Alternative Investment Fund Managers Research Articles

SPACs in the AIFMD Context

The growth in the use of Special Purpose Acquisition Companies (SPACs) within the context of the European market economy has been particularly evident in recent months. When structuring SPACs, the question of whether and when SPACs fulfil the objective criteria of the activities indicative of the characteristics of their specific management under the Alternative Investment Fund Managers Directive (AIFMD), arises. SPACs are, in fact, similar in their basics to the alternative investment funds established under this directive and whose investment strategy is directed towards private equity. The aim of this paper is to answer the presented question, which is crucial for current financial market practice. If the intended investment structure of SPACs fulfils the criteria of the AIFMD, it can only be structured under the rules (and restrictions) arising from respective regulations. Any misconduct is otherwise severely sanctioned.

Italian Tax Authorities Provide First Clarification of the New Tax Exemption for Dividends Related to Direct Investment by EU/EEA Investment Funds

In this note, the authors discuss Answer 327/2021 of the Italian tax authorities, which addresses the new tax exemption for dividends on qualified shareholdings in relation to investments in companies resident in Italy for tax purposes. The Answer addresses foreign undertakings for collective investment established in an EU Member State or EEA country that exchanges adequate information with Italy, in particular, where the managers are subject to the EU Alternative Investment Fund Managers Directive (2011/61) rather than the EU UCITS Directive (2009/65).

The Crowdfunding Regulation: Opportunities for Debt Fund Managers

European banking law restrictions have so far prevented “alternative lending solutions”, such as debt funds and crowdlending platforms, to operate on a Pan-European scale. Consequently, crowdlending platforms currently do not benefit from a European passport and are restricted in attracting investors and projects on a cross-border basis. Regulation (EU) 2020/1503 (the “CFR”), which will enter into force in November 2021, will change this. As debt funds face similar restrictions in originating loans on a Pan-European basis, this contribution analyzes the opportunities for debt funds and their alternative investment fund managers (“AIFMs”) offered by the CFR.

The Regime of Depositary Under the Alternative Investment Fund Managers Directive 2011: French and Luxembourg Perspectives

The Alternative Investment Fund Managers Directive 2011 requires every fund manager to designate a depositary for every fund it manages. This is the first time in the history of European alternative investment fund industry that an appointment of a depositary is obligatory across all Member States. We analyse the differences in the implementation of this regime in French and Luxembourg law. AIFM Directive, UCITS Directive, depositary

The Regulation of European Social Entrepreneurship Funds (‘EuSEFs’)

Increasingly, investors also pursue social goals and are not only seeking financial returns. For that reason, a social investment market is emerging in the EU, comprising, in part of, of investment funds targeting social undertakings. Such investment funds provide funding to social undertakings that act as drivers of social change by offering innovative solutions to social problems. To that end, the EuSEFR, as an optional specialist regime available to alternative investment fund managers (‘AIFMs’) registered or authorized under the AIFMD, was adopted. AIFMs managing qualifying social entreneurship funds (‘EuSEF’) may opt to use the ‘EuSEF’ label, i.e. EuSEF marketing passport, for these funds and market them to professional and certain high networth investors throughout the EU. The EuSEFR establishes uniform rules enabling a clear demarcation line can be drawn between EuSEFs and alternative investment funds (‘AIFs’) that engage in other, less specialized, investment strategies, which the EuSEFR is not seeking to promote. The EuSEFR establishes a uniform regulatory framework on the nature of EuSEFs, in particular on qualifying portfolio undertakings into which the EuSEFs are to be permitted to invest, and the investment instruments to be used. The EuSEFR is an optional regime. To AIFMs that do not wish to use the designation ‘EuSEF’, the EuSEFR does not apply. In those cases, AIFMs may continue to base themselves upon labels under existing national rules and general EU investment fund law applies. This also implies that AIFMs may choose not to use the ‘EuSEF label’ but instead indicate, in accordance with the SFDR, that the AIFs they manage (i) have environmentally ‘sustainable investment’ as their objective, (ii) promote environmental or social characteristics or (iii) qualify as an ‘other financial product’ implying that no designated ESG methodology is being complied with. This contribution discusses the EuSEFR legal framework. To that end, Section 2 discusses the EuSEFR’s scope, including the relationship between Full AIFMs managing EuSEFs that are subject to the AIFMD and the ‘EuSEFR regime’ for Small AIFMs managing EuSEFs. Section 3 focuses on the EuSEFR and the relationship between ‘intermediary’, ‘product’ and ‘marketing/sales regulation’. These are elaborated in more detail in Section 4 (‘manager regulation’), Section 5 (‘depositary regulation’), and Section 6 (‘marketing & sales regulation’). Section 7 explains the registration regime for both Full/Small AIFMs intending to manage EuSEFs and the ‘product’ EuSEF itself and Section 8 concludes.

