CACEIS December 2022


CONTENT

CACEIS

EUROPEAN UNION

Brexit

ESMA publishes its assessment of the Brexit relocation processes

CACEIS

  • On 8 December 2022, the European Securities and Markets Authority (ESMA) published its Peer Review Report on National Competent Authorities’ (NCAs) handling of firms’ relocation to the European Union (EU) in the context of the UK’s withdrawal from the EU.

    The Peer Review gives further insight into the supervisory approaches adopted by NCAs when authorising relocating firms in the scope of Brexit. It should be noted that Brexit was an exceptional, one-off event, which created uncertainty and was complex to handle for market participants and NCAs alike.

    Key findings in the report:

    • NCAs allowed in certain cases for an extensive use of outsourcing/delegation arrangements; and
    • Several firms relocated with limited technical and human resources in the EU. In particular, NCAs applied different interpretations of proportionality when it came to substance requirements. This led in certain cases to some smaller firms relocating with only very minimal set-ups.

    ESMA makes a number of recommendations for future ESMA work to achieve greater convergence at EU level on the application of the risk-based approach, the proportionality principle and on outsourcing/delegation arrangements. In addition, NCAs are also encouraged to improve their assessment of the adequacy of the internal control function, the extend of outsourcing and delegation, and the appropriateness of governance arrangements - to ensure a strong set up of the EU entity already at the authorisation stage.

    The peer review focused its assessment on NCAs of jurisdictions where most or complex activities were relocated, which means per sector – AFM (The Netherlands) and AMF (France) for fund managers and trading venues, BaFIN (Germany) and CySEC (Cyprus) for MiFID firms, CSSF (Luxembourg) for fund managers, and CBoI (Ireland) for all three sectors. However, the recommendations are not only relevant to the NCAs that participated in this exercise but to all EU NCAs.

  • Capital Markets Union (CMU) Action Plan

    EC publishes new proposals on clearing, corporate insolvency and company listing to make EU capital markets more attractive

    CACEIS

  • On 7 December 2022, the European Commission published new proposals on clearing, corporate insolvency and company listing to make EU capital markets more attractive.

    The measures intended to make EU clearing services more attractive and resilient, supporting the EU's open strategic autonomy and preserving financial stability will: 

    • Make EU's clearing landscape more attractive by enabling central counterparties (CCPs) to expand their products quicker and easier, and by further incentivising EU market participants to clear and build liquidity at EU CCPs.
    • Help build a safe and resilient clearing system, by strengthening the EU supervisory framework for CCPs and drawing lessons from the recent developments in energy markets caused by Russia's aggression against Ukraine. For example, by increasing the transparency of margin calls, so that market participants (including energy firms) are in a better position to predict them.
    • Reduce excessive exposures of EU market participants to CCPs in third countries, particularly for derivatives identified as substantially systemic by the European Securities and Markets Authority. Today's proposal requires all relevant market participants to hold active accounts at EU CCPs for clearing at least a portion of certain systemic derivative contracts. This will improve the management of financial stability risks in the EU.

    This clearing package consists of Communication; a Regulation amending the European Market Infrastructure Regulation (EMIR), the Capital Requirements Regulation (CRR) and the Money Market Funds (MMF) Regulation; a Directive amending the Capital Requirements Directive (CRD), Investment Firm Directive (IFD), and the Directive on Undertakings for Collective Investment in Transferable Securities (UCITS). The Commission has also opened a consulation on the clearing package, until 6 February 2023.

    The measures intended to harmonise certain corporate insolvency rules across the EU, making them more efficient and helping promote cross-border investment will:

    • Harmonise specific aspects of insolvency proceedings across the EU. For example, it includes rules on actions to preserve the insolvency estate (i.e. avoiding actions by debtors that would reduce the value that creditors can get); creditors' committees to ensure a fair distribution of the recovered value among creditors; so-called “pre-pack” proceedings (i.e. where the sale of the business is agreed before the insolvency starts); and the duty on directors to timely file for insolvency to avoid that the value of the company deteriorates.
    • Introduce a simplified regime for microenterprises to lower the costs of winding them down and to enable the companies' owners to be discharged from debt, granting them a fresh start as entrepreneurs.
    • Require Member States to produce an information factsheet, summarising the essential elements of their national insolvency laws to facilitate decisions by a cross-border investor.

    The corporate insolvency package consists of a Directive on corporate insolvency as well as a consultation opened until 6 February 2023.

    The measures intended  to alleviate – through a new Listing Act – the administrative burden for companies of all sizes, in particular SMEs, so that they can better access public funding by listing on stock exchanges will:

    • Simplify the documentation that companies need to list on public markets, and streamline the scrutiny processes by national supervisors, thereby speeding up and reducing the costs of the listing process whenever possible. For example, it is estimated that EU listed companies will save approximately €100 million per year from lower compliance costs, with companies saving €67 million per year from simpler prospectus rules alone.
    • Simplify and clarify some market abuse requirements, without compromising market integrity.
    • Help companies be more visible to investors, by encouraging more investment research especially for small and medium sized companies.
    • Allow company owners to list on SME growth markets using multiple vote share structures, so that they can retain sufficient control of their company after listing, while protecting the rights of all other shareholders.

    This listing package consists of an amending Regulation amending the Prospectus Regulation, Market Abuse Regulation and the Markets in Financial Instruments Regulation, an amending Directive amending the Markets in Financial Instruments Directive and repealing the Listing Directive, and a Directive on multiple-vote shares. The Commission has also opened a consultation, until 6 February 2023.

  • Central Securities Depositary Regulation (CSDR)

    Council agrees negotiating position on CSDR Refit

    CACEIS

  • On 20 December 2022, the EU member states settled their negotiating position on a proposed update of the central securities depositories regulation (CSDR). The planned review will make EU securities settlement more efficient by simplifying requirements and clarifying authorisation processes among other things.

    Securities are tradable financial assets such as stocks or bonds. Central securities depositories (CSDs) play a crucial role in their registration and safekeeping, as well as, following a trade in securities, in ensuring its proper settlement, i.e. delivery of securities to the buyer against the delivery of cash to the seller. According to European Commission figures, transactions settled by EU central securities depositories in 2019 reached around €1,120 trillion.

    Because passporting requirements are burdensome, they hinder cross-border settlement, thus minimising competition and reducing choice. Passporting allows a financial firm to operate across the EU with one single licence. This regulation aims in particular to increase the provision of cross-border settlement by CSDs.

    The proposed new rules – if adopted – clarify that it is the home member state, i.e. where the CSD is authorised, that will ultimately decide on the CSD’s application to provide cross-border services. In the case where the CSD’s activities in at least two other member states are considered of substantial importance for the functioning of the securities markets and the protection of investors, a college of supervisors will be mandatorily set up. This will facilitate the exchange of information between supervisors and ease the cooperation between member state authorities. The timeframe of the passporting process will also be clarified and shortened, in order to facilitate the provision of a broader scope of services across the member states.

    The proposal also further streamlines rules on so-called “mandatory buy-in”: where a transaction has failed to settle at the end of a prescribed period, the buyer of the securities could be forced to repurchase them elsewhere. The failing party would then be required to meet any price differential between the original and new transaction and all costs of the mandatory buy-in. Mandatory buy-in would be a new measure of last resort, to be activated only in the case where the level of settlement fails would be substantial in the EU.

    The proposal also includes provisions on enabling CSDs’ access to banking-type ancillary services from other duly authorised CSDs, so as to facilitate settlement in non-domestic currencies. Furthermore, it also lays down rules ensuring that authorities in the EU have adequate powers and information to monitor risks in relation to both EU and third country CSDs, including by enhancing their supervisory cooperation.

    All these clarifications would thus bring the CSDR in line with other financial service legislation.

  • Directive on security of Network and Information Systems (NIS Directive)

    EU publishes Directive (EU) 2022/2555 on measures for a high common level of cybersecurity across the Union (NIS 2 Directive)

    CACEIS

  • On 27 December 2022, EU published in the Official Journal of the European Union (OJ) Directive (EU) 2022/2555 of the European Parliament and of the Council of 14 December 2022 on measures for a high common level of cybersecurity across the Union, amending Regulation (EU) No 910/2014 and Directive (EU) 2018/1972, and repealing Directive (EU) 2016/1148 (NIS 2 Directive).

    NIS2 set the baseline for cybersecurity risk management measures and reporting obligations across all sectors that are covered by the directive, such as energy, transport, health and digital infrastructure.

    The revised directive aims to harmonise cybersecurity requirements and implementation of cybersecurity measures in different member states. To achieve this, it sets out minimum rules for a regulatory framework and lays down mechanisms for effective cooperation among relevant authorities in each member state. It updates the list of sectors and activities subject to cybersecurity obligations and provides for remedies and sanctions to ensure enforcement.

    The directive is formally establishing the European Cyber Crises Liaison Organisation Network, EU-CyCLONe, which will support the coordinated management of large-scale cybersecurity incidents and crises.

    While under the old NIS directive member states were responsible for determining which entities would meet the criteria to qualify as operators of essential services, the new NIS2 directive introduces a size-cap rule as a general rule for identification of regulated entities. This means that all medium-sized and large entities operating within the sectors or providing services covered by the directive will fall within its scope.

    While the revised directive maintains this general rule, its text includes additional provisions to ensure proportionality, a higher level of risk management and clear-cut criticality criteria for allowing national authorities to determine further entities covered.

    The text also clarifies that the directive is not applying to entities carrying out activities in areas such as defence or national security, public security, and law enforcement. Judiciary, parliaments, and central banks are also excluded from the scope.

    NIS2 also applies to public administrations at central and regional level. In addition, member states may decide that it applies to such entities at local level too.

    Moreover, the new directive has been aligned with sector-specific legislation, in particular the regulation on digital operational resilience for the financial sector (DORA) and the directive on the resilience of critical entities (CER), to provide legal clarity and ensure coherence between NIS2 and these acts.

    A voluntary peer-learning mechanism will increase mutual trust and learning from good practices and experiences in the Union, thereby contributing to achieving a high common level of cybersecurity.

    The new legislation also streamlines the reporting obligations in order to avoid causing over-reporting and creating an excessive burden on the entities covered.

  • Directive on the Resilience of Critical Entities (CERD)

    EU publishes Directive (EU) 2022/2557 of the European Parliament and of the Council of 14 December 2022 on the resilience of critical entities and repealing Council Directive 2008/114/EC

    CACEIS

  • On 27 December 2022, EU published Directive (EU) 2022/2557 of the European Parliament and of the Council of 14 December 2022 on the resilience of critical entities and repealing Council Directive 2008/114/EC.

    The directive adopted covers critical entities in a number of sectors, such as energy, transport, health, drinking water, waste water and space. Certain central public administrations will also be covered by some of the provisions of the directive.

    Member states will need to have a national strategy to enhance the resilience of critical entities, carry out a risk assessment at least every four years and identify the critical entities that provide essential services. Critical entities will need to identify the relevant risks that may significantly disrupt the provision of essential services, take appropriate measures to ensure their resilience and notify disruptive incidents to the competent authorities.

    The directive also establishes rules for the identification of critical entities of particular European significance. A critical entity is considered of particular European significance if it provides an essential service to six or more member states. In this case, the Commission may be requested by the member states to organise an advisory mission or the Commission may itself propose, with the agreement of the member state concerned, to assess the measures the entity concerned has put in place to meet the obligations arising from the directive.

  • European Crowdfunding Service Providers (ECSP) Regulation

    ESMA updates Q&As on the European crowdfunding service providers for business Regulation

    CACEIS

  • On 16 December 2022, the European Securities and Markets Authority (ESMA) updated the questions and answers (Q&As) on the European crowdfunding service providers for business Regulation.

    The update relates to the following questions:

    • Should the total consideration of offers made by the project owner pursuant to an exemption under Regulation (EU) 2017/1129 other than those under Articles 1(3) and 3(2) of that Regulation be taken in consideration for the purpose of the calculation of the threshold set out in point (c) of Article 1(2) of the ECSPR?
    • When does the key investment information sheet have to be made available to prospective investors?
    • Is the project owner responsible for the translation of the content of a KIIS made available to prospective investors?
    • Can the marketing effort of a CSP focus on a specific project or a specific category of projects?
    • Can a legal person with a single member of the management body be authorised as a crowdfunding service provider?
    • Can a CSP use several trading names? 
  • European Market Infrastructure Regulation (EMIR)

    ESMA publishes Guidelines and technical documentation on reporting under EMIR REFIT, the CSSF follows with a press release on the topic

    CACEIS

  • On 20 December 2022, the European Securities and Markets Authority (ESMA) published Guidelines and technical documentation on reporting under EMIR REFIT.

    The Guidelines published today will further enhance the harmonisation and standardisation of reporting under EMIR contributing to the high quality of data necessary for the effective monitoring of the systemic risk. Furthermore, increased harmonisation and standardisation of reporting allows to contain the costs along the complete reporting chain - the counterparties that report the data, the TRs which put in place the procedures to verify the completeness and correctness of data, and the authorities, defined in Article 81(3) of EMIR, which use data for supervisory and regulatory purposes. The Guidelines provide clarifications on the following aspects: 

    • transition to reporting under the new rules,
    • the number of reportable derivatives,
    • intragroup derivatives exemption from reporting,
    • delegation of reporting and allocation of responsibility for reporting,
    • reporting logic and the population of reporting fields,
    • reporting of different types of derivatives,
    • ensuring data quality by the counterparties and the TRs,
    • construction of the Trade State Report and reconciliation of derivatives by the TRs,
    • data access.

    The final report on Guidelines is accompanied by the validation rules and the reporting instructions. The validation rules document sets out detailed technical rules on how the TRs should verify the completeness and accuracy of the reported data as well as the conditions and thresholds to be applied to determine whether the values reported by both counterparties match or not. Finally, the Validation rules document contains also a template for notifications of reporting errors and omissions to the NCAs.

    The reporting instructions contain EMIR XML messages which were updated or newly developed based on the revised technical standards and validation rules. A fully standardised format for reporting will eliminate the risk of discrepancies due to inconsistent data. End-to-end reporting in ISO 20022 XML is expected to further enhance data quality and consistency and mitigate the data integrity risks, by reducing the need for data cleaning/normalisation and facilitate their exploitation for various supervisory and/or economic analysis based on the changes presented by the EMIR Refit regulation. The implemented schema sets were designed to ensure the backward compatibility of the data reporting.

    The final report contains a detailed assessment of the feedback received to the proposals in the consultation paper published in July 2021. ESMA will continue to engage with the market participants with a view to clarifying any remaining doubts and to facilitate a smooth transition to reporting under EMIR REFIT. The guidelines will be translated and published in all EU languages. They will enter into application on 29 April 2024. 

    On 21 December 2022, the Commission de Surveillance du secteur financier (CSSF) published a press release where it draws the attention of the market players on some significant changes to the EMIR reporting framework introduced by these new technical standards and the related documentation, notably the end-to-end reporting in ISO 20022 XML, the framework for the mandatory delegation, the information to NCAs for significant reporting issues, and new controls and feedback reports by trade repositories.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    ESMA publishes hyperlinks to CAs' websites about information on cross-border distribution of investment funds

    CACEIS

  • On 7 December 2022, the European Securities and Markets Authority (ESMA) published the hyperlinks to Competent Authorities (CAs)' websites where they publish complete and up-to-date information on the applicable national laws, regulations and administrative provisions governing marketing requirements for AIFs and UCITS, as well as the summaries thereof, and the hyperlinks to the websites of competent authorities where they publish and maintain complete and up-to-date list of the fees and charges they levy for carrying out their duties in relation to the cross-border activities of fund managers.

  • ESMA publishes updated list of national rules governing marketing requirements regarding cross-border distribution of investment funds (6/12/2022)

    CACEIS

  • On 9 December 2022, European Securities and Markets Authority (ESMA) published hyperlinks and the summaries of national rules governing marketing  requirements regarding cross-border distribution of investment funds.

    Regulation (EU) 2019/1156 on facilitating cross-border distribution of collective investment undertakings requires ESMA to publish on its website the hyperlinks to the websites of competent authorities where they publish complete and up-to-date information on the applicable national laws, regulations and administrative provisions governing marketing requirements for AIFs and UCITS, as well as the summaries thereof, and the hyperlinks to the websites of competent authorities where they publish and maintain complete and up-to-date list of the fees and charges they levy for carrying out their duties in relation to the cross-border activities of fund managers.

    This document contains both hyperlinks and the summaries of national rules governing marketing requirements, which were provided by competent authorities.

  • ESMA updates Q&As on the application of the AIFMD

    CACEIS

  • On 16 December 2022, the European Securities and Markets Authority (ESMA) updated the questions an answers (Q&As) on the application of the AIFMD.

    The update relates to the following question:

    • Are managers of special purpose acquisition companies (“SPACs”) subject to the AIFMD?
  • ESMA publishes Final Report on the draft technical standards on the notifications for cross-border marketing and cross-border management of AIFs and UCITS

    CACEIS

  • On 21 December 2022, European Securities and Markets Authority (ESMA) published Final Report on the draft technical standards on the notifications for cross-border marketing and cross-border management of AIFs and UCITS.

    The ESMA published a final report specifying the information to be provided, and the templates to be used, to inform competent authorities of the cross-border marketing and management of investment funds and the cross-border provision of services by fund managers.

    Under the UCITS Directive and the AIFMD, ESMA is empowered to draft optional Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) for the notifications of cross-border activities. The purpose of the draft ITS and RTS is to facilitate the process for notifying cross-border marketing and management activities in relation to UCITS and AIFs, as well the cross-border provisions of services by fund managers, by standardising the content and the format of the information to be provided by management companies, UCITS and AIFMs

    The RTS specify the information to be provided by management companies and AIFMs wishing to carry out their activities in host Member States. The ITS contain the templates to be used by management companies, UCITS and AIFMs to notify their intention to carry out their activities in host Member States and specify the procedure for the communication of information between competent authorities as regards these notifications.

    ESMA has submitted the RTS and ITS to the European Commission for adoption within three months respectively in the form of a Commission Delegated Regulation and a Commission Implementing Regulation. Following their adoption, the Commission Delegated Regulation and the Commission Implementing Regulation will then be subject to the non-objection of the European Parliament and of the Council.

