Commission Adopts Changes to the Risk-Weight of Certain Alternative Investments (Solvency II)
Published 8 March 2019
With trillions (EUR) of assets under management, the insurance sector plays a vital role at the European capital market.
Insurance companies’ investment allocation is closely related to the capital requirements and risk management principles implemented in the Solvency II Directive as well as the delegated regulation (EU) 2015/35 setting out methods, assumptions and standard parameters for calculating the capital requirements.
An amendment to the delegated regulation (EU) 2015/35 was adopted by the European Commission 8 March 2019. The legislation includes changes to the risk-weight of certain alternative investments; specifically the new legislation introduces a new category of “long-term equity” exposures with a risk-weight of 22% (as opposed to the current risk-weight of 39 % applying to closed-ended and unleveraged alternative investment funds, including venture capital funds that are European Venture Capital Funds (EuVECA), and as opposed to the risk-weight of 49 % applying to unlisted equity in general) provided they meet a series of conditions, including the length of the investment and its geographic location.
See the amended regulation here.
Also tagged ‘Risk Management’
On 30 April 2019, the European Securities and Markets Authority (ESMA) published its final report on integrating sustainability risks and factors relating to environmental, social and good governance considerations in the AIFMD and UCITS Directive.AIFMDESMAGovernanceRegulatory Technical StandardsRisk ManagementSustainability
On October 25, 2020, the European Commission launched, as a part of the EU Action Plan, a public consultation on a possible EU-level regulatory initiative dedicated to foster long-term sustainable and responsible corporate behavior as part of the Commission’s strategy to achieve carbon neutrality under the European Green Deal.Sustainability
ESA Publishes Joint Supervisory Statement on the Interpretation on Fund Managers’ ESG Disclosure Obligations
From 10 March 2021, fund managers are required to make certain ESG disclosures available on their website and in their pre-contractual disclosures to investors.AIFMDComplianceDisclosure RequirementsSustainability
ESMA has launched a consultation on guidelines on marketing communications under the cross border distribution of funds regulation.AIFMD
As of 1 January 2021 a new employee share scheme applies. This new employee scheme entails that certain new and small companies can award employees with shares, options and warrants up to 50% of the employee's annual salary while the employee will be subject to taxation as share income (up to 42% taxation) instead of personal income (up to approx. 55% taxation).
EU and non-EU AIFMs submitting an application for marketing of non-EU AIFs to professional investors in Denmark will be subject to new requirements. The Danish FSA has issued a new Executive Order, which enters into force on 1 January 2021.AIFMD