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Published byJoseph Walsh Modified over 8 years ago
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Strictly private & confidential
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2 ASSOCIATION OF INVESTMENT FUND MANAGEMENT COMPANIES 2015 election year – number of populist measures that can have long term effect CHF loan regulation – 8 bn HRK estimated negative effect on banking sector bottom-line, pressure on already modest FX reserves; however, capital adequacy will remain strong despite huge loss (ca 19,8% vs current 22,3%) vouchers for electricity, Christmas payout for pensioners, termination of 40% income tax rate... Lack of much needed structural reforms of public sector in the election year High unemployment (16%) and low labour market participation (ca 51%) Unfavourable demographic change High youth unemployment and significant youth migration outflow The pension system is fragmented into a high number of special pension schemes, which gives rise to unequal treatment and further contributes to early exits Political environment
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3 ASSOCIATION OF INVESTMENT FUND MANAGEMENT COMPANIES In 1Q15 „statistically” out of recession, recovery confirmed in 2Q15 (+1,2% yoy GDP growth) – mostly due to higher private consumption and government spending Robust retail sales (4,5% yoy in July - highest growth in the past 8 years, growing 12 months in a row), VAT receipts, and better consumer confidence suggest that private consumption has bottomed out Employment has stabilized and corporate profits are recovering (solid corporate earnings in 2Q15) Excellent tourism season will bode well for GDP growth and private consumption on annual basis – estimated tourism revenue ca 8 bn EUR (above record 2008 level – 7.5 bn EUR) Industrial production grew in July (3,9% yoy), positive trend 6 months in a row supported by low base and foreign demand recovery High budget deficit and growing public debt Macroeconomic environment
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4 ASSOCIATION OF INVESTMENT FUND MANAGEMENT COMPANIES Stock exchange index development
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5 ASSOCIATION OF INVESTMENT FUND MANAGEMENT COMPANIES Act on Open-Ended Investment Funds with Public Offering (UCITS IV) Transposes Directives 2009/65/EC, 2010/44/EU, 2010/43/EU, 2010/78/EU Transposes EU Regulations 583/2010, 584/2010 Alternative Investment Funds Act (AIFM) Transposes Directive 2011/61/EU Capital Markets Act (MiFID) Transposes Directives 89/117/EC, 97/9/EU, 2001/34/EU, 2003/6/EU, 2003/71/EU, 2003/124/EU, 2003/125/EU, 2004/39/EU, 2004/72/EC, 2004/109/EU, 2006/48/EU, 2006/49/EU, 2006/73/EU, 2007/14/EU, 2007/44/EU, 2009/111/EU, 2010/73/EU, 2010/78/EU, 2011/89/EU Takeover Act AMLCTF Act FATCA – IGA Model 1 A (information exchange postponed till 30.09.2016.) Bankruptcy Act (revised from 01.09.2015.) Allowing Close-Out Netting -> soon ISDA legal opinion Legal Framework
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6 ASSOCIATION OF INVESTMENT FUND MANAGEMENT COMPANIES Corporate Tax Open ended funds are not subject to corporate tax Close ended fund are subject to 20% corporate tax Corporate investors are subject to 20% corporate tax Capital Gain Tax Natural persons are not subject to capital gain tax 01.01.2016. capital gain tax is 12% Payable within eight days No Tax after three years Savings Tax Natural persons are not subject to 12% savings tax Withholding Tax Natural persons are subject to 12% withholding tax Value Added Tax Funds management is not subject to VAT Portfolios management is subject to 25% VAT Financial Transaction Tax Currently no FTT Tax Framework
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7 ASSOCIATION OF INVESTMENT FUND MANAGEMENT COMPANIES Houshold assets
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8 ASSOCIATION OF INVESTMENT FUND MANAGEMENT COMPANIES Investment Funds Assets
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9 ASSOCIATION OF INVESTMENT FUND MANAGEMENT COMPANIES Asset Managers
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10 ASSOCIATION OF INVESTMENT FUND MANAGEMENT COMPANIES MiFID II Draft in Oct 2015; final in Jun 2016 Investment advice and distribution issue Portfolio management inducement issue (ESMA guideline) Capital Gain Tax 8 day obligation -> Asset managers will calculate tax ISDA opinion Collateral issue UCITS V Implementation in 2015 (partially implemented in current Investment Funds Act) EU MMF Croatia is not investable grade There are not 20 credit institutions Suggestion that directive applies only to EUR MMF FTT Some rumors but nothing further Current issues and projects
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