  • Markets in financial instruments Directive and Regulation (MiFID II / MiFIR)

    Council agrees negotiating position on MiFIR2/MiFID3

    CACEIS

  • On 20 December 2022, the EU member states’ representatives agreed on a mandate to start negotiations with the European Parliament concerning a review of the Markets in Financial Instruments Regulation (MIFIR) and of the second Markets in Financial Instruments Directive (MiFID II). The priorities for this review are to improve transparency and availability of market data, improve the level-playing field between execution venues and ensure that EU market infrastructures can remain competitive at international level.

    On the basis of this mandate, negotiations with the European Parliament can begin with a view to reaching a final agreement on the future legislation.

    This proposal will make EU market infrastructures more robust. Proposed amendments will also increase market liquidity, making it easier for companies to get funding from capital markets.

    The draft regulation aims to establish a centralised database or ‘consolidated tape’, which will provide access to market data from trading venues as well as systematic internalisers and approved publication arrangements across the EU in a consolidated manner. This will improve the overall price transparency across trading venues and will provide investors with easier access to trading data.

    The text ensures that consolidated tape providers (‘CTP’) provide reliable consolidated data close-to-real time, noting that the CTP should publish the consolidated tape of executed trades together with best bids and offers available at the time of the particular trade as well as European best bid and offer available at the time of the trade from the most competitive markets.

    In addition, the draft regulation introduces a restriction of payments for routing client orders in the Union. The regulation leaves a discretion to Member States to allow this practice only in their territory.

    Furthermore, the draft regulation clarifies the limitation on the dark trading, lifting the complexity and the burden of the system. The current double volume cap establishes that the amount of dark trading on an individual venue may not exceed 4% of total trading and the amount of dark trading in an equity instrument in the EU may not exceed 8% of total trading. The new single volume cap set out in the draft regulation relies solely on the EU-wide threshold set at 10%.

    In addition, to ensure an adequate level of transparency, the text modifies the deferral times for the size and liquidity profile of transaction in bonds, structure products and emission allowances. Those deferrals should be based on the liquidity of a bond, structured finance product and emission allowance, and the size of transactions.

    • for liquidity providers in bonds, masking price and volume of transactions for very large trades should not in any case exceed four weeks
    • for OTC derivatives, the duration of deferrals should be calibrated based on a more flexible basis because only adequate market data can determine the suitability of each period. ESMA will determine the duration of these deferrals

    Through this update, certain provisions about the investment firms trading on their own account are also strengthened, as they provide liquidity to the market even during market stress conditions.

  • Packaged Retail and Insurance-based Investment Products (PRIIPs)

    ESAs update Q&As on the PRIIPs Key Information Document (KID)

    CACEIS

  • BACKGROUND

    These Q&As concern Regulation (EU) No 1286/2014 (the PRIIPs Regulation) and its Delegated Acts. 

    The original delegated rules are found in Commission Delegated Regulation (EU) 2017/653. However, this has been amended, in particular by Commission Delegated Regulation (EU) 2021/2268. The rules in Commission Delegated Regulation (EU) 2021/2268 are, in general, applicable from 1 January 2023. 

    Following the Q&A publication of 14 November 2022 this document includes Q&As that relate to the amendments introduced in Commission Delegated Regulation (EU) 2021/2268 that are applicable on 1 January 2023. Where a Q&A relates to the amendments in Commission Delegated Regulation (EU) 2021/2268, this is specifically indicated underneath the answer.

    Given that some Q&As published since 2017 concerned requirements that were amended by Commission Delegated Regulation (EU) 2021/2268, these Q&As needed to be revised or deleted.

    WHAT'S NEW?

    These revisions or deletions were published on 21 December 2022 and in these cases it is specifically indicated underneath the answer.

    WHAT'S NEXT?

    This  Q&As that relate to the amendments introduced in Commission Delegated Regulation (EU) 2021/2268 are applicable on 1 January 2023.

  • Regulation on digital operational resilience for the financial sector (DORA)

    EU publishes Regulation (EU) 2022/2554 and Directive (EU) 2022/2556 on digital operational resilience for the financial sector (DORA)

    CACEIS

  • BACKGROUND

    The ever-increasing dependency of the financial sector on software and digital processes means that information communication technologies (ICT) risks are inherent in finance.

    The European Commission adopted a detailed and comprehensive regulatory framework on digital operational resilience for EU financial entities in the context of its Digital Finance Strategy.

    These laws consist of:

    • A regulation aimed to enhance and streamline the financial entities’ conduct of ICT risk management, establish a thorough testing of ICT systems, increase supervisors’ awareness of cyber risks and ICT-related incidents faced by financial entities, as well as introduce powers for financial supervisors to oversee risks stemming from financial entities’ dependency on ICT third-party service providers; and
    • A proposal for a directive amending the various operational risk or risk management requirements set out in existing pieces of legislation and updating empowerments for technical standards.

    WHAT'S NEW?

    The final text of DORA set requirements for the security of network and information systems of companies and organisations operating in the financial sector as well as critical third parties which provide ICT (Information Communication Technologies)-related services to them, such as cloud platforms or data analytics services. DORA creates a regulatory framework whereby the financial firms will have to make sure they can withstand, respond to and recover from all types of ICT-related disruptions and threats, with the objective to prevent and mitigate cyber threats. The auditors will be part of a future review of the regulation. Critical third-country ICT service providers to financial entities in the EU will be required to establish a subsidiary within the EU so that oversight can be properly implemented.

    WHAT'S NEXT?

    The text will enter into force mid-January 2023 and will become applicable after 24 months implementation period, i.e., mid January 2025. Technical details will be published in a form of RTS & ITS 12 and 18 months after DORA’s entry into force, i.e., in January & June 2024. 

  • Sustainable Finance / Green Finance

    EU publishes Directive (EU) 2022/2464 on Corporate Sustainability Reporting (CSRD)

    CACEIS

  • On 16 December 2022, the European Union published Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting (CSRD).

    The CSRD amends the 2014 Non-Financial Reporting Drective (NFRD). It introduces more detailed reporting requirements and ensures that large companies are required to report on sustainability issues such as environmental rights, social rights, human rights and governance factors. 

    The CSRD also introduces a certification requirement for sustainability reporting as well as improved accessibility of information, by requiring its publication in a dedicated section of company management reports. EU rules on non-financial information apply to all large companies and all companies listed on regulated markets. These companies are also responsible for assessing the information at the level of their subsidiaries. 

    The rules also apply to listed SMEs, considering their specific characteristics. An opt-out will be during a transitional period, meaning that SMEs will be exempted from the application of the Directive until 2028. 

    For non-European companies, the requirement to provide a sustainability report applies to all companies generating a net turnover of EUR 150 million in the EU and which have at least one subsidiary or branch in the EU. 

    These companies must provide a report on their environmental, social and governance impacts. Reporting must be certified by an accredited independent auditor or certifier. The reporting of non-European companies must also be certified, either by a European auditor or by one established in a third country. 

    The application of the regulation will take place in three stages: 1 January 2024 for companies already subject to the non-financial reporting directive; 1 January 2025 for companies that are not presently subject to the NFRD; 1 January 2026 for listed SMEs, small and non-complex credit institutions and captive insurance undertakings.

  • EC publishes second draft Notice on the interpretation and implementation of the Disclosures Delegated Act under Article 8 of EU Taxonomy Regulation on the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets

    CACEIS

  • On 19 December 2022, European Commission published second draft Commission Notice on the interpretation and implementation of certain legal provisions of the Disclosures  Delegated Act under Article 8 of EU Taxonomy Regulation on the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets.

    Non-financial undertakings will commence reporting their Taxonomy Key Performance Indicators (KPIs) as of 1 January 2023. The purpose of this Notice is to provide further interpretative and implementation guidance to these non-financial undertakings in the form of replies to Frequently Asked Questions (FAQs) on the reporting under the Disclosures Delegated Act. The Commission may update these FAQs where appropriate.

    Financial undertakings will commence the reporting of their respective Green Asset Ratio (GAR)/Green Investment Ratio (GIR) as of 1 January 2024. Another Notice in the form of replies to FAQs concerning the reporting by financial undertakings under the Disclosures Delegated Act may be adopted in due course.

    This Notice is published alongside another Commission notice in the form of replies to FAQs concerning the technical screening criteria for Taxonomy-aligned economic activities set out in the Climate Delegated Act (Commission notice on the Climate Delegated Act.

    This draft has been approved in principle by the European Commission on 19 December 2022 and its formal adoption in all the official languages of the European Union will take place later on, as soon as the language versions are available.

  • EC publishes second draft Notice on the interpretation and implementation of the EU Taxonomy Climate Delegated Act establishing TSC for economic activities that contribute to the first two environmental objectives without DNSH the others

    CACEIS

  • On 19 December 2022, European Commission publishes second draft Commission Notice on the interpretation and implementation of certain legal provisions of the EU Taxonomy Climate Delegated Act establishing technical screening criteria for economic activities that contribute substantially to climate change mitigation or climate change adaptation and do no significant harm to other environmental objective.

    This Notice is published alongside another Commission Notice containing replies to frequently asked questions (FAQs) on disclosures by undertakings regarding the Taxonomy-eligibility and alignment of their activities under Article 8 of the Taxonomy Regulation and the relevant Delegated Act (‘Disclosures Delegated Act’). This note complements previous guidance provided by Directorate General Financial Stability, Financial Services and Capital Markets Union “FAQs: How should financial and non-financial undertakings report Taxonomy-eligible economic” and Commission Notice on the interpretation of certain legal provisions of the Disclosures Delegated Act under Article 8 of EU Taxonomy Regulation on the reporting of eligible economic activities and assets.

    This Notice contains technical clarifications responding to FAQs on the technical screening criteria set out in the Climate Delegated Act. The purpose of this Notice is to facilitate the effective application of the Climate Delegated Act. 

    This Notice does not address the many questions and proposals regarding the reasoning and evidence for the choice of criteria. On these issues, the Commission points out that the impact assessment accompanying the Climate Delegated Act contains further explanations on the development of this act, notably on the reasoning and the balance between the requirements of the Taxonomy Regulation for setting the technical screening criteria.

    This draft has been approved in principle by the European Commission on 19 December 2022 and its formal adoption in all the official languages of the European Union will take place later on, as soon as the language versions are available.

  • FRANCE

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    e l'EBA sur le rôle et les responsabilités du responsable conformité LCB/FTACPR declares compliance to EBA Guidelines on role and responsibilities of the AML/CFT compliance officer / L'ACPR déclare sa conformité aux lignes directrices d

    CACEIS

  • On 15 December 2022, the Autorité de Contrôle Prudentiel et de Résolution (ACPR) declared its compliance with the European Banking Authority (EBA) guidance on compliance management policies and procedures and the role and responsibilities of the AML/CFT compliance officer under Article 8 and Chapter VI of Directive (EU) 2015/849.

    These guidelines specify the roles and responsibilities at both the reporting entity and group levels: 

    • the management bodies (management and supervisory functions, without however calling into question the collegiate responsibility of the supervisory body) ;
    •  the AML Compliance Officer (AMLCO) referred to in Article 8(4) of Directive (EU) 2015/849. This function corresponds to the function of the person responsible for implementing the AML/CFT system provided for in Article L. 561-32 of the Monetary and Financial Code and specified in Article 3 of the Order of 6 January 2021. 

    These guidelines are applicable to all credit and financial institutions defined in paragraphs 1 and 2 of Article 3 of Directive (EU) 2015/849.

    Version française

    Le 15 décembre 2022, l'Autorité de Contrôle Prudentiel et de Résolution (ACPR) a déclaré sa conformité aux lignes directrices de l'Autorité Bancaire Européenne (EBA) sur les politiques et procédures de gestion de la conformité et le rôle ainsi que les responsabilités du responsable conformité LCB/FT sous l'article 8 et le chapitre VI de la directive (UE) 2015/849.

    Ces lignes directrices spécifient les rôles et les responsabilités à la fois au niveau de l'entité de déclaration et au niveau du groupe :

    • les organes de gestion (fonctions de gestion et de surveillance, sans remettre en cause la responsabilité collégiale de l'organe de surveillance) ;
    • le responsable conformité LCB/FT mentionné dans l'article 8(4) de la directive (UE) 2015/849. Cette fonction correspond à celle de la personne responsable de la mise en place d’une organisation et des procédures internes pour lutter contre le blanchiment des capitaux et le financement du terrorisme prévu par l'article L. 561-32 du Code monétaire et financier et précisé à l'article 3 de l'arrêté du 6 janvier 2021.

    Ces lignes directrices s'appliquent à tous les établissements de crédit et financiers définis aux alinéas 1 et 2 de l'article 3 de la directive (UE) 2015/849.

  • Regulatory fees

    France publishes Decree No. 2022-1734 of 30 December 2022 on contributions due to the AMF / La France publie le décret n° 2022-1734 du 30 décembre 2022 sur les contributions dues à l'AMF

    CACEIS

  • On 31 December 2022, France published Decree No. 2022-1734 of 30 December 2022 on contributions due to the Autorité des marchés financiers (AMF). 

    The decree sets the precise amount or rate for each specific duty and contribution and the dates on which these amounts must be paid to the AMF.

    Version française

    Le 31 décembre 2022, la France a publié le décret n° 2022-1734 du 30 décembre 2022 sur les contributions dues à l'Autorité des marchés financiers (AMF).

    Le décret fixe le montant ou le taux précis de chaque obligation ou contribution spécifique ainsi que les dates auxquelles ces montants doivent être payés à l'AMF.

  • BELGIUM

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    FSMA adopts Guidelines on the role, tasks and responsibilities of AML/CFT compliance officers

    CACEIS

  • On 6 December 2022, the Financial Services and Markets Authority (FSMA) adopted Guidelines on the role, tasks and responsibilities of AML/CFT compliance officers.

    These guidelines, published by the European Banking Authority, set out the role, tasks and responsibilities of the management body, the senior manager responsible for this area and the compliance officer in combatting money laundering and terrorist financing (hereafter AML/CFT), as well as the expectations in terms of policies and procedures for ensuring compliance with the AML/CFT obligations.

    The FSMA considers that these guidelines provide useful details on the application of certain provisions of the Law of 18 September 2017 and of the FSMA Regulation of 3 July 2018, and has therefore incorporated these guidelines into its supervisory policy, in particular for the purpose of evaluating the adequacy of the governance arrangement and the compliance function put in place by the obliged entities to combat money laundering and terrorist financing.

  • Directive on the protection of persons who report breaches of Union law (Whistleblowers Directive)

    Belgium publishes Law of 28 November 2022 on Whistleblowing

    CACEIS

  • On 15 December 2022, the Belgium published Law of 28 November 2022 on the protection of persons who report breaches of Union or national law found within a legal entity in the private sector (1).

    The purpose of this Act is to strengthen the implementation of the law and policies of the Union in specific areas by establishing common minimum standards ensuring a high level of protection for persons reporting breaches of Union law. It transposes the Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of individuals reporting breaches of Union law in relation to legal entities in the sector private sector with regard to federal jurisdiction.

    The Law comes into force on 15 February 2022.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    Belgium publishes Royal Decree transposing Delegated Directive (EU) 2021/1270 as regards ESG risks and ESG factors to be taken into account for UCITS, adapting the rules on marketing communications and ither various provisions for CIU

    CACEIS

  • On 12 December 2022, Belgium published Royal Decree (RD) of 5 December 2022 transposing Commission Delegated Directive (EU) 2021/1270 of 21 April 2021 amending Directive 2010/43/EU as regards sustainability risks and sustainability factors to be taken into account for undertakings for collective investment in transferable securities (UCITS), adapting the rules on marketing communications by collective investment undertakings with varying number of units and containing various provisions.

    Directive (EU) 2021/1270 brings amendments to Directive (EU) 2010/43 organizational requirements, conflicts of interest, business conduct, risk management and the content of the agreement between the depositary and the management company. It aims to ensure that the processes, systems and internal controls of management companies collective investment undertakings and self-directed investment companies, which manage themselves their portfolio, take into account sustainability risks, and that capabilities and knowledge techniques that are necessary to analyze these risks are present. The present RD operates faithful transposition, strictly reflecting the content of the Directive. It is in this context, it is necessary to amend the RD of 12 November 2012 on undertakings for collective investment which meet the conditions of Directive 2009/65/EC (the UCITS RD) and the RD of 12 November 2012 on the management companies of collective investment undertakings which respond under the conditions of Directive 2009/65/EC (RD Management Companies). It should be noted whereas the Alternative Investment Finds system has already undergone changes in this respect at European level and is therefore not appropriate to amend the Royal Decree of 25 February 2017 on certain employment undertakings Alternative collective public and their collective management companies, and containing various provisions (AIF RD) in parallel.

    Furthermore, this RD aims to amend the rules on advertising applicable to collective investment undertakings with a variable number of units that are distributed in the context of a public offer or to retail investors: the objective of these amendments is to align the legal regime to which such advertising is subject with the CBDF Regulation and the Guidance on advertising communications under the Regulation on the cross-border distribution of collective investment undertakings, published by ESMA on 2 August 2021. In practical terms, the amendments therefore concern public UCITS and AIFs in financial instruments and cash, as well as collective investment schemes with a variable number of units that would be distributed to retail investors without being the subject of a public offer.

    Finally, this RD aims to make a number of miscellaneous amendments to the regulation of public collective investment undertakings with a variable number of units. It is therefore proposed to amend the UCITS RD, the Management Company RD and the AIF RD. The proposed changes in respect of advertising communications also require an amendment to the Royal Decree of 25 April 2014.

  • Belgium publishes Royal Decree of 18 September 2022 amending various regulatory provisions relating to institutional, private and debt investment undertakings

    CACEIS

  • On 6 December 2022, Belgium published Royal Decree (RD) of 18 September 2022 amending various regulatory provisions relating to institutional, private and debt investment undertakings.

    The objective of this RD is to achieve harmonisation between the different RDs applicable to institutional, private and debt investment undertakings, as well as the implementation of the dematerialisation process of the relations between the FPS Finance and the collective investment undertakings. This decree makes amendments to the following RDs:

    • the Royal Decree of 9 November 2016 on specialised real estate investment funds ;
    • the Royal Decree of 23 May 2007 on the private pension fund;
    • the Royal Decree of 5 March 2017 on public starter funds and private starter investment funds;
    • the Royal Decree of 7 December 2007 on alternative collective investment undertakings with a variable number of units and institutional units whose exclusive purpose is the collective investment in the category of investments authorised in article 183, paragraph 1, 1°, of the law of 19 April 2014;
    • the Royal Decree of 30 July 2018 on certain implementing measures relating to institutional debt investment undertakings.

