1. MiFID II and the impact on asset management
Where does BNPP AM stand?
For Professional Investors
Marketing Communication
Vincent Moreau
London, 2 October 2017

2. The clock is ticking: only 3 months to go
Level 1 texts
Level 2 texts
Local texts
Further guidelines?
From 2009
EU Commission
Prepares MiFID II
Directive
April 2014
EU Parliament
Votes MiFID II
Directive
April 2014 – June 2017
EU regulator (ESMA)
Defines Technical Standards detailing MIFID II
July 2017
Local Regulators
Transpose MIFID II in local law
January 2018
Entry into force
Further guidelines in the coming years?
BNPP AM will be ready by the end of this year
The project will continue in 2018 as some regulatory issues remain unclear
Product governance: negative target market
Client transparency: transaction costs disclosures
Reporting: clarifications on regulatory reporting…

3. MiFID II key changes for BNPP AM
- MiFID II main changes -
Identification and follow-up of client targeted by a fund
Stricter rules on inducements to avoid conflict of interest (ban for discretionary portfolio management and independent advice)
Creation/update of no-rebate shares
Clearer complaint management process
Investor
protection
Full transparency on products costs
Enhanced reporting on mandates
Extension of transaction reporting to all instruments
Transparency on brokers used (top 5 brokers/instrument)
Transparency
Reinforced best selection and best execution policy and control
Research budget transparency
Electronic execution of OTC derivatives
Market
execution
Reinforced staff’s knowledge and experience
Increased board requirements
Remuneration policy validated by the board after Compliance advice
Storage of all communications / meetings with clients
Governance

4. BNPP AM assumptions & project status
15/11/2018

5. Investor protection - BNPP AM status - - BNPP AM approach -
Prototype ready, being validated
Target Market shared in Nov.
European Fund and Asset Management Association (EFAMA) template
Time horizon: linked to product’s volatility
Negative target market: no view so far
Product Governance
No-rebate shares ready by Nov. for France, Luxembourg and being defined for Belgium
No-rebate shares access limited to mandates & Independent advice
Shares classes
Investor protection
Distributors status requested in Q4 during client reviews
Most distributors should be non-independent
Distributors to contact BNPP AM to get access to no-rebate shares
Distributor’s status

6. Transparency - BNPP AM status - - BNPP AM approach - Beta test ongoing
Ready end of year to comply with MiFID and PRIIPs
Transactions: PRIIPs-like approach, standard transaction costs grid at asset class level
Costs & Charges
Raw data being produced, databases being updated
Shared by Nov.
Industry standards (EMT for MiFID and EPT for PRIIPs) endorsed, no bespoke template produced
Data
Exchange
Transparency
Performance reporting globally compliant
Cost & charges reporting being developed
Reporting produced for all mandates
Approach consistent with fund management
Reporting to mandates

7. Questions?

8. Inducements and no rebate shares
Parvest
Best Selection Europe
(Distribution share)
Target market: high-level status
Target market prototype prepared  Discussions ongoing with peers to fine-tune the approach
Provided end of Q4 to clients
All vanilla strategies may be provided to basic investors
More complex strategies would be reserved to informed investors: absolute return, loan, commodities, structured (question mark on AIFs)

9. Inducements and no rebate shares – No rebate shares creation and conversion process
DRAFT
Eligibility to the no rebate share (Privilege share)
“These shares may only be acquired by:
Managers (DPM)
OR Distributors specifically authorised by the board which provide only fee-based independent advisory services as defined by MiFID, with respect to distributors that are incorporated in the European Economic Area”
OR Clients with more than EUR 3 million per sub-fund
1 Specific situations (e.g. Non-independent advisor with inducement) managed through specific SICAV’s board resolution)
Timeframe for prospectus update
Jun. 17
Flexi I
Sept-Oct. 17
Easy + L1
Oct.-Nov. 17
Parvest
To be defined
40 creations
Prospectus updates through 2017
275 updates
10 creations
Sept-Oct. 17 French & Belgium FCPs
Share classes & inducements: high-level status
No-rebate shares ongoing in France and Luxembourg  No-rebate offer available by the end of November
BNPP AM wording for the no-rebate share consistent and protective vs. wording from other players
The conversion from Classic shares to Privilege shares is a tricky question:
French-law funds: specific Legal and operational difficulties
Discussion ongoing at French market place level

10. AGENDA Level 1 texts Level 2 texts Local texts Further guidelines?
From 2009
EU Commission
Prepares MiFID II
Directive
April 2014
EU Parliament
Votes MiFID II
Directive
April 2014 – June 2017
EU regulator (ESMA)
Defines Technical Standards detailing MIFID II
July 2017
Local Regulators
Transpose MIFID II in local law
January 2018
Entry into force
Further guidelines in the coming years?
BNPP AM will be ready by the end of this year
The project will continue in 2018 as some regulatory issues remain unclear
Product governance: negative target market
Client transparency: transaction costs disclosures
Reporting: clarifications on regulatory reporting…

11. Disclaimer
BNP PARIBAS ASSET MANAGEMENT UK Limited, “the investment company”, is authorised and regulated by the Financial Conduct Authority.  Registered in England No: , registered office: 5 Aldermanbury Square, London, England, EC2V 7BP, United Kingdom.
This material is produced for information purposes only and does not constitute:
an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or
 investment advice.
This material makes reference to certain financial instruments authorised and regulated in their jurisdiction(s) of incorporation.
No action has been taken which would permit the public offering of the financial instrument(s) in any other jurisdiction, except as indicated in the most recent prospectus and the Key Investor Information Document (KIID) of the relevant financial instrument(s) where such action would be required, in particular, in the United States, to US persons (as such term is defined in Regulation S of the United States Securities Act of 1933). Prior to any subscription in a country in which such financial instrument(s) is/are registered, investors should verify any legal constraints or restrictions there may be in connection with the subscription, purchase, possession or sale of the financial instrument(s).
Investors considering subscribing to the financial instrument(s) should read carefully the most recent prospectus and Key Investor Information Document (KIID) and consult the financial instrument(s’) most recent financial reports. These documents are available on the website.
Opinions included in this material constitute the judgement of the investment management company at the time specified and may be subject to change without notice. The investment management company is not obliged to update or alter the information or opinions contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the financial instrument(s) in order to make an independent determination of the suitability and consequences of an investment therein, if permitted. Please note that different types of investments, if contained within this material, involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or profitable for an investor’s investment portfolio.
Given the economic and market risks, there can be no assurance that the financial instrument(s) will achieve its/their investment objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the financial instrument(s) and material market and economic conditions, including interest rates, market terms and general market conditions. The different strategies applied to financial instruments may have a significant effect on the results presented in this material. Past performance is not a guide to future performance and the value of the investments in financial instrument(s) may go down as well as up. Investors may not get back the amount they originally invested.
The performance data, as applicable, reflected in this material, do not take into account the commissions, costs incurred on the issue and redemption and taxes.
This document is directed only at person(s) who have professional experience in matters relating to investments (“relevant persons”).  Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Conduct Authority.  Any person who is not a relevant person should not act or rely on this document or any of its contents.
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