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#Covid-19 RegWatch

In response to Covid-19, many regulatory authorities at international, European and local levels have adopted emergency measures to protect financial stability and to enable market actors, such as asset owners and asset managers, to focus their efforts on business continuity. These regulatory initiatives include deferral of regulatory obligations and measures regarding preservation of funds liquidity.

On this website, our regulatory experts provide an overview of the key measures taken at international and EU-level, as well as in several key EU markets.

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1. International

1.1 Bank of International Settlements – Basel III implementation postponed

On 27 March 2020, the Bank of International Settlements (“BIS”) published a press release announcing the deferral of the implementation of the so-called Basel III standards i.e. those standards still outstanding. The deferral aims to increase the operational capacity of banks and supervisors in order to respond to the situation created by Covid-19.


  • The implementation date of the Basel III standards finalised in December 2017 has been deferred by one year to 1 January 2023. The accompanying transitional arrangements for the output floor has also been extended by one year to 1 January 2028.
  • The implementation date of the revised market risk framework finalised in January 2019 has been deferred by one year to 1 January 2023.
  • The implementation date of the revised Pillar 3 disclosure requirements finalised in December 2018 has been deferred by one year to 1 January 2023.

Read here

1.2 Bank of International Settlements – Additional supporting measures

On 3 April 2020, the BIS issued a press release announcing additional measures to alleviate the impact of Covid-19 on the global banking system.
Read here

Of particular interest, the BIS has agreed, together with the International Organisation of Securities Commissions (IOSCO), to extend the deadline by one year for the completion of the final two implementation phases of the margin requirements for non-centrally cleared derivatives.

This one year extension will provide additional operational capacity for firms to respond to the immediate impact of Covid-19 and at the same time, help covered entities act diligently in complying with the requirements by the revised deadline.

The final implementation phase will take place on 1 September 2022, at which point covered entities with an aggregate average notional amount (AANA) of non-centrally cleared derivatives greater than EUR 8 billion will be subject to the requirements. As an intermediate step, from 1 September 2021, covered entities with an AANA of non-centrally cleared derivatives greater than EUR 50 billion will be subject to the requirements.
Read here

1.3 Financial Stability Board – FSB reprioritises work programme

On 2 April 2020, the Financial Stability Board (“FSB”) issued a statement on reprioritising its work programme for 2020 in light of Covid-19.

The reprioritisation includes the following elements:

  • A vulnerabilities assessment: the FSB will focus on monitoring current risks to global financial stability, and in particular the impact of Covid-19 on the resilience of the financial system.
  • Non-bank financial intermediation (NBFI): reprioritisation will support the discussion of policy issues arising from NBFI vulnerabilities (becoming transparent during the Covid-19 crisis), and decisions as to how to organise such work in the FSB.
  • OTC derivatives. Finalising the oversight arrangements for the Unique Product Identifier (UPI) and the Unique Transactions Identifier (UTI) will continue given UPI service providers are awaiting clarity on oversight arrangements.
  • Benchmark transition. The transition from LIBOR remains a priority as firms cannot rely on LIBOR being produced after 2021. Benchmark transition will help to strengthen the global financial system.

Read here

1.4 Financial Stability Board – report on financial stability risks of COVID-19

On 15 April 2020, the FSB issued a report on the financial stability implications of, and policy measures taken following the Covid-19 outbreak.
Read here

1.5 Financial Stability Board – Statement on the impact of COVID-19 on global benchmark reform

On 1 July 2020, the FSB issued a statement recognising that the Covid-19 outbreak may have disrupted the global benchmark reform.

Nevertheless, the FSB maintains its view that financial and non-financial sector firms across all jurisdictions should continue their efforts in making wider use of risk-free rates in order to reduce reliance on IBORs where appropriate and in particular to remove remaining dependencies on LIBOR by the end of 2021.
Read here

1.6 Financial Stability Board – FSB extends implementation timelines for securities financing transactions

On 7 September 2020, the FSB announced extensions to the implementation timelines for minimum haircut standards for non-centrally cleared securities financing transactions (SFTs), to ease operational burdens on market participants and authorities, and thereby assist them in focusing on priorities from the impact of COVID-19.
Read here

2. Europe

2.1 ECB Banking Supervision provides further flexibility to banks in reaction to coronavirus

On 20 March 2020, the European Central Bank (ECB) announced further measures to ensure that its directly supervised banks can continue to fulfil their role to fund households and corporations amid the coronavirus-related economic shock to the global economy.
Read here

On 29 April 2020, the ECB decided to extend the deadlines applicable to the reporting of statistical data by reporting agents such as insurance companies or pension funds.
Read here

2.2 EU commission – Extension of consultation deadlines

On 3 April 2020, in light of the global COVID-19 crisis, the European Commission (EC) extended the deadline for the MiFID II//R and the NFRD consultations by four weeks. As such:

  • The deadline for the MiFID II/R review consultation will now be 18 May 2020 (previously this was 20 April 2020).
  • The deadline for the non-financial reporting directive (NFRD) review will now be 11 June 2020 (previously this was 14 May 2020).

Read here

2.3 ESMA – Recommendations aimed at ensuring business continuity of financial market participants in response to Covid-19

On 11 March 2020, the European Securities and Markets Authority (ESMA) made recommendations to financial market participants in respect of business continuity planning, market disclosure, financial reporting and fund management.
Read here

2.4 ESMA – Extension of consultations response dates

On 20 March 2020, ESMA decided to extend the response date for all ongoing consultations with a closing date on, or after, 16 March by four weeks.
Read here

2.5 ESMA- Postponement of reporting requirements under SFTR

On 26 March 2020, ESMA asked National Competent Authorities (NCAs) not to prioritise their supervisory actions towards entities subject to securities financing transactions reporting obligations during the period 13 April to 13 July 2020. ESMA expects trade repositories to be registered sufficiently ahead of the next phase of the reporting regime, i.e. 13 July 2020, for credit institutions, investment firms, CCPs and CSDs and relevant third-country entities to start reporting as of this date. The 13 April 2020 reporting deadline has been postponed to 13 July 2020 due to the covid-19 pandemic.
Read here

2.6 ESMA – Postponement of reporting obligations under MMFR

On 31 March 2020, ESMA announced that submission of the first quarterly reports to the NCAs was postponed to September 2020.
Read here

2.7 ESMA – clarifications for best execution reports under MiFID II

On 31 March 2020, ESMA issued a public statement to clarify issues regarding the publication by execution venues and firms of the general best execution reports required under RTS 27 and 28 of MiFID II, in light of the COVID-19 pandemic.
Read here

2.8 ESMA - Actions to mitigate the impact of COVID-19 on the deadlines for the publication of periodic reports by fund managers

On 9 April 2020, ESMA published a public statement to promote coordinated action by NCAs in the context of the COVID-19 pandemic. It concerns the obligations of the entities listed below to publish annual and half yearly reports in respect of funds they manage, in relation to reporting periods ending from 31 December 2019 to 30 April 2020.

  • UCITS management companies
  • Self-managed UCITS investment companies
  • Authorised AIFMs
  • Non-EU AIFMs marketing AIFs pursuant to Article 42 of the AIFMD
  • EuVECA managers, and
  • EuSEF managers.

