20 Mar TheINsiders at ALFI Spring Conference Day 1
Day one of the annual ALFI (Association of the Luxembourg Investment Funds Industry) Spring Conference took place on Tuesday at the Luxembourg conference centre on the Kirchberg. More than 900 delegates from Luxembourg and abroad were in attendance to discuss the status and impacts of the latest influx of European, national and international regulation to hit the industry, as well as to celebrate ALFI’s 25th anniversary.
ALFI was first established in 1988 to represent the interests of, what at that time was Luxembourg’s fledgling investment funds industry, its mission to “Lead industry efforts to make Luxembourg the most attractive international centre.” Since then, ALFI and its members have been instrumental in developing the Luxembourg investment funds industry into the leader it is today – the largest fund domicile in Europe and world leader in cross-border fund distribution with assets under management amounting to €2,495 billion as of the end of January 2013, representing an increase of almost €300 billion in the last year alone (€126 billion of which came from increased net sales).
Throughout its 25-year history, not only has ALFI and its members seen the Luxembourg investment funds industry enjoy tremendous growth (even during some of the worst financial and economic conditions ever), they have also had to deal with the seemingly incessant flow of ever more complicated regulations – European, national and international.
“Four years ago the European Commission launched a massive program of regulatory reform,” explained Nathalie Dogniez, Partner, KPMG Luxembourg, “the next wave of which will hit the industry soon and will have a huge impact on how we conduct our business.”
Silke Bernard, Managing Associate of Linklaters Luxembourg listed the top five as, “AIFMD, EMIR, UCITS V and UCITS VI, each of these will have consequences across the entire value chain of the funds industry – asset managers, custodians, administrators, distributors and other service providers.”
However, it is not just European regulation that the industry has to face, national and international regulation such as the Luxembourg financial sector supervisor’s (CSSF) Circular 12/546 and FATCA need to be addressed too.
Opinions at the conference as to the benefits of the next swathe of regulation varied with Inès de Dinechin, CEO of Lyxor Asset Management claiming, “Over regulation kills performance,” although she did admit that the purpose of the new regulation is, “to make life easier for investors, which is a good thing.”
Silke Bernard, however takes a more positive view. “It is true that the industry is facing a lot of challenges at this time, but challenges also mean opportunities and in Luxembourg we already have all the skills and expertise needed to comply with all of these new regulations.”
Similarly, Sandrine LeClercq of Baker and McKenzie Luxembourg views regulation as both an opportunity and a challenge, highlighting the principal issue for the industry as, “To convince EU and non-EU fund managers wishing to take full advantage of the AIFMD that Luxembourg is their destination of choice.”
Marc Saluzzi, ALFI Chairman, is of a similar opinion, “A major growth opportunity in 2013 stems from the implementation of the AIFMD. At ALFI we believe this directive is a clear opportunity to replicate our UCITS success story in the alternative field and our ambition is to double the assets in the three main
alternative classes (hedge funds, private equity and real estate) over the next five years.” To this end, one of ALFI’s main priorities for 2013 is to foster a beneficial environment for alternative investment funds within the framework of this directive.
Another top priority for ALFI in 2013 is the education of investors, especially with regards to long term savings. Anouk Agnes, Deputy Director General at ALFI explained, “People throughout Europe will need to take increasing responsibility for their own long-term financial security. Investment funds are a key part of long-term saving and therefore people need to become more confident about investing in order that they can grow their money over time and make informed decisions about their financial future.”
As part of its investor education activities, ALFI has produced 4 short films entitled “Saving and investing: what should you do with your money”, “What are equity, bond and real estate assets”, “What is an investment fund?” and “What is a UCITS fund and why should I invest in one?”. The films are available at www.alfi.lu
- AIFMD: Alternative Fund Managers’ Directive
- EMIR: European Market Infrastructure Regulation
- UCITS V: Latest amendment to UCITS (Undertaking for Investment in Transferable Securities) legislation, which focuses depositary functions, remuneration policies and sanctions.
- UCITS VI: Further UCITS amendment focusing on product rules, liquidity management, depositary, money market funds and long-term investments policies.
- FATCA: Foreign Account Tax Compliance Act.
Original article published here: http://www.wort.lu/en/view/alfi-spring-conference-day-1-regulation-is-a-challenge-and-an-opportunity-5149994de4b01dcce8e99302