The Prudential Regulation Authority (PRA) has unveiled its post-Brexit framework for insurance firms, finalizing the new rules under Policy Statement 15/24. The reforms emphasize safety, soundness, and a streamlined regime to enhance competitiveness and growth. This marks a pivotal shift for insurers, enabling productive investments and a dynamic UK insurance market from late 2024.
As a leader in financial services, LPA supports clients in navigating complex regulations with innovative, tailored solutions to future-proof their operations. Let’s shape the future together! #SolvencyUK #Innovation
Update CSSF document upload: New transmission procedures for asset managers
The CSSF (Commission de Surveillance du Secteur Financier) has fundamentally revised the procedures for transmitting the Key Information Document (KID) and other regulatory documents (MR/AI). These changes will enter into force on 15 November 2024 and affect all asset managers that manage or distribute funds in Luxembourg.
As already announced in the communication of 5 April 2024, two digital transmission methods will be available from this date to ensure a more efficient and secure exchange:
Document upload via eDesk: A dedicated portal through which documents can be manually uploaded and submitted directly to the CSSF.
Automated API transmission: For asset managers processing larger volumes of data, the CSSF offers an API-based solution via the S3 protocol. This enables direct, automated transmission.
Important information for asset managers
Exclusive use of the new channels: From 15 November 2024, the CSSF will only accept the transmission of documents via an eDesk or API channel.
Discontinuation of the old transmission methods: Documents submitted via the previous channels will no longer be considered! This requires rapid adaptation of internal processes to comply with the new standards.
What does this mean for asset managers?
Switching to the new procedures is not only a technical challenge, but also requires strategic decisions in process design. This is where we come in. With extensive experience in state-of-the-art technologies and the latest regulatory compliance requirements in asset management, we offer solutions that are specifically tailored to the needs of the industry:
Consultancy and implementation: support with the integration of the new API interface or the use of the eDesk portal.
Regulatory compliance: Ensuring that all CSSF requirements are met.
Technological customisation: Development of customised IT solutions that can be seamlessly integrated into existing systems.
Efficient and future-proof with LPA
The CSSF’s new transmission procedures offer the opportunity to digitalise processes and make them more efficient in the long term. With our services, we help you to successfully implement this changeover and ensure regulatory compliance.
Contact us to optimise your processes in line with the new requirements.
LPA – your partner for innovative and sustainable asset management solutions.
The Commission Delegated Regulation (EU) 2024/2759, which supplements the revised ELTIF 2.0 regime (ELTIF RTS), was published in the Official Journal of the EU on 25 October 2024 and takes effect on 26 October 2024. This supplement specifies new responsibilities for ELTIF managers, including product lifecycle management, minimum holding periods, redemption policy requirements, cost disclosure, AIFM/AIFMD Reporting, and risk-liquidity assessments. This long-awaited update aims to facilitate retail investor access to ELTIF products while providing greater flexibility in asset selection.
Key Takeaways from ELTIF 2.0:
Lifecycle Procedures: ELTIF managers shall consider the lifecycle and characteristics of assets to be aligned with the ELTIF’s lifecycle.
Use of Derivatives: Solely economically suitable derivatives for hedging purposes are allowed.
Minimum Holding Period and Redemption Policy: Must align with the ELTIF’s structure and target investor type (primarily retail investors), with maximum redemption limits specified in Annexes I & II. A transfer request matching mechanism is allowed, with details disclosed in a clear, non-technical manner for retail investors.
Matching Requirements: Content requirement for full or partial matching of transfer requests to ensure fair and orderly transactions, considering the fund’s liquidity and redemption policies.
Risk and Liquidity Requirements: Outlines criteria for determining the liquid assets percentage in an ELTIF to meet redemption requests. These criteria consider factors like the ELTIF’s lifecycle, investment strategy stability, and potential market conditions impacting redemptions.
Cost Disclosures: Costs borne directly or indirectly by investors must be disclosed following the standardized approach defined in Article 12.
KID Requirement: Key Information Document (KID) required for retail distribution to provide appropriate transparency and customer protection.