Rule omission, rule migration and the limits of financial industry power

AbstractThis paper seeks to deepen our understanding of financial industry lobbying efforts that result in specific regulatory rules being dropped from the regulatory agenda, or what we call ‘rule omission’. Critically, existing research either ignores rule omission or characterizes it as the pinnacle of lobbying success. We argue that only in carefully mapping out industry preferences and tracking what happens to rules following their omission can we say something about the extent to which finance wins or loses in its effort to shape regulation. Our analysis is based on two in‐depth case studies from the European Union: (1) solvency rules in the Institutions for Occupational Retirement Provision Directive (IORPP II), where rule omission does reflect a strong case of industry influence; and (2) short selling rules in the Alternative Investment Fund Managers Directive (AIFMD), a case of rule omission resulting in more stringent rules over industry activities.

The Directive on Alternative Investment Funds Managers (AIFMD): An Introduction

This is the introductory chapter to the third edition of the book ' The Alternative Investment Fund Managers Directive', 3rd. ed. 2020, provided with kind permission by the publisher WoltersKluwer. The chapter provides an overview of the legislative history leading to the AIFMD, introduces to the regulatory approach of the AIFMD, discusses latest developments with regard to the AIFMD (including the Cross-Border Fund Distribution Directive and Regulation, Brexit as well as AIFMD II) and ends with a detailed overview of the full book. It argues that the AIFMD's specific regulatory approach to collective investment schemes paired with the European passport explains why almost a decade after its adoption the AIFMD has become the role model for fund legislation worldwide.

Implementation of Directive 2011/61/Eu of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers Into Czech Legal System

This contribution deals with the implementation of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 into Czech legal system. The main aim of the contribution is to confirm or disprove the hypothesis that entity in Section 15 of Act no. 240/2013 Coll, on Investment Companies and Investment Funds, as amended, is an alternative fund according to the Directive 2011/61/EU and that Directive 2011/61/EU was not transposed in Czech Republic properly. Author used to confirm or disprove above mentioned hypothesis scientific methods, especially comparison, induction and deduction. This contribution also looks at the Directive 2011/61/EU evaluation of its effectiveness and possible development of regulation in this area.

The 'MiCAR Top-Up' for Fund Managers

Recently, a new amended MiCAR draft proposal has been published. The proposal provides for a dedicated and harmonized framework for crypto-assets and related activities and services and includes all types of crypto-assets that are not yet covered by EU financial law (especially Directive 2014/65/EU, as amended (“MiFID II”). This also means, however, that “security tokens” (tokens that function like existing securities, such as company stocks or bonds) and qualify as “financial instruments” under MiFID II do not fall within the scope of MiCAR. For all other forms of crypto-assets, various asset categories are defined, such as utility tokens, a “catch-all” crypto-asset category, asset-referenced tokens and E-money tokens. MiCAR includes rules for issuers and service providers. Except for several types of EU regulated institutions, such as credit institutions, MiFID II investment firms, alternative investment fund managers (“AIFM”), as well as, UCITS management companies (“UCITS ManCo”) (hereinafter collectively referred to as “ManCos”), services based on crypto-assets will require prior approval from national supervisory authorities to offer crypto asset services under MiCAR. Crypto-asset services for which a license is required under the MiCAR includes activities such as custody, brokerage, trading, or investment advice. Furthermore, regulatory requirements concern, among other things, the initial capital reserves, the security of the IT infrastructure, the corporate governance structure, and the suitability of the management board. Article 53a MiCAR determines whether and to what extent ManCos may provide a number of cryp-to-asset services, what MiCAR “top-up” requirements apply and the ongoing compliance obligations that apply to ManCos under MiCAR providing one or more crypto-asset services. This contribution continues to clarify the impact of a possible “MiCAR top-up regime”, on fund managers in the context of the “MiFID II top-up regime”. In the light thereof, it also discusses (i) license extension formalities, (ii) on-going compliance duties and (iii) the impact of MiCAR on fund managers in the light of the current draft proposal. It then concludes.