    Firstly, the RD makes changes to the RDs to harmonise them on various aspects, including the registration and de-registration procedures, the annual financial report, and in accordance with the Only Once principle, provided for by the law of 5 May 2014 guaranteeing the principle of a single collection of data in the operation of the services and bodies that come under or perform certain tasks for the authority and simplifying and harmonising the electronic and paper forms

    Secondly, the RD integrates the dematerialisation process provided for in articles 305/1 to 305/6 of the law of 19 April 2014 on undertakings for collective investment and their managers, and in articles 271/19 to 271/25 of the law of 3 August 2012 on undertakings for collective investment which comply with the conditions of Directive 2009/65/EC and on undertakings for investment in debt securities, and in the Royal Decrees relating to the undertakings for collective investment referred to herein; as well as the entry into force of the aforementioned articles (articles 68 and 69), provided for by article 305/7 of the law of 19 April 2014 and article 271/26 of the law of 3 August 2012.

    Thirdly, the RD provides for the possibility for the agents of the General Administration of the Treasury of the FPS Finance to access certain data available in the UBO register in the context of their task of controlling undertakings for collective investment.

    Finally, it is necessary to bring the RD into line with a number of legal provisions which have come into force, but also to update the legislative references made in the various Royal Decrees listed above. To this end, references to the old Civil Code are replaced by articles of the new Civil Code (Article 3). References to the Companies Code are replaced by the articles of the Companies and Associations Code, according to the concordance table (Articles 14, 15, 16, 18, 24, 25, 30, 33, 34, 35, 36, 37, 49, 50, 51 and 66). Other changes include the replacement of articles of the law of 16 June 2016, which was repealed by the law of 11 July 2018 (Articles 3 and 51).

  • FSMA publishes FAQs about marketing communications for UCIs

    CACEIS

  • On 12 December 2022, the Financial Services and Markets Authority (FSMA)

    A royal decree was published on 12 December laying down new rules governing advertisements for UCIs offered in Belgium. The FSMA has prepared a Communication on the subject. It deals with several topics in the form of FAQs.

    The FAQs provide explanations of the advertising rules that apply in various situations and of the FSMA’s supervision of advertisements.

    They also go into greater depth on certain aspects specific to marketing communications that concern a pulic offer of public open-ended UCIs. So, for example, they provide answers to questions about what exactly is meant by ‘marketing communications’ and what rules must be followed when indicating returns and sustainability aspects.

    They also describe the procedures for obtaining the FSMA’s prior approval of marketing communications for such UCIs. The new procedure according to which changes can be made without prior approval by the FSMA are also discussed.

  • FSMA publishes update of the communication on electronic submission to the FSMA of information on collective investment undertakings

    CACEIS

  • On 2 December 2022, the Financial Services and Markets Authority (FSMA) published  update of the communication on electronic submission to the FSMA of information on undertakings for collective investment.

    This update explains, among other things, how Belgian public UCIs with variable number of units can send the FSMA their key information documents ("PRIIPs KIDs"), as well as the SFDR annex to their prospectus.

    More specifically, this document presents the procedure to be followed when : 

    • the transmission of statistical information and periodic questionnaires via the FiMiS platform
    • the transmission of periodic documents via the eCorporate platform; 
    • transmission by e-mail.
  • Markets in financial instruments Directive and Regulation (MiFID II / MiFIR)

    Belgium publishes Royal Decree transposing Delegated Directive (EU) 2021/1269 amending Delegated Directive (EU) 2017/593 on the integration of ESG factors into applicable product governance obligations, and laying down miscellaneous provisions

    CACEIS

  • On 12 December 2022, Belgium published Royal Decree (RD) of 5 December 2022 transposing Commission Delegated Directive (EU) 2021/1269 of 21 April 2021 amending Delegated Directive (EU) 2017/593 as regards the integration of sustainability factors into applicable product governance obligations, and laying down miscellaneous provisions.

    This Directive amends Commission Delegated Directive (EU) 2017/593 of 7 April 2016 supplementing the Directive 2014/65/EU of the European Parliament and of the Council with regard to safeguarding instruments financial and client funds, applicable product governance obligations and rules governing the granting or receipt of fees, commissions or any other benefit pecuniary or non-monetary.

    It aims to ensure that investment firms and credit institutions producing and distributing instruments financial factors take sustainability factors into account in the product approval procedure applied to each financial instrument and other product governance and supervision arrangements that govern each financial instrument intended for distribution to clients seeking instruments financial companies with a sustainable profile.

    Apart from Articles 3, 1° and 4, 1°, the decree faithfully transposes the Directive into Belgian law, strictly reproducing the content of the Directive.

    • Article  3, 1°: it introduces several amendments to Article 22 of the MiFID II implementing RD. Point 1° of the provision clarifies that the definition by regulated undertakings of the potential target market for each financial instrument shall take into account, where appropriate, sustainability objectives. It is also clarified that when regulated undertakings define the possible client group(s) with whose needs, characteristics and objectives that instrument is not compatible, they do not have to take into account possible sustainability factors. The current rule requires regulated firms to identify both the potential target market for each financial instrument, specifying the type(s) of clients whose needs, characteristics and objectives are compatible with that financial instrument, and the 'negative' target market, i.e. the group(s) of clients whose needs, characteristics and objectives are not compatible with that financial instrument. As drafted, the provision of this RD departs slightly from Article 1(2)(a) of the Directive, a strict reading of which might suggest that regulated undertakings are not required to define a negative target market for a financial instrument when the latter takes into account sustainability factors. This interpretation does not seem to be in line with the will of the European legislator. This interpretation is confirmed by ESMA in its Consultation Paper "Review of the Guidelines on MiFID II product governance requirements" of 8 July 2022 and should therefore be applied in a harmonised manner by the supervisors of the different Member States.
    • Article 4, 1°: it  makes amendments to paragraphs 2 and 5 of Article 23 of the MiFID II Implementing RD, relating to product governance requirements for regulated firms that offer or recommend financial instruments that they do not necessarily produce. The purpose of these amendments is similar to those made to Article 22 of the same Order, i.e. to explicitly provide for the consideration of sustainability factors when defining the target market and its review.

    In this context, it is only necessary to amend the RD of 19 December 2017 laying down the rules and procedures for transposing the Directive on markets in financial instruments.

  • GERMANY

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    Federal Ministry of Finance publishes Sanction Enforcement Act II

    CACEIS

  • On 27 December 2022, the Federal Ministry of Finance published the Sanctions Enforcement Act II which initiates structural improvements in sanctions enforcement and in the fight against money laundering in Germany. In particular, this concerns the following regulatory contents:

    1. Creation of a central office for sanctions enforcement at federal level to enforce sanctions law in the Federal Republic of Germany, unless the Federal Office of Economics and Export Control (BAFA) or the Deutsche Bundesbank (BBk) are responsible.
    2. Creation of an administrative procedure for the determination of assets of sanctioned persons and partnerships as well as a corresponding register.
    3. Establishment of an information collection point
    4. Possibility of appointing a special representative to monitor compliance with sanctions in companies
    5. Linking real estate data to the transparency register
    6. Notification obligation of associations domiciled abroad that hold real estate ownership in the Federal Republic of Germany (also existing cases instead of previously only in the case of new acquisitions)
    7. Introduction of a ban on cash payments for real estate transactions
    8. Creation of more transparency in the figure of the fictitious beneficial owner according to § 3 paragraph 2 sentence 5 of the Money Laundering Act
    9. Utilisation of ownership and control structure overviews for authorities and obliged entities
    10. Declaration of UN listings to be directly applicable
    11. Adaptation of the assurance provisions in the Financial Supervision Acts
  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    BaFin publishes Consultation 09/2022 on the Electronic Communications Regulation under the Investment Code

    CACEIS

  • On 2 December 2022, the Federal Financial Supervisory Authority (BaFin) has published a draft consultation on on the Electronic Communications Regulation under the Investment Code.

    Section 7b paragraphs 1 and 2 of the Capital Investment Code, which was inserted into the Capital Investment Code with the Fund Location Act (FoStoG), obliges management companies, investment companies, custodians, interested acquirers pursuant to Section 19 paragraph 1 sentence 1 of the Capital Investment Code and owners of significant holdings from April 1, 2023 for electronic communication with the Federal Agency via an electronic communication procedure provided by it. The supervisory authority has specified the more precise provisions for the use of the electronic communication procedure it provides for submissions and retrievals (see annex).

  • Markets in financial instruments Directive and Regulation (MiFID II / MiFIR)

    BaFin publishes General Decree continuing to allow subsequent publication of transactions related regarding post-trade transparency

    CACEIS

  • On 20 December 2022, BaFin published General Decree continuing to allow subsequent publication of transactions regarding post-trade transparency.

    Transactions in financial instruments can continue to be published later than the European Markets in Financial Instruments Regulation (Markets in Financial Instruments Regulation – MiFIR) in principle. The Federal Financial Supervisory Authority (BaFin) has extended its corresponding regulations by a further six months until 2 July 2023.

    Its current rules on the publication deadlines of transactions are limited to 1 January 2023. With effect from 2 January 2023, BaFin is extending it and issuing the following three general rulings for this purpose:

    • General disposition to permit the subsequent publication of transactions in non-equity instruments on trading venues operated by an investment services company.
    • General disposition to permit subsequent publication of over-the-counter (OTC) transactions in non-equity instruments by investment service providers.
    • General disposition to allow subsequent publication of transactions in equity instruments on trading venues operated by an investment services provider.

    There are still no plans to allow OTC transactions in equity instruments to be published separately. According to MiFIR, these are covered by the permission for trading venues. Trading venues that fall under the supervision of BaFin must obtain its approval before making use of the permission for subsequent publication.

  • BaFin issues General decree on post-trade transparency trading venues that are not operated by an exchange/equity instruments

    CACEIS

  • On 20 December 2022, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) issued General decree on post-trade transparency trading venues that are not operated by an exchange/equity instruments.

    BaFin has announced, according to § 41 paragraphs 3 and 4 VwVfG in connection with § 17 paragraph 2 FinDAG for the purpose of announcing the general decree of the Federal Financial Supervisory Authority on January 2nd, 2023 regarding the post-trade transparency requirements for trading venues with regard to on shares, share certificates, exchange-traded funds, certificates and other comparable financial instruments, Article 6 paragraph 1, Article 7 paragraph 1 of Regulation ( EU ) No. 600/2014 of the European Parliament and of the Council of May 15, 2014 on markets in financial instruments and amending Regulation ( EU ) No. 648/2012, which was last amended by Regulation 2022/858 ("MiFIR"), Delegated Regulation ( EU ) 2017/587 of the Commission of July 14, 2016 supplementing Regulation ( EU ) No.600/2014 of the European Parliament and of the Council on markets in financial instruments through regulatory technical standards on the transparency requirements for trading venues and investment firms with regard to shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments ( OJ L 87 of 31.03. 2017, L 228 of 02.09.2017, p. 33 - "RTS 1"), which was last amended by Regulation ( EU ) 2019/442 of 20.03.2019, that investment services companies within the meaning of Section 2 (10) of the Securities Trading Act ( WpHG ) pursuant to Article 7 Paragraph 1 Subparagraph 1 of the MiFIR , which operate a trading venue pursuant to Section 2 Paragraph 8 No. 8 WpHG and have an authorization pursuant to Article 7 Paragraph 1 3 subparagraph, are authorised to publish details of transactions within the meaning of Article 7(1) subparagraph 2 of MiFIR within the framework prescribed by Article 7(1) of MiFIR and Article 15 RTS 1 at a later date than required by Article 6 of MiFIR . This general decree is limited until July 2nd, 2023.

  • HONG KONG

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    Government publishes Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Ordinance Bill 2022

    CACEIS

  • On 16 December 2022, the Government Gazette of Hong Kong published Anti-Money Laundering and Counter-Terrorist Financing (AML-CFT) (Amendment) Ordinance Bill 2022.

    The amended AML/CFT Ordinance introduces: 

    • a licensing regime for virtual asset service providers; and 
    • a two-tier registration regime for dealers in precious metals and stones. 

    The Government has also taken this opportunity to make a number of miscellaneous amendments to ensure alignment with the latest international standards set by the Financial Action Task Force.  (FATF). Those amendments relevant to the banking sector include – 

    • amending the definition of “politically exposed person” (PEP) to align with the FATF requirement; 
    • facilitating a risk-based approach in determining the degree of customer due diligence (CDD) that former PEPs are subject to; 
    • supporting the use of technology by clarifying that a recognized digital identification system can be used for the purposes of CDD and satisfying the additional requirements where a customer is not physically present for identification purposes; and 
    • clarifying that, where a trust is concerned, a beneficial owner includes a trustee of the trust, a beneficiary and a class of beneficiaries of the trust entitled to a vested interest in the trust.

    The above amendments will come into operation on 1 June 2023 to provide sufficient time for preparatory work. To help Authorized Institutions implement these changes, the Hong Kong Monetary Authority will soon consult the banking sector on corresponding changes to the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Authorized Institutions) as well as specific guidance on topical issues.

  • Financial Market Infrastructure (FMI)

    SFC announces launch of investor identification regime for March 2023

    CACEIS

  • On 12 Decembrer 2022, the Securities and Futures Commission (SFC) publishes Circular to Intermediaries on the Launch of the Hong Kong Investor Identification Regime on 20 March 2023.

    After issuing the Consultation Conclusions Paper in August 2021 on proposals to implement the HKIDR, the SFC has been closely monitoring market readiness by conducting three rounds of survey. The survey results indicate that significant progress has been made to prepare for the implementation, but some intermediaries may need more time to obtain from individual clients the necessary consent to the collection, storage, processing and use of personal data under the HKIDR, and update client identification information. Given the above, the SFC has decided to launch the HKIDR on 20 March 2023.

    Client consent is needed in order for intermediaries to comply with the SFC’s requirements and relevant data privacy laws, including the Personal Data (Privacy) Ordinance. The SFC would like to remind investors to respond to the request from their intermediaries as soon as possible. After the implementation of the HKIDR, if investors do not provide the required consent, they will only be allowed to sell existing securities holdings but not to buy securities on the Stock Exchange of Hong Kong Limited (SEHK). For details of the HKIDR regime, investors may refer to the “Information for investors” section of the SFC’s dedicated webpage.     

  • Listing / Trading rules

    SFC annouces expansion of eligible stocks under Stock Connect

    CACEIS

  • On 19 December 2022, the Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) jointly announced their in-principle approval for the further expansion of the scope of stocks eligible for trading under Mainland-Hong Kong Stock Connect.  

    After the expansion, which will cover both northbound and southbound trading, Stock Connect is expected to include stocks that account for more than 80% of the equity trading in each market. This will strengthen mutual access between the Mainland and Hong Kong stock markets and provide additional liquidity for both markets.

    Preparations for the implementation of these adjustments will take about three months, subject to market readiness and the completion of operational arrangements. The stock exchanges will announce the implementation details and the official launch date in due course.

  • Sustainable Finance / Green Finance

    HKMA publishes due diligence processes for green and sustainable products

    CACEIS

  • On 9 December 2022, the Hong Kong Monetary Authority (HKMA) published good practices relating to the development and ongoing management of green and sustainable products offered by authorized institutions (AIs). 

    The HKMA observes that AIs have expanded their green and sustainable product offerings in recent years for reasons including meeting customer demand, achieving their climate-related commitments, and contributing to the achievement of global carbon neutrality goals. These products range from green deposits, sustainability-linked financing to green and sustainable investment products. 

    In view of this development, the HKMA has recently undertaken a round of thematic examinations focused on the development and ongoing management of green and sustainable products. The objective is to ensure that the AIs examined have put in place proper systems of control to ensure that these products and the related funds are managed in a way consistent with their climate strategies, thereby reducing any potential exposures to greenwashing risks. Some good practices were identified over the course of this exercise. They are summarised around the following five high-level principles for reference by the industry:

    • Setting up a robust product governance framework for green and sustainable products.
    • Conducting comprehensive “greenness assessments” of clients and transaction due diligence for green lending.
    • Performing post-offering monitoring and controls to ensure the proper management of green and sustainable products. 
    • Enhancing transparency and accountability in respect of green and sustainable products.
    • Building appropriate expertise in product development and comprehensive due diligence processes.
  • IRELAND

    Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    CBI publishes updates to the pre-submission process for Qualifying Investor AIFs proposing to invest in Irish property assets

    CACEIS

  • On 7 December 2022, Central Bank of Ireland published updates to the pre-submission process for Qualifying Investor AIFs proposing to invest in Irish property assets.

    In the case of (1) above, a pre-submissionshould take account of the Central Bank’s macroprudential policy framework for Irish property funds and must contain the following information (non-exhaustive list):

    • Copies of the prospectus/supplement(s), as relevant;
    • A completed model portfolio template. The information provided should include a line by line breakdown of the properties and related securities/instruments that the Qualifying Investor AIF intends to utilise (an aggregate percentage per asset class is not acceptable). Note: Where available, details of the specific properties that will be invested in by the Qualifying Investor AIF should be included;
    • An indication of the expected target market of the Qualifying Investor AIF;
    • Details of the maximum LTV/leverage limits that will apply including any debt at SPV/intermediate investment vehicle level. This level should be in line with the leverage limits outlined in Section 4.3 of the Central Bank’s macroprudential policy framework for Irish property funds. Rationale for such limits should also be provided;
    • Details of the liquidity status of the Qualifying Investor AIF. The Central Bank will not authorise property funds if they are not structured as (i) closed-ended or (ii) open-ended with limited liquidity as per the Central Bank’s AIF Rulebook; and
    • Details of the redemption provisions that will apply.  Generally, property funds should provide for a liquidity timeframe (the time between the dealing deadline and payment of redemption proceeds) of at least 12 months, taking into account the nature of the assets held.
  • CBI publishes consultation on own funds requirements for UCITS Management Companies and AIFMs authorised to provide discretionary portfolio management services

    CACEIS

  • On 7 December 2022, Central Bank of Ireland published a consultation on own funds requirements for UCITS Management Companies and AIFMs authorised to provide discretionary portfolio management services.