At LPA, we understand the importance of staying up-to-date with the regulatory landscape. The Capmatix AM product line facilitates key fund reportings, including AIFM/AIFMD reporting, and document generation to support compliance.
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The European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Securities and Markets Authority (ESMA) recently published the Final Report on draft Implementing Technical Standards (ITS) for the European Single Access Point (ESAP). This report outlines the requirements for entities to submit specific financial and sustainability-related information in compliance with the ESAP, aimed at increasing transparency and standardizing access to crucial regulatory information.
The ITS mandates that collection bodies submit data related to Prospectuses and key information disclosures required under the Sustainable Finance Disclosure Regulation (SFDR). These include details on sustainability risk policies applied within investment decisions, the adverse impacts at the entity and group levels, and sustainability-related product disclosures. Additionally, entities must report on Product Intervention and Product Rules (PRIIPs) and the Markets in Crypto-Assets Regulation (MiCAR). For MiCAR compliance, submissions should include a Crypto-asset white paper for assets that are neither e-money tokens (EMT) nor asset-referenced tokens (ART), as well as essential information regarding the issuer of ART/EMT and any relevant crypto-asset service providers.
The standards also establish the acceptable data formats to ensure consistency and accessibility. Article 2, paragraph 1, point (3) of Regulation (EU) 2023/2859 specifies the requirements for “data-extractable” formats, while Article 2, paragraph 1, point (13) of Directive (EU) 2019/1024 clarifies the criteria for “machine-readable” formats. According to these guidelines, HTML, PDF, and txt formats are deemed extractable as long as text within them is accessible for extraction. In contrast, machine-readable formats—such as XBRL, XBRL-XML, XBRL-CSV, and Inline XBRL—are required for their compatibility with software applications that facilitate data identification, recognition, and extraction.
By standardizing submission formats and procedures, the ESAP aims to create a more efficient, transparent, and technologically compatible system for information accessibility across the EU.
The Prudential Regulation Authority (PRA) is gearing up to release its long-awaited final Solvency II rules package in mid-November, set to go live on 31 December 2024. These landmark changes will reshape regulatory requirements for UK Solvency II firms, insurance groups, and select third-country branches.
The upcoming rules could require updates to existing PRA waivers and modifications, especially those tied to retained EU law and the PRA Rulebook. To ease the transition, the PRA will directly reach out to affected firms later this month with simple steps to align their compliance needs, ensuring a seamless shift to the new framework. Firms will have until 30 December to provide necessary consent, allowing uninterrupted compliance into the new year.
More details will soon be posted on the Bank of England’s website. Stay tuned!
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How the new TCC regulation will affect asset managers, brokers and investors – revolution or formality?
Together with Drescher & Cie, we cordially invite you to our event, which will focus on one of the most important topics for banks, asset managers and wealth managers in 2025: The new transaction cost calculation (TCC Arrival Price Method) for funds and ETFs. Be prepared and get a valuable head start in an increasingly competitive market.
What do banks, asset managers and wealth managers need to know and consider in 2025? Our experts Sebastian Höft, Global Director of Asset Management and Simon Blechinger , Product Manager Asset Management Solutions, from LPA Lucht Probst Associates will provide detailed insights and explanations of the new regulations and their impact on fund performance trends, for example. Find out how you can strengthen your competitive position through increased transparency and efficiently fulfil regulatory requirements.
Focus on the future of transaction costs for funds and ETFs
On 21 October, the European Finance Forum (EFF) took place in Munich, where we as LPA were represented by Sebastian Höft, our Global Director of Sales Asset Management, and our Product Manager Simon Blechinger, LL.M., M.Sc. The event attracted a high-calibre audience from the asset management and banking industry and provided an outstanding platform for academic exchange.
The discussion centred on the upcoming introduction of the new TCC transaction cost method of arrival prices for funds and ETFs, which will be applied from 2025. There was particular interest in how this methodology will affect the presentation of implicit costs. Our two speakers Höft and Blechinger shed light on key issues such as the frequency with which PRIIP KIDs will be created, which could be monthly or even more frequently in future.
