Financial services update: UCITS Directive; shadow banking recommendations; securitisation regulation

The weekly financial services bulletin from Macfarlanes outlines the week's key developments in the banking and finance sector.

First, the Financial Stability Board has published for public consultation an initial integrated set of policy recommendations to strengthen the oversight and regulation of the shadow banking system. The FSB has defined shadow banking as "credit intermediation involving entities and activities outside the regular banking system".

The European Securities and Markets Authority has issued a formal opinion on the meaning of Article 50(2)(a) of the UCITS Directive. This is the provision which allows a UCITS to invest up to 10 per cent of its assets in transferable securities and money market instruments other than those referred to in Article 50(1) - the so-called "trash bucket".

The European Venture Capital Association has launched its handbook of professional standards, which it describes as a set of values of accountability, transparency and governance for the private equity and venture capital industry in Europe.

Lastly, as part of its investigation of the shadow banking sector, the Financial Stability Board asked the International Organisation of Securities Commissions to develop the necessary policy recommendations for certain aspects of securitisation, with particular emphasis on risk retention, transparency and disclosure standardisation.