The European Crowdfunding Regulation: Opportunities for Alternative Investment Fund(s) (Managers)?

The European Crowdfunding Regulation: Opportunities for Alternative Investment Fund(s) (Managers)?

Zur möglichen Qualifikation von Mietenpools und Alternativen Investmentfonds nach dem AIFMG

In an update of the „Frequently Asked Questions zur Anwendung des Alternative Investmentfonds Manager-Gesetz (AIFMG)“ (FAQs) by the Austrian Financial Market Authority (FMA) regarding the Austrian implementation (AIFMG) of the Alternative Investment Fund Managers Directive (AIFMD) dated 9 October 2020, rental pool constructions were also included as possible alternative investment funds (AIF) pursuant to the AIFMG. However, such AIF qualification needs to be assessed on a case-by-case basis and can only be affirmed in case such rental pool or rental poollike structure fulfills the requirements of a collective investment scheme. Against this background, the present article intends to provide a practical overview of cases in which a rental pool can qualify as AIF and cases in which it cannot.

The Regulation of European Venture Capital Funds (‘Euvecas’)

Venture capital provides finance to undertakings that are generally very small, that are in the initial stages of their corporate existence and that display a strong potential for growth and expansion. In addition, venture capital funds provide undertakings with valuable expertise and knowledge, business contacts, brand equity and strategic advice. By providing finance and advice to those undertakings, venture capital funds stimulate economic growth, contribute to the creation of jobs and capital mobilization, foster the establishment and expansion of innovative undertakings, increase their investment in research and development and foster entrepreneurship, innovation and competitiveness. To that end, the EuVECAR as an optional specialist regime available to alternative investment fund managers (‘AIFMs’) registered or authorized under the AIFMD was adopted. AIFMs managing qualifying venture capital funds (‘EuVECA’) can optionally opt into using the ‘EuVECA’ label for these funds and market them to professional, and certain high net-worth investors through the EU under the EuVECA marketing passport. The EuVECAR establishes uniform rules, so that a clear demarcation line can be drawn between a qualifying venture capital fund and alternative investment funds (‘AIFs’) that engage in other, less specialized, investment strategies, which the EuVECAR is not seeking to promote. The EuVECAR establishes a uniform regulatory framework on the nature of EuVECAs, in particular on qualifying portfolio undertakings into which the qualifying venture capital funds are to be permitted to invest, and the investment instruments to be used. The EuVECAR is an optional regime. Where AIFMs do not wish to use the designation ‘EuVECA’ then the EuVECAR does not apply. In those cases, AIFMs may continue to base themselves upon labels under existing national rules and general EU law applies. This contribution discusses the EuVECAR legal framework. To that end, Section 2 discusses the EuVECAR’s scope, including the relationship between Full AIFMs managing EuVECAs that are subject to the AIFMD and the ‘EuVECAR regime’ for Small AIFMs managing EuVECAs. Section 3 focuses on the EuVECAR and the relationship between ‘intermediary’, ‘product’ and ‘marketing/sales regulation’. These are elaborated in more detail in Section 4 (‘manager regulation’), Section 5 (‘depositary regulation’), and Section 6 (‘marketing & sales regulation’). Section 7 explains the registration regime for both Full/Small AIFMs intending to manage EuVECAs and the ‘product’ EuVECA itself and Section 8 concludes.

