Welcome Address Kevin Rideout Hong Kong Exchanges and Clearing - PowerPoint PPT Presentation

Welcome Address Kevin Rideout Hong Kong Exchanges and Clearing Limited 2 irishfunds.ie

Welcome Address Kieran Fox Irish Funds 3 irishfunds.ie

Total Assets Under Administration – Split between Irish & Non Irish Funds Total Assets Under Administration 4,500 4,095 4,251 4,000 3,806 3,375 3,500 3,000 2,722 EUR Billion 2,500 2,199 1,883 1,886 2,000 1,394 1,398 1,443 1,500 965 1,344 1,664 1,899 2,085 2,231 838 1,000 636 759 1,055 500 964 807 748 728 646 584 434 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 June- 17 Net Assets Domiciled Net Assets Non Domiciled 4 irishfunds.ie

Irish Domiciled Assets • UCITS represent 75% of Irish Domiciled Assets • 86 UCITS Man Cos • 156 AIFMs Registered or Authorised • 597 AIFMs operating in Ireland on cross border basis • 364 ICAVs established (since 18 March 2015) 5 irishfunds.ie

Ireland’s Relationship with European Investment Fund Landscape • € 13 trillion in assets • € 8 trillion UCITS • € 5 trillion Alternative Investment Funds (AIFs) • € 1 trillion of net inflows into UCITS over last 3 years • € 463 billion net inflows into European funds 2016 (>30% of which went to Irish domiciled funds) 6 irishfunds.ie

Growth of Largest European Fund Domiciles 250 198 200 180 % Growth 157 127 150 116 100 50 - 2012 2013 2014 2015 2016 Europe 113 123 142 158 178 Luxembourg 114 125 148 167 177 Ireland 116 127 157 180 198 France 109 110 114 121 129 Germany 113 124 140 153 166 UK 117 135 159 179 177 Source: EFAMA Statistics 7 irishfunds.ie

Irish Funds: Passport to Europe & Beyond UCITS funds & AIFMs benefit from an EU wide passport and can be sold in any other EEA member state without need for additional authorisation Global Distribution of Irish Funds: 70 countries Top 10 countries where Irish Funds registered for sale 1. UK 6. Austria 2. Germany 7. Luxembourg 3. France 8. Sweden 4. Switzerland 9. Italy 5. Netherlands 10. Spain 8 irishfunds.ie

Irish Funds – Maximising Distribution 9 irishfunds.ie

Irish Domiciled Funds – Net Sales Net Sales - Total Domiciled Funds 180,000 160,000 140,000 120,000 EUR Mn 100,000 161,500 80,000 139,416 135,668 60,000 114,706 98,463 85,465 40,000 20,000 0 2012 2013 2014 2015 2016 YTD June Net Sales - Total Domiciled Funds 2017 Net sales for Net Sales into Irish funds by type € Bn YTD June 2017 170.0 have already Equity Funds surpassed the 120.0 Bond Funds total for 2016 – Balanced Funds 70.0 which itself was a record year Money Market 20.0 Funds AIF -30.0 Dec-13 Dec-14 Dec-15 Dec-16 YTD June 2017 10 10 irishfunds.ie

ETFs - An Irish Success Ireland as a Domicile for European Net Sales into All European ETFs 2016 € Bn ETFs Total Assets Rest of of European ETFs - € Bn 3 Bn Europe Ireland Ireland € bn 248 7% 310 € bn 44% Rest of 56% Europe 41 Bn 93% Source: Irish Funds, June 2017 11 11 irishfunds.ie

Looking Ahead - Technology 12 12 irishfunds.ie

Looking Ahead – Brexit Three interdependent themes Current context Target outcome Continuity in UK investor access to EU/Irish funds OVER 2,000 IRISH FUNDS SOLD TO UK INVESTORS 1 Management Distribution Models (‘Delegation’) Continuity in UK firm Growth management of Irish funds € 613 bn 2 IN IRISH FUND ASSETS MANAGED BY 170+ UK FIRMS IN IRELAND 2 Increase Ireland’s growth trajectory as an SOURCE: 1-Lipper IM Dec 2015 international asset 2-Monterrey Ireland Fund Report 2016 management centre 13 13 irishfunds.ie

