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 FAQs will clarify some of the key questions raised about Janus Henderson’s approach to MiFID II.

This document is intended to be continually edited and updated as and when new questions are received.

Background

The Markets in Financial Instruments Directive II (MiFID II) comes into force on 3 January 2018.

This FAQ aims to answer general questions that you may have on how Janus Henderson Investors (“Janus Henderson”) has delivered these regulatory requirements. This is important because there are a number of methodologies available to asset managers when calculating these costs and charges.

Implicit Transaction Costs

What approach did Janus Henderson take to calculate historic implicit transaction costs?

Janus Henderson concluded the most accurate approach is to use pre-defined spreads (Appendix A) for calculating historic implicit transaction costs. This decision is in line with guidance from various European Asset Management Associations such as AFG, ALFI & BVI.

Why was the arrival price methodology not used for calculating historic implicit transaction costs?

Janus Henderson, working with Donnelley Financial Solutions (“Donnelley”), carried out sample analysis to calculate the arrival price of implicit transaction costs and compared the results with other approaches such as spread based calculations. Due to the unreliability of sourcing historic arrival prices, it was deemed a more accurate reflection of implicit transaction costs, to calculate using pre-defined spreads. Janus Henderson deems the spread methodology to be more aligned with the intention of the regulations. Of course, overtime, the use of this methodology for historical costs will be replaced as we continue to capture the actual arrival price at the time of a transaction.

How will Janus Henderson calculate implicit transaction costs from 1st January 2018?

Janus Henderson will calculate implicit transaction costs in line with the regulatory requirements:

  • ‘Complex’ Methodology where applicable – Arrival Price
  • ‘New Funds’ Methodology – when a recently launched fund does not have sufficient historical data an estimate of portfolio turnover or an average of available transaction costs will be used.

MiFID EMT

In what format will Janus Henderson provide MiFID data to distributors?

Janus Henderson will provide data using the European Working Group approved European MiFID Template (“EMT”).

Will Janus Henderson distribute the data directly to clients?

Janus Henderson have appointed Donnelley to disseminate MiFID information, on request, via the EMT. Any requests for data can be made to the support team (janushendersonsupport@dfsco.com).

Can clients source the MiFID EMT from other data platforms?

Yes, Janus Henderson intend to make available MiFID EMTs to be used by a number of data platforms. Please contact Donnelley or your sales representative should you wish to discuss this in more detail.

How often will an updated EMT be published?

Donnelley will publish an updated EMT on a monthly basis.

What languages will the MiFID EMT be published in?

On request MiFID EMTs will be published in English, French & German. Please contact your sales representative should you wish to discuss additional languages.

What period of data has been used to calculate transaction costs for the EMT?

As required by the regulation 1 year of transaction history has been used to calculate transaction costs.

How is the EMT made available?

By email or SFTP, in Excel, CSV, XML format.

Which risk indicator is included in the EMT?

The SRRI indicator per PRIIPs regulation rather than the SRI indicator per the UCITS regulation.

Target Market

Are your funds for informed clients?

Generally no, they may be accessed by investors with a Basic level of knowledge and experience.

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 but these are not available to Retail investors.

Is the PAIF non-complex?

Yes

Do you have any leveraged funds?

None of our Unit Trusts and OEICs are leveraged vehicles.

Do you have any structured funds?

No

Appendix A

Important message

Fund name changes

Please note that from the 15 December 2017 funds previously named Janus or Henderson have been renamed Janus Henderson. This change aligns our product names with our name, Janus Henderson Investors, following the merger of Janus Capital and Henderson Global Investors in May 2017.

This name change does not impact on the management of the underlying funds and investors and advisers are not required to take any action. This does not affect Janus Henderson’s range of investment trusts.