain on how the depositary delegation rules should apply to CSDs.
Responses to the Call for Evidence are due by 23 September 2016.
ESMA is also holding a roundtable on asset segregation on 20 July, to which various subject matter experts have been invited from among insolvency practitioners, asset managers, depositaries, CSDs, prime brokers, collateral managers, buy-side, T2S and consumer representatives. The discussions at the roundtable will mainly focus on the topics covered in the Call for Evidence and Irish Funds will have participation at the roundtable.
The Irish Funds response to ESMA’s previous asset segregation consultation is available here.