    The Central Bank has published Consultation Paper 152 on own funds requirements for UCITS Management Companies and AIFMs authorised to provide discretionary portfolio management services. 

    This consultation seeks stakeholders’ views on the Central Bank proposal to align the own funds requirements for UCITS Management Companies and AIFMs that provide discretionary portfolio management services with the own funds requirements applicable to MiFID investment firms authorised to provide similar services set out in Regulation (EU) 2019/2033 (the Investment Firms Regulation). 

    This consultation will remain open until 23 February 2023.

  • Packaged Retail and Insurance-based Investment Products (PRIIPs)

    CBI publishes 37th Edition of the UCITS Q&A

    CACEIS

  • On 21 December 2022, the Central Bank of Ireland published the 37th Edition of the UCITS Q&A.

    This edition of the Q&A features three new Q&A’s (ID 1107, 1108 and 1109) and concerns PRIIPs filing requirements which come into effect from January 2023.

  • CBI publishes the 46th Edition of the Central Bank AIFMD Q&A Document

    CACEIS

  • On 21 December 2022, the Central Bank published the 46th Edition of the Central Bank AIFMD Q&A.

    This new edition revises Q&A ID 1126, which considers if AIFs in scope of the PRIIPs Regulation are required to file KIDs with the Central Bank. The Q&A sets out the the Central Bank’s requirement that Retail Investor AIFs which produce PRIIPs KIDs shall file these on an ex post basis. This will include periodic updates to existing KIDs.  The first annual reporting of such KIDs will take place in January 2024. 

  • ITALY

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    Banca d'Italia publishes communication of 20 October 2022 on FAQs related to the AML questionnaire

    CACEIS

  • On 7 December 2022, Banca d'Italia published communication of 20 October 2022 on FAQs related to the AML questionnaire.

    The following FAQs were published:

    • How should sections D ("Fiduciary mandates") and F ("Group Information") of the questionnaire be completed when not applicable to the intermediary?
    • Should customers set up by foreign companies with headquarters outside the national territory but with secondary offices operating in Italy be indicated in item b of section A ("customers based abroad")?
    • Should sole proprietorship customers be listed under "a.1 of which are natural persons" in Section A?
    • How should the number of joint reports be recorded under item c. of Section A?
    • How should AML costs and investments (items 8 and 9 of the questionnaire) be recorded for intermediaries belonging to groups?
    • How should costs, investments and FTEs be indicated (items 8, 9 and 18 of the questionnaire) if these items do not only concern anti-money laundering but also other cost centers (e.g. AML manager who is also responsible for compliance; costs related to the outsourcing of multiple activities including some related to AML)?
    • Should the number of "FTEs used in second-level AML/CTF controls" (item 18) include FTEs used by external company resources (e.g. outsourcers)?
    • Should FTEs be reported in terms of hours or persons employed in AML checks?
    • In relation to the location of the AML function (item 10), in the case of outsourcing of the AML function to the parent company, should the subsidiary indicate the answer "not applicable by outsourcing", even if, in addition to the internal manager, an office dedicated to AML controls has been maintained?
    • Clarifications
  • Directive on the protection of persons who report breaches of Union law (Whistleblowers Directive)

    Italian government approves draft legislative decree implementing Whistleblowing Directive

    CACEIS

  • On 9 December 2022, Italian governement approved draft legislative decree implementing Directive (EU) 2019/1937 on the protection of persons who report breaches of EU law (whistleblowers) and laying down provisions concerning the protection of persons who report breaches of national regulatory provisions (Whistleblowing Directive).

    The operational scope of the directive is limited, in the light of the principle of subsidiarity which governs legislative action at European level, to infringements of Community legislation in a range of sectors expressly indicated in the annex to the directive (among these: public procurement, financial services, product and transport safety, environment, food, public health, privacy, network and IT system security, competition) (article 2). Furthermore, the legislation has residual value with respect to the special disciplines that regulate whistleblowing in specific sectors (references to these regulations are contained in part II of the annex).

    Within the scope of operation thus outlined, the directive provides for protection for the whistleblower without differentiating between the public sector and the private sector.

    The directive offers an extremely broad definition of whistleblower (article 4), which includes all subjects, connected in a broad sense to the organization in which the violation occurred, who could fear retaliation in consideration of the situation of economic vulnerability in which are located (employees, self-employed workers, external collaborators, those who carry out paid or unpaid traineeships, volunteers, those whose employment relationship has ended or has not yet begun 2 and all subjects who work under the supervision and management of contractors, sub-contractors and suppliers). The protective measures also extend to the so-called facilitators (i.e. those who assist the worker in the reporting process), colleagues and even relatives of whistleblowers, but to the latter subjects, pursuant to art. 3 paragraph 5, the provision of the reversal of the burden of proof pursuant to art. 17 paragraphs 2 and 3. From a subjective point of view, therefore, the directive provides for a very extensive protection.

    According to the provisions of the directive, reports can be made through three different reporting channels: internal, external and public.

    Article 6 of the directive provides that protection exists even in the event of reports or disclosures which later turn out to be unfounded, if the whistleblower has had "reasonable reasons to believe that the violations were true". In the case of knowingly false reports, the directive establishes the obligation for the Member States to provide for adequate sanctions, in addition to compensation for damages. Chapter II of the directive (articles 7, 8 and 9) provides that all public bodies must have internal reporting channels, with the possibility of exemption for municipalities with less than 10,000 inhabitants and for public bodies with fewer than 50 employees. Private entities with more than 50 employees must also equip themselves with these channels (there is, however, the possibility for private entities with a number of employees between 50 and 250 to set up common reporting systems), as well as private entities operating in determined and specific sectors (Part IB and II of the Annex), irrespective of the number of employees.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    CONSOB publishes resolution no. 22551 of 21 December 2022 amending the issuers' regulation on key information that investment funds must provide to investors

    CACEIS

  • On 22 December 2022, CONSOB published resolution no. 22551 of 21 December 2022 amending the issuers' regulation on key information that investment funds must provide to investors.

    The rules on key information that investment funds must provide to savers are changing. From 1 January 2023 - according to the latest amendments to the Issuers' Regulation (resolution no. 22551 of 21 December 2022) approved by Consob in implementation of the Community regulations - the so-called Kid (Key Information Document), already adopted for financial-insurance products and closed AIFs (alternative investment funds), aimed at retail investors, will also apply to other categories of funds, UCITS (undertakings for collective investment in transferable securities) and open-ended AIFs for retail clients. Until the end of 2022, open UCITS and AIFs, benefiting from a specific exemption provided for by European legislation, use, instead, another synthetic information document scheme, the so-called Kiid (Key Investor Information Document), as required by EU sector provisions.

    This standardizes the rules on summary information documents, those that in a few pages describe the characteristics of the financial products offered, such as duration, return, degree of risk. From 2023, therefore, all types of Priips (Packaged Retail and Insurance-based Investment Products), i.e. hybrid financial products of a financial-insurance nature, aimed at retail customers, will be accompanied by key information presented according to the same model.

    Exceptions are UCITS fund offerings aimed at non-retail investors (so-called "qualified" investors, such as banks and investment firms), for which managers can choose between Kid and Kiid.

  • Italian governement approves draft implementing decree on rules for Directive (EU) 2021/2261 of the European Parliament and of the Council of 15 December 2021 amending Directive 2009/65/EC as regards the use of KIDs by management companies of UCITS

    CACEIS

  • On 9 December 2022, Italian governement approved draft implementing decree on rules for Directive (EU) 2021/2261 of the European Parliament and of the Council of 15 December 2021 amending Directive 2009/65/EC as regards the use of KIDs by management companies of UCITS.

    The legislation makes limited changes to the current regulations, in particular with regard to the timing of application of certain provisions of the Regulation on "Packaged Retail and Insurance-based Investment Products – PRIIPs" to companies managing undertakings for collective investment in transferable securities (UCITS).

    The quick fix to Directive 2009/65/EC is intended to avoid interpretative doubts arising when the transitional period expires, whereby retail investors in UCITS could receive both a document containing key information under the PRIIPs 

    Regulation and key investor information under the UCITS Directive.

  • Markets in financial instruments Directive and Regulation (MiFID II / MiFIR)

    Italian government approves draft implementing provisions for MiFID II Quick Fix

    CACEIS

  • On 9 December 2022, Italian governement approved draft implementing provisions for Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 2021 amending Directive 2014/65/EU as regards information requirements, product governance and position limits, and Directives 2013/36/EU and (EU) 2019/878 as regards their application to investment firms, to support the recovery from the COVID-19 crisis.

    The main purpose of the Directive is to overcome non-essential bureaucratic burdens, providing for a series of simplification measures aimed at mitigating the economic difficulties of intermediaries.

    The amendments envisaged by the Directive impact both investors and the mitigation of unnecessary obligations in favour of professional clients and eligible counterparties under MiFID II.

    In particular, the innovations introduced by the Directive include:

    • Exemption from product governance requirements, where investment services relate to bonds without embedded derivatives other than a make-whole clause or where financial instruments are offered exclusively to eligible counterparties;
    • The simplification of information obligations, and in particular it is provided that: all information addressed to customers is provided in electronic format; For transactions in distance financial instruments, information on costs and charges may be provided following the conclusion of the transaction (subject to agreement with the client). For professional clients: disclosure of costs and charges is only necessary in the case of investment advice and portfolio management; the information concerning costs and benefits of the portfolio switches is not due (unless requested by the customer); it is not necessary to provide the periodic report on the services provided and the adequacy report (unless explicitly requested;
    • For eligible counterparties, the possibility for investment firms not to be subject to disclosure requirements, adequacy assessment, best execution requirements and order management obligations;
    • The suspension until 28 February 2023 of the periodic disclosure obligations to the public on best execution provided by European trading venues and other execution venues;
    • The introduction of support measures for commodity derivatives.
  • Prudential Requirements for Investment Firms Directive & Regulation (IFD / IFR)

    Banca d'Italia publishes SIM Supervision Regulation

    CACEIS

  • On 23 December 2022, Banca d'Italia published SIM Supervision Regulation.

    The Bank of Italy issued the Regulation on the supervision of SIM cards. The Regulation is aimed at completing the transposition into national law of the provisions of the IFD, at exercising the national discretions granted to the Bank of Italy and identifying the administrative procedures pursuant to the IFR, the IFD, and the delegated regulations of the Commission, as well as to carry out a reorganization of the secondary discipline of the Bank of Italy on SIM cards.

  • LUXEMBOURG

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    CSSF announces the start of the 2022 "Annual AML Survey" on 15 February 2023 / La CSSF announce le début de l'enquête annuelle LCB-FT de 2022

    CACEIS

  • On 7 December 2022, the Commission de Surveillance du secteur financier (CSSF) published a communication about the 2022 survey related to the fight against money laundering and terrorism financing (AML/CFT).

    The CSSF will start the annual online survey for the year 2022 on 15 February 2023.

    The objective is to collect standardised key information concerning money laundering and terrorism financing (ML/TF) risks to which professionals under CSSF supervision are exposed and the implementation of measures to mitigate these risks. This cross-sector survey contributes to the CSSF’s ongoing assessment of ML/TF risks present in the financial sectors under its supervision and forms part of the AML/CFT risk-based supervision approach put in place by the CSSF.

    The 2022 survey remains mostly unchanged compared to the previous year. However, some questions have been removed, added or amended. The new and amended questions have been highlighted in the survey.

    Answers to the survey questions will have to be submitted through the CSSF eDesk portal by 31 March 2023 (at the latest).

    The survey must be initiated and submitted within the CSSF eDesk portal by:

    • the compliance officer in charge of the control of compliance with the professional obligations1 (“responsable du contrôle du respect des obligations professionnelles” (“RC”)), or
    • the person responsible for compliance with the professional obligations2 (“responsable du respect des obligations professionnelles” (“RR”)).

    The completion of the survey, however, may be assigned within the CSSF eDesk portal to another employee of the entity or third party, while bearing in mind that the ultimate responsibility for the adequate completion of the survey shall remain with the “RC” or the “RR”.

    In terms of logistics, this implies that the aforementioned person and their potential delegates must have an eDesk account, which requires a LuxTrust authentication.

    In order to avoid connection problems when the survey will be launched, the CSSF invites all entities it supervises for AML/CFT purposes to ensure they have an account. Reference is made to the “Authentication and user account management” user guide in the dedicated section of the CSSF eDesk portal homepage for further details.

    Version française

    Le 7 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié une communication concernant l'enquête de 2022 liée à la lutte contre le blanchiment de capitaux et le financement du terrorisme (LCB-FT).

    La CSSF va commencer l'enquête en ligne annuelle pour l'année 2022 le 15 février 2023.

    L'objectif est de recueillir des informations clés normalisées concernant les risques de blanchiment de capitaux et de financement du terrorisme (CB-FT) auxquels les professionnels sous la surveillance de la CSSF sont exposés et d'appliquer les mesures pour atténuer ces risques. Cette enquête transversale contribue à l'évaluation en cours des risques de CB-FT présents dans les secteurs financiers sous la surveillance de la CSSF et fait partie de l'approche de surveillance fondée sur les risques de LCB-FT mise en place par la CSSF.

    L'enquête 2022 reste en grande partie inchangée par rapport à l'année précédente. Cependant, certaines questions ont été supprimées, ajoutées ou modifiées. Les nouvelles et les questions modifiées ont été mises en évidence dans l'enquête.

    Les réponses aux questions de l'enquête devront être soumises via le portail CSSF eDesk au plus tard le 31 mars 2023.

    L'enquête doit être initiée et soumise via le portail CSSF eDesk par :

    • soit le responsable de la conformité en charge du contrôle de la conformité aux obligations professionnelles (“responsable du contrôle du respect des obligations professionnelles” (“RC”)), 
    • soit la personne responsable de la conformité aux obligations professionnelles (“responsable du respect des obligations professionnelles” (“RR”)).

    La réalisation de l'enquête peut cependant être affectée via le portail CSSF eDesk à un autre employé de l'entité ou à un tiers, en respectant que la responsabilité ultime pour l'achèvement adéquat de l'enquête reviendra au "RC" ou au "RR".

    En termes de logistique, cela implique que la personne susmentionnée et ses délégués potentiels doivent avoir un compte eDesk, ce qui nécessite une authentification LuxTrust.

    Pour éviter des problèmes de connexion lorsque l'enquête sera lancée, la CSSF invite toutes les entités qu'elle supervise aux fins de lutte contre le blanchiment de capitaux et le financement du terrorisme (AML/CFT) à s'assurer qu'elles ont un compte. Il est fait référence au guide de l'utilisateur "Authentification et gestion des comptes d'utilisateurs" dans la section dédiée de la page d'accueil du portail CSSF eDesk pour plus de détails.

  • Luxembourg Ministry of Justice announces the restoration of access to RBE for professionals and the press / Le ministère luxembourgeois de la Justice annonce le rétablissement de l'accès au RBE pour les professionnels et la presse

    CACEIS

  • On 21 December 2022, the Luxembourg Ministry of Justice announced the restoration of access to RBE for professionals and the press.

    Following the suspension of public access to the Register of Beneficial Owners (RBE), made necessary due to the recent judgment of the Court of Justice of the European Union (CJEU) of 22 November 2022, Luxembourg Business Registers (LBR), the Ministry of Justice and the State Information Technology Centre have actively collaborated to find a technical and legal solution in accordance with the conditions adopted by the CJEU.

    Consequently, access to the RBE was initially (dated 16 December 2022) restored for professionals referred to in Article 2 of the amended law of 12 November 2004 on the fight against money laundering and the financing of terrorism who request it from LBR. The LBR www.lbr.lu website provides information on the procedure to follow.

    Access has also been restored for press representatives. This access is managed by the Luxembourg Press Council as part of an agreement with LBR that was concluded on 20 December 2022. Under this agreement, the Press Council may grant access to the consultation of the RBE to holders of a professional journalist's press card issued by the same Press Council, this access being justified by the legitimate interest that the press can rely on to consult the RBE, as confirmed by the CJEU in its judgment of 22 November 2022.

    The Ministry of Justice is now studying, together with LBR, under what conditions access can be restored for other actors with a legitimate interest and having a link with the fight against money laundering and the financing of terrorism.

    The Ministry of Justice will also prepare amendments to the law of 13 January 2019 so that the text is fully in line with the text of Directive (EU) 2015/849 of 20 May 2015 as amended following Directive 2018/843 and the CJEU judgment.

    It should also be noted that the competent national authorities have and continue to benefit from dedicated access through an intranet portal, enabling them to carry out their tasks in the fight against money laundering and the financing of terrorism.

    Version française

    Le 21 décembre 2022, le ministère luxembourgeois de la Justice a annoncé le rétablissement de l'accès au RBE pour les professionnels et la presse.

    Suite à la suspension de l'accès public au Registre des Bénéficiaires Effectifs (RBE), rendue nécessaire en raison de l'arrêt recent de la Cour de Justice de l'Union européenne (CJUE) du 22 novembre 2022, le Luxembourg Business Registers (LBR), le Ministère de la Justice et le Centre Informatique de l'Etat ont activement collaboré pour trouver une solution technique et juridique conforme aux conditions adoptées par la CJUE.

    Par conséquent, l'accès au RBE a été initialement (en date du 16 décembre 2022) rétabli pour les professionnels visés à l'article 2 de la loi modifiée du 12 novembre 2004 relative à la lutte contre le blanchiment de capitaux et le financement du terrorisme qui en font la demande auprès du LBR. Le site Internet de la LBR www.lbr.lu fournit des informations sur la procédure à suivre.

    L'accès a également été rétabli pour les représentants de la presse. Cet accès est géré par le Conseil de la presse luxembourgeois dans le cadre d'une convention avec la LBR conclue le 20 décembre 2022. En vertu de cette convention, le Conseil de la presse peut accorder l'accès à la consultation du RBE aux titulaires d'une carte de presse de journaliste professionnel délivrée par le même Conseil de la presse, cet accès étant justifié par l'intérêt légitime dont peut se prévaloir la presse pour consulter le RBE, tel que confirmé par la CJUE dans son arrêt du 22 novembre 2022.

