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’
ESMA Submits Report on Sustainability Risks and Factors in the AIFMD and UCITS Directive
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
New ESG KPI Report by Invest Europe
Invest Europe, the trade association representing Europe’s private equity and venture capital sector, has published its first ESG KPI report with data from 2021.GovernanceVenture Capital
New countries have been added to the EU tax blacklist
On 14 February 2023, the British Virgin Islands, Costa Rica, the Marshall Islands, and the Russian Federation have been added to the EU tax blacklist by the EU Council.Cross-BorderGovernance
EU Markets in Crypto-assets Regulation (MiCA) impending
The EU Markets in Crypto-Assets Regulation (MiCA) is expected to be passed in April 2023 according to the European Parliament’s legislative updates.Crypto-assetsMiCA
ELTIF 2.0 now published in the OJEU
The amendments include a broader scope of eligible assets, a simplified definition of ‘retail assets’, which include lighter retail investor requirements, and an increased market capitalization threshold.Retail Investors
Thematic review of sustainability disclosures for funds with sustainable investment as the objective
On 3 February 2023, the Danish Financial Supervisory Authority (“DFSA”) published a thematic review of sustainability disclosures for eight funds with sustainable investments as their objective.ComplianceDisclosure RequirementsSustainability
ELTIF 2.0 Adopted
On 15 February 2023, the European Parliament has voted in favour of an update to the EU’s Regulation for Long-Term Investment Funds (ELTIFs), also known as ELTIF 2.0.Retail Investors