The Markets in Financial Instruments Directive (“MiFID II”)

EMT

Like many in the industry, Janus Henderson has agreed to use the European MiFID Template (EMT) as the format to disseminate information to distributors about our products.

We have appointed Donnelley Financial Solutions (DFS) to produce and provide EMTs for all our products and these are available on request. Please send any delivery requirements or SFTP details to janushendersonsupport@dfsco.com.

Other data providers/intermediaries who hold information about Janus Henderson funds will also have EMTs available.

We have prepared the EMTs using information we reasonably consider to be accurate. However, Janus Henderson makes no warranty that the information contained in any EMT is appropriate or sufficient for any particular use or in any particular territory.

Policies

Janus Henderson’s Best Execution policy explains how Janus Henderson strives to achieve the best result for their clients whenever they trade financial instruments. It allows clients to understand the execution priorities across various asset classes and lists the counterparties and venues that enable Janus Henderson to achieve this.

Product approval process

MiFID II requires investment firms which manufacture financial instruments for sale to clients to maintain, operate and review a process for the approval of each financial instrument and significant adaptations of existing financial instruments before they are marketed or distributed to clients.

Investment firms are also required to assess whether the product is reaching the clients for whose needs, characteristics and objectives it was not considered compatible.

The Janus Henderson product approval process, outlined below, specifies an identified target market of end clients within the relevant category of clients for each financial instrument and ensures all relevant risks to the identified target market are assessed.

Within 3 months of a new product being launch the post implementation review process is started. Thereafter a new product will fall into the 6 monthly review that ensures products are satisfying investor needs and meeting regulatory requirements.

Complexity statements

Under MiFID II, all investment products will be defined as either “non-complex” or “complex”. These classifications will determine the conditions under which products can be distributed to different types of clients.

In accordance with Article 25(4)(a) of the MiFID II Directive, all Janus Henderson UCITS funds are automatically classed as non-complex.

We have applied the tests sets out in Article 57 of MiFID II to our non-UCITS and AIFs and the following products also meet all the necessary criteria to be classed as non-complex.

  • NURS
  • PAIF
  • Investment Trusts
FAQs

The following MiFID II FAQ provides answers to questions asked about Janus Henderson’s approach to MiFID II topics, including Costs & Charges; availability of the European MiFID Template (“EMT”) and Target Market. The FAQs will be regularly updated, as and when new questions are received.

Background

The Markets in Financial Instruments Directive (MiFID II) came into force on 3 January 2018. Distributors and advisors providing services under this regulation are required to provide information about all costs and charges within the funds they offer to their clients.

Transaction Costs

What are transaction costs?

Transaction costs are the costs associated with buying and selling the securities within the fund. There are two types of transaction costs:
  • Explicit - this is a cost charged to and paid directly by the fund to purchase and sell financial instruments.
  • Implicit - these costs are not easily observable making them hard to quantify. They include costs embedded in the bid-offer spread and the response of the market to a trade or the timing of a trade (market impact, opportunity cost or delay costs).

What is included in the transaction costs figure?

  • Brokerage commissions;
  • Transaction taxes and stamp duty;
  • Exchange fees;
  • Implicit costs;
  • Clearing charges;
  • Anti-dilution offset (Funds typically have a pricing mechanism that seeks to mitigates the impact of transactions caused by cash flow into or out of the fund to the existing investors such as a fund spread. The amount of benefit to the on-going holders of the fund collected through such anti-dilution mechanisms is used to offset the transaction costs incurred.
  • Indirect transaction costs (costs incurred by any underlying funds held).

How is Janus Henderson calculating implicit transaction costs?

Janus Henderson implicit transaction costs have been calculated using the Arrival Price Methodology prescribed by MiFID II. For asset classes where Arrival Price data is unavailable or there is insufficient data coverage, suitable proxies have been applied to produce costs that are fair, clear, not misleading and reflective of market conditions.

MiFID II EMT

In what format does Janus Henderson provide MiFID II data?

We provide MiFID II data, for distributors, advisers & data platforms, using the European Fund and Asset Management Association (“EFAMA”) endorsed template called the European MiFID Template (“EMT”).

Does Janus Henderson distribute the data directly to clients?

Donnelley Financial Solutions (“DFIN”) are our nominated disseminators of the EMT. Requests for data can be made to the Support team at (janushendersonsupport@dfinsolutions.com).

Can clients source the EMT from data platforms?

Yes, we provide the EMT to a number of data platforms. Please contact DFIN, or your Janus Henderson sales representative, for further information. janushendersonsupport@dfinsolutions.com

How often will an updated EMT be published?

We publish an updated EMT quarterly.

Can the EMT be published in languages other than English?

Yes. Please contact your Janus Henderson sales representative for further information.

In what format is the EMT made available?

Excel, CSV, XML. Transmitted via email or SFTP.

Which risk indicators are displayed in the EMT?

  • The UCITS SRRI, synthetic indicator based on market risk measure;
  • The PRIIPs SRI; based on market risk measure & credit risk measure;
.

What are Ex-Ante costs?

These are the expected costs and associated charges of the fund.

What are Ex-Post costs?

These are the actual costs incurred in the fund. Ex-post costs will be provided from January 2019 for costs incurred in 2018.

What costs are included in the EMT Ongoing Charges which are not included in the Ongoing Charges quoted in fund documentation?

  • Bank overdraft interest;
  • Repo interest paid;
  • Income from security lending retained by the firm;
  • Ongoing charges from any funds, REITs, investment trusts held by the fund, or proxies where the actual charges are not available;
  • Costs in regard to the purchase and sale of real property and on-going maintenance costs.

Target Market

Are funds/trusts classified as complex?

All UCITS are automatically non-complex. Most of our non-UCITS funds/trusts have been assessed against the criteria set out in the Regulations and are also non-complex. The small number of funds that have been assessed as Complex however; these are not available to Retail investors.

Is the PAIF non-complex?

Yes.

Do you have any leveraged funds?

No.

Do you have any structured funds?

No.

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