    Le Ministère de la Justice étudie maintenant, avec la LBR, dans quelles conditions l'accès peut être rétabli pour d'autres acteurs ayant un intérêt légitime et ayant un lien avec la lutte contre le blanchiment d'argent et le financement du terrorisme.

    Le ministère de la Justice préparera également des modifications de la loi du 13 janvier 2019 afin que le texte soit pleinement conforme au texte de la directive (UE) 2015/849 du 20 mai 2015 tel que modifié suite à la directive 2018/843 et à l'arrêt de la CJUE.

    Il convient également de noter que les autorités nationales compétentes ont accès dédié et continuent d'en bénéficier via un portail intranet, leur permettant d'effectuer leurs missions en matière de lutte contre le blanchiment de capitaux et le financement du terrorisme.

  • Cross-border activities

    CSSF publishes Circular 22/827 on EU financial entities with branches or exercising through FPS in Lux / La CSSF publie la circulaire 22/827 sur les entreprises d'investissement ayant des succursales ou exerçant en LPS au Luxembourg

    CACEIS

  • On 27 December 2022, Commission de Surveillance du secteur financier (CSSF)  published Circular CSSF 22/827 updating Circular CSSF 07/325 as amended by Circular CSSF 21/765 on provisions relating to credit institutions and investment firms of EU origin established in Luxembourg by way of branches or exercising activities in Luxembourg by way of free provision of services.

    The purpose of this circular is to amend Circular CSSF 07/325 on provisions relating to credit institutions and investment firms of EU origin established in Luxembourg by way of branches or exercising activities in Luxembourg by way of free provision of services, following the introduction of the revised long form report by Circular CSSF 22/821. The circular draws upon the provisions of the revised long form report and introduces a self-assessment questionnaire to be filled in on an annual basis by Luxembourg branches of credit institutions whose head office is in another Member State. The circular also modifies relevant regulatory references following (i) the latest updates made to the Law of 5 April 1993 on the financial sector and to the Law of 12 November 2004 on the fight against money laundering and terrorist financing, and (ii) the entry into force of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments (“MiFID II Directive”) which replaced Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments. The MiFID II Directive was transposed into Luxembourg law by the Law of 30 May 2018 on markets in financial instruments. Please refer to the Annex for the details of the amendments to Circular 07/325.

    Version française

    Le 27 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié la circulaire CSSF 22/827mettant à jour la circulaire CSSF 07/325 telle que modifiée par la circulaire CSSF 21/765 concernant les dispositions relatives aux établissements de crédit et aux entreprises d'investissement d'origine communautaire établis au Luxembourg par le biais de succursales ou exerçant des activités au Luxembourg en libre prestation de services.

    La présente circulaire a pour objet de modifier la circulaire CSSF 07/325 concernant les dispositions relatives aux établissements de crédit et aux entreprises d'investissement d'origine communautaire établis au Luxembourg par le biais de succursales ou exerçant des activités au Luxembourg en libre prestation de services, suite à l'introduction du rapport détaillé révisé par la circulaire CSSF 22/821. La circulaire s'inspire des dispositions du rapport détaillé révisé et introduit un questionnaire d'auto-évaluation à remplir annuellement par les succursales luxembourgeoises d'établissements de crédit dont le siège social est situé dans un autre Etat membre. La circulaire modifie également les références réglementaires pertinentes suite (i) aux dernières mises à jour apportées à la loi du 5 avril 1993 relative au secteur financier et à la loi du 12 novembre 2004 relative à la lutte contre le blanchiment de capitaux et le financement du terrorisme, et (ii) à l'entrée en vigueur de la directive 2014/65/UE du Parlement européen et du Conseil concernant les marchés d'instruments financiers (" directive MiFID II ") qui a remplacé la directive 2004/39/CE du Parlement européen et du Conseil concernant les marchés d'instruments financiers. La directive MiFID II a été transposée en droit luxembourgeois par la loi du 30 mai 2018 relative aux marchés d'instruments financiers. Veuillez vous référer à l'annexe pour les détails des modifications apportées à la circulaire 07/325.

  • Financial supervision

    Luxembourg publishes Grand-Ducal Regulation of 23 December 2022 on the fees to be levied by the CSSF / Le Luxembourg publie le règlement grand-ducal du 23 décembre 2022 relatif aux taxes à percevoir par la CSSF

    CACEIS

  • On 23 December 2022, Luxembourg published Grand-Ducal Regulation of 23 December 2022 on the fees to be levied by the Commission de Surveillance du Secteur Financier.

    The fees to be levied by the Commission de Surveillance du Secteur Financier, covering its staff costs, financial costs and operating costs, pursuant to Article 24 of the amended Law of 23 December 1998 establishing a Financial Sector Supervisory Commission, are set in this Grand-Ducal Regulation.

    Art. 4. Repeal provision

    The amended Grand-Ducal Regulation of 17 December 2021 on the fees to be levied by the Commission de Surveillance du Secteur Financier is repealed.

    Art. 5. Entry into force

    This Regulation shall apply from 1er January 2023.

    Version française

    Le 23 décembre 2022, le Luxembourg a publié le règlement grand-ducal du 23 décembre 2022 relatif aux taxes à percevoir par la Commission de Surveillance du Secteur Financier.

    Les taxes à percevoir par la Commission de Surveillance du Secteur Financier, couvrant ses frais de personnel, ses frais financiers et ses frais de fonctionnement, en application de l'article 24 de la loi modifiée du 23 décembre 1998 portant création d'une Commission de Surveillance du Secteur Financier, sont fixées dans le présent règlement grand-ducal.

    Art. 4. Disposition d'abrogation

    Le règlement grand-ducal modifié du 17 décembre 2021 concernant les taxes à percevoir par la Commission de Surveillance du Secteur Financier est abrogé.

    Art. 5. Entrée en vigueur

    Le présent règlement est applicable à partir du 1er janvier 2023.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    CSSF publishes FAQ on UCI administrator (2/12/2022) / La CSSF publie des FAQ sur l'administrateur d'UCI (2/12/2022)

    CACEIS

  • On 2 December 2022, the Commission de Surveillance du secteur financier (CSSF) published an FAQ on authorisation and organisation of entities acting as UCI administrator (UCIA).

    The updates relates to the following questions:

    • To which entities does the UCIA Circular apply?
    • Does the UCIA Circular apply to UCIs or IFMs having wholly delegated the UCI administration functions? 
    • Is it required that one and the same UCIA performs all the administration functions?
    • Is the UCIA responsible for the function(s) for which it has been appointed?

    Version française

    Le 2 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié des FAQ sur l'autorisation et l'organisation des entités agissant en tant qu'administrateur d'OPC (UCIA).

    Les mises à jour concernent les questions suivantes:

    • Pour quelles entités s'applique la circulaire UCIA?
    • La circulaire UCIA s'applique-t-elle aux OPC ou aux gestionnaires de fonds d'investissement ayant entièrement délégué les fonctions d'administration d'OPC?
    • Est-il nécessaire qu'un même administrateur d'OPC effectue toutes les fonctions d'administration?
    • L'UCIA est-elle responsable des fonctions pour lesquelles elle a été nommée?
  • CSSF updates notification form for the free provision of services / La CSSF met à jour le formulaire de notification pour la fourniture gratuite de services

    CACEIS

  • On 9 December 2022, Commission de Surveillance du secteur financier (CSSF) updated form for any notification regarding the free provision of services and amendments to the information included in such a notification.

    Version française

    Le 9 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour le formulaire pour toute notification concernant la fourniture gratuite de services. Les modifications apportées aux informations figurent dans cette notification.

  • CSSF updates notification form for branch establishment / La CSSF met à jour le formulaire de notification pour l'établissement d'une succursale

    CACEIS

  • On 9 December 2022, Commission de Surveillance du secteur financier (CSSF) updated form for any notification regarding branch establishment and amendments to the information included in such a notification.

    Version française

    Le 9 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour le formulaire pour toute notification concernant l'établissement d'une succursale et les modifications apportées aux informations figurant dans cette notification.

  • CSSF publishes Guidelines on the UCITS risk reporting and related templates (13/12/2022) / La CSSF publie des lignes directrices sur le reporting des risques des OPCVM et les modèles connexes (13/12/2022)

    CACEIS

  • On 13 December 2022, Commission de Surveillance du secteur financier (CSSF) published Guidelines on the UCITS risk reporting (URR) and related forms.

    This document gives further guidance on the UCITS risk reporting and contains definitions, explanations and examples for the items as referred to in the Excel reporting file.

    Reporting scope: The present reporting obligation does apply to all Luxembourg domiciled UCITS1 authorized by the CSSF as at the reporting reference dates (30 June, resp. 31 December) until further notice. UCITS liquidated during the reference period are out of scope.

    While management companies and investment companies know the UCITS they manage and that are covered by the reporting scope, the CSSF asks them nevertheless to critically verify, prior to the submission of the report, that they cover all UCITS authorized as at the reporting reference date by consulting the following list available on the CSSF website:

    www.cssf.lu/en/document/ucits-identifiers-for-urr-reporting/

    Please note that this list will only be available in the 3rd week following each reporting reference date.

    The reporting file encompasses two separate sheets:

    • the first sheet named “DataURR” mainly refers to risk information at UCITS level (hereafter “UCITS risk data”) whereas
    • the second sheet labelled “Contact details” aims at collecting contact details at the level of the management company or self-managed investment company in order to enable the CSSF, amongst others, to send the circular letter for UCITS risk reporting by e-mail (in addition to the posted letter) to all addressees.

    Version française

    Le 13 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié des lignes directrices sur le reporting des risques des OPCVM (URR) et les formulaires relatifs.

    Ce document fournit des informations supplémentaires sur le reporting des risques des OPCVM et contient des définitions, des explications et des exemples pour les éléments mentionnés dans le fichier de reporting Excel.

    Portée de la déclaration : L'obligation de déclaration actuelle s'applique à tous les OPCVM de droit luxembourgeois autorisés par la CSSF aux dates de référence de déclaration (30 juin et 31 décembre) jusqu'à nouvel ordre. Les OPCVM liquidés pendant la période de référence sont exclus du champ d'application.

    Bien que les sociétés de gestion et les sociétés d'investissement connaissent les OPCVM qu'elles gèrent et qui sont couverts par la portée de la déclaration, la CSSF leur demande cependant de vérifier de manière critique, avant la soumission du rapport, qu'ils couvrent tous les OPCVM autorisés aux dates de référence de déclaration en consultant la liste suivante disponible sur le site web de la CSSF:

    www.cssf.lu/en/document/ucits-identifiers-for-urr-reporting/

    Veuillez noter que cette liste ne sera disponible que la 3ème semaine suivant chaque date de référence de déclaration.

    Le fichier de déclaration comprend deux feuilles séparées :

    la première feuille intitulée "DataURR" se réfère principalement aux informations de risque au niveau des OPCVM (ci-après "données de risque des OPCVM") tandis que la seconde feuille intitulée "Coordonnées de contact" vise à recueillir les coordonnées au niveau de la société de gestion ou de la société d'investissement autogérée afin de permettre à la CSSF, entre autres, d'envoyer la lettre circulaire pour le reporting des risques des OPCVM par courrier électronique (en plus de la lettre postée) à tous les destinataires.

  • CSSF updates FAQ on Luxembourg Law of 17 December 2010 on undertakings for collective investment (UCI) (16/12/2022) / La CSSF met à jour le Q&A de la loi du 17 décembre 2010 sur les entreprises d'investissement collectif

    CACEIS

  • On 16 December 2022, the Commission de Surveillance du secteur financier (CSSF) updated the FAQ concerning the Luxembourg Law of 17 December 2010 relating to undertakings for collective investment (version 15).

    The update relates to modification of question 6.1 and publication of questions 6.2 6.3, 6.4, 6.5, 6.6, 6.7, and 6.8:

    • Do manufacturers of Luxembourg UCITS need to draw up a PRIIPs KID?
    • When do Luxembourg UCITS that replace their KIIDs by PRIIPs KIDs need to file such PRIIPs KIDs with the CSSF?
    • Which procedure must be followed in order to file a PRIIPs KID with the CSSF?
    • Does a specific nomenclature/naming convention apply in connection with the filing of a PRIIPs KID with the CSSF?
    • Is it possible to draw up and file a PRIIPs KID instead of a KIID prior to 1 January 2023?
    • Are manufacturers of Luxembourg UCITS required to draw up a PRIIPs KID if such UCITS is no longer available to retail investors as of 1 January 2023?
    • Do the questions and answers of the CSSF’s Frequently Asked Questions concerning the Key Investor Information Document (KIID) also apply to Luxembourg UCITS that issue a PRIIPs KID?

    Version française

    Le 16 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour les FAQ concernant la loi luxembourgeoise du 17 décembre 2010 relative aux entreprises d'investissement collectif (version 15).

    La mise à jour concerne la modification de la question 6.1 et la publication des questions 6.2, 6.3, 6.4, 6.5, 6.6, 6.7 et 6.8 :

    • Les fabricants d'OPCVM luxembourgeois doivent-ils préparer un KID PRIIPs ?
    • Quand les OPCVM luxembourgeois qui remplacent leur KIID par des KID PRIIPs doivent-ils déposer de ces KID PRIIPs auprès de la CSSF ?
    • Quelle procédure doit être suivie pour déposer un KID PRIIPs auprès de la CSSF ?
    • Une nomenclature/une convention de dénomination spécifique s'applique-t-elle pour le dépôt d'un KID PRIIPs auprès de la CSSF ?
    • Est-il possible de rédiger et de déposer un KID PRIIPs au lieu d'un KIID avant le 1er janvier 2023 ?
    • Les fabricants d'OPCVM luxembourgeois sont-ils tenus d'élaborer un KID PRIIPs si ces OPCVM ne sont plus disponibles pour les investisseurs particuliers à compter du 1er janvier 2023 ?
    • Les questions et réponses des FAQ de la CSSF concernant le Document d'Information Clé pour l'Investisseur (KIID) s'appliquent-elles également aux OPCVM luxembourgeois qui émettent un KID PRIIPs ?
  • CSSF updates FAQ on KIID (16/12/2022) / La CSSF met à jour les FAQ sur le KIID (16/12/2022)

    CACEIS

  • On 16 December 2022, the Commission de Surveillance du secteur financier (CSSF) updated its frequently asked questions (FAQ) on Key Investor Information Document.

    The update relates to modification of the Context and questions 2, 9 and 11  and Deletion of question 6.1 – Version 3.

    The questions are the following:

    • Which procedure must be followed in order to file the final version of a KIID with the CSSF?
    • How must the final version of the KIID be filed with the CSSF?
    • Which steps must be fully completed before a UCITS may issue a unit/share class of a UCITS or compartment thereof?

    Version française

    Le 16 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour ses questions fréquemment posées (FAQ) sur le Document d'Information Clé pour l'Investisseur (KIID).

    La mise à jour concerne la modification du contexte et des questions 2, 9 et 11, ainsi que la suppression de la question 6.1 - Version 3.

    Les questions sont les suivantes :

    • Quelle procédure doit être suivie pour déposer la version définitive d'un KIID auprès de la CSSF ?
    • Comment la version définitive du KIID doit-elle être déposée auprès de la CSSF ?
    • Quelles étapes doivent être entièrement terminées avant qu'un OPCVM ne puisse émettre une catégorie d'unité/part d'un OPCVM ou d'un compartiment de celui-ci ?
  • CSSF updates FAQ concerning SIFs and SICARs that do not qualify as AIFs (16/12/2022) / La CSSF met à jour les FAQ concernant les SIF et les SICAR qui ne sont pas considérés comme des OPCI (16/12/2022)

    CACEIS

  • On 16 December 2022, the Commission de Surveillance du secteur financier (CSSF) updated its frequently asked questions (FAQ) concerning Specialised investment funds (SIFs) and Investment companies in risk capital (SICARs) that do not qualify as Alternative Investment Funds (AIFs).

    The update relates to modification of question 1. A:

    • Do manufacturers of Luxembourg SIFs and SICARs that do not qualify as AIFs the units of which are being advised on, offered or sold to retail investors need to draw up a PRIIPs KID?
    • Do the same questions and answers as mentioned under 23.b) to 23.q) of the Frequently Asked Questions concerning the Luxembourg Law of 12 July 2013 on alternative investment fund managers apply to the drawing up of a PRIIPs KID by Luxembourg SIFs and SICARs that do not qualify as AIFs?

    Version française

    Le 16 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour ses questions fréquemment posées (FAQ) concernant les fonds d'investissement spécialisés (SIF) et les sociétés d'investissement en capital risque (SICAR) qui ne sont pas considérés comme des organismes de placement collectif d'actifs alternatifs (OPCA).

    La mise à jour concerne la modification de la question 1.A:

    • Les fabricants de SIF et SICAR luxembourgeois qui ne sont pas considérés comme des OPCA, dont les parts sont conseillées, proposées ou vendues aux investisseurs particuliers, doivent-ils préparer un KID PRIIPs ?
    • Les mêmes questions et réponses mentionnées sous les parties de 23.b) à 23.q) des questions fréquemment posées concernant la loi luxembourgeoise du 12 juillet 2013 sur les gestionnaires d'OPCI s'appliquent-elles à la préparation d'un KID PRIIPs par les SIF et SICAR luxembourgeoises qui ne sont pas considérées comme des OPCA ?
  • CSSF updates FAQ concerning the Luxembourg Law of 12 July 2013 on alternative investment fund managers (16/12/2022) / La CSSF met à jour les FAQ concernant la loi luxembourgeoise du 12 juillet 2013 sur les gestionnaires d'OPCIs (16/12/2022)

    CACEIS

  • On 16 December 2022, the Commission de Surveillance du secteur financier (CSSF) updated its frequently asked questions (FAQ) concerning the Luxembourg Law of 12 July 2013 on alternative investment fund managers.

    The update relates to modification of question 23.A and 23.B, deletion of questions, 23.C., G, H., O., P., Q.:

    • Do manufacturers of Luxembourg AIFs the units of which are being advised on, offered or sold to retail investors need to draw up a PRIIPs KID?
    • Can Luxembourg AIFs, the units of which are being advised on, offered or sold to retail investors, benefit from the exemption provided under Article 32(2) of the PRIIPs Regulation if they have issued a UCITS KIID (hereafter referred to as “UCITS-like KIID”)?