International asset management centre Re- affirm Ireland’s attractiveness as an Opportunity international asset management centre Growth • Predictability / efficiency of regulatory process Benefits • 12.5% corporate tax rate ‘The • Common law system Basics’ • Only English-speaking country in the Eurozone • Less expensive than Zurich, Paris & Luxembourg 1 • 800+ investment firms active in Ireland 4 • Increased presence of front office activities Asset • 18 of the top 20 global AMs have Irish funds Manager • € 4trn total AuA, € 300bn managed from Ireland 2 Activity • AM counterparties already in transit from UK • Space for 100K new employees by 2020, 100K new houses 3 • Leading global tech centre & fintech location Infra- • London-Dublin: Most flight options in Europe NOTES: structure • 35K+ employed in international financial 1. Source PwC 2. http://www.iaim.ie/why-ireland (STEM = Science, Technology, Engineering & services in Ireland, 14K in funds industry Mathematics) & http://www.hea.ie/sites/default/files/awards_- • 130K degree-level graduates across business, _all_undergraduate_by_level_and_field.xlsx law and STEM w/ 20K new grads p.a. 2 3. IFS 2020 Action Plan 2017 (http://finance.gov.ie) & IDA Ireland 4. MiFID firms, UCITS ManCos, Irish AIFMs & Non-Irish AIFMs Provide UK managers with options to support the Solution establishment of a physical presence in Ireland 14 14 irishfunds.ie

Panel One Hong Kong Equity Capital Market Update Moderator : Moderator Michelle Lloyd , Maples and Calder Panellists Panellists : Tae Yoo , HKEX Conor O’Mara , Jefferies Patrick Wong , HSBC 15 15 irishfunds.ie

Fireside Chat Bond Connect Update Barnaby Nelson , Standard Chartered Julien Martin , Bond Connect Company & HKEX 16 16 irishfunds.ie

Are Alternatives Becoming Mainstream? How to get ahead by leveraging the Evolving Product & Regulatory Environment Ian Headon Northern Trust 17 17 irishfunds.ie

Mountains of Regulation Alongside the continuing impact of existing legislation, there are a number of initiatives expected to be implemented over the course of the next few years. 2019 IORP II 2017-2018 MMFR 4MLD PRIIPs NOW MiFID II EMIR UCITS V IDD AIFMD SFTR BMR FATCA CDOT/CRS GDPR CSDR Solvency II NISD CRD IV MAD II/MAR OECD’s Common Reporting Standard EMIR European Markets Infrastructure Regulation CRS MiFID II Markets in Financial Instruments Regulation & revised Directive AIFMD Alternative Investment Fund Managers Solvency II Revised EU Solvency Directive Directive IDD Insurance Distribution Directive MAD II/MAR Revised Market Abuse Directive/Regulation FATCA Foreign Account Tax Compliance Act PRIIPs Packaged Retail & Insurance-based GDPR General Data Protection Regulation CSDR Central Securities Depositories Regulation Investment Products IORP II Revised Directive on Institutions for CRD IV Capital Requirements Directive Occupational Retirement Provision 4MLD The 4th revised EU Anti-Money Laundering UCITS V Undertakings for the Collective Investment in Directive NISD Network & Information Security Directive Transferable Securities BMR Benchmarks Regulation MMFR Money Market Fund Regulation SFTR Securities Financing Transactions Regulation 18 18 irishfunds.ie

Brexit: The Start of a Change The key themes contained within EU legislation can largely be traced back to regulatory commitments made at Global level, resulting from EU Member States’ membership on a number of international fora. DAC2 EMIR 4MLD Remuneration CRD IV Implements the G20 commitment on Closely linked to work AIFMD, UCITS, CRD Implements OECD’s Common centrally clearing, on AML undertaken by III / IV international standards Reporting Standard in margining and FATF on bank capital the EU transaction reporting adequacy and liquidity as developed by the MAR/MAD II Basel Committee ATAP SFTR A key FSB aim is to minimise market Implements the base Forms part of the G20 Individual abuse to mitigate erosion and profit work on shadow Accountability systemic risk shifting (BEPS) Action banking Plan Basel principles MMFR provide a framework to achieve robust and MiFID II FSB recently transparent risk concluded MMFs are Introduces organised management and insufficiently regulated trading facilities to decision-making move OTC to trading venues TAX/REVENUE PROTECTION TRANSPARENCY RISK REDUCTION INVESTOR PROTECTION MARKET ABUSE/ACCOUNTABILITY 19 19 irishfunds.ie

EU Investors and Alternatives Marketing to EU Investors EU Fund Non EU AIF Marketing Passport for EU AIFM’s Timeframe Private Placement EU AIFM – EU AIF = full compliance, and EU AIFM – Full Compliance for AIFM; Depositary (Depot – access to Passport Lite) Non EU AIFM – Minimal compliance, and dependent upon local marketing rules 2016 - 2018 Non EU AIFM’s need to comply, but with a 28 member states each require compliance with N.P.P.R lighter depositary liability NB, we understand that pursuant to Article 42, marketing to Germany / Austria / Denmark, will trigger a Depositary (Depot Lite) requirement. There may be an impact for use of subsidiaries / feeders (lookthrough) Subject to Passporting being made available Potential for NPPRs to be switched off, requiring Passporting, 2018 - 2021 to the Non EU AIFM location and therefore full compliance Reverse Solicitation Exempt 20 20 irishfunds.ie