The Regulation of European Long-Term Investment Funds (‘ELTIFs’)

In accordance with the Europe 2020 strategy, long-term finance is a crucial enabling tool for putting the European economy on a path of smart, sustainable and inclusive growth with high employment, and competitiveness for building tomorrow’s economy in a way that is less prone to systemic risks and is more resilient. Certain types of alternative investment funds (‘AIFs’) provide finance of lasting duration to various infrastructure projects, unlisted companies, or listed small and medium-sized enterprises (‘SMEs’) that issue equity or debt instruments for which there is no readily identifiable buyer. By providing finance to such projects, these types of AIFs contribute to the financing of the European Union’s real economy. Furthermore, AIFs, on the demand side, provide a steady income stream for pension administrators, insurance companies and other entities that face regular and recurrent liabilities and are seeking long-term returns within well-regulated structures. While providing less liquidity than investments in transferable securities, AIFs can provide a steady income stream for individual investors that rely on the regular cash flow that an AIF can produce. Furthermore, AIFs can also offer good opportunities for capital appreciation over time for those investors not receiving a steady income stream. ‘Long-term financing’ for projects, such as transport infrastructure, can be scarce. As the financial crisis in 2007/2008 has shown, complementing bank financing with a wider variety of financing sources that better mobilize capital markets could help tackle financing gaps. AIFs, under certain conditions, can play a crucial role in this respect. The ELTIFR as an optional specialist regime has been adopted for alternative investment fund managers (‘AIFMs’) to boost European long-term investments in the real economy. Long- term investments in projects, undertakings, and infrastructure in third countries can also bring capital to ELTIFs and thereby benefit the European economy. To that end, the European legislator has introduced a dedicated legal framework for AIFMs managing European long-term investment funds (‘ELTIFs’). This regime designates those AIFs as ‘ELTIFs’ that comply with the requirements under the Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds, as amended (‘ELTIFR’). EU AIFs with an ‘ELTIF’ label may be marketed to professional and certain high net-worth investors throughout the EU. The ELTIFR establishes uniform rules, so that a clear demarcation line can be drawn between an ELTIF and other AIFs that engage in other, less specialized, investment strategies, which the ELTIFR is not seeking to promote. The ELTIFR establishes a uniform regulatory framework on the nature of ELTIFs, in particular on eligible investments in which ELTIFs are to be permitted to invest, and the investment instruments to be used. The ELTIFR is an optional regime. Where AIFMs do not wish to use the designation ‘ELTIF’, the ELTIFR does not apply. In those cases, AIFMs may continue to base themselves upon labels under existing national rules and general EU law applies. This contribution discusses the ELTIF legal framework. Section 2 discusses the ELTIFR’s scope, including the relationship between the AIFMD and the ‘ELTIFR top-up’. Section 3 focuses on the ELTIFR and the relationship between ‘intermediary’, ‘product’ and ‘marketing/sales regulation’. These are elaborated in more detail in Section 4 (‘manager regulation’), Section 5 (‘product regulation’), Section 6 (‘depositary regulation’), and Section 7 (‘marketing & sales regulation’). Section 8 discusses the ‘ELTIFR retail investor regime’, including the retail provisions AIFMs managing ELTIFs and their distributors have to comply with. Section 9 explains the authorization regime for both AIFMs intending to manage ELTIFs and the ‘product’ ELTIF itself and Section 10 concludes.

The Alternative Investment Fund Managers Directive: Ten Years After

The Alternative investment Fund Managers Directive 2011 is a first pan-European regulation of alternative investment fund industry. It establishes the set of duties for the managers that manage hedge funds and private equity funds. Adopted as a response to the 2007/8 financial crisis, its effectiveness can be questioned after almost ten years of evolving financial markets. This article thus will analyse whether the Alternative Investment Fund Managers Directive (AIFMD) still represents an effective regulatory tool from the three viewpoints: (1) prevention of future financial crises and protection of investors; (2) establishment and maintaining of single European market for financial services; and (3) accommodating for the needs of financial industry post-Brexit. Alternative investment Fund Managers Directive

Establishing an EU internal market for depositaries

Purpose This paper aims to examine the rationale for the establishment of a depositary passport as the next logical step in building an internal market for investment funds in the European Union (EU). It makes the point that the de facto prohibition of depositary passporting poses risks to financial stability and has an adverse impact on investor protection in EU member states, which do not have a fully developed funds industry. Design/methodology/approach This paper analyses both the arguments in favour and against the adoption of a depositary passport. Moreover, it examines this proposal in the context of different approaches to fostering the internal market such as mutual recognition, harmonisation of regulation, reflexive governance of financial supervision and centralised supervision. Findings Based on the review of the current EU legal framework, this paper, subsequently, puts forward possible solutions for the establishment of an internal market for depositary business, which solutions have been discussed with various experts in the field to assess their feasibility in practice. Originality/value The paper contributes to the debate on the EU internal market in the field of asset management, which is topical in view of the upcoming review of the EU’s Alternative Investment Fund Managers Directive.

