Art & Finance Newsletter #3
There are significant developments in compliance and regulations of art transactions in Europe and the United States at this time. If your clients are engaged in the buying or selling of art you will want to pay attention.
The new EU AML directive has already been released (see below). In the United States however, the House Financial Services Committee is rumored to be introducing legislation 14 May that would add “dealers of art and antiquities” to the list of regulated financial institutions under the Bank Secrecy Act. I will update you in the following edition of this newsletter should there be any movement in this space.
By the way, if you are in Shanghai this week please join me on 18 May at the 3rd Global Asset Allocation Focus conference. I will be speaking on a panel about Family Office Co-investment in art. Maximum enlightenment and significant entertainment.
On to the art market...
Increased Efficiency for Art Market Disputes
The Court of Arbitration for Art (CAA), will launch 7 June in the Hague and will be dedicated exclusively to resolving art market disputes.
Instead of being decided by judges and juries who have little knowledge of art and the art market, cases will be heard by arbitrators who are seasoned lawyers familiar with art industry practices and issues specific to art disputes.
The CAA is based in the Hague, but proceedings may be held anywhere in the world and anonymity of the parties & artworks will be maintained.
The Art Newspaper - Expertise & Impartiality For Art Disputes
New AML Directive to Affect EU Art Market
Under the new rules, “persons trading or acting as intermediaries in the trade of works of art, including when this is carried out by art galleries and auction houses,” must verify the identities of their customers before entering into a transaction worth €10,000 or more.
This rule also applies to any “series of linked transactions” with an aggregate value of €10,000 or more. Customer verification is now required for all such transactions regardless of payment method.
This new AML directive officially takes effect in 2019, and Member States have 18 months to incorporate its rules into their national legislation.
European Commission Press Release - EU AML Directive
Art on the Balance Sheet
In the most recent art & finance report by Deloitte Luxembourg & ArtTactic, nearly two-thirds of wealth managers surveyed said they were offering services to clients related to financial planning around their art holdings, up from a third six years ago.
But because so much of this wealth exists outside of AUM, advisers say it is increasingly important to discuss how it fits in a client’s overall financial picture.
How do you broach this topic with your clients?
Wall Street Journal - Art On The Wealth Portfolio
Big week in the art market, any questions?
It's ok if you do not "understand" art or the art market.
But as trusted advisors to your clients investment portfolios or wealth you should be asking questions about all assets your clients may hold. I hope this newsletter sheds light on some of those questions for you.
Don't forget to tell your associates and colleagues to sign up for this newsletter!
Until next time,
Blake