Read here

2.9 EIOPA - recommendations on supervisory flexibility regarding the deadline of supervisory reporting and public disclosure

On 20 March 2020, the European Insurance and Occupational Pensions Authority (EIOPA) published recommendations addressed to competent authorities for the insurance sector regarding the deadline of supervisory reporting and public disclosure (annual reporting – quarterly reporting – Solvency and Financial Condition report) and a Q&A in relation thereto.
Read here

2.10 EIOPA - EIOPA urges (re)insurers to suspend all discretionary dividend distributions and share buy backs

On 2 April 2020, EIOPA issued a public statement urging (re)insurers to suspend all discretionary dividend distributions and share buy-backs. EIOPA considers this essential to ensuring access to and continuity of insurance services, safeguarding the ability of the insurance sector to continue to perform its role as risk transfer mechanism from citizens and businesses and its capacity to mobilise savings and invest them in the real economy.
Read here

2.11 EIOPA – other measures impacted by Covid-19

On 2 April 2020, EIOPA issued a public statement outlining the impact of Covid-19 on its work programme. Among others, EIOPA mentions the following impacts:

  • Review of technical implementation means for the package on Solvency II Supervisory Reporting and Public Disclosure. The comments deadline is extended by six weeks from 20 April to 1 June 2020
  • Consultation on the implementing technical standards for the pan-European Personal Pension Product (PEPP). The comments deadline is extended by four weeks from 20 May to 17 June 2020
  • Consultation on Discussion Paper on IBOR transitions. The comments deadline is extended by nine weeks from 30 April to 30 June 2020
  • Climate risk sensitivity analysis 2020, data request to complete data available for top-down element and qualitative survey to groups reporting for FS purposes as agreed in the roadmap for the 2020 exercise on climate-related transition risks will be cancelled. The report will be performed with the available information.
  • Data collection for the work on the impact of ultra-low yields on insurers to complement Solvency II data planned for Q1/Q2 will be launched later also to incorporate Covid-19 reflections if necessary

Read here.

2.12 EIOPA – Statement on principles to mitigate the impact of Coronavirus/COVID-19 on the occupational pensions sector

On 17 April 2020, EIOPA issued a public statement on principles to mitigate the impact of Covid-19 on the occupational pensions sector, which is covered by the EU Directive on Institutions for Occupational Retirement Provision (‘IORP II Directive’). The statement aims at harmonising the regulatory principles by which national competent authorities (‘NCAs’) supervise the sector.

NCAs should monitor closely IORPs’ business continuity and operational risks, liquidity position, funding situation and pro-cyclicality, protection of members and beneficiaries, and communication.

It is worth noting that EIOPA expects that NCAs should be flexible with respect to deadlines for publication of documents and data considered less urgent given the current circumstances as well as in respect of national reporting requirements. The timings for the provision of occupational pension information to EIOPA are extended by two weeks for the information regarding the first quarter of 2020 and by eight weeks for the information regarding annual reporting with reference to the year-end 2019.
Read here.

2.13 EIOPA – new timetable for advice on Solvency II review

EIOPA, in close coordination with the European Commission (EC), has decided to deliver its advice to the EC on Solvency II review at end December 2020, to take into account the importance of assessing the impact of the current Covid-19 situation on the Solvency II review.
Read here

2.14 ESAs – Joint RTS on amendments to the bilateral margin requirements under EMIR

On 4 May 2020, the European Supervisory Authorities (ESA) issued joint regulatory technical standards (RTS) to amend the Delegated Regulation on the risk mitigation techniques for non-centrally cleared OTC derivatives (bilateral margining), under the European Markets Infrastructure Regulation (EMIR), to incorporate a one-year deferral of the two implementation phases of the bilateral margining requirements.
Read here

2.15 ESMA – public statement on risks for retail investors and conduct of business obligations for MiFID II firms

On 6 May 2020, ESMA issued a public statement on the risks for retail investors when trading under the highly uncertain market circumstances due to the Covid-19 pandemic.

As part of the public statement, ESMA also reminds MiFID II investment firms of the key conduct of business obligations under MiFID when providing services to retail investors.
Read here

2.16 ESRB – Recommendation to address financial market liquidity

On 6 May 2020, the European Systemic Risk Board (“ESRB”) published a Recommendation to address financial market liquidity and implications for asset managers and insurers in light of the COVID-19 pandemic.

The Recommendation is designed to enhance preparedness to respond to potential future adverse shocks that could lead to a deterioration in financial market liquidity, resulting in potential adverse implications for financial stability conditions in the Union.

The Recommendation focuses on investment funds with large exposures to corporate debt on the one hand, and on investment funds with large exposures to real estate on the other.
Read here

2.17 EC – proposal to delay DAC6 reporting deadlines

On 8 May 2020, the European Commission (EC) put forward their proposal to defer by three months due to Covid-19, the reporting deadlines under the EU mandatory disclosure rules regime (DAC6) on reporting certain cross-border arrangements. The proposal is as follows:

  • To move the date for the beginning of the 30-day period for reporting cross-border arrangements from 1 July 2020 to 1 October 2020
  • To move the date for the reporting of cross-border arrangements, that became reportable from 25 June 2018 to 30 June 2020 (the so-called “historical” arrangements), from 31 August 2020 to 30 November 2020

The EC also proposes a possibility to further extend the deferral period for a maximum of three additional months. It is also stated that this option would only be invoked if the exceptional circumstances of severe risks for public health caused by the COVID-19 pandemic persist and the EU Member States are forced to implement lockdown measures. The consent of all EU Member States is required in order for the EC’s proposal to be adopted and to enter into force.
Read here

2.18 ESMA – Support to the ESRB recommendations

On 14 May 2020, ESMA published a statement supporting the recommendations issued by the General Board of the European Systemic Risk Board (ESRB), which suggests that relevant national competent authorities across the European Union, coordinated by ESMA, undertake focused supervisory engagement with investment funds that have significant exposures to less liquid assets, focusing on corporate debt and real estate.
Read here

2.19 European Commission – Proposal to defer AGMs of European Societies

On 29 April 2020, the European Commission published a proposal for a temporary derogation to the rules on European Companies (SE) and European Cooperative Societies (SCEs), in particular as regards the organisation of their Annual General Meetings (AGMs). The proposal of the Commission would allow SEs and SCEs to hold their AGMs within 12 months of the end of the financial year, but no later than 31 December 2020. This draft legislative proposal is currently being examined for approval at the European Parliament and the Council.
Read here

2.20 ESRB – Recommendation on liquidity risks arising from margin calls

On 25 May 2020, the ESRB published a recommendation to EU and national regulators as regards the liquidity risks arising from margin calls in the context of the Covid-19 pandemic.

The Recommendation concerns (i) limiting the effect of cliff effects in relation to the demand for collateral, (ii) CCP stress scenarios under the European Markets Infrastructure Regulation for the assessment of future liquidity needs, and (iii) limiting liquidity constraints related to margin collection.
Read here

2.21 European Commission – updated work programme

On 27 May 2020, the European Commission published an updated version of its work programme, which it was required to revise due to the Covid-19 outbreak. The adoption of several key policy initiatives has been postponed:

  • Renewed Sustainable Finance Strategy – from Q3 2020 to Q4 2020;
  • Review of the Non-Financial Reporting Directive – from Q4 2020 to Q1 2021;
  • Action Plan on Capital Markets Union – from Q3 2020 to Q4 2020;
  • Review of the Capital Requirements legislation – from Q3 2020 to Q4 2020.

Read here

2.22 ESRB & EIOPA – Recommendation on liquidity in the insurance sector

On 8 June 2020, the ESRB sent a letter to EIOPA as regards the increased liquidity risk for the insurance sector due to the market shocks that followed the spread of the Covid-19 pandemic.

The ESRB recommends that, in the near term, EIOPA and its members should prioritise improved monitoring of liquidity in the insurance sector, and, in the medium term, to adjust the Solvency II framework accordingly through the ongoing review of this legal framework.
Read here

On 9 June 2020, following the ESRB’s letter, EIOPA issued a public statement in support of the ESRB’s recommendation on enhanced liquidity monitoring in the insurance sector.
Read here

2.23 ESMA – Renews reporting obligation for net short positions above 0.1%

On 11 June 2020, ESMA renewed its decision to temporarily require the holders of net short positions in shares traded on a European Union (EU) regulated market to notify the relevant national competent authority (NCA) if the position exceeds 0.1% of the issued share capital.
Read here

2.24 ESMA – Statement on MiFIR Open Access and Covid-19

On 11 June 2020, ESMA issued a public statement to clarify the application of the MiFIR open access provisions (OAP) for trading venues (TVs) and central counterparties (CCPs) in light of the recent adverse developments related to COVID-19, with the objective to coordinate national supervisory practices.
Read here

2.25 ECB – Financial industry calls for one-year extension to T2-T2S consolidation project timeline

On 22 June 2020, the ECB published a press release indicating that following discussions with the financial industry, the ECB’s Market Infrastructure Board has reviewed the timeline of the T2-T2S consolidation project and has concluded that postponing its go-live by one year, from November 2021 to November 2022, would best accommodate the industry’s preferences.