    Version française

    Le 16 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour ses questions fréquemment posées (FAQ) concernant la loi luxembourgeoise du 12 juillet 2013 sur les gestionnaires d'OPCIs.

    La mise à jour concerne la modification de la question 23.A et 23.B, la suppression des questions, 23.C., G, H., O., P., Q:

    • Les fabricants d'OPCI luxembourgeois, dont les parts sont conseillées, proposées ou vendues aux investisseurs particuliers, doivent-ils préparer un KID PRIIPs ?
    • Les OPCI luxembourgeois, dont les parts sont conseillées, proposées ou vendues aux investisseurs particuliers, peuvent-ils bénéficier de l'exemption prévue à l'article 32(2) du règlement PRIIPs s'ils ont émis un KIID d'OPCVM (ci-après dénommé "KIID OPCVM") ?
  • Markets in financial instruments Directive and Regulation (MiFID II / MiFIR)

    CSSF publishes communication on BaFin product intervention regarding futures / La CSSF publie une communication sur l'intervention de BaFin sur les produits dérivés de type futures.

    CACEIS

  • On 30 December 2022, Commission de Surveillance du secteur financier (CSSF) published communication on BaFin product intervention regarding futures.

    The CSSF would like to draw the attention of supervised entities to the following product intervention measure regarding futures, taken by Germany’s “Federal Financial Supervisory Authority” (“BaFin”) and published on its website on 30 September 2022:

    BaFin – Administrative Acts – General Administrative Act – Product intervention regarding Futures

    The measure is based on Article 42 “Product intervention by competent authorities” of Regulation (EU) No 600/2014 of the European parliament and of the Council of 15 May 2014 on markets in financial instruments (“MiFIR”).

    As a consequence of this measure, entities supervised by the CSSF are prohibited from marketing, distributing and selling futures to retail clients domiciled in Germany except if “additional payment obligations” have been contractually excluded. Transactions for hedging purposes or to close out open futures positions are not subject to this prohibition.

    Reference is made to the General Administrative Act published by BaFin for the precise scope of the restriction.

    The restriction is effective from 1 January 2023.

    Version française

    Le 30 décembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié une communication sur l'intervention de BaFin concernant les produits dérivés de type future.

    La CSSF souhaite attirer l'attention des entités surveillées sur la mesure d'intervention de produit suivante concernant les produits dérivés futures, prise par l'Autorité fédérale de surveillance financière (BaFin) de l'Allemagne et publiée sur son site web le 30 septembre 2022:

    BaFin - Actes administratifs - Acte administratif général - Intervention de produit concernant les produits dérivés futures

    Cette mesure est basée sur l'article 42 "Intervention de produit par les autorités compétentes" du règlement (UE) n° 600/2014 du Parlement européen et du Conseil du 15 mai 2014 sur les marchés d'instruments financiers (MiFIR).

    En conséquence de cette mesure, les entités surveillées par la CSSF sont interdites de commercialiser, distribuer et vendre des futures aux clients particuliers domiciliés en Allemagne, sauf si des "obligations de paiement supplémentaires" ont été exclues contractuellement. Les transactions à des fins de couverture ou pour clôturer des positions de futures ouvertes ne sont pas soumises à cette interdiction.

    La référence est faite à l'Acte administratif général publié par BaFin pour la portée précise de la restriction.

    La restriction est effective à partir du 1er janvier 2023.

  • Sustainable Finance / Green Finance

    Circular No. 815 of 28 December 2022 on Budget Law 2023 - Circular Subscription tax (art. 174§3 OPC law) / Circulaire n° 815 du 28 décembre 2022 sur la loi budgétaire 2023 - Circulaire Taxe d'abonnement (art. 174§3 loi OPC)

    CACEIS

  • On 29 December 2022, the Luxembourg Tax Authority (Administration de l'enregistrement, des domaines et de la TVA) published Circular No. 815 of 28 December 2022 on Budget Law 2023 - Circular Subscription tax (art. 174§3 OPC law).

    The changes come into force as of 1 January 2023.

    The budget law for the 2023 financial year excludes investments in natural gas and nuclear from the tax advantage of the reduced subscription tax for UCIs.

    These are the economic activities referred to in sections 4.26, 4.27, 4.28, 4.29, 4.30, 4.31 of Annexes I and II to Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council. This exclusion impacts, on the one hand, the determination of the share of net assets eligible for the annual fixing of the reduced rate in the certificate certified by an approved statutory auditor and, on the other hand, the calculation of the tax base for the subscription tax assessed on the last day of each quarter.

    Version française

    Le 29 décembre 2022, l'Administration de l'enregistrement, des domaines et de la TVA a publié la circulaire n° 815 du 28 décembre 2022 relative à la loi budgétaire 2023 - Circulaire Taxe d'abonnement (art. 174§3 loi OPC).

    Les modifications entrent en vigueur le 1er janvier 2023.

    La loi de finances pour l'exercice 2023 exclut les investissements sur le gaz naturel et le nucléaire de l'avantage fiscal de la taxe d'abonnement réduite pour les OPC.

    Il s'agit des activités économiques visées aux sections 4.26, 4.27, 4.28, 4.29, 4.30, 4.31 des annexes I et II du règlement délégué (UE) 2021/2139 de la Commission du 4 juin 2021 complétant le règlement (UE) 2020/852 du Parlement européen et du Conseil. Cette exclusion a un impact, d'une part, sur la détermination de la part de l'actif net éligible à la fixation annuelle du taux réduit dans l'attestation certifiée par un commissaire aux comptes agréé et, d'autre part, sur le calcul de l'assiette de la taxe d'abonnement évaluée le dernier jour de chaque trimestre.

  • CSSF publishes the first set of FAQs on SFDR (02/12/2022) / La CSSF publie la première série de FAQ sur le SFDR (02/12/2022)

    CACEIS

  • On 2 December 2022, the Commission de Surveillance du secteur financier (CSSF) published the first set of Frequently Asked Questions (FAQs) aim at providing further clarity on aspects of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial sector (SFDR) (02/12/2022).

    The FAQs aim at providing further clarity on aspects of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial sector (SFDR).

    The document starts by mentionning the key European and CSSF publications before adressing the partticular FAQs. They focus on four main points:

    • Updated of prospectiuses/ issuing documents.
    • Website disclosures.
    • Pre-contractual disclosures.
    • Periodic disclosures

    Version française

    Le 2 décembre 2022, la Commission de surveillance du secteur financier (CSSF) a publié la première série des questions fréquemment posées (FAQ) visant à apporter davantage de clarté sur certains aspects du règlement (UE) 2019/2088 relatif aux informations sur la durabilité dans le secteur financier (SFDR) (02/12/2022).

    Les questions fréquemment posées visent à clarifier certains aspects du règlement (UE) 2019/2088 concernant les informations à fournir sur le développement durable dans le secteur financier (SFDR).

    Le document commence par mentionner les principales publications européennes et de la CSSF avant d'aborder les FAQs spécifiques. Celles-ci se concentrent sur quatre points principaux :

    • Mise à jour des prospectus/documents d'émission.
    • Informations sur le site web.
    • Informations précontractuelles.
    • Informations périodiques
  • SWITZERLAND

    Pension Funds

    AMAS publishes communication on the Swiss Association of Pension Funds ESG-Reporting 2022 / L'AMAS publie une communication sur le rapport ESG 2022 de l'Association suisse des institutions de prévoyance

    CACEIS

  • On 14 December 2022, the Asset Management Association Switzerland (AMAS) published a communication on the Swiss Association of Pension Funds (Association Suisse des Institutions de Prévoyance, ASIP) ESG-Reporting 2022.

    The ASIP is pursuing its objective of increasing, through regular and comprehensive reporting, transparency with regard to the implementation of these criteria. Above all, the focus is on a transparent presentation of ESG information, so that all stakeholders involved can trace the different stages of the investment of pension assets, and what progress has been made in terms of sustainability. 

    This standard was developed in cooperation with other associations - including the Asset Management Association (AMAS), Swiss Sustainable Finance (SSF) and the investment foundations. It is intended as a recommendation that will be regularly reviewed. By publishing this reporting standard, the ASIP is sending out a signal that pension funds are taking sustainability into their own hands, actively communicating this and taking responsibility for it. By voluntarily deciding to report on a regular basis, they contribute to greater transparency in the implementation of ESG criteria.

    The standard is set to become effective of 1 January 2023 (to be recommended for the 2023 report, generally published in Q1 2024). 

    Version française

    Le 14 décembre 2022, l'Association suisse de gestion d'actifs (AMAS) a publié une communication sur le rapport ESG 2022 de l'Association suisse des institutions de prévoyance (ASIP).

    L'ASIP poursuit son objectif d'accroître, à travers un reporting régulier et complet, la transparence quant à la mise en œuvre de ces critères. L'accent est mis avant tout sur une présentation transparente des informations ESG, afin que tous les acteurs concernés puissent retracer les différentes étapes de l'investissement de la fortune de prévoyance, et les progrès réalisés en matière de durabilité. 

    Cette norme a été élaborée en collaboration avec d'autres associations - notamment l'Association de gestion d'actifs (AMAS), Swiss Sustainable Finance (SSF) et les fondations d'investissement. Elle est conçue comme une recommandation qui sera régulièrement révisée. En publiant ce standard de reporting, l'ASIP envoie le signal que les caisses de pension prennent en main la durabilité, la communiquent activement et en assument la responsabilité. En décidant volontairement de faire un rapport régulier, elles contribuent à une plus grande transparence dans la mise en œuvre des critères ESG.

    La norme devrait entrer en vigueur le 1er janvier 2023 (recommandée pour le rapport 2023, publié généralement le premier trimestre 2024). 

  • Sustainable Finance / Green Finance

    Federal Council publishes Ordinance on the report on climate issues / Le Conseil fédéral publie l'ordonnance relative au rapport sur les questions climatiques

    CACEIS

  • On 1 December 2022, the Federal Council published Ordinance on the report on climate issues.

    This Ordinance determines the modalities applicable to establishment by the companies referred to in Art. 964a Code of Obligations (CO) of the report intended to report on climate issues, which are an integral part of environmental issues falling within the non-financial issues set out in art. 964b CO. Climate issues encompass the impact of climate change on businesses and the impact of business activity on climate change.

    If a company has prepared a report on climate issues that meets the requirements set out in Art. 3, it shall be deemed to have fulfilled in this respect the obligation to report on environmental matters.

    If a company does not prepare a climate report that meets the requirements set out in Art. 3, it must:

    • a. demonstrate that it otherwise fulfills the environmental accountability requirements set out in art. 964b, paragraph 1, CO with regard to climate issues, or
    • b. indicate in a clear and reasoned manner why it has not adopted an approach in this area.

    The report on climate issues, which builds on the report Recommendations of the Task Force on Climate-related Financial Disclosures (June 2017 version) and on the annexe Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures (version October 2021), addresses in particular the implementation of recommendations in several areas.

    The report on climate issues must be published as part of the report on non-financial issues. Publication by electronic means in accordance with Art. 964c, paragraph 2, number 1, CO must be made at least in an internationally widely used electronic format that can be read by man and machine. It must take place on the company's website and be fulfilled no later than one year after the entry into force of this Ordinance.

    This Ordinance shall enter into force on 1 January 2024.

    Version française

    Le 1er décembre 2022, le Conseil fédéral a publié l'ordonnance relative au rapport sur les questions climatiques.

    Cette ordonnance détermine les modalités applicables à l'établissement par les entreprises visées à l'art. 964a Code des obligations (CO) du rapport destiné à rendre compte des enjeux climatiques, qui font partie intégrante des enjeux environnementaux relevant des enjeux non financiers énoncés à l'art. 964b CO. Les questions climatiques englobent l'impact du changement climatique sur les entreprises et l'impact de l'activité des entreprises sur le changement climatique.

    Si une entreprise a établi un rapport sur les questions climatiques qui répond aux exigences de l'art. 3, elle est considerée comme ayant rempli à cet égard l'obligation de faire un rapport sur les questions environnementales.

    Si une entreprise ne prépare pas de rapport sur les questions climatiques qui réponde aux exigences énoncées à l'art. 3, elle doit

    • a. démontrer qu'elle remplit par ailleurs les exigences en matière de responsabilité environnementale énoncées à l'art. 964b, al. 1, CO en ce qui concerne les questions climatiques, ou
    • b. indiquer de manière claire et rationnelle pourquoi elle n'a pas adopté de démarche dans ce domaine.

    Le rapport sur les enjeux climatiques, qui s'appuie sur le rapport Recommandations du groupe de travail sur les informations financières liées au climat (version de juin 2017) et sur l'annexe Mise en œuvre des recommandations du groupe de travail sur les informations financières liées au climat (version d'octobre 2021), traite notamment la mise en œuvre des recommandations dans plusieurs domaines.

    Le rapport sur les questions climatiques doit être publié dans le cadre du rapport sur les questions non financières. La publication par moyen électronique doit être effectuée au moins dans un format électronique largement utilisé au niveau international et lisible par l'homme et la machine selon l'art. 964c, alinéa 2, chiffre 1, CO. Cette obligation doit avoir lieu sur le site internet de la société et être effectuée au plus tard un an après l'entrée en vigueur de la présente ordonnance.

    La présente ordonnance entre en vigueur le 1er janvier 2024.

  • Federal Council defines measures for a Swiss sustainable financial centre / Le Conseil fédéral définit des mesures pour une place financière suisse durable

    CACEIS

  • On 16 December 2022, the Federal Council approved the report on sustainability in the financial sector. Fifteen measures planned for 2022 to 2025 are intended to consolidate the Swiss financial centre's position as a leading global location for sustainable finance.

    Sustainability is one of the main pillars of the Swiss financial market strategy adopted by the Federal Council in December 2020. By becoming a sustainable finance pioneer, Switzerland can strengthen its competitiveness as a financial location while simultaneously achieving the United Nations Sustainable Development Goals. In its report "Sustainable finance in Switzerland – Areas for action for a leading sustainable financial centre, 2022–2025", the Federal Council sets out 15 measures with which Switzerland can further consolidate its position as one of the world's leading locations for sustainable finance. To be internationally competitive, it is crucial for the Swiss financial centre to also stand out in the area of sustainable finance through high credibility and the prevention of greenwashing.

    The measures are aimed, among other things, at ensuring more and better sustainability data from all sectors of the economy, for instance through disclosures on climate compatibility. Transparency in the financial sector should be increased overall, for example if financial institutions apply the recently introduced Swiss Climate Score or join international net-zero alliances. The Federal Council recommends that financial institutions and pension funds state on their websites the extent to which their dialogue with the companies in which they invest and the exercise of their voting rights are compatible with the sustainability goals that they voluntarily support.

    In addition, the Federal Council wishes to encourage investments that achieve a positive and measurable social and/or environmental impact, in addition to a financial return. It also wants to help shape the transition to a sustainable economy in international bodies and support global carbon pricing initiatives, for example.

    Version française

    Le 16 décembre 2022, le Conseil fédéral a approuvé le rapport sur la durabilité dans le secteur financier. Quinze mesures prévues de 2022 à 2025 visent à consolider la position de la place financière suisse en tant que site mondial de premier plan pour la finance durable.

    La durabilité est l'un des principaux piliers de la stratégie de la place financière suisse adoptée par le Conseil fédéral en décembre 2020. En devenant un pionnier de la finance durable, la Suisse peut renforcer sa compétitivité en tant que sa place financière tout en atteignant simultanément les objectifs de développement durable des Nations Unies. Dans son rapport "La finance durable en Suisse - Domaines d'action pour une place financière durable de premier plan, 2022-2025", le Conseil fédéral présente 15 mesures avec lesquelles la Suisse peut encore consolider sa position comme l'un des principaux endroits financièrs durables au monde. Pour être compétitive au niveau international, la place financière suisse doit impérativement se distinguer dans le domaine de la finance durable par une crédibilité élevée et la prévention du greenwashing.

    Les mesures visent, entre autres, à ce que tous les secteurs de l'économie fournissent des données plus nombreuses et de meilleure qualité sur la durabilité, par exemple en publiant des informations sur la compatibilité climatique. La transparence dans le secteur financier devrait être globalement accrue, par exemple si les établissements financiers appliquent le Swiss Climate Score récemment introduit ou si ils rejoignent des alliances internationales net zéro. Le Conseil fédéral recommande aux établissements financiers et aux caisses de pension d'indiquer sur leur site Internet dans quelle mesure leur dialogue avec les entreprises dans lesquelles ils investissent et l'exercice de leurs droits de vote sont compatibles avec les objectifs de durabilité qu'ils soutiennent volontairement.

    En outre, le Conseil fédéral souhaite encourager les investissements qui ont un impact social et/ou environnemental positif et mesurable, en plus d'un rendement financier. Il souhaite également contribuer à façonner la transition vers une économie durable dans les instances internationales et soutenir par exemple les initiatives mondiales de tarification du carbone.

  • AMAS updates self-regulation and FAQ on the disclosure for sustainability-related collective assets (20/12/2022) / AMAS met à jour l'autorégulation et la FAQ sur la divulgation des actifs collectifs liés à la durabilité (20/12/2022)

    CACEIS

  • On 20 December 2022, the Asset Management Association Switzerland (AMAS) updated its self-regulation and frequently asked questions (FAQ) of 26 September 2022 on transparency and disclosure for sustainability-related collective assets.

    Version française

    Le 20 décembre 2022, l'Association suisse de gestion d'actifs (AMAS) a mis à jour son autorégulation et ses questions fréquemment posées (FAQ) du 26 septembre 2022 sur la transparence et la communication des actifs collectifs liés à la durabilité.

  • NETHERLANDS

    Markets in financial instruments Directive and Regulation (MiFID II / MiFIR)

    House of Representatives of the States General publishes MiFID II Quick Fix amending MiFID II

    CACEIS

  • On 23 December 2022, House of Representatives of the States General published amendment of the Financial Supervision Act to implement Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 2021 amending of Directive 2014/65/EU as regards information requirements, product governance and position limits, and Directives 2013/36/EU and (EU) 2019/78 as regards their application to investment firms, to contribute to the recovery from the covid-19 crisis (Implementation Act Investment Firm Recovery Package Directive).