An exciting aspect of the presentation was the presentation of initial research results, which suggested that corporate bond funds could probably become more cost-effective through the arrival price method. This represented a surprising advantage, while ETFs, which are considered favourable due to their high liquidity, may be more expensive in the implied cost presentation. These findings provide food for thought about the existing market mechanisms, even if they are not representative.
Our conclusion of the day? The new regulation poses major challenges for market participants and makes it clear that specialised technology companies such as LPA are essential in order to calculate PRIIP KIDs correctly and compliantly – precisely in the interests of the supervisory authorities and for professional fund advice and brokerage.
Networking was not neglected either: the evening ended with a cosy get-together in a relaxed atmosphere and great conversations. A big thank you goes to the team of the EFF European Finance Forum and the board members Rudolf Geyer and Dr Thomas Grauer – for the top organisation, the impressive premises in Munich’s Maximilianstraße and of course the excellent catering. We are already looking forward to the next joint event and highly recommend this format to everyone from the banking and capital market world!
See you next time and here’s to many more exciting insights!
The European Securities and Markets Authority (ESMA) has released the timeline for key regulatory updates in sustainable finance, set to take effect in 2025. These changes will be particularly relevant for fund managers, asset managers, and compliance professionals who need to integrate ESG and sustainability requirements into their products and processes.
From new guidelines on fund names to enhanced disclosure obligations for non-financial companies, these regulations will play a crucial role in ensuring transparency and compliance within the sustainable finance sector. It is essential to be prepared for these upcoming changes to meet regulatory demands and address the growing emphasis on sustainability.
Here are the key dates and requirements for 2025:
ESMA Guidelines on funds names using ESG or sustainability-related terms:
21 November 2024: Applicable for any new incepted fund
21 May 2025: Applicable for existing funds. End of transition period
Taxonomy Regulation:
1 January 2025: Non-financial undertakings need to disclose KPIs on taxonomy-alignment according to Taxonomy Regulation Disclosures Delegated Act
EU Green Bond Regulation:
Mar-Jun 2025: Consultation on remaining technical standards
Sustainable Finance Disclosure Regulation:
Summer 2025: ESMA considers to review Level 1 implementation
30 June 2025: Joint ESAs Report on voluntary disclosures under SFDR
Benchmark Regulation:
End 2025: End of third country benchmarks transitional provisions
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As part of the “Facts, Funds & Food” series, LPA and BVI hosted a successful event last Tuesday on the timely topic: “Are You Ready for 2025? Updates on CRR III and Transaction Costs.” Just after the BVI Asset Management Conference and ahead of Oktoberfest, the event attracted a strong audience from the asset management sector.
Key discussions centered around the implementation of the new Arrival Price Method for transaction costs and the evolving requirements for PRIIPs/KIDs updates. Notably, CRR III will apply higher risk weights to crypto and tokenized assets compared to traditional ones, with final regulations expected by mid-2025.
We extend our thanks to BVI for their excellent venue, a high turnout of industry leaders, and an impressive speaker lineup. With our Capmatix AM software, LPA is fully prepared for these upcoming regulatory changes. We’re excited to continue supporting our partners in adapting to the new transaction cost and CRR III requirements, said Sebastian Höft (LPA), Global Director of Sales Asset Management.
We’re delighted to be able to make our presentation available to all interested market participants. Just send us an email to contact@l-p-a.com with the subject line “FFF LPA” and we’ll get back to you as soon as we can.