The decision on a possible extension of the timeline will be taken by the Governing Council of the European Central Bank (ECB) and is expected by the end of July 2020.
Read here

2.26 ESMA – ESMA proposes to further postpone CSDR settlement discipline regime

On 28 August 2020, ESMA published a final report on draft regulatory technical standards (RTS) definitively postponing the date of entry into force of the Commission Delegated Regulation (EU) 2018/1229 (RTS on settlement discipline) until 1 February 2022.

The postponement is due to the impact of the COVID-19 pandemic on the implementation of regulatory projects and IT deliveries by Central Securities Depositaries and a wide range of market participants and follows a request from the European Commission (EC).
Read here

2.27 ESMA – Announcement of new technical rules deferring the entry into force of settlement discipline rules under CSDR

On 28 July 2020, ESMA announced that it is working on a proposal to possibly delay the entry into force of the CSDR settlement discipline regime until 1 February 2022. This is due to the impact of the COVID-19 pandemic on the implementation of regulatory projects and IT deliveries by CSDs and came as a request from the European Commission.
Read here

2.28 ECB – Governing Council approves one-year extension to T2-T2S consolidation project timeline

The Governing Council of the ECB has decided to extend the timeline of the T2-T2S consolidation project by one year, following discussions with Europe’s financial community. The project is now scheduled to go live in November 2022. In addition, the Governing Council has approved to start User Testing in December 2021.

The project had already entered an internal software testing phase, known as “Eurosystem acceptance testing”. However, a recent community readiness survey showed that the coronavirus (COVID-19) pandemic and the rescheduling of SWIFT’s global migration of cross‑border payments to ISO 20022 had posed challenges to national financial communities across Europe. In the light of that fact, market participants indicated that they would prefer the go-live date of the T2-T2S consolidation project to be postponed by 12 months.
Read here

3. France

3.1 French Government – Ordinance relating to extending deadlines

On 26 March 2020, the ordinance n°2020-306, adopted pursuant to the Emergency Law, was published in the Journal Officiel. The ordinance provides, inter alia, for the extension of deadlines as regards some contractual arrangements (such as cash financing arrangements).
Read here

On 16 April 2020, the ordinance n° 2020-427 modifying ordinance n° 2020-306, was published in the Journal Officiel. According to this new ordinance parties to the contract remain free to exclude the application of article 4 by written clauses, in particular if they decide to take into account differently the impact of the health crisis on the conditions of execution of the contract. They may also decide to renounce to avail themselves of the provisions of this article.
Read here

3.2 French Government – Ordinance relating to general meetings and governing bodies

On 26 March 2020, the ordinance n° 2020-321, adopted pursuant to the Emergency Law, was published in the Journal Officiel. Amongst others, this ordinance relates to annual general meetings and deliberations of annual general meetings and governing bodies of legal persons. These exceptional measures are intended to apply only during the Covid-19 crisis period.
Read here

On 12 April 2020, the decree n° 2020-418 complementing and detailing the ordinance n° 2020-321 mentioned above was published in the Journal Officiel.
Read here

3.3 AMF – Short selling ban

On 17 March 2020, the Autorité des marchés financiers (AMF) decided to ban the creation or increase of short net positions from 18 March until 16 April 2020.
Read here

On 15 April 2020, the AMF announced the extension of the net short position ban until 18 May 2020.
Read here

3.4 AMF – FAQ dedicated to Covid-19

On 31 March 2020, the AMF published its Frequently Asked Questions (FAQ) on Covid-19 in order to support fund management companies. In this FAQ, which will be frequently updated, the AMF:

  • Welcomes the use of “swing pricing”, Anti Dilution Levies (with reduced formalism) and “gating” mechanisms in the current period, given the low liquidity of some underlying assets and potential high costs of portfolio readjustment
  • Reminds management companies (ManCos) of the existing rules in respect of net asset value (NAV) calculation. In particular, any decrease in the frequency of the NAV, such as a change from a daily NAV to a weekly NAV, must be subject to appropriate notification to UCITS or AIFs investors including with a possibility of withdrawal free of charge for at least 30 calendar days
  • Postponement of the delivery of specific reports, such as annual reports on internal controls, postponed to June 24th, and the climate commitment report postponed to 20 April 2020.

Read here

3.5 ACPR – Recommendation addressed to insurance companies

On 3 April 2020, the Autorité de Contrôle Prudentiel et de Résoution (ACPR) issued a recommendation addressed to insurance companies to suspend distribution of dividends, in the context of Covid-19.
Read here

3.6 AMF – Short selling ban

On 18 May 2020, the AMF suspended the ban on the creation or increase of net short positions.
Read here

4. Luxembourg

4.1 Luxembourg Government - Shareholder meetings and meetings of management bodies in digital form

On 20 March 2020, the Government of Luxembourg enacted, by way of decree, a number of temporary measures. Among these are rules allowing all Luxembourg companies, private or listed, to hold their shareholder or partner meetings (including the annual general meeting) without any participant attending in person. The same rule applies to meetings of management bodies such as boards of directors, boards of managers and supervisory boards.
Read here

4.2 CSSF FAQ dedicated to Covid-19

On 3 March 2020, the Commission de Surveillance du Secteur Financier (CSSF) published and keeps updated a FAQ on Covid-19 answering the following items inter alia:

  • Swing factor to be applied on the NAV up to the maximum level laid down in the prospectus of UCITS, UCI Part II & SIFs
  • Swing factor increase to be applied beyond the maximum swing factor laid down in the fund prospectus of UCITS, UCI Part II & SIFs
  • Deadlines for reports to be submitted by UCIs, SIFs, SICARs, investment fund managers, pension funds and securitisation undertakings
  • Deadlines for reports to be submitted by investment firms be extended
  • Postponement of quarterly reporting requirements under Article 37 of the Money Market Funds Regulation
  • Reporting by UCITS of investment breaches limited to active investment breaches

The CSSF will update the FAQ if and when needed.
Read here

4.3 CSSF FAQ on swing pricing and dilution levy mechanisms

On 20 March 2020, the CSSF published a communication and an update of its FAQs on the use of the swing pricing and dilution levy mechanisms by Luxembourg regulated UCITS, Part II UCIs and SIFs further to the questions received from industry participants in the context of the financial market developments around Covid-19.
Read here

4.4 CSSF – Press release on regulatory reporting

On 23 March, the CSSF issued a press release in light of the COVID-19 situation as regards regulatory reporting obligations.
Read here

4.5 CSSF – Press release on submission of long form reports

On 25 March, the CSSF issued a press release in light of the COVID-19 situation as regards the submission of long form reports.
Read here

4.6 CSSF – Launch of a new questionnaire to investment fund managers – update on financial data and governance arrangements

On 9 April 2020, the CSSF issued a weekly questionnaire to investment fund managers (IFMs).

The objective is to provide the CSSF with weekly updates on financial data (total net assets, subscriptions and redemptions) and an update on governance arrangements in relation to the activities performed by IFMs established in Luxembourg or in other European/non-European countries and managing at least one UCITS, AIF and/or any other UCI (not qualifying as AIF).

The first questionnaire, covering the period 13 to 17 April 2020, should be submitted to the CSSF by close of business on 22 April 2020.
Read here

4.7 CSSF - ESMA Guidelines on the Reporting under Articles 4 and 12 SFTR

On 9 April 2020, the CSSF issued Circular 20/739 announcing that the CSSF applies the ESMA “Guidelines on the Reporting under Articles 4 and 12 of the securities financing transactions Regulation 2015/2365 (published on 6 January 2020) and has integrated those guidelines into its administrative practice and regulatory approach.
Read here

4.8 CSSF - ESMA Guidelines on the Reporting under Articles 4 and 12 SFTR

On 10 April 2020, the CSSF issued Circular 20/740 financial crime and AML/CFT implications during the COVID-19 pandemic.

