Luxembourg Funds Intelligence Briefing

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Top funds industry news July 27, 2020: Luxembourg court cites GDPR in blocking transfer of account information to US, and other business-critical news

Conflicts between the now-generalised systems of exchange of information between countries for tax purposes and the requirements of the EU’s General Data Protection regulation have been highlighted by a Luxembourg appeal court ruling barring, at least temporarily, Israel’s Bank Hapoalim from transferring client data to the US Internal Revenue Service. The case involved an ‘accidental American’ client with an account at the Luxembourg branch of Banque Hapoalim Suisse who claimed successfully that even when anonymised – or pseudonymised – the data to be transferred contained personal information protected by the GDPR. The judgement, which opens the way for a hearing on the substance of the case, could potentially create problems for the 2014 inter-governmental agreement with Washington requiring Luxembourg’s banks to comply with the US Foreign Account Tax Compliance Act.

— Simon Gray, Editor in Chief

Sustainable Finance

Asset managers urge UK government to commit to EU sustainable investment rules

The UK Sustainable Investment and Finance Association, a trade group representing asset managers, is urging the UK government to commit to the EU’s rules for green investments and to publish its regulations quickly to prevent the country falling behind Europe as a hub for investment according to environmental, social responsibility and governance criteria. The EU rules take effect next March, but the British government has not proposed legislation as the Brexit transition period draws to a close, making it likelier that any framework will lag that of the EU.

Best source: Financial Times (subscription required)

Fund Services

Allison Whaley appointed head of funds at Intertrust Luxembourg

Fund and corporate services provider Intertrust Luxembourg has appointed Allison Whaley as head of funds, while Matt Breuer and Derek Russell have been named as client directors. Whaley joined the group in March from JPMorgan, where she was global head of fund custody in its London office for six years. She will work alongside Derek Ramage, who was appointed head of the fund operations team in May.

Best source: Delano
See also: Paperjam (in French)


EU supervisory authorities say draft PRIIPs regulatory standards failed to get board approval

The European Supervisory Authorities say they cannot submit draft regulatory technical standards for packaged retail and insurance-based investment products to the European Commission for approval because the measures did not obtain the required qualified majority of board members in favour. Although the boards of the European Banking Authority and the European Securities and Markets Authority approved the standards by the needed qualified majority, that of the European Insurance and Occupational Pensions Authority did not. Its members objected to revision of the delegated regulation at this time and indicated a preference for including the past performance graph in the key information document.

Best source: Asset Servicing Times
See also: European Insurance and Occupational Pensions Authority

Bank of England aims to enable funds to make longer-term investments after Covid-19

The Bank of England says its goal is to make it easier for pension schemes and investment funds to take long-term stakes in companies as they seek to recover from the Covid-19 pandemic. Alex Brazier, an executive director at the central bank, says a requirement for more realistic redemption periods for funds invested in illiquid assets would level the playing field among investment providers. Insurers may have greater flexibility to make equity investments when the UK leaves the EU, Brazier says, also noting that pension funds produce daily valuations though they have no obligation to do so.

Best source: Reuters

Crime and Litigation

Luxembourg court cites GDPR in blocking transfer of bank account information to US

Luxembourg’s appeal court has forbidden Bank Hapoalim Suisse and its Luxembourg subsidiary from transferring client data to the US without the approval of one of its clients and the assurance of adequate data protection provisions in the recipient jurisdiction, a ruling based on the provisions of the EU’s General Data Protection Regulation. The case had been referred to Luxembourg by the Swiss courts. The Israeli bank had agreed to provide the US authorities with data on more than 2.000 client accounts as part of a settlement of charges of abetting tax evasion, also including an $874m penalty, but the transfer was opposed by an Israeli national who was born in the US but left the country more than 50 years ago, at the age of 19. The Luxembourg court ruled that even the anonymised data that Hapoalim proposed to transfer were subject to protection under the GPDR.

Best source: Reporter (subscription required, in French)

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