ESMA’s Mission to Integrate ESG Risks and Factors into UCITS and AIFMD: Value Added or Additional Administrative Burden

Environmental, social, and governance (ESG) factors are getting more and more important for the fund industry, not only for the management companies of the funds but also especially for the investors who become more sensitive to these kinds of aspects. This increasing importance has also been recognized by the European Commission, which officially mandated on July 24, 2018, the European Securities and Markets Authority to provide technical advice on how sustainability risks and factors should be integrated in European regulation. This article examines which approach the European Securities and Markets Authority suggests in order to integrate sustainability risks and factors in the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive and the Alternative Investment Fund Managers Directive and how this is seen by the market, as burden or value added, and therefore will be in the interest of UCITS management companies, self-managed UCITS investment companies, Alternative Investment Fund Managers, and their associations and for investors in these products. <b>TOPICS:</b>ESG investing, portfolio construction, portfolio theory <b>Key Findings</b> • ESG factors are getting more important for market players, and there are still a lot of challenges ahead. • ESMA’s initiative was well received from the market and helps to close the gap. • Market participants mainly don’t see this initiative as administrative burden but more a value added.

Practical Applications of Analysis of Three Emerging Trends in Limited Partner Operational Due Diligence

Practical Applications Summary In Analysis of Three Emerging Trends in Limited Partnership Operational Due Diligence, from the Winter 2020 issue of The Journal of Alternative Investments, author Jason Scharfman (of Corgentum Consulting) details three ways in which institutional investors (known as limited partners, or LPs) have increased the operational due diligence (ODD) they do on alternative investment fund managers (known as general partners, or GPs). ODD is the process by which LPs analyze the potential for investment losses due to inadequate processes, failed systems, or fraudulent behavior among GPs. Prompted by high-profile instances of fraud committed by fund managers (like Bernie Madoff) and increased regulatory requirements, LPs have improved their ODD by expanding its scope (the number of risk factors evaluated), depth (the amount of detail requested), and integration with investigative due diligence (such as criminal background checks on fund managers). To help coordinate and ensure the quality of this expanded ODD, some LPs have stopped outsourcing investigative due diligence to third parties and brought it in-house to help integrate it with ODD. Eliminating the middleman in this way helps focus the investigation on what is most relevant to the LP while containing costs as well. TOPICS:Real assets/alternative investments/private equity, legal/regulatory/public policy

The Impact of the New CSSF Circular on Luxembourg ManCos providing MiFID II Portfolio Management Services

On 23 August 2018, the CSSF issued its circular 18/698 on the substance requirements (the “CSSF Circular”) applying to Luxembourg management companies. The management companies to which the CSSF Circular applies, include alternative investment fund managers (“AIFM”), as well as management companies subject to chapters 15 (“UCITS ManCo”), 16 and 17 of the Law of 17 December 2010 (“UCITS Law”) relating to undertakings for collective investment. According to this new CSSF Circular, the CSSF is further tightening its substance and corporate governance requirements and placing greater demands on Luxembourg ManCo (as defined below) operators. Currently, both the AIFM and the UCITS Law allow AIFMs and UCITS ManCos (hereinafter collectively referred to as “ManCos”) to perform certain additional “MiFID II portfolio management services” in addition to the management and marketing of AIFs and UCITS (as applicable). For that purpose, the AIFM and the UCITS Law, till now, required AIFMs and UCITS Mancos to solely comply with certain MiFID I requirements as implemented in the amended Law of 5 April 1993 on the financial sector (“LFS Law”). The implementation of Directive 2014/65/EU (“MiFID II”), as implemented in the LFS Law in Luxembourg, strengthened investor protection rules. Contrary to the pre-MiFID II era, the AIFM nor the UCITS Law clarify whether and to what extent the new MiFID II rules apply to ManCos that perform additional MiFID II portfolio management services. By absence of any MiFID II updates of the AIFM and UCITS Law in this regard, the CSSF Circular clarified what MiFID II rules are applicable to ManCos additionally performing MiFID II portfolio management services. This contribution discusses the new CSSF Circular rules applicable to ManCos performing “MiFID II portfolio management services”, in addition to, those set out in the AIFM Law and the UCITS Law. For that purpose, first this contribution provides an overview of the MiFID II portfolio management services allowed to be performed and the requirements applicable to Man-Cos under the AIFM Law and UCITS Law.This article then clarifies what MiFID II and Luxembourg-specific requirements are under the CSSF Circular applicable to ManCos for the performance of these services. It continues by discussing the impact of the CSSF Circular clarifications regarding Luxembourg ManCos and then concludes.

