DAG Blog…

May 2024 Update

The DAG chairmanship has transitioned from Paul Witham of FIL to Brian Blanchard of AllianceBernstein, with Boris Villiaume of Allianz serving as the deputy chair. The group extends its gratitude to Paul for his dedicated leadership of the DAG.

Guidance document on Marketing Intermediary Due Diligence now published.

March 2024 Update

Distribution Due Diligence paper

The DAG WG recently drafted a paper which outlined the requirements of AML/KYC & KYD and the responsible parties. Since this subject impact distributors the Investment Fund Manager/Management Company and the appointed Transfer Agents the paper will be reviewed by the Findel AML WG. The paper is expected to be published on the website in Q2 2024.

Platform meetings:

Members recapped on the recent meeting with a Luxembourg based distribution platform. In addition to an overview of the platforms business strategy, members also discussed the appointment of sub-distributors by the platform, the requirement of Ongoing Monitoring and the need for platforms/Intermediaries/Distributors to provide Key Performance Indicators to Investment Fund Managers (IFMs)/ Management Companies as part of their Ongoing Monitoring.

Costs & Charges

Members discussed different approaches to consider the different types of fees, platform fees, trailer fees, network fees. A summary of the different fee types and approaches will be documented to assess common approaches.

November 2023 Update 

US Brokers:

The DAG working group are progressing with an explainer document to outline and clarify the different requirements of Distributor Due diligence performed by the Investment Fund Manager/Management Company, as well the AML/KYC performed by the Transfer Agent. A draft paper has been produced for DAG members review and will be available on the Findel website shortly.

Consumer duty:

The FCA’s Consumer Duty is a set of new rules and guidance designed to increase the protection for retail financial services market. Due diligence questionnaires have been extended for UK distributors. Members discussed the impact the feedback required in the distributor feedback template (DFT) and the potential challenges in collecting and assessing large volumes of information. Discussions ongoing ahead of the entry into force date of 31^st July 2024.

Platform meetings:

Members recapped on the recent meeting with a large fund distribution platform. In addition to an overview of the platforms business strategy the group discussed feedback concerning the due diligence questionnaires requested from Investment Fund Managers (IFMs)/ Management Companies, the feedback was this generally works fine. Members also discussed the appointment of sub-distributors by the platform, then the requirement of Ongoing Monitoring and the need for platforms/Intermediaries/Distributors to provide Key Performance Indicators to Investment Fund Managers (IFMs)/ Management Companies as part of their Ongoing Monitoring.

The link to Findel’s KPI guidance can be found here Ongoing Monitoring of Marketing Intermediaries. Finally members discussed the lack of automation for Transfer processing, the Findel support SWIFT transfers as a way of automating these instructions.

Next DAG meeting topics:  to include ;

• Platform meeting updates
• UK Consumer duty ongoing

August 2023 Update

US Brokers:

Following DAG working group meeting with several US brokers outlining issues and inconsistencies in approaches  the DAG working group will clarify the differing requirements of Distributor Due diligence performed by the Investment Fund Manager and the AML/KYC onboarding performed by Transfer Agents. To be shared soon.

European Platform meetings:

Following good discussions with platforms in 2021 & 2022, the DAG working group will again invite platforms to meet with the DAG to discuss progress of different topics such as KPI’s, Transfer Automation and Distributor due diligence and highlight other improvement areas. The DAG will use this to help identify what they will prioritise in 2024.

CBDF Marketing Communication:

The DAG working group discussed the requirements to comply with when producing and issuing Marketing Communications. Subsequently & following the testing of Marketing Communications by the CSSF, on the 23^rd August the CSSF has issued their General Findings and Observations to the industry. The link can be found below

2021-2023 Marketing communications under the regulation on cross-border distribution of funds – CSSF