The purpose of this Circular is to provide guidance to all professionals subject to anti-money laundering and counter-terrorism financing (AML/CFT) supervision of the CSSF in relation to the money laundering and terrorism financing (ML/TF) risks and AML/CFT implications of the COVID-19 pandemic.
Read here

4.9 CAA – Publications

Throughout March and April 2020, the Commissariat aux Assurance (CAA) published inter alia the following in the context of Covid-19:

  • On 25 March 2020, the CAA published that the CSSF will follow these recommendations and extend deadlines for the submission of Solvency 2 reporting and public disclosure, in accordance with the EIOPA's recommendations of 20 March 2020 ( « Recommendations on supervisory flexibility regarding the deadline of supervisory reporting and public disclosure - Coronavirus/COVID-19 (EIOPA-BoS-20/236)).
  • On 2 April 2020, the CAA offered some relief in respect of annual and quarterly reporting including in respect of Solvency II reporting SOLO.

Read here

4.10 CSSF – Circular 20/742

On 4 May 2020, the CSSF issued Circular 20/742, notifying market participants of the entry into force of:

  • The Law of 25 March 2020 amending notably the Law of 12 November 2004 on the fight against money laundering and terrorist financing entered into force on 30 March 2020, and (ii) the Law of 25 March 2020 establishing a central electronic data retrieval system concerning IBAN accounts and safe-deposit boxes entered into force on 26 March 2020
  • Circular CSSF 20/740 to provide Luxembourg professionals with information particularly relevant for their activities and to provide guidance on how to abide by AML/CFT professional obligations during this Covid-19 crisis

Read here (only in French)

4.11 CSSF – Communiqué

On 4 May 2020, the CSSF published a Communiqué outlining its approach to AML/CFT supervision in the collective investment fund sector during the Covid-19 outbreak.
Read here

4.12 CSSF – Notification on fund issues and large redemptions

On 13 May 2020, the CSSF expanded the scope of its monitoring of the largest investment fund managers, which it had put in place in March 2020. Although not specifically related to the Covid-19 pandemic, the CSSF indicates this monitoring is due to “specific circumstances and risks to which these companies were exposed to because of the prevailing market conditions”.

By expanding the scope of this exercise, more fund managers will now have to notify the CSSF of significant developments and issues.

Specifically, a notification is requirement when:

  • Significant events/issues affecting the functioning of the investment funds managed by the IFM
  • Larger redemptions at the level of Luxembourg regulated investment funds (UCITS, Part II UCI, SIF) managed by the IFM (i.e. daily net redemptions exceeding 5% of the NAV, net redemptions over a calendar week exceeding 15% of the NAV and/or application of gates/ deferred redemptions)

Read here

4.13 Luxembourg Government – law on the extension of certain deadlines for the financial sector

On 12 May 2020, the Luxembourg Government published a law extending by three months certain deadlines for some financial services firms.
Read here in French

5. Germany

BaFin - FAQ on supervisory approach to Covid-19 crisis

On 24 March 2020, the German Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”) issued a press release outlining its supervisory approach in the context of the Covid-19 crisis.

In the press release, BaFin set out a range of measures in order to ease the burden on financial market participants while ensuring financial stability.

The measures focus on credit institutions, insurers, pension funds, and firms active in the securities services sector.
Read here

By way of example, BaFin will not raise any objections to a temporary passive exceedance of the statutory proportion of real estate held through investment funds of insurance and pension funds subject to the German Investment Regulation (Anlageverordnung).

All specific measures taken by BaFin are listed in a FAQ which will be updated and expanded as the Covid-19 situation develops.
Read here

6. Ireland

6.1 Companies Registration Office - Update Regarding Filing of Annual Returns

In March 2020, the Companies Registration Office decided that all annual returns due to be filed by any Company now and up to 30 June 2020 will be deemed to have been filed on time if all elements of the annual return are completed and filed by that date. This will enable businesses and their financial advisers to focus on the more immediate financial challenges facing them at this time. The situation will be kept under review and the date of 30 of June may be extended depending on the situation as it develops.

6.2 Central Bank of Ireland Covid-19 FAQs

In March 2020, the Central Bank of Ireland published a page on its website with FAQ’s and a press release on the current situation in Ireland surrounding Covid-19.
Read here

The Central Bank continues to seek real time information about how Irish funds are operating in the current COVID-19 environment in order to seek to fulfil its public mandate role of protecting the interests of investors. They have also confirmed that they will also maintain appropriate regulatory oversight throughout this period.

The Central Bank have noted through updates to industry bodies that there are no Central Bank or legal rules regarding in person voting for contractual or other arrangements and that the ability of a board to hold telephone (or other remotely held) meetings is a matter typically addressed by the entities constitutional documentation.

6.3 Central Bank of Ireland Covid-19 prudential regulatory flexibility measures

On 20 April 2020, the Central Bank of Ireland published an update relating to flexibility for remittance of certain returns / reporting including:

  • Regulatory Requirements Applicable to Investment Firms & Fund Service Providers
  • Remittance Dates for Financial Statements of Investment Funds
  • Additional Data Requests from the Central Bank of Ireland to Investment Firms, Investment Funds & Fund Service Providers
  • Risk Mitigation Programmes (RMPs) for Investment Firms & Fund Service Providers
  • Updates to Central Bank Regulatory Policy Frameworks
  • ESMA Announcements
Read here

6.4 The Office of Director of Corporate Enforcement FAQ update

On 21 April 2020, the Office of Director of Corporate Enforcement has provided an update to their FAQ section regarding Annual General Meetings
Read here

6.5 The Central Bank of Ireland Covid-19 communication to Fund Management Companies

On 30 April 2020, the Central Bank of Ireland published a letter to Irish Fund Management Companies regarding requirements applicable to securities markets, investment management and investment firms in light of the challenges posed by COVID-19. Furthermore, the Central Bank of Ireland clarified application measures identified by the European Securities and Markets Authority (ESMA) recently.
Read here

6.6 The Companies Registration Office - Update Regarding Filing Date for Annual Returns

On 29 May 2020, the Registrar of Companies has decided to extend the current arrangement in relation to the filing of annual returns. The Registrar had announced in March that all annual returns due to be filed by any Company between 18th March and 30th June 2020 would be deemed to have been filed on time if all elements of the annual return were completed and filed by 30th June. Following a review of the situation, the Registrar has now decided to extend this arrangement for a further period until 31 October 2020.

The Registrar has also decided to extend the arrangement in relation to entities (industrial and provident societies, friendly societies and trade unions) that are required to file with the Registry of Friendly Societies until 31 December 2020.

Filing obligations will be deemed to have been met if all elements of the relevant returns have been submitted by the aforementioned dates. However, entities are encouraged to file as normal during this period if in a position to do so.
Read here

6.7 The Irish Revenue Commissioners announce exercising of option to extend by six months the time limits for the reporting and exchange of information under the DAC6

On 26 June 2020 and following the adoption of Council Directive (EU) 2020/876 which allows for the deferral of the exchange dates for DAC2, and the filing and exchange dates for DAC6, as a result of the impact of the COVID-19 pandemic, Revenue can confirm that the deadline for the filing of DAC2 returns in respect of the 2019 reporting period is now deferred until 30 September 2020.

The new deadline of 30 September will also apply for the filing of CRS and FATCA returns in line with what has already been agreed by the Global Forum on Transparency and Exchange of Information for Tax Purposes and by the United States.
Read here (under Exchange of Information)

7. Italy

7.1 Bank of Italy grants extensions to certain reporting obligations

On 20 March 2020, the Bank of Italy granted extensions (from 60 to 150 days depending on the different topics) to certain reporting obligations in order to enable the banking and financial system to concentrate all its efforts on dealing with the Covid-19 crisis.