    The House of Representatives of the States General, in this letter of amendment, has added a number of elements in order to resolve a number of omissions related to the implementation of the Cross-Border Directive distribution of investment funds and UCITS.

    This note contains an amendment to the definition of financial instrument in Section 1:1 of the Financial Supervision Act (Wft). This change is related to the adaptation of the definition of financial instrument in the Markets Directive for financial instruments 2014 by Regulation (EU) 2022/858 of the European Parliament and the Council of 30 May 2022 on a pilot scheme for market infrastructures based on distributed ledger technology, and amending Regulations (EU) No 600/2014 and (EU) No 909/2014 and Directive 2014/65/EU (DLT pilot regime regulation).

  • SPAIN

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    Spain publishes Order ETD/1217/2022, of 29 November, by which regulate the declarations of movements of means of payment in the field of the prevention of the laundering of capitals and of the financing of the terrorism

    CACEIS

  • On 8 December 2022, Spain published Order ETD/1217/2022, of 29 November, by which regulate the declarations of movements of means of payment in the field of the prevention of the laundering of capitals and of the financing of the terrorism.

    The Order specifies the requirements for individuals and entities to report certain types of financial transactions, such as the movement of large sums of cash or the use of certain payment instruments, in order to prevent money laundering and terrorism financing. The Order also establishes the authorities responsible for receiving and processing these declarations, as well as the penalties for non-compliance with the reporting requirements.

    Indeed, according this Order, individuals and entities in Spain are required to report certain types of financial transactions if they exceed certain thresholds. These transactions include:

    • The movement of large sums of cash within or into the country, such as cash deposits or withdrawals of more than 10,000 euros.
    • The use of certain payment instruments, such as prepaid cards, for transactions of more than 2,000 euros.
    • The transfer of funds to or from countries that are considered high-risk for money laundering or terrorism financing, regardless of the amount involved.

    The individuals or entities that are required to report these transactions are known as "obligados," and they include banks, financial institutions, and other types of businesses that handle financial transactions. The obligados are required to report the transactions to the relevant authorities, such as the Financial Intelligence Unit (Unidad de Inteligencia Financiera, UIF) or the tax authorities.

    The penalties for non-compliance with the reporting requirements under this Order depend on the specific circumstances of the case. If an obligado fails to report a transaction that meets the reporting requirements, they may be subject to administrative sanctions and fines. The amount of the fine will depend on the severity of the offense and the potential harm caused by the failure to report. In general, the fines for non-compliance with the reporting requirements can range from a few hundred euros for minor offenses to several million euros for more serious offenses.

    The Order is set to enter into force on 28 December 2022.

  • UNITED KINGDOM

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    UK published the Register of Overseas Entities (Verification and Provision of Information) (Amendment) Regulations 2022

    CACEIS

  • On 20 December 2022, the UK published the Register of Overseas Entities (Verification and Provision of Information) (Amendment) Regulations 2022.

    These Regulations make provision relating to the register of overseas entities (“the register”) kept by the registrar of companies for England and Wales (“the registrar”) in accordance with Part 1 of the Economic Crime (Transparency and Enforcement) Act 2022 (c. 10).

    Part 2 of these Regulations amends the Register of Overseas Entities (Verification and Provision of Information) Regulations 2022 (“the Principal Regulations”), which make provision in respect of the verification by a relevant person of certain information before it can be submitted to the registrar.

    Regulation 2(2) replaces regulation 5(1) of the Principal Regulations to exclude information about a government, public authority or beneficiaries of certain pension scheme trusts from needing to be verified. It also excludes from needing to be verified again information which has already been verified relating to updating the register and applications for removal from the register. Regulation 2(3) and (4) amends regulation 6(6) of the Principal Regulations to allow a relevant person to verify certain information relating to beneficial ownership differently from other information. Regulation 2(5) amends regulation 7(4) of the Principal Regulations to replace the term “close business relations” with a more precise phrase and regulation 2(6) amends regulation 8(1) of the Principal Regulations to expand the scope of the information which must be retained by a relevant person.

  • Audit matter

    FRC publishes communication on AS TM1 Assumptions to remain unchanged prior to implementation of AS TM1 v5.0

    CACEIS

  • On 19 December 2022, the FRC Financial Reporting Council (FRC) published a communication on AS TM1 Assumptions to remain unchanged prior to implementation of AS TM1 v5.0.

    Actuarial Standard Technical Memorandum 1 (AS TM1) sets out the required approach for producing the annual Statutory Money Purchase Illustrations (SMPIs) received by people saving for retirement in defined contribution pension plans. Each year there are over 40 million SMPIs produced in respect of these defined contribution plans.

    The FRC conducts an annual review of the appropriateness of assumptions used in AS TM1. We have carried out a review of whether the assumptions in AS TM1 v4.2 remain appropriate for the period from 6 April 2023 until the adoption of AS TM1 v5.0 from 1 October 2023.

    The FRC carried out an extensive consultation on the content of AS TM1 v5.0, which was published in October 2022 and will be effective for statements issued on or after 1 October 2023. AS TM1 v5.0 will increase the consistency of approach in production of SMPIs between pension providers. We do not see a significant benefit for users from requiring any changes to be made to existing v4.2 of AS TM1 prior to implementation of AS TM1 v5.0 in October 2023.

    No changes will be made, therefore, to the assumptions, and the extant version (v4.2) will remain in force for SMPIs produced between 6 April 2023 and 1 October 2023.

  • European Market Infrastructure Regulation (EMIR)

    PRA publishes policy statement on amendments to BTS 2016/2251 of the Margin requirements for non-centrally cleared derivatives

    CACEIS

  • On 15 December 2022, the Prudential Regulation Authority (PRA) published Policy Statement (PS) 11/22 on amendments to Binding Technical Standards (BTS) 2016/2251 of the Margin requirements for non-centrally cleared derivatives.

    The PRA and Financial Conduct Authority (FCA) consulted on amendments to margin requirements for non-centrally cleared derivatives in FCA CP22/13 to address issues previously raised by industry. Consultation responses were generally supportive of the proposals but proposed some minor amendments. In response to the comments made during the consultation, the PRA and FCA have made some minor changes to the proposals consulted on. These are: 

    • Extending the eligibility of EEA UCITS as collateral to provide a transitional period for firms to become compliant with the new requirements relating to the treatment of third-country funds as eligible collateral.  
    • Increasing the fall-back transition period for circumstances where firms come into scope of the margin requirements for the first time, and the rules would otherwise apply immediately.  

    The proposals will apply to:

    • PRA-authorised firms that are financial counterparties for the purposes of Article 2 of the European Market Infrastructure Regulation (UK EMIR), and 
    • all FCA solo-regulated entities and non-financial counterparties in scope of the margin requirements under UK EMIR.

    The requirements will be effective on publication of this PS, which is when the final technical standards instrument by the PRA and FCA comes into force. Unless otherwise stated, any remaining references to EU or EU-derived legislation refer to the version of that legislation which forms part of retained EU law. 

  • Financial services

    UK Government publishes Edinburgh Reforms

    CACEIS

  • On 9 December 2022, the UK Government announced a set of reforms to drive growth and competitiveness in the financial services sector.

    The package builds on the reform agenda that HMT is taking forward through the Financial Services and Markets (FSM) Bill, setting out a series of measures that aim to make the UK financial services sector “open, sustainable and technologically advanced”.

    The government is already taking forward work to deliver its vision through the Financial Services and Markets (FSM) Bill and, along with the announcement of the final policy statement on reforming Solvency II at Autumn Statement, this set of announcements is the next step in that work.

    The government’s approach to reforming the financial services regulatory landscape recognises and protects the foundations on which the UK’s success as a financial services hub is built: agility, consistently high regulatory standards, and openness. This will ensure the sector benefits from dynamic, proportionate regulation and that consumers and citizens benefit from high quality services, appropriate consumer protection and from a sector that embraces the latest technology.

    Measures set out in the package include:

    • reforming the ring-fencing regime for banks; 
    • issuing new remit letters for the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) with targeted recommendations on growth and international competitiveness; 
    • publishing the plan for repealing and reforming EU law using powers within the FSM Bill; 
    • overhauling the UK’s regulation of prospectuses; 
    • reforming the Securitisation Regulation; • repealing the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and consulting on a new direction for retail disclosure; 
    • intending to repeal EU legislation on the European Long-Term Investment Fund (ELTIF), reflecting that the new UK Long-Term Asset Fund (LTAF) provides a better fund structure for the UK market; 
    • launching a call for evidence on reforming the Short Selling Regulation; 
    • publishing a draft statutory instrument (SI) to demonstrate how the new powers being taken forward in the FSM Bill will be used to ensure that the FCA has sufficient rulemaking powers over its retained EU payments legislation; 
    • consulting on removing burdensome customer information requirements set out in the Payment Accounts Regulations 2015; 
    • welcoming the PRA consultation on removing rules for the capital deduction of certain non-performing exposures (NPEs) held by banks; 
    • bringing forward secondary legislation to implement Wholesale Markets Review (WMR) reforms; 
    • establishing an Accelerated Settlement Taskforce; 
    • committing to establish the independent Investment Research Review; 
    • commencing a review into reforming the Senior Managers & Certification Regime (SM&CR) in Q1 2023; 
    • committing to having a regime for a UK consolidated tape in place by 2024; 
    • consulting, in early 2023 on issuing new guidance on Local Government Pension Scheme asset pooling; 
    • increasing the pace of consolidation in Defined Contribution pension schemes; • from April 2023, improving the tax rules for Real Estate Investment Trusts (REITs); 
    • announcing changes to the Building Societies Act 1986; 
    • delivering the outcomes of the Secondary Capital Raising Review; consulting on reform to the VAT treatment of fund management; 
    • publishing an updated Green Finance Strategy in early 2023; 
    • consulting in Q1 2023 on bringing Environmental, Social, and Governance (ESG) ratings providers into the regulatory perimeter; 
    • consulting on a UK retail central bank digital currency (CBDC) alongside the Bank of England in the coming weeks; 
    • publishing a response to the consultation on expanding the Investment Manager Exemption to include cryptoassets; 
    • implementing a Financial Market Infrastructure Sandbox in 2023; 
    • - working with the regulators and market participants to trial a new class of wholesale market venue which would operate on an intermittent trading basis; 
    • consulting on Consumer Credit Act Reform; 
    • laying regulations in early 2023 to remove well-designed performance fees from the pensions regulatory charge cap; and 
    • committing to work with the FCA to examine the boundary between regulated financial advice and financial guidance. 

    In a policy statement on the reforms, the Government has set out its approach to its implementation programme, including underpinning principles and the following proposed phased approach to retained EU law policy areas: 

    • tranche 1, which is already underway, covering the WMR, Lord Hill’s Listing Review, the Securitisation Review and review of Solvency II; and 
    • tranche 2, which will cover the above and other measures, including the Taxonomy Regulation, MMFR, Payment Services Directive and the EMoney Directive, Insurance Mediation and Distribution Directives, CRR and Directive and Long-Term Investment Funds (LTIF) Regulation. 

    The Government intends to make significant progress on both tranches by the end of 2023. A core list of EU financial services files in scope of the implementation programme is set out in an annex to the policy statement. 

    The Government has also published three illustrative SIs and accompanying notes alongside the policy statement to demonstrate its intended approach, and a ministerial statement has been submitted to Parliament.

  • Insurance

    FCA publishes Dear CEO letter on its expectations of life insurers in relation to the cost of living

    CACEIS

  • On 14 December 2022, the published a Dear CEO letter on its expectations of life insurers in relation to the cost of living.

    In summary, the FCA expectations of life insurers include: 

    • Protection products: the FCA expects life insurers to ensure customers are provided with appropriate product information during all stages of communication and to make customers aware of the options available to them if they have difficulty paying premiums. 
    • Pensions, long-term savings and retirement income: the FCA expects firms to take reasonable steps to make customers aware of their options and the consequences of accessing and stopping or reducing contributions to pensions and long-term savings, as well as highlighting to customers the potential risks associated with their chosen investment or drawdown strategies. 
    • Customer value: firms have told the FCAthat they expect heightened demand for annuity products due to the significant increase in rates over this year and potentially for equity release / lifetime mortgage products among older consumers. The FCA expects firms to ensure that these propositions offer fair value to customers. This is particularly important when lending on a long-term fixed rate in a higher interest rate environment.
    • Customer support: firms should be supporting customers showing signs of financial difficulty or struggling with debt. This should involve consideration of our Covid insurance and premium finance guidance. Supporting customers includes considering the needs of those with characteristics of vulnerability – the FCA our Vulnerable Customer Guidance sets out itsviews of what firms should do to comply with their obligations under our principles and ensure they treat customers in vulnerable circumstances fairly. 
    • Scams: the FCA believes an increasing number of consumers are vulnerable to scams. Life insurers should ensure anti-scam communications are used to protect customers where possible. 
    • Operational resilience: life insurers should also consider what affect the rising cost of living will have on their operational resilience, including supporting their staff and effectively managing third party providers to reduce the risk of operational disruption.
  • Investor protection / Consumer protection

    FCA extends 10% depreciation notifications to investors

    CACEIS

  • On 22 December 2022, the FCA has extended the temporary measures on the requirement for firms to issue 10% depreciation notifications to investors. 

    This requirement arises from Article 62 of the MiFID Org Regulation as reproduced in COBS 16A.4.3 UK. A firm providing portfolio management services to a retail client is expected to: 

    1. Issue at least one notification in the current reporting period, indicating to the retail client that their portfolio or position has decreased in value by at least 10%.
    2. Inform the client that they may not receive similar notifications should their portfolio or position values decrease by a further 10% or more in the current reporting period.
    3. Direct the client to non-personalised communications providing general updates on market conditions. These updates, which may be provided via public channels such as the firm’s website, should aim to contextualise changes in portfolio or position value so as to help the consumer make a considered decision about their investments rather than act on impulse.
    4. Remind the client of how to check their portfolio value, and how to get in touch with the firm?if they wish to obtain further information or seek advice.
  • Markets in financial instruments Directive and Regulation (MiFID II / MiFIR)

    UK publishes Markets in Financial Instruments (Investor Reporting) (Amendment) Regulations 2022

    CACEIS

  • On 7 December 2022, the UK published the Markets in Financial Instruments (Investor Reporting) (Amendment) Regulations 2022 (SI 2022/1297).

    SI 2022/1297 amends UK Delegated Regulation (EU) 2017/565 as regards organisational requirements and operating conditions for investment firms (UK MiFID Org Regulation) to implement changes to the investor reporting regime as part of the WMR.

    In particular, SI 2022/1297 extends the following changes made by SI 2021/774 in respect of professional or sophisticated clients to retail clients:

    • makes electronic communications the default method for investment firms when communicating with their clients; 
    • removes obligations for investment firms providing portfolio management services to a retail client to inform the client when the overall value of the portfolio depreciates. 

    SI 2022/1297 was announced in the Ministerial statement on 9 December 2022 as part of the UK Government’s package of reforms to the UK’s regulatory framework for financial services. Unless annulled by Parliament, SI 2022/1297 comes into force on 7 June 2023, except changes to the loss reporting rules, which come into force on the fortieth day after the day on which they were laid before Parliament

  • Pension Schemes

    FCA publishes PS22/13: Calculating redress for non-compliant pension transfer advice

    CACEIS

  • On 28 November 2022, the Financial Conduct Authority (FCA) published PS22/13: Calculating redress for non-compliant pension transfer advice.

    On 2 August, the FCA published CP22/15. It proposed proposed changes to our methodology for calculating redress for consumers who received non-compliant advice to transfer from a defined benefit (DB) pension scheme to a defined contribution (DC) pension scheme. This policy statement summarises the feedback the FCA received and the changes it has made to the methodology as a result. 

    Consumers may have suffered financial loss if they received non-compliant DB pension transfer advice from a firm and would have remained in their DB pension without that advice. The FCA expects firms to use the methodology to calculate how much redress should be paid to consumers to put them back in the position they would have been in if they had remained in their DB scheme.

    The legal instrument in this policy statement contains final rules and guidance. There will be an implementation period of just over 4 months before the changes take effect on 1 April 2023.

  • FCA sets out plans to improve engagement with pensions

    CACEIS

  • On 1 December 2022, the Financial Conduct Authority (FCA) published consultation paper (CP) 22/25 on proposed regulatory framework for pensions dashboard service firms.

    Pension dashboards (CP22/25) will provide consumers with easier access to information about their pension savings. The FCA has set out its approach to supervision and enforcement for dashboard operators, including on fees, regulatory reporting, record keeping, prudential requirements and conduct rules.

    Under these proposals, dashboard operators will be able to offer savers additional services that improve engagement with pensions provided they meet rigorous conduct standards. These services could include investment advice (including robo-advice) or guidance, as well as provide models, calculators and other similar tools.

    The consultation is open until 16 February 2022.

    The FCA has also set out final rules requiring non-workplace pension (PS22/15) providers to offer consumers a default investment option, to support those struggling to make a choice. Providers can continue to offer wider options for more engaged consumers. 

    Under the rules, savers will also be warned about the risk of inflation eroding the value of significant and sustained levels of cash holdings. Firms will have 12 months to implement these rules, but given the current levels of inflation, the FCA is encouraging providers to send cash warnings now.

    These publications are the FCA’s latest steps to make sure savers are able to access value for money pension products and are supported in their decision-making as they build and access their savings pot.

  • Remuneration Policies

    PRA consults on the ratio between fixed and variable components of total remuneration ('bonus cap')

    CACEIS

  • On 19 December 2022, the Prudential Regulation Authority (PRA) published a consultation paper (CP) 15/22 on the ratio between fixed and variable components of total remuneration ('bonus cap').

    On 23 September 2022, the former Chancellor announced the Government’s intention to remove the bonus cap. The Government have since confirmed this. The aim of the UK remuneration regime is to encourage alignment between risk taking, risk management, long term performance and individual reward. This is achieved through the core elements of the variable remuneration framework, including:?? linking payment of awards to risk-adjusted performance, payments in instruments?, deferral, application of risk adjustment - including the use of malus and clawback.  The bonus cap does not limit total remuneration, but limits the proportion of remuneration that can be adjusted by risk and performance measures.  

    The PRA has set out its joint proposed rule changes with the Financial Conduct Authority (FCA) to remove the existing limits on the ratio between fixed and variable components of total remuneration (the ‘bonus cap’).