+++ Acarda, the specialist for integrated, regulatory and automated data management and reporting solutions will in future be operating under the umbrella of the LPA Group +++ This acquisition takes LPA into the growth segment of asset management and marks another milestone on its journey of international expansion +++ The acquisition broadens the LPA proposition combining innovative CapTech and RegTech automation solutions for financial sector organizations worldwide
Frankfurt/Main, (08.09.2020) – The LPA Group (https://www.l-p-a.com), the European market leader in capital market technology (CapTech) and technology-centric transformation services for the financial world, today announces the acquisition of the Acarda Group. As one of the leading international solution providers for asset managers, fund administrators, insurance companies and banks, RegTech specialist, Acarda focuses primarily in the automation of regulatory reporting and in automated data management. One of the company’s USPs is the proprietary cloud-based SaaS (Software-as-a-Service) platform, arep. This automates the entire reporting process irrespective of the IT systems on which asset managers, service providers or insurance companies operate their business. In addition to European reports and data templates such as AIFMD, Solvency II, PRIIPS/MiFID II and CRR, arep covers country-specific reports, for example for BaFin, CSSF, FCA and BVI.
The addition of Acarda will enable the LPA Group to enter the attractive digitalization and transformation business in asset management and increase its expertise and technical know-how in the field of automation. Founded in 2006, Acarda solutions are actively used by over 40 leading international organizations and employs around 50 people at locations in Frankfurt/Main and Luxembourg. As a result of the extensive expertise gained in asset management, the LPA Group can partner with more asset managers, insurers and fund administrators in addition to banks and financial services companies. In adding leading asset management companies in Germany, Luxembourg, France, Austria, UK and Ireland among others to its list of customers, LPA is once again underlining its ambitious international growth objectives. For the company, which also includes the CapTech Modelity, startup AAAccell, which has received many awards for its innovations, and EffCom. The acquisition of Acarda represents a further step toward becoming the global CapTech market leader.
The accretive, add-on acquisition has already been preceded by a successful collaboration and test phase lasting several months. Since April 2020, the two companies have been working closely together, successfully exploiting sales synergies and setting up initial technology and interface projects. With a view to the future, LPA and Acarda plan to work closely on joint products and to develop further ancillary segments. The two managing directors of Acarda, Gerhard Jovy and Ali Karaca, will remain on board after the takeover by the LPA Group. Peter Schurau, CEO of the LPA Group: “Our aim is not only to help shape the global market for CapTech and technology-centric transformation services, but to lead it. Innovative IT transformation that can be implemented immediately is in high demand in the financial industry. That is why we want to grow not only organically, but also through acquisitions. I am therefore delighted about the transaction with Acarda because the company perfectly complements the LPA Group. From our very fruitful cooperation with Gerhard Jovy, Ali Karaca and their team in the past, we can expect further product innovations for the global financial world.” Stefan Lucht, co-founder and managing partner at LPA: “There is enormous potential for process automation not only in the capital market sector but also in the entire financial industry, both for users and for providers. With the acquisition of Acarda, we are proud to now be a highly competent solution provider for asset managers and insurers. Acarda’s automated reporting solutions provide real value for our customers worldwide and increase our footprint in the digitalization of time-consuming processes.” Gerhard Jovy, Managing Director Acarda: “In asset management in particular, there is increasing demand for a central software platform that covers regulatory requirements. And a succession of new requirements promises further growth potential. Combined with the technology and consulting expertise of the LPA Group, we will be able to serve customer needs in this segment even better in the future. We look forward to a successful collaboration and to developing new products and solutions together. About the LPA Group: The LPA Group is one of the world’s leading developers and consultants for technology-based capital market solutions (CapTech) for banks, insurance companies and fund providers. The core business of the multi-award-winning group is the CapTech suite, a portfolio of leading technology solutions for automated consultancy, sales and documentation for financial instruments, structured products and OTC derivatives. The products and services of the LPA Group help financial services companies in their capital market activities to automate their necessary advisory and regulatory documentation processes, thereby increasing their efficiency and achieving full compliance. One of the main LPA solutions, Capmatix, speeds up digital transformation within leading organisations by providing powerful and highly configurable modules that are used as building blocks that fit seamlessly into an existing digital infrastructure. The LPA Group also advises its customers on the strategic planning and implementation of CapTech solutions. At its headquarters in Frankfurt and at ten other international locations including Tel Aviv, London, Zürich, New York, Paris, Barcelona and Singapore, almost 400 technology and capital market experts are now working for a portfolio of international clients.