The Bank of Italy is also in the process of rescheduling on-site inspections and evaluating whether to allow some flexibility regarding the deadlines for supervisory and central credit register reporting, in coordination with the European supervisory authorities.
Read here in Italian
Read here in English

7.2 CONSOB grants extensions for reporting obligations

On 25 March 2020, the CONSOB granted a 60 day extension to certain reporting obligations stated in its Circular 17297/2010 in order to enable the banking and financial system to concentrate all its efforts on dealing with the Covid-19 crisis. In particular: reporting on collective investment management activity, investment and ancillary services, distribution of financial products and annual reporting on organizational structure for AM Companies, SICAVs, SICAFs.
Read here

7.3 COVIP extends reporting deadlines

On 11 March, 20 March and 1 April 2020, in light of the Covid-19 crisis, the Commissione di vigilanza sui fondi pensione (COVIP), Italian regulatory authority for pension schemes, issued three circulars in order to extend specific deadlines. Among others: 2019 balance sheet approval, 2019 communications to clients, “2019 Rendiconto”, “Relazione Responsabile fondo pensione”, regulatory reporting. Furthermore, COVIP will allow pension schemes to organise their general assembly using video-audio conference tools even if not explicitly written in their official documentation.

Official COVIP communications link below:


7.4 Italian Inland Revenue Agency

On 3 April 2020, the Italian Inland Revenue Agency published Circular letter n. 8 which clarifies measures recently adopted through Law Decree 17 March 2020, n. 18 to mitigate the impacts of the Covid-19 emergency. In particular, the Inland Revenue has confirmed that it is possible to extend to 15 June 2020 the validity of Certificates of residence (COR) issued by foreign tax authorities and which expired on 31 March 2020.

This applies whenever it has been ascertained that due to the declared Covid-19 emergency in his tax residence state, a foreign investor has been unable to obtain a renewed Certificate of Residence
Read here

7.5 CONSOB and Bank of Italy – joint communication on investment funds

On 14 April 2020, following ESMA’s public statement on “Actions to mitigate the impact of COVID-19 on the deadlines for the publication of periodic reports by fund managers” of 9 April 2020, CONSOB and Bank of Italy issued a joint communication on the topic addressed to investment funds. ESMA’s expectation is that NCA do not prioritize supervision action referred to this topic.

Italian regulatory authorities reported that, for the moment, Italian asset managers have reported no particular issues or postponement requests.

CONSOB and Bank of Italy expect that AMs will fulfil investors’ information needs in due time in accordance with Italian regulation, putting in place all possible organizational efforts.
Read here (in Italian)

7.6 CONSOB– Short selling ban

On 18 May 2020, CONSOD suspended the ban on the creation or increase of net short positions with effect as from 19 May 2020.
Read here

8. Spain

8.1 Spanish Government – Royal Decrees published dedicated to covid-19 measures

On 20 March 2020, the Spanish Government issued Royal Decree (RD-Ley 8/2020) related to economic measures. The Royal Decree includes new limitations on foreign investments and changes in the corporate governance of issued companies, how shareholder meetings are held during 2020 and extensions to the deadlines for annual audited financial statements, intermediate management statements and semi-annual financial statements
Read here

On 31 March 2020, the Spanish Government issued Royal Decree (RD-Ley 11/2020) related to social and economic measures that complement and maintain all the provisions already included in RD- Ley 8/2020. Among others:

  • Exceptional period of six months, from 14 March, 2020 (Declaración de estado de alarma), for pension funds´ shareholders to get their investment under special circumstances (e.g. temporal unemployment, business owner of establishments whose opening to the public has been seen suspended, etc). This measure is also extended to the rest of saving investment products (i.e. EPSVs, PPAs)
  • Additional extraordinary measures for the corporate governance of juridic entities (SICAVs) and annual reports produced during the current situation (estado de alarma)
  • In the case of investment funds, CNMV will have the capacity to: 1) require asset managers to reinforce the liquidity ratio in their institutional portfolios and to increase the investment in more liquid assets and 2) to set preadvise periods for redemptions.

Read here

8.2 CNMV – different measures & communications to market players due to covid-19

Throughout March 2020, given market volatility, the Spanish regulator Comisión Nacional del Mercado de Valores (“CNMV”) communicated guidelines on a ban on short selling and the creation or increase of net short positions on shares.

On 13 March 2020 - CNMV temporarily prohibited short selling in 69 listed companies. CNMV communicated the decision to ban short sales during the day’s trading session for all liquid shares admitted to trading on the Spanish stock exchanges whose price fell by more than 10% on 12 March and on all illiquid shares (in accordance to Delegated Regulation 918/2012) whose price fell by more than 20%.

On 16 March 2020 - In light of the extreme market volatility seen recently in Spain due to the impact of the COovid-19 virus on financial markets, on 16 March 2020, the CNMV decided to prohibit the short selling of, and the increase of existing short positions, on all Spanish securities and financial instruments for a period of one month. This ban came into place at the start of trading on 17 March and will end on 17 April 2020, but could be extended for a period of three months depending on market and social conditions, as contemplated within article 24 of EU regulation 236/2012. This ban is applicable to trades traded on the BME and MAB, the trading venues over which the CNMV has regulatory control. Any equity trades, or those related to stock indices (cash trades, derivatives traded on organized markets or traded OTC) which create a net short position, or increase a pre-existing short position, albeit intraday, are subject to the ban.
Read here

On 22 March 2020 - Q&A published by CNMV on short selling ban on the creation and increase of net short positions (update to communication made on 16 March 2020).
Read here

On 27 March 2020 - CNMV made further comments in regards to information to be provided by asset managers as consequence of Covid-19 and in response to the Q&A issued by Inverco.
Read here

8.3 CNMV – updated Q&A on temporary short position ban

On 15 April 2020, CNMV extended for a further month the temporary ban on the creation or increase of net short positions in listed shares.

The extension of the ban takes effect from 18 April and shall remain in force until 18 May, both dates included, and may be in turn extended for renewable periods not exceeding three months if the circumstances justifying it continue, in accordance with Article 24 of Regulation (EU) 236/2012, or be lifted at any time without the period expiring, if deemed necessary.

Read here

On 17 April 2020, CNMV published the updated Q&A related to the temporary ban of 16 March 2020 on the creation and increase of net short positions related to shares admitted to trading on trading venues for which the CNMV is the competent authority.

Read here in Spanish

8.4 Ministry of Economy and Digital Transformation – Directorate General for Insurance and Pension Funds - EIOPA´s recommendations on supervisory reports

On 24 March 2020, T2S stated that T2S will temporarily move the start of Night Time Settlement from 8:00pm CET to 9:00pm CET until further notice. The change is mostly aimed at minimising the impacts due to the current exceptional market conditions and volumes.

On 30 March 2020, T2S announced that the move would remain in place until 06 April 2020.

8.5 T2S- Night time settlement cut-off postponement

On 24 March 2020, T2S stated that T2S will temporarily move the start of Night Time Settlement from 8:00pm CET to 9:00pm CET until further notice. The change is mostly aimed at minimising the impacts due to the current exceptional market conditions and volumes.

On 30 March 2020, T2S announced that the move would remain in place until 6 April 2020.

8.6 CNMV – Short position ban

18 May 2020, CNMV has decided not to renew the current prohibition to create or increase net short positions.
Read here in English
Read here in Spanish

8.7 Spanish Government – Royal Decree extending state of alarm

On 23 May 2020, the Spanish Government adopted Royal Decree 537/2020 in relation to the extension of the state of alarm and the resumption of the calculation of administrative deadlines and proceedings since 1 June, of those established in the pension and collective investment regulation.
Read here in Spanish

9. United Kingdom

9.1 FCA extends deadlines for publishing fund reports and accounts

On 6 April 2020, the Financial Conduct Authority (FCA) announced temporary relief to the regulatory deadlines for publishing funds’ half-yearly and annual reports and accounts because of the impact of Covid-19.
Read here

9.2 FCA removes Mifid 10% drop notifications until October

The FCA will not implement rules for wealth managers and advisors that require reporting a 10% drop in the value of retail investors’ portfolios, granting supervisory flexibility for six months, until the end of September.
Read here

9.3 FCA – Expectations of investment firms

The FCA has set out its general guidance and rules regarding its expectations of firms in the light of the Covid-19 crisis.
Read here

9.4 FCA – Non-critical Regulatory Change

The FCA is reviewing the possibility of delaying or postponing activity which is not critical to protecting consumers and market integrity in the short-term. This will allow firms to focus on supporting their customers during this difficult period.