Will the EU Commission Successfully Integrate Sustainability Risks and Factors in the Investor Protection Regime? A Research Agenda

Building a common EU framework for sustainable finance undoubtedly implies the integration of sound and sustainable processes and skills across the whole structure and governance of financial institutions. Consequently, a new financial paradigm is going to be needed, which will require the strengthening of investor care and protection, so contributing to the restoration of trust in the financial sector. In particular, on 18 December 2018, the European Securities and Markets Authority (ESMA) launched two public consultations on draft technical advice for the integration of sustainability risks and factors into the Directive on Markets in Financial Instruments (MiFID), the Alternative Investment Fund Managers Directive (AIFMD), and the Undertakings for Collective Investment in Transferable Securities Directive (UCITS) regimes, with the aim to clarify the so-called fiduciary duties and to increase transparency in the financial services industry. However, the success of the EU initiatives on investor protection regulation may be seriously endangered by the existence of many challenges, weaknesses, and contradictions raised by economists and stakeholders in relation to the definition of sustainability, ESG data availability and reliability, the development of an EU taxonomy, conflicts of interest, product governance, and suitability assessment. This paper starts by briefly analyzing the recent developments of the regulation of sustainable finance at the global level, then offers a more detailed view on the establishment of a common regime on sustainable finance in the EU, with particular reference to the action plan ‘Financing Sustainable Growth’. Then, it examines the recent proposals for regulation on sustainable finance, specifically considering the barriers to the integration of sustainability risks and factors in the EU investor protection regulation—with particular reference to investment services—with respect to its four main dimensions: (1) disclosure of product information, (2) conduct of business (COB) rules, (3) product governance and intervention, and (4) financial education. The paper concludes that the EU reforming proposals, though admirable, risk oversimplifying a complex issue that cannot be easily solved without considering its practical implications on each category of financial operators in the performance of different financial services.

A Cross-Sectoral Analysis of Corporate Governance Provisions Applicable to Financial Institutions: About Forests and Trees

This book chapter compares the governance rules adopted for financial institutions in the various EU instruments. Where the rules differ between financial institutions, we examine whether there are indications that such differences are indeed grounded in a market failure that is not present in other institutions; where the rules are the same, we examine whether this similarity is justified. This approach allows us to identify the possibility and desirability of a cross-sectoral governance regime in the EU. We discuss the corporate governance regimes of banks (CRD IV), investment firms (CRD IV, MiFID II and the new Investment Firms Directive and Investment Firms Regulation), insurance companies (Solvency II), pension funds (Occupational Pension Funds Directive), UCITS management companies (UCITS Directive), and alternative investment fund managers (AIFMD). Moreover, we compare the rules on institutional level 1, level 2 and level 3. Three conclusions can be drawn from our analysis of the corporate governance provisions across the financial sectors. Firstly, many of the differences between the regimes seem the result of a lack of coordination in adopting the various instruments, rather than of a thorough analysis of diverging identified market failures and their remedies. Secondly, some of the governance mechanisms used are of such a general nature that – even assuming significant differences in governance needs – it can validly be assumed that they would benefit the governance of all types of financial institutions. Thirdly, where differences in the regulatory framework are necessary, these differences can be found as much within sectors as across sectors. The systemic threat posed by different types of asset managers and their funds, eg, varies greatly. However, the existing governance regime focuses on the cross-sectoral divide, rather than on the differences within sectors. The chapter proposes the idea of European cross-sectoral rules applicable to systemically important financial institutions, ideally via a high-level cross-sectoral directive or regulation based on – eg, as they seem most worked out in adequate detail – the governance rules in CRD IV. We appreciate that there may be a need to distinguish between the different business models and the way they present systemic risk and suggest that this can be achieved through technical implementation measures at level 2 taken by the Commission.