1. Welcome to Euro Shorts, a short briefing on some of the week’s developments in the
financial services industry in Europe.
If you would like to discuss any of the points we raise below, please contact me or one of
our other lawyers.
Claire Cummings
020 7585 1406
claire.cummings@cummingslaw.com
www.cummingslaw.com
France clarifies marketing regime for AIFs in France
The AMF, the French Securities Regulator, has issued guidance (DOC-2014-03)
on the procedures for marketing shares and units of AIFs in France. In doing so,
the AMF brings welcome clarity to the French position with respect to the
marketing of AIFs, in particular under the AIFMD. In publishing its guidance,
the AMF has sought to issue a consolidated document covering the marketing of
various types of funds in various situations.
European Commission updates EMIR FAQs
The European Commission has updated its FAQs on EMIR this week. The
Commission has included a new section IV relating to EU CCPs. The section
contains one question relating to whether non-EU clearing members of EU CCPs
providing services to clients are subject to the segregation requirements in
Article 39 of EMIR. The Commission confirms that under Article 39(5), clearing
members must offer their clients, at least, the choice between omnibus client
segregation and individual client segregation and inform them of the costs and
level of protection associated with each option. The references to clearing
members in Article 39 are not limited to EU clearing members, so all clearing
members of EU CCPs are required to comply.

2. FCA discussion paper on dealing commission
The FCA has published a discussion paper on the use of dealing commission
regime for investment managers. The paper (DP14/3) reports on the FCA’s
review as to how the use of dealing commission, in particular for the purpose of
research, currently functions and concludes that the findings of the review
support the case for structural change. The review found that while some
investment managers have improved their governance over how they purchase
research with dealing commissions, there are still too few firms applying
sufficient rigour in assessing the value of the research services they use and there
is a lack of price transparency in the market for research due to the way the
market has evolved, and the bundled supply of execution and research services
by brokers makes price discovery difficult. Overall, the FCA concludes that
unbundling research from dealing commissions would be the most effective
option. Responses are requested by 10 October 2014.
MiFID II fears
During a meeting chaired by ESMA in Paris this week, concerns have apparently
been raised by attendees that MiFID II could cause serious problems for banks,
brokers and other market participants in the run up to the January 2017
implementation. The ESMA hearing covered market structure issues, investor
protection and commodity derivatives. Potential issues highlighted by
participants included problems with attempting to apply level one MiFID II
principles to non-equity asset classes such as fixed income, FX and OTC
transactions, a possible lack of distinction between retail and institutional
investors, issues with the rules that should apply to trading algorithms, and
anxiety about whether ESMA will allow sufficient time for market participants
to prepare.
Doubts increase for eurozone recovery this year
According to reports, Germany’s faltering economy has cast further doubt over
the eurozone’s prospects for recovery this year. Other Member States, such as
France, also show little prospect of a strong rebound. There are concerns that the
region faces permanent slow growth and no price inflation, as Germany’s
economy is not growing strongly enough to sustain a recovery across the
eurozone as a whole. Britain, on the other hand, has underlined its robust
recovery, according to June figures, with the strongest quarterly growth in four
years. There is a wider debate across the EU about whether to shift the policy
focus towards spending and away from spending cuts and austerity, with Italy’s
PM leading a drive for greater flexibility in the face of Germany’s focus on

3. thrift.
Cayman Islands enacts FATCA regulations
The Cayman Islands government has issued Regulations seeking to implement
the provisions of the FATCA IGAs entered into between the Cayman Islands and
each of the U.S. and the UK. The majority of affected Cayman Islands financial
institutions have until the end of 2014 to register with the IRS for their Global
Intermediary Identification Numbers ("GIIN"), although they are being
encouraged to submit GIIN registrations sooner rather than later.
Keler added as CCP under EMIR
The European Securities and Markets Authority (ESMA) has updated its list of
central counterparties (CCPs) with the addition of Keler CCP, the Hungarian
clearing house. With the authorisation of Keler CCP, there are now nine CCPs
authorised under EMIR.
Cummings
Tel: + 44 20 7585 1406
Mob: + 44 7734 057 327
www.cummingslaw.com
11 July 2014