This includes extending the closing date for responses to open consultation papers and calls for input until 1 October 2020 and rescheduling most other planned work.

For a full list covering Asset & Wealth Management, Insurance, Pensions and more see the FCA’s website here

9.5 FCA – letter to CEOs of insurance firms

On 15 April 2020, the FCA published its CEO letter to insurance firms with specific focus on Business Interruption.
Read here

9.6 FCA – letter to CEOs of insurance firms

On 17 April 2020, the FCA has updated their expectations on financial resilience for FCA solo-regulated firms:
Read here

9.7 IA – support for the Asset Management Industry

The Investment Association (IA) is supporting members via dedicated Covid-19 expert pages, which includes useful information pertaining to multiple business areas, from HR to fund liquidity for example.
Read here

9.8 HMRC – CRS, FATCA reporting and DAC 6 Implementation and Reporting

Her Majesty's Revenue and Customs (HMRC) published a statement recognising that due to Covid 19, financial institutions may not be able to meet the Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA), reporting deadline of 31 May 2020 for the 2019 reports. In these unprecedented circumstances, HMRC accepts that any financial institution that files a return late because of Covid 19 difficulties will have a reasonable excuse (and so will not be liable to any penalties for that delay) provided the report is made without unreasonable delay after they are resolved.

HMRC issued an statement recognising the challenges taxpayers and intermediaries face in implementing DAC6 because of Covid 19 and the unprecedented measures introduced to tackle it. Under the current DAC 6 regulations the first reports for arrangements since 1 July are due to be sent to HMRC by 31 July 2020, and by 31 August for pre-existing arrangements (25 June 2018 to 30 June 2020). Where reports are made late, no penalties are due where there is a reasonable excuse for the delay and reports are made without unreasonable delay once that excuse has ceased.
Read here

9.9 PRA – Statement on COVID-19 regulatory reporting and disclosure amendments

On 26 June 2020, the Bank of England published a statement by the Prudential Regulation Authority (‘PRA’) as regards regulatory reporting and disclosure amendments. In the PRA’s previous statement 'COVID-19 regulatory reporting and disclosure amendments' published on Thursday 2 April 2020, the PRA set out that it would accept delayed submission of certain regulatory returns with deadlines on or before Sunday 31 May 2020. That statement noted the PRA would consider in due course the treatment of those returns with a deadline of June onwards.

Going forward, the PRA will therefore, in general, expect on time submission for future regulatory reporting. Firms experiencing difficulty with timely submission should contact their usual supervisor to discuss.
Read here

9.10 FCA – Extension of the Senior Managers & Certification Regime (SM&CR) implementation periods for solo-regulated firms

On 30 June 2020, the FCA issued a press release stating that the deadline for solo-regulated firms to have undertaken the first assessment of the fitness and propriety of their Certified Persons has been delayed from 9 December 2020 until 31 March 2021.
Read here

9.11 FCA – Approved Persons Regime (APR) and coronavirus

On 30 June, the FCA issued a press release noting that firms may need longer periods of temporary arrangements if, for example, an Approved Person is absent because of coronavirus, or if recruitment to replace an Approved Person has been delayed due to the pandemic. In relation to this the FCA have also published their expectations on the Senior Managers & Certification Regime (SM&CR) for solo regulated firms and for dual-regulated firms with the Prudential Regulation Authority (PRA).
Read here

9.12 PRA – Statement on the Capital Requirements Regulation (CRR) ‘Quick Fix’ package

On 30 June 2020, the Bank of England published a statement by the PRA indicating that from 27 June 2020, amendments to the Capital Requirements Regulation (CRR) - the CRR ‘Quick Fix’ - applied that respond to the Covid-19 pandemic. In accordance with the European Union (Withdrawal Agreement) Act, the CRR ‘Quick Fix’ applies directly to PRA-regulated firms.

This statement sets out the PRA’s initial views on certain measures included in the package.
Read here

10. Australia

10.1 APRA - CPS 234 – Information Security – Extension Third Party Arrangements

On 16 April 2020, APRA announced an extension in relation to CPS 234 Information Security and third party service provider arrangements with APRA regulated entities. The commencement date was set at 1 July 2020, an extension to 1 January 2021 may now be sought by the APRA regulated entity, on a case by case basis. The APRA regulated entities seeking the extension are required to meet certain conditions in their application such as, the details as to the nature of the third party arrangements and how the entity is monitoring the risks within this arrangement.
Read here

10.2 APRA – CPS 226 – Margining and Risk Mitigation for Non Centrally Cleared Derivatives – extension to commencement date

Phased in initial margin requirements – APRA announced on 16 April 2020 the extension in relation to meeting the margining requirements for all non-centrally cleared derivatives.

This implementation was based on a phased in approach. The announcement provides an extension of 12 months, that being, implementation on 1 September 2020 extends to 1 September 2021; 1 September 2021 extends to 1 September 2022. This is in line with the Basel Committee on Banking Supervision and the International Organisation of Securities Commissions.
Read here
Read here

10.3 ASIC - Portfolio Holdings Disclosure

Portfolio Holdings Disclosure reporting requires most Registerable Superannuation Entities to publish fund holdings on their website. This reporting requirement was to commence on 31 December 2020 with first reporting 3 months thereafter.

On 16 April 2020 ASIC announced the deferral of the first reporting date for portfolio holdings disclosure. A revised reporting date has not yet been advised.
Read here

10.4 ASIC - Regulatory Guide 97 - Disclosing fees and costs in PDSs and periodic statements

In November 2019 ASIC released modifications to Regulatory Guide 97 in relation to how fees and costs were to be disclosed. The new disclosure requirements were to commence for Product Disclosure Documents issued on or after 30 September 2020 and Periodic Statements on or after 1 July 2021.

ASIC on the 14 April 2020 released a statement advising they are now considering changes to these arrangements for Product Disclosure Statements that come into effect on 30 September 2020.
Read here

10.5 ASIC announces amendments to transitional arrangements for Product Disclosure Statements

11 June 2020 – ASIC announced amendments to transitional arrangements for Product Disclosure Statements in relation to RG97-Disclosing fees and costs in PDSs and periodic statements. Product Disclosure Statements given on or after 30 September 2022 must now comply with the new disclosure regime by this date.
Read here

10.6 APRA - COVID-19 Pandemic Data Collection request

24 June 2020 APRA announced additional data collection requirements for their ongoing assessment during the COVID-19 pandemic. Registerable Superannuation Entities are required to meet 2 additional reporting requirements, that being both monthly and quarterly . Reporting will extend to cover items such as liquidity, early release demographics advice and operational resilience.
Read here

11. New Zealand

FMA/NZX – On 19 March (updated 3 April) the FMA issued regulatory relief, via a class exemption, allowing entities and schemes impacted by COVID-19 an additional two months to produce their audited financial statements. The NZX announced the same relief for listed issuers.
Read here

FMA – On 26 March the Government announced a delay to the start of the new regime under the Financial Services Legislation Amendment Act from June 29, 2020 to early 2021. The current Financial Advisers Act 2008 continues to apply until then.
Read here

FMA – On 27 March the Council of Financial Regulators confirmed that financial services are considered ‘essential services’ under NZ’s Alert Level 4. This includes all financial institutions that are essential to ensure continued operation of the financial system (including custodians and administrators).
Read here

12. Hong Kong

24 April 2020: In view of the unprecedented volatility noted in overseas crude oil futures markets, SFC views that it is important that the Managers remain vigilant to respond to extreme market circumstances so that the ETFs can be managed in the best interests of investors (including the forthcoming local public holidays when overseas markets will remain open).
Read here

25 March 2020: To address recent market volatility and uncertainty in local and international markets relating to COVID-19 outbreak, the SFC added section 3 to the FAQ on Post Authorization Compliance Issue of SFC Unit Trust and Mutual Funds.

