IFA News, Regulatory and Conference Highlights – June 2024

News

• Preqin is currently exploring the possibility a sale.
• Goldman Sachs has raised USD13.1bn for its senior direct lending fund, West Street Loan Partners V.
• Takeaways from the Milken Conference:
  • there was renewed focus on Middle Eastern fund managers;
  • there was continued discussion surrounding consolidation in the private capital market with David Solomon, CEO of Goldman Sachs, opining that there is only room for 10 to 15 market leaders;
  • there was further discussion regarding the retailisation of private capital funds being the next frontier; and
  • there was positivity regarding a resurgence in M&A moving forward but many speakers noted that it was unlikely that US interest rates would drop any time soon, not least prior to a general election.

Regulatory Updates

U.S.

• The SEC Investor Advisory Committee discussed its views on the New Frontier for Investment Advice and AI Regulation at a public meeting on 6 June 2024.
• The U.S. Court of Appeals for the 5th Circuit has struck down the SEC's Private Fund Adviser Rules that were adopted in August 2023. The rules broadly required additional fee disclosures and prohibited managers from granting preferential redemption or information rights to certain LPs (5 June 2024).
• The SEC has adopted amendments to Regulation S-P. The regulation governs the treatment of non-public personal information about consumers by broker-dealers, investment companies, registered investment advisers and transfer agents(19 May 2024).
• The Office of Financial Research adopted its Final Rule regarding the U.S. Repo market. The rule requires daily reporting to the OFR by certain U.S. covered reporters with large exposures to the non-centrally cleared bilateral repo market. The Final Rule comes into effect 5 July 2024 (6 May 2024).

UK

• The Chief Executive of the FCA confirmed in a recent speech (5 June 2024) that the FCA:
  • will be engaging with market participants at an outreach event in New York regarding the build-up of systemic risk from leverage; and
  • has approved 4 LTAFs so far.
• The chair of the FCA, Ashley Alder, has confirmed in a recent speech that the FCA are currently focusing on:
  • continued review of UCITS, AIFMD and MIFID to confirm where the UK regulatory regime will diverge (if at all) from the EU;
  • supervising valuations for non-bank financial intermediation;
  • plans to consult on a new regime to replace the PRIIPS Regulation in the UK;
  • potentially extending the disclosure and labelling regime of SDR to overseas funds; and
  • developing models with respect to fund tokenisation.

EU

• ESMA has published its final report and guidelines on funds' names using ESG or sustainability-related terms (15 May 2024).

Luxembourg

• The CSSF has invited investment firms and relevant stakeholders to provide stakeholder feedback on the EBA and ESMA's investment firms' prudential framework. A public hearing on the discussion paper will take place on 20 June 2024. The consultation runs until 3 September 2024 (5 June 2024).
• The CSSF has replaced Circular CSSF 02/77 with Circular CSSF 24/856, taking effect 1 January 2025. Circular 02/77 concerns the rules surrounding NAV calculation errors and non-compliance with investment rules (such as investment criteria, portfolio management techniques and investment restrictions). The new Circular expands the scope of the rules to cover UCITs, ELTIFs, SIFs and SICARs (29 March 2024).

Ireland

• The Central Bank of Ireland has confirmed it will establish an Innovation Sandbox Programme to commence in Q4 of this year to provide regulatory advice and support for innovative projects to promote better outcomes for society and the financial system (4 June 2024).

Events