The AWM Monthly Briefing - 25 April 2019 - Highlights of the Day

10 minutes

Hot topic of the month: ManCo Barometer Poster 2019: latest figures, trends and key insights from our survey on Circular 18/698

Luxembourg continues to play a pivotal role in international fund distribution. As of December 2018, it hosted 316 UCITS and AIFM licensed Management Companies (ManCos); up 19 from 297 in December 2017 (a 6.4% increase), with 6/19 entrants coming from the UK. Licensed AIFMs increased by 14 to 242, and over 20 new licenses were granted for MiFID related activities.

The overall increase in ManCos contributes positively to the PwC ManCo Index (Barometer) which takes into account the number of UCITS ManCos and licensed AIFMs, their number of employees and AuM. The number of employees in UCITS ManCos increased 12.2% year-over-year (y-o-y) to 4,874. The AuM, however, remained flat, finishing at EUR 3.38tn at the end of 2018.

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We have observed significant events in terms of the Top ManCos in the form of a consolidation tendency of big players such as Amundi Luxembourg and Pioneer Asset Management in the beginning of 2018 and also the onboarding of Standard Life funds by the ManCo Aberdeen in Luxembourg to create Aberdeen Standard Investments Luxembourg.

Laurent Carême, Director, PwC Luxembourg

PwC Luxembourg was pleased to welcome Pascal Berchem (Chef de Service, CSSF) to a full house of attendees.

In his interview with Olivier Carré (PwC Luxembourg - Partner), Mr. Berchem discussed substance and governance principles, and expectations related to Circular 18/698 (Authorisation and organisation of investment fund managers incorporated under Luxembourg law).

Focus on

AML - Ready for Inspection?

The deadline for the completion of the CSSF’s  AML/CFT Questionnaire was COB, 15 April 2019. 

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AWM Trends 2019: our new CEO survey

After expressing record levels of optimism in 2018, CEOs in 2019 were more cautious.

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Distribution update: focus on APAC developments 

The APAC asset and wealth management (AWM) industry is poised to be the centre for AuM growth. 

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Regulatory updates

Circular 19/714 on IT outsourcing relying on a Cloud Computing Infrastructure

On 27 March 2019, with immediate effect, the CSSF published circular CSSF 19/714 making substantial amendments to its "IT Outsourcing relying on a cloud-computing infrastructure Circular" CSSF 17/654.

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AML/CFT

The deadline for the completion of the CSSF’s  AML/CFT Questionnaire was COB, 15 April 2019.

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Brexit

In the event of a "Hard Brexit", Luxembourg adopted the bills 7401 and 7426 to protect its financial sector and investment funds.

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ESA reform (A8/0013)

ESA reform A8-0013/2019 on the proposal for a regulation of the European Parliament and of the Council amends a number of regulations. 

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UCITS and AIFMD FAQs (11 April 2019)

In accordance with the exemption provided for in article 32(1) of the PRIIPs Regulation, manufacturers of Luxembourg UCITS need to have PRIIPs KIDs in place as of 1 January 2020.

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X-border distribution (A8/0430, A8/0431)

The European Parlement voted in a plenary session to postponement by 2 years of the deadline to enforce UCITS PRIIPs, i.e. the new deadline for manufacturers of Luxembourg UCITS to issue PRIIPs for these vehicles is now set at 1 January 2022. 

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Spotlight on a PwC Solution

Birgit Goldak - PwC Luxembourg

We offer a number of solutions to ensure that our clients safeguard their businesses and reputations, and remain compliant with increasing and changing regulatory requirements.

AML Distributor Due Diligence

The CSSF Circular 18/698 sets out the substance requirements for Luxembourg investment management companies. It expects companies to have sufficient governance and organisational structures for effective oversight of its delegated functions and distribution networks, including marketing and distribution.

For effective AML Distributor Due Diligence, our approach is firstly to establish scalable structures, practices and procedures that provide long term, and on-going value. We provide training on AML/CTF matters, evaluate your current distribution oversight model and agreements, and use a risk-based approach to prioritise your due diligence follow up. Given our depth and breadth of reach and expertise, we help you understand local legislation and how best to enter new markets.

When conducting Distributor Due Diligence, we offer “hands on” support by gathering the right documentation, and providing Gap Analyses and SAE 3000 Due Diligence Reports. We also update procedures, and are available for in-depth site visits to local distributors.

Beneficial Owner (BO) Register

On BO topics, we train, provide advice, design and implement processes, and review specific cases to identify BOs in compliance with legal obligations.

Preparation for Financial Action Task Force (FATF) Visit

In preparation for the FATF visit to Luxembourg in autumn 2020, we are available to review your key AML documents (Policy, Risk Assessments, Risk Appetite Framework), help map Luxembourgish legalese to FATF terms, and conduct dry run sessions with your Conducting Officers and CEOs.

Contact us

Michael Delano

Asset & Wealth Management Leader, Audit Partner, PwC Luxembourg

Tel: +352 49 48 48 2109

Thomas Druant

Partner, PwC Luxembourg

Tel: +352 49 48 48 2334

Aurélie Mertes

Marketing Manager, PwC Luxembourg

Tel: +352 62133 57 21

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