Under question 1 of section 3, fund managers may increase the swing factor beyond the maximum level that has been set out in the funds’ offering documents as a temporary measure, without SFC’s prior approval subject to certain conditions. In question 2 provides the cases where an SFC-authorized fund can apply swing pricing even if it has not been disclosed.
Read here
Note: Questions 1 and 2 under Section 3 have been added.

27 March 2020: In view of the volatility in local and international markets related to the COVID-19 outbreak, the SFC issued a circular to managers, trustees and custodians of SFC-authorized fund. The SFC reiterated their obligations to properly manage the liquidity of funds and ensure fair treatment of investors in light of the current market situation.
Read here

1 April 2020: In view of the potential operational difficulties faced by applicants during the COVID-19 outbreak, the SFC updated the FAQ to implement the following temporary relief measures to alleviate the administrative burden in respect of new fund applications.
Read here
Note: Question 3 under Section 3 has been added.
Read here
Note: Question 14 has been added.

13. India

13.1 Government of India reviews Foreign Direct Investment (FDI) policy in Covid-19 dated 17 April 2020

The Government of India (GOI) published revisions in the present Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current Covid-19 pandemic and notified amendment of consolidated FDI Policy, 2017.
Read here
Read here

13.2 SEBI notification on entities from Mauritius under SEBI (FPI) Regulations 2019 – dated 13 April 2020

The Ministry of Finance (MoF) and the Securities and Exchange Board of India (SEBI) clarified that Mauritius is eligible country for the purposes of eligibility criteria for Category I Foreign Portfolio Investors (FPIs) registration.
Read here

13.3 Amendment in FPI Regulations to allow FPIs from a specified non-FATF country to obtain Category I license dated 07 April 2020

FPI Regulations have been amended to provide that FPI applicants from a non-FATF member country can also qualify for a Category I registration provided such a country is notified by the Indian Government for this purpose or the Indian Government enters into an agreement or treaty with such country.
Read here

13.4 Introduction of Fully Accessible Route (FAR) of investment in specified Government securities without any investment restrictions - Dated 15 April 2020

  • RBI introduced a new route (FAR) for foreign investments in a few Central G-Secs with expiries in 2024/2029 and 2049. Under this route, there will be no restriction or ceiling on investments
  • In addition to the above, all new issuances of G-Secs of 5-year, 10-year and 30-year tenors from FY 2020-21, will be eligible for investment under FAR
  • All existing investments (by FPIs or other investors) in any of the above securities will be reckoned under FAR and not be subject to any investment restrictions. With the exclusion of the above securities from the General Investment route, FPIs have been granted a period of 1 year to readjust their remaining investments under the General investment route
  • Non-resident investors, not allowed to invest in G-Secs, can now invest under FAR through the International Central Securities Depositories e.g. Euroclear and Clearsteam

Read here

13.5 Temporary relaxation in documentation for FPI registration by SEBI till 30 June 2020

In light of the recent events pursuant to Covid-19, it was decided by SEBI to grant relaxations in a situation where Foreign Portfolio Investors (FPIs) are not in a position to send original and/or certified documents as specified in Operational guidelines for FPIs and Designated Depository Participants (DDPs) issued under SEBI (FPI) Regulations, 2019.
Read here

13.6 RBI notifies changes in market hours

In order to minimise Covid-19 risks and to ensure that market participants maintain adequate checks and supervisory controls while optimising thin resources along with ensuring safety of personnel, it was decided by RBI to revise trading hours for various markets till further notice.
Read here

13.7 SEBI and AMFI notifies revised cut-offs for subscriptions and redemptions in mutual fund schemes

SEBI and AMFI decided to revised cut-offs timings for subscription and redemption in mutual fund schemes for a temporary period till 30 April 2020.
Read here

13.8 RBI Governors statement on Covid-19 crisis

The Reserve Bank of India (RBI) governor via press release announced various measures taken to tackle Covid-19

  • Reduce the fixed rate reverse repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 4.0 per cent to 3.75 per cent with immediate effect.
  • Banks exempted from making dividend payout for 2019-20
  • Liquidity coverage ratio requirement of banks brought down to 80% from 100%
  • 90 days NPA norm for the moratorium period relaxed
  • India is expected to post sharp turnaround in 2021-22, says RBI Governor quoting IMF projection said by RBI governor
  • IMF projection of 1.9% GDP growth for India is highest in G20

Read here

14. United States

14.1 Extended Filing Deadlines and Prospectus Delivery Deadlines During Covid-19 Crisis

The SEC has extended due dates for several filing and other requirements affecting 1940 Act registered funds and registered advisers in orders for situations where the fund or adviser is unable to meet the filing deadlines due to circumstances related to covid-19. Notification must be made to the SEC staff via email of the intention to rely on any of the extensions to filing requirements and certain other disclosures must be made on the fund/adviser website.

  • Fund N-PORT and N-CEN filings due between March 13 and June 30 may be made up to 45 days after the due date.
  • Adviser ADV updates and Form PF filings due between March 13 and June 30 may be made up to 45 days after the due date.
  • Fund semi-annual or annual reports due between March 13 and June 30 may be transmitted to shareholders up to 45 days from the due date.

In addition, the SEC takes the position that it would not provide a basis for an SEC enforcement action if a registered fund does not deliver to investors the current fund prospectus where the prospectus is not able to be timely delivered because of circumstances related to covid-19 and delivery was due between March 13 and June 30, provided that the sale of shares to the investor was not an initial purchase by the investor of shares of the registered fund, and provided the prospectus is delivered to investors as soon as practicable, but not later than 45 days after the date originally required. Notification must be made to the SEC staff via email at of the intention to rely on this order.
Read here
Read here

14.2 Extended Filing Deadlines for CPO NFA Filings

The CFTC staff has provided no-action relief to commodity pool operators (CPOs) for CPO-PQR filings due to challenges caused by covid-19. Small and Mid-Sized CPOs have until May 15, 2020 to submit their annual filings for 2019 while Large CPOs have until July 15, 2020 to submit their filings for Q1 2020.

14.3 April 29 Extended Edgar Filing Window

The SEC’s Division of Investment Management announced that it will extend the EDGAR filing window on April 29, 2020, from 5:30 p.m. to 10:00 p.m. Eastern Daylight Time for registered investment company and business development company filings to mitigate potential filing delays associated with COVID-19.

Filings submitted after 5:30 pm would normally be considered filed on the next business day. Filings submitted after 5:30 pm on April 29 will automatically have the filing date adjusted to April 29. The extension of the filing window was designed to accommodate December 31 fiscal year end funds filing their annual registration statement update. The announcement notes the extension is for one day only.
Read here

14.4 IRS Tax Extension for Covid-19 Crisis

The IRS issued Notice 2020-23 expanding the federal tax filing and payment relief for certain tax form filings and payment obligations that are due between April 1 and July 15 to July 15, 2020.
Read here

14.5 Relief from Certain In-Person Fund Board Voting Requirements During Covid-19 Crisis

On March 25, 2020, the SEC issued an amended order under the 1940 Act which provides 1940 Act registered funds and business development companies (BDCs), and their investment advisers (Advisers) and principal underwriters, relief from 1940 Act requirements that the following agreements, plans, and arrangements be approved by the company’s board of directors by an in-person vote if necessary due to circumstances related to Covid-19:

  • Investment advisory contracts
  • Principal underwriting contracts
  • Selection of independent public accountant
  • Rule 12b-1 plans and related agreement
  • Interim advisory agreements where the previous advisory agreement was terminated by assignment

Conditions include:

  • Reliance on the 1940 Act Order is necessary or appropriate due to circumstances related to current or potential effects of the covid-19 pandemic.
  • The votes that would otherwise be required to be cast at an in-person meeting are instead cast at a meeting in which directors may participate by any means of communication that allows all directors participating to hear each other simultaneously during the meeting.
  • The board of directors, including a majority of the directors who are not interested persons of the registered fund or BDC, ratifies the action taken pursuant to this exemption by vote cast at the next in-person meeting.

