Selected regulatory updates of interest to the funds and asset management sector. This update reports on ESMA's final report on guidelines addressing leverage risks under the AIFMD. See also our Related Materials links for regulatory updates of broad application.
Following a seasonal break, the next update will be published on 11 January 2021
The European Securities and Markets Authority (ESMA) has published its final report containing guidelines under Article 25 of the Alternative Investment Fund Managers Directive (AIFMD). Article 25 provides for national competent authorities (NCAs) to identify the extent to which the use of leverage in the alternative investment fund sector contributes to the build-up of systemic risk in the financial system, risks of disorderly markets, or risks to the long-term growth of the economy.
The guidelines provide NCAs with a set of indicators to consider when performing their risk assessment and a set of principles that they should consider when calibrating and imposing leverage limits. They follow the two-step approach introduced by the International Organization of Securities Commissions and translate this approach into the EU framework.
The guidelines will now be translated into the official EU languages and published on ESMA's website. They will apply two months after the publication of the translation
Authored by Yvonne Clapham
Download the full bulletin of regulatory news for financial institutions, 21 December 2020
Financial institutions general regulatory news, 21 December 2020
Banking and finance regulatory news, 21 December 2020
Insurance regulatory news, 21 December 2020
Securities and markets regulatory news, 21 December 2020
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