    This consultation closes on 31 March 2023. 

  • UNITED STATES

    Benchmarks

    FED adopts final rule that implements Adjustable Interest Rate (LIBOR) Act by identifying benchmark rates based on SOFR (Secured Overnight Financing Rate) that will replace LIBOR in certain financial contracts after June 30, 2023

    CACEIS

  • On 16 december 2022, Federal Reserve System (FED) adopted final rule that implements Adjustable Interest Rate (LIBOR) Act by identifying benchmark rates based on SOFR (Secured Overnight Financing Rate) that will replace LIBOR in certain financial contracts after June 30, 2023.

    The Federal Reserve Board on Friday adopted a final rule that implements the Adjustable Interest Rate (LIBOR) Act by identifying benchmark rates based on SOFR (Secured Overnight Financing Rate) that will replace LIBOR in certain financial contracts after June 30, 2023. The final rule is substantially similar to the proposal with certain clarifying changes made in response to comments.

    LIBOR, formerly known as the London Interbank Offered Rate, was the dominant benchmark rate used in financial contracts for decades. However, it was fragile and subject to manipulation, and U.S. dollar LIBOR panels will end after June 30, 2023.

    Congress enacted the LIBOR Act to provide a uniform, nationwide solution for so-called tough legacy contracts that do not have clear and practicable provisions for replacing LIBOR after June 30, 2023. As required by the law, the final rule identifies replacement benchmark rates based on SOFR to replace overnight, one-month, three-month, six-month, and 12-month LIBOR in contracts subject to the Act. These contracts include U.S. contracts that do not mature before LIBOR ends and that lack adequate "fallback" provisions that would replace LIBOR with a practicable replacement benchmark rate.

    In response to comments, the final rule restates safe harbor protections contained in the LIBOR Act for selection or use of the replacement benchmark rate selected by the Board, and clarifies who would be considered a "determining person" able to choose to use the replacement benchmark rate selected by the Board for use for certain LIBOR contracts. Consistent with the LIBOR Act, the final rule also ensures that LIBOR contracts adopting a benchmark rate selected by the Board will not be interrupted or terminated following LIBOR's replacement.

    The final rule will be effective 30 days after publication in the Federal Register.

  • Derivative Financial Instruments (Derivatives)

    CFTC publishes CFTC Staff Advisory No. 22-17 on Non-U.S. Swap Dealer Chief Compliance Officer Annual Reports

    CACEIS

  • On 2 December 2022, US Commodity Futures Trading Commission (CFTC) published CFTC Staff Advisory No. 22-17 on Non-U.S. Swap Dealer Chief Compliance Officer Annual Reports.

    The Commodity Futures Trading Commission’s Market Participants Division today issued a staff advisory to non-U.S. swap dealers (SDs) that rely on a CFTC entity-level comparability determination (comparability determination) for purposes of complying with the chief compliance officer annual report (CCO Annual Report) filing required by CFTC Regulation 3.3.

    The staff advisory reminds non-U.S. SDs of their obligation to comply with the terms of the relevant comparability determination by furnishing the CFTC with the annual compliance report that is required under the standards of their foreign jurisdiction. The advisory also reminds non-U.S. SDs that, in lieu of relying on an applicable comparability determination, they may choose instead to prepare, certify, and furnish to the CFTC a CCO Annual Report that is in full compliance with the content and delivery requirements of CFTC Regulations 3.3(e) and (f).

  • Financial Market Infrastructure (FMI)

    CFTC publishes CFTC Staff Letter No. 22-16 extending Brexit-Related No-Action Positions

    CACEIS

  • On 1 December 2022, US Commodity Futures Trading Commission (CFTC) published CFTC Staff Letter No. 22-16 extending Brexit-Related No-Action Positions.

    The Commodity Futures Trading Commission’s Division of Market Oversight (DMO) and the Market Participants Division (MPD) announced today they are extending temporary no-action positions in connection with the withdrawal of the United Kingdom (UK) from the European Union (EU), known as Brexit.

    In addition, DMO is amending its no-action position to include an additional multilateral trading facility (MTF) authorized in the UK. The no-action position was also amended to remove an MTF and an organised trading facility (OTF) because the facilities are no longer in operation. 

    On February 25, 2019, the CFTC issued a statement in conjunction with the Bank of England, including the Prudential Regulation Authority, and the Financial Conduct Authority to provide regulatory certainty on the continuity of derivatives trading and clearing activities between the UK and the United States.

    This letter extends the positions previously announced in CFTC Staff Letter No. 21-24. It seeks to maintain the regulatory certainty established when the CFTC originally acted to issue EU comparability determinations and exemptive orders for certain EU entities. CFTC staff continues to believe that maintaining these no action positions is proper while the CFTC works with the relevant UK authorities to analyze relevant UK law and, where appropriate, issue UK comparability determinations and exemptive orders for certain UK entities.

  • CFTC publishes CFTC Staff Letter No. 22-21 on No-Action Letter Regarding Investments of Customer Funds in Securities Benchmarked to SOFR

    CACEIS

  • On 23 December 2022, US Commodity Futures Trading Commission (CFTC) published CFTC Staff Letter No. 22-21 on No-Action Letter Regarding Investments of Customer Funds in Securities Benchmarked to SOFR.

    The Commodity Futures Trading Commission’s Market Participants Division today announced it is extending CFTC Staff Letter No. 21-02 regarding investments of customer funds by futures commission merchants (FCMs). In issuing the extension in conjunction with the Division of Clearing and Risk, the scope of the letter was expanded to include investments by derivatives clearing organizations (DCOs).

    In light of the transition from the London Interbank Offered Rate (LIBOR) interest rate benchmark, and the increasing reliance on the Secured Overnight Financing Rate (SOFR) as an alternative benchmark, under the no-action letter, FCMs may continue to invest customer funds in securities that contain an adjustable rate of interest that is benchmarked to SOFR. DCOs also may make such investments under the letter. The no-action letter is conditioned upon an FCM or DCO otherwise complying with all relevant terms and conditions of the CFTC’s regulations governing the investment of customer funds, including the requirement that the adjustable rate security is one of the enumerated permitted investments. 

    This no-action letter will expire on the earlier of December 31, 2024 or the effective date of a CFTC action, including, without limitation, a rulemaking or order that addresses SOFR as a permitted benchmark.

  • SEC proposes Regulation Best Execution

    CACEIS

  • On 14 December 2022, U.S. Securities and Exchange Commission (SEC) proposed Regulation Best Execution.

    The Securities and Exchange Commission today proposed Regulation Best Execution, which would establish through Commission rules a best execution regulatory framework for brokers, dealers, government securities brokers, government securities dealers, and municipal securities dealers. While a best execution rule was first established in 1968 by the National Association of Securities Dealers, Inc., the predecessor to the Financial Industry Regulatory Authority, Inc., the proposed rule, if adopted, would create the first SEC-established rule concerning best execution.

    Proposed Regulation Best Execution would require broker-dealers to establish, maintain, and enforce written policies and procedures reasonably designed to comply with the proposed best execution standard. Further, the proposal would require these policies and procedures to address how broker-dealers will comply with the best execution standard and how they will determine the best market and make routing or execution decisions for customer orders.

    The policies and procedures would also be required to address additional factors for conflicted transactions with retail customers. With respect to such transactions, the proposal would require broker-dealers to document their compliance with the best execution standard, including all efforts to enforce their best execution policies and procedures for conflicted transactions and the basis and information relied on for their determinations that such conflicted transactions would comply with the best execution standard. Broker-dealers would also be required to document any arrangement concerning payment for order flow. Moreover, proposed Regulation Best Execution would require broker-dealers to review the execution quality of customer orders at least quarterly.

    Proposed Regulation Best Execution would require broker-dealers to review their best execution policies and procedures at least annually, document such reviews, and present written reports detailing the results of such reviews to their boards of directors or equivalent governing bodies.

    Broker-dealers that qualify as introducing brokers under proposed Regulation Best Execution would be exempt from many of the operative provisions of the proposed rules so long as they establish, maintain, and enforce policies and procedures that require them to regularly review the execution quality obtained from their executing brokers, compare that execution quality with the execution quality they might have obtained from other executing brokers, and revise their order handling practices accordingly. Introducing brokers would be required to document the results of this review. 

    The proposing release is published on SEC.gov and will be published in the Federal Register. The public comment period will remain open until March 31, 2023, or until 60 days after the date of publication of the proposing release in the Federal Register, whichever is later.

  • BRAZIL

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    BACEN amends Circular No. 3,978 of January 23, 2020 for policy, procedures and internal controls related to AML/CFT

    CACEIS

  • On 31 December 2022, Banco Central do Brasil (BACEN) amends Circular No. 3,978 of January 23, 2020 for policy, procedures and internal controls related to AML/CFT.

    BACEN has amended the Circular No. 3,978, of 23 january 2020, which provides for the policy, procedures and internal controls to be adopted by institutions authorized to operate by the Central Bank of the Brazil aiming to prevent the use of the financial system for the practice of "laundering" or concealment of property, rights and values, in that treats the law 9,613 of 3 March 1998 and terrorist financing, provided for in the 13,260 of March 16, 2016. The institutions referred to in Article 1 shall now keep records of all operations carried out, contracted products and services, including cash outs, deposits, contributions, payments, receipts, transfers of resources and operations in the exchange. In the case of transactions in the exchange market, the institutions referred to in Article 1 shall additionally keep record and custody of the supporting documents required for the operations in that market, in accordance with criteria aligned with the evaluation of the the risk of Chapter IV.

    Art. 1 Circular No. 3,978, of 23 January 2020, it comes into force with the following amendments:

    "Art. 28. The institutions referred to in Article 1 shall keep records of all operations carried out, contracted products and services, including cash outs, deposits, contributions, payments, receipts, transfers of resources and operations in the exchange.

    .........................................................................................................................

    § 4 - In the case of transactions in the exchange market, the institutions referred to in Article 1 shall additionally keep record and custody of the supporting documents required for the operations in that market, in accordance with criteria aligned with the evaluation of the the risk of Chapter IV." (NR)

    Art. 2nd Art is revoked. 68 of the Circular No. 3,978, 2020.

    Art. 3 This Resolution shall enter into force on the date of its publication.

  • Financial Market Infrastructure (FMI)

    CVM publishes CVM Resolution 174 amending Resolution 31

    CACEIS

  • On 5 December 2022, the Brazilian Securities and Exchange Commission (CVM) with CVM Resolution 174 amends CVM Resolution 31 with the objective of making the process of constitution, modification and deconstitution of securities, including shares of open investment funds, faster and safer.

    It results from public hearing SDM 04/21 and brings the following main changes in relation to the draft put into discussion:

    1. Clarifies that the changes promoted in CVM Resolution 31 do not prevent the performance of registrars in the constitution, modification and deconstitution of encumbrances, encumbrances or other kind of securities guarantees, including shares of investment funds.
    2. Expands the application of the rules on the constitution of encumbrances, encumbrance or other kinds of guarantees to any security.
    3. Provides that any charges generated by the constitution of encumbrances, encumbrances or other kind of securities guarantees shall be borne exclusively by the parties directly involved in the transaction, in accordance with the terms agreed upon by them.
  • Foreign Exchange Market (FOREX, FX)

    BACEN publishes BCB Resolution No. 277 of 12/31/2022 regulating Law No. 14,286, of December 29, 2021 on foreign exchange market and other measures

    CACEIS

  • On 31 December 2022, Banco Central do Brasil (BACEN) publishes BCB Resolution No. 277 of 12/31/2022 regulating Law No. 14,286, of December 29, 2021 on foreign exchange market and the entry into the country and the exit of the country of values in reais and foreign currency, and provides other measures.

    Art. 1 This Resolution regulates Law No. 14,286, 29 December 2021, in relation to the aspects of the Bank's competence Central Bank of Brazil for the foreign exchange market, which includes:

    I - purchases and sales of foreign currency;

    II - international payments and transfers made through international payment or transfer service;

    III - accounts in reais held by non-residents;

    IV - foreign currency accounts held in Brazil; and

    V - transactions with gold-exchange instrument

  • BACEN publishes BCB Resolution No. 278 of 12/31/2022 in relation to foreign capital in the country, in foreign credit operations and foreign direct investment, as well as the provision of information to the Central Bank of Brazil

    CACEIS

  • On 31 December 2022, Banco Central do Brasil (BACEN) publishes BCB Resolution No. 278 of 12/31/2022 in relation to foreign capital in the country, in foreign credit operations and foreign direct investment, as well as the provision of information to the Central Bank of Brazil

    The Resolution is regulating the Law No. 14,286 of 29 December 2021, in relation to foreign capital in the country, in the operations of foreign credit and foreign direct investment, as well as the provision of information to the Central Bank of Brazil.

  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    BACEN publishes BCB Resolution No. 281 related to BCB Resolution No. 278 regulating transitional provisions on foreign capital, foreign credit and foreign direct investment operaions in the country, as well as the provision of information to BACEN

    CACEIS

  • On 31 December 2022, Banco Central do Brasil (BACEN) publishes BCB Resolution No. 281 of 12/31/2022 regulating transitional provisions to be observed in conjunction with BCB Resolution No. 278 of December 31, 2022 in relation to foreign capital in the country, in foreign credit and foreign direct investment operations, as well as the provision of information to the Central Bank of Brazil.

    It is  regulating transitional provisions to be observed in conjunction with BCB Resolution No. 278 of December 31, 2022, which regulates Law No. 14,286 of December 29, 2021, in relation to foreign capital in the country, in foreign credit and foreign direct investment operations, as well as the provision of information to the Central Bank of Brazil.

  • CVM publishes CVM Resolution 175 on new Regulatory Framework for Investment Funds

    CACEIS

  • On 23 December 2022, the Brazilian Securities and Exchange Commission (CVM) published CVM Resolution 175 on new Regulatory Framework for Investment Funds.

    The CVM issued on the 23 December /22, CVM Resolution 175, initially composed of a general part, applicable to all investment funds, and specific rules for financial investment funds (FIF) and investment funds in credit rights (FIDC). The project resulted in the repeal of 38 standards, which henceforth are better systematized in a single standard. This number is a good indication of the magnitude of CVM's delivery to the company. Through the new regulations for funds, CVM seeks to reflect fundamental advances for greater efficiency in the functioning of the fund market, as well as reduce compliance costs for its participants, without disregarding the protection of investors, a fundamental mandate of the Municipality.

  • COLOMBIA

    Regulatory fees

    Banco de la República published DFV-102 External Operating and Services Circular Subject 8: Fees for services provided by the Department of Trust and Securities

    CACEIS

  • On 22 December 2022, Banco de la República published DFV-102 External Operating and Services Circular Subject 8: Fees for services provided by the Department of Trust and Securities.

    This Circular completely replaces the DFV External Operating and Services Circular - 102 of December 17, 2021 and October 31, 2022, corresponding to Subject 8: FEES FOR SERVICES PROVIDED BY THE TRUST AND SECURITIES DEPARTMENT of the Manual of Trust and Securities Department.

    The aforementioned Circular is modified, to indicate the rates that will apply as of January 1, 2023 for the services provided by the Banco de la República through the Department of Trust and Securities.

  • INTERNATIONAL

    Anti-money laundering / Combating the financing of terrorism (AML / CFT)

    FATF publishes 3rd Enhanced Follow Up Report & Technical Compliance Re-Rating on anti-money laundering and counter-terrorist financing measures Turks and Caicos Islands

    CACEIS

  • On 21 December 2022, Financial Action Task Force (FATF) published 3rd Enhanced Follow Up Report & Technical Compliance Re-Rating on anti-money laundering and counter-terrorist financing measures Turks and Caicos Islands.

    Overall, Turks and Caicos Islands has made significant progress in addressing the technical compliance deficiencies identified in their Mutual Evaluation Report.

    • For Recommendations 8, 16, 22, 26, 34, only minor deficiencies remain and they are all re-rated from PC to Largely Compliant.
    • Turks and Caicos Islands has been re-rated C on Recommendations 10, 14, 17, 18, 19, 23 and 40.

    Turks and Caicos Islands has 35 Recommendations rated C/LC. Turks and Caicos Islands will remain in enhanced follow-up based on effectiveness ratings.

    The next enhanced follow-up report is due November 2023.

  • CONTACTS

    This publication is produced by the Projects & Regulatory Monitoring teams as well as experts from the Legal Department and the Compliance Department of CACEIS entities, together with the close support of the Communications Department.

    Editors
    Gaëlle Kerboeuf, Group General Secretary, Legal Department
    Marie Marion, Group Head of Transversal Functions, Compliance Department

    Permanent Editorial Committee
    Gaëlle Kerboeuf, Group General Secretary, Legal Department
    Marie Marion, Group Head of Transversal Functions, Compliance Department
    Corinne Brand, Group Communications Manager

    Local
    François Honnay, Head of Legal and Compliance (Belgium)
    Fanny Thomas, Legal Supervisor (France)
    Yves Gaveau, Senior Expert Veille réglementaire AdF
    Stefan Ullrich, Head of Legal (Germany) 
    Robin Donagh, Legal Advisor (Ireland)
    Costanza Bucci, Head of Legal & Compliance (Italy)
    Luciana Vertulli, Compliance Officer (Italy)  
    Fernand Costinha, Head of Legal (Luxembourg)
    Julien Fetick, Senior Financial Lawyer (Luxembourg)
    Gérald Stadelmann, Head of Legal (Luxcellence Luxembourg)
    Samuel Zemp, Compliance Officer (Switzerland)
    Sarah Anderson, Head of Legal (UK)
    Olga Kitenge, Legal, Risk & Compliance (UK)
    Chelsea Chan, Head of Trustee and Legal (Hong Kong)
    Henk Brink (The Netherlands)
    Beatriz Sanchez Jete, Compliance (Spain)
    Arrate Okerantza Elejalde, Legal (Spain)
    Jessica Silva, Compliance (Brazil)
    Luiz Fernando Silva, Compliance (Brazil)
    Libia Andrea Carvajal, Compliance (Colombia)
    Daiana Garcia, Compliance (Colombia)
    Karim Martínez, Compliance (Mexico)
    Edgar Zugasti, Compliance (Mexico)

    Design
    CACEIS Group Communications

    Photos credit
    CACEIS, Adobe Stock

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