The relief extends until August 15.
Read here

14.6 Affiliated Purchases of Debt Securities during covid-19 crisis

The SEC staff has issued no-action relief under Section 17(a) of the 1940 Act to affiliates of open-end funds, other than ETFs and money market funds, to allow them to purchase debt securities from the funds. The relief is subject to conditions, including that the price must be the security’s fair market value, provided that this price is not materially different from the value indicated by a reliable third-party pricing service, and that the fund must publicly disclose the purchase on its website and inform the SEC staff. In addition, if the purchaser thereafter sells the security for a higher price, it must promptly pay the difference to the fund, unless the purchaser is a bank or bank affiliate and this condition would conflict with Sections 23A and 23B of the Federal Reserve Act. The relief will be in effect until further notice from the staff.
Read here

14.7 Relief for Affiliated Purchases of Money Market Funds

The SEC staff of the Division of Investment Management issued a no-action letter to the Investment Company Institute (ICI) in light of COVID-19, which stated that, on a temporary basis, they would not recommend enforcement action to the SEC for “affiliated purchases” of money market fund securities The relief is subject to the following conditions: 1. The purchase price of all affiliated purchases must be at fair market value. 2. All affiliated purchases must comply with Rule 17a-9 under the 1940 Act, except to the extent such purchase would conflict with banking regulations or an exemption issued by the Federal Reserve on March 17, 2020. Relief will be effective until further notice from SEC staff.
Read here

14.8 Interfund Lending Relief during covid-19 crisis

The SEC has issued an order providing additional flexibility for open-end funds to engage in interfund lending even without their own interfund lending exemptive order.

  • Fund affiliates may lend money to the fund on a collateralized basis, provided the board makes determinations that the borrowing is in the best interest of the fund and its shareholders and that it will be for the purposes of satisfying shareholder redemptions.
  • For fund families with an existing interfund lending exemptive order, a lending fund may lend up to 25% of its current net assets and the term may be for any period that does not extend beyond the expiration of the relief, notwithstanding the terms of the order, provided, among other conditions, that the board reasonably determines that the maximum term for interfund loans is appropriate.
  • Money market funds that do not have their own interfund lending orders may not participate as borrowers under the order.
  • The relief is available until a notice terminating it is issued, which will be at least two weeks from the date of the notice and no earlier than June 30, 2020. Prior to relying on any of the relief, the fund would have to notify SEC staff and provide notification on a fund’s public website.

Read here

14.9 Fed Money Market Mutual Fund Liquidity Facility (MMLF) during Covid-19 crisis

To preserve liquidity for money market funds, the Federal Reserve Board has announced a Money Market Mutual Fund Liquidity Facility (MMLF) that is intended to assist money market funds in meeting demands for redemptions. Under this facility, the Federal Reserve Bank of Boston will lend to depository institutions and bank holding companies, taking as collateral assets purchased by the borrower from prime money market funds (i) concurrently with the borrowing or (ii) or on or after March 18, but before the opening of the facility. The facility is similar to the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility that operated from late 2008 to early 2010 but will purchase a broader range of assets. The facility will be available until September 30, unless extended.
See fact sheet here

14.10 Fed TALF Program during Covid-19 crisis

On April 9, 2020, the Federal Reserve further clarified and updated the terms for the new 2020 Term Asset-Backed Securities Loan Facility (TALF 2020) which will permit US companies to borrow using certain assets as collateral. The revised term sheet has materially updated the following provisions:
(i) the eligible borrower definition, (ii) the eligible collateral, (iii) pricing, (iv) collateral valuation, and (v) the conflict of interest provisions. The program will be available through the end of 2020.
See revised term sheet here

14.11 Treasury Guarantee of Money Market Funds during Covid-19 crisis

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was enacted into law on March 27 has authorized the Treasury to make temporary guarantees of money market funds through year-end 2020. This is similar to the guarantees used in 2008 under the Emergency Economic Stabilization Act of 2008.

14.12 Regulatory Relief Letter from SIFMA to the SEC

On March 25, SIFMA sent a letter to the SEC’s Division of Trading and Markets requesting regulatory relief consideration for a list of issues raised by industry participants. The topics addressed are:

  • Wet Signatures
  • DTCC Processing of Physical Securities
  • Regulation SHO
  • Quarterly Physical Box Count Requirements
  • Medallion Processing
  • Transfer Agent Exemptions

On April 2, the SEC issued a statement regarding paper filings, wet signatures and notarization. The conditions regarding electronic submissions of paper documents and signatures include:

  • Contacting SEC staff to discuss appropriate process for submission (e.g. secure file transmissions)
  • Signing the relevant documents electronically, if a signature is required, by using a typed signature within the electronic submission in the position of the manual signature
  • Having the signatory retain a manually signed signature page or other document authenticating, acknowledging, or otherwise adopting his or her signature, which indicates the date and time of execution, and having the signatory provide such document, as promptly as practicable, upon request
  • Establish and maintain policies and procedures governing this process

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14.13 SEC - Custody relief from inadvertent receipt of securities of a client

Rule 206(4)-2 (the “Custody Rule”) of the Advisers Act, requires an SEC registered investment adviser (an “RIA”) who inadvertently receives securities from a client to return the securities to the sender within three or five business days (depending on the type of asset) to avoid being deemed to have custody of such client assets under the Custody Rule. Acknowledging that an RIA’s personnel may be unable to access mail or deliveries at an office location due to the implementation of the firm’s business continuity plan in response to the coronavirus, the staff of the SEC’s Division of Investment Management revised Question II.1 of its Custody Rule frequently asked questions (“Custody Rule FAQ”) to indicate that, in such circumstances, the Division would not consider the RIA to have received client assets at that office location until firm personnel are able to access the mail or deliveries at that location.

The Custody Rule FAQ is available here

14.14 SEC - Custody relief for registered advisers who fail to hold custody of physical certificates with custodian

In the new Question VII.4 of its Custody Rule FAQ, the SEC Division of Investment Management indicated that it would not recommend enforcement action against an RIA who cannot maintain physical certificates of privately issued securities with a qualified custodian as required under the Custody Rule because the qualified custodian is not accepting physical certificates due to circumstances related to the coronavirus.

The relief is conditioned on satisfaction of the following requirements:

  1. the physical certificates can be used only to effect a transfer or to otherwise facilitate a change in beneficial ownership of the security with the prior consent of the issuer or holders of the outstanding securities of the issuer;
  2. ownership of the security is recorded on the books of the issuer or its transfer agent (or person performing similar functions) in the name of the client;
  3. the physical certificates contain a legend restricting transfer;
  4. the physical certificates are appropriately safeguarded by the RIA and can be replaced upon loss or destruction; and
  5. the RIA makes and retains (in accordance with the Rule 204-2 of the Advisers Act) a record of the custodian’s closure.

The Custody Rule FAQ is available here

15. Brazil

15.1 Government Authorizes to Postpone AGMs

On 30 March 2020, the Government of Brazil published Provisional Measure No. 931 authorizing joint-stock companies, limited companies and cooperatives, whose fiscal year ends between 31 December 2019 and 31 March 2020 (inclusive), to hold their annual general meetings (AGMs) within seven months from the end of its fiscal year (as per law, such meetings must be held within four months from the end of the fiscal year-end). The provisional measure also authorizes shareholders to vote remotely in AGMs for all types of companies. It should be noted that the Securities and Exchange Commission (CVM) already allows shareholders of publicly held companies to vote remotely in AGMs. Further, the provisional measure established that the AGM must be held, preferably, at the company’s premises or, due to force majeure, in a different location within the same municipality. However, the CVM may authorize exceptions to such requirement and even allow AGMs to be held virtually. Effective for 120 days. Within this period, it must be approved by the Brazilian Congress and convert into Law to remain effective.
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