Anti-money laundering / Combating the financing of terrorism (AML / CFT)
EBA publishes Guidelines on remote customer onboarding
On 22 November 2022, European Banking Authority (EBA) published guidelines on remote customer onboarding.
The European Banking Authority (EBA) published its final Guidelines on the use of remote customer onboarding solutions. These Guidelines set out the steps credit and financial institutions should take to ensure safe and effective remote customer onboarding practices in line with applicable anti-money laundering and countering the financing of terrorism (AML/CFT) legislation and the EU’s data protection framework. The Guidelines apply to all credit and financial institutions that are within the scope of the Anti-money Laundering Directive (AMLD).
These Guidelines establish common EU standards on the development and implementation of sound, risk-sensitive initial customer due diligence policies and processes in the remote customer onboarding context. They set out the steps financial institutions should take when choosing remote customer onboarding tools and when assessing the adequacy and reliability of such tools, in order to comply effectively with their AML/CFT obligations. The Guidelines are technologically neutral and do not prioritise the use of one tool over another.
Directive on security of Network and Information Systems (NIS Directive)
Council of the EU adopts the Directive on Security of Network and Information Systems (NIS 2) Directive
On 28 November 2022, the Council of the EU adopted Directive on Security of Network and Information Systems (NIS).
NIS2 will 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 will formally establish the European Cyber Crises Liaison Organisation Network, EU-CyCLONe, which will support the coordinated management of large-scale cybersecurity incidents and crises.
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 will not apply 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 will also apply 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.
The directive will be published in the Official Journal of the European Union in the coming days and will enter into force on the twentieth day following this publication. Member states will have 21 months from the entry into force of the directive in which to incorporate the provisions into their national law.
European Market Infrastructure Regulation (EMIR)
EU publishes Commission Delegated Regulation (EU) 2022/2310 on clearing thresholds for OTC commodity and other derivative contracts
On 28 November 2022, European Union published Commission Delegated Regulation (EU) 2022/2310 of 18 October 2022 amending the regulatory technical standards laid down in Delegated Regulation (EU) No 149/2013 as regards the value of the clearing threshold for positions held in OTC commodity derivative contracts and other OTC derivative contracts.
The Delegated Act introduces a modification with Article 1 modifying Article 11 of Commission Delegated Regulation (EU) 149/2013 regarding the value of the clearing threshold for “OTC commodity derivative contracts and other OTC derivative contracts”, in the following way:
- EUR 4 billion in gross notional value for OTC commodity derivative contracts and other OTC derivative contracts not provided for under points (a) to (d).’
The Regulation enters into force on 29 November 2022.
EU publishes Commission Delegated Regulation (EU) 2022/2311 of 21 October 2022 amending the regulatory technical standards laid down in Delegated Regulation (EU) No 153/2013 as regards temporary emergency measures on collateral requirements
On 21 October 2022, the European Union published in the Official Journal of the European Union (OJ) Commission Delegated Regulation (EU) 2022/2311 of 21 October 2022 amending the regulatory technical standards laid down in Delegated Regulation (EU) No 153/2013 as regards temporary emergency measures on collateral requirements.
The delegated act introduces a modification via its Article 1 which amends Article 39 and 62 of Commission Delegated Regulation (EU) No 153/2013 of 19 December 2012 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on requirements for central counterparties, as well as its annex I, in the following way:
- Article 39 is amended to temporarily allow until 29 November 2023 for the use of public guarantees as specified in Annex I;
- Article 62 is amended to temporarily allow from 29 November 2022 to 29 November 2023 for the use of uncollateralised or partially collateralised bank guarantees;
- Amendment of Annex I.
This Regulation enters into for on 29 November 2022.
Investment Funds / Collective Investment Schemes (CIS) / Asset Management
ESMA updates compliance table on Guidelines on ETFs and other UCITS issues
On 4 November 2022, the European Securities and Markets Authority (ESMA) updated the compliance table on Guidelines on ETFs and other UCITS issues.
The document present competent authorities willingness to comply or intend to comply with ESMA’s Guidelines on ETFs and other UCITS issues (ESMA/2014/9379.
ESMA launches a consultation on new Guidelines on funds’ names using ESG or sustainability-related terms
On 18 November 2022, European Securities and Markets Authority (ESMA) launched consultation on guidelines on funds’ names using ESG or sustainability-related terms.
This consultation paper aims to develop Guidelines on funds’ names with ESG or sustainability-related terms with more specific guidance compared to the supervisory briefing on the use of ESG or sustainability-related terms in funds’ names on which ESMA is seeking the views of external stakeholders, as further explained in the following sections.
The main elements of the consultation paper on draft guidelines for the use of ESG or sustainability-related terms in funds’ names on which ESMA is seeking stakeholders’ feedback are:
- A quantitative threshold (80%) for the use of ESG related words;
- An additional threshold (50%) for the use of “sustainable” or any sustainability-related term only, as part of the 80% threshold;
- Application of minimum safeguards to all investments for funds using such terms (exclusion criteria);
- Additional considerations for specific types of funds (index and impact funds).
ESMA proposes that the draft guidelines would become applicable from 3 months after the publication of their translation on the ESMA website. Furthermore, a transitional period of 6 months is suggested for those funds launched prior the application date, in order to comply with the Guidelines.
ESMA will consider the feedback it received to this consultation and expects to issue the final Guidelines by Q2/Q3 2023.
ESMA updates Guidelines on stress tests for MMFs
On 30 November 2022, the European Securities and Markets Authority (ESMA) published the Final Report on the 2022 update of guidelines on MMF stress tests under the Money Market Funds Regulation (MMFR).
This 2022 final report includes updated guidelines on specifications on the type of the stress tests and their calibration, so that managers of MMFs have the information needed to fill in the corresponding fields in the reporting template mentioned in article 37 of the MMF Regulation (section 5 of the Guidelines – updates in red in the Annex).
MMFs and managers of MMFs are expected to measure the impact of the common reference stress test scenarios specified in the Guidelines. On the basis of these measurements, they are expected to fill in the reporting template referred to in Article 37 of the MMF Regulation and set out in Commission Implementing Regulation (EU) 2018/7083 and send the results to NCAs with their quarterly reports required by Article 37. The new 2022 parameters set out in the updated guidelines included in this final report will have to be used for the purpose of the first period to be reported following the start of the application of the updated guidelines (i.e. 2 months after the publication of their translations). Until then, managers should use the parameters set in the 2021 Guidelines and report the results accordingly. ESMA may consult on the revision of section 4.8 of the guidelines in the first half of 2023.
Markets in financial instruments Directive and Regulation (MiFID II / MiFIR)
ESMA launches consultation on review of the technical standards under Article 34 of MiFID II
On 17 November 2022, European Securities and Markets Authority (ESMA) launched consultation on review of the technical standards under Article 34 of MiFID II.
The main amendments proposed add the following items to the information that investment firms are required to provide at the passporting stage:
- the marketing means the firm will use in host Member States;
- the language(s) for which the investment firm has the necessary arrangements to deal with complaints from clients from each of the host Member States in which it provides services;
- in which Member States the firm will actively use its passport as well as the categories of clients targeted; and
- the investment firm’s internal organisation in relation to the cross-border activities of the firm.
For the sake of clarity, the amendments to the RTS and ITS do not change the information required from credit institutions as referred to in Article 1(2) of the RTS. Credit institutions wishing to provide investment services or activities as well as ancillary services on a cross-border basis through tied agents established in their home Member States should notify the home national competent authorities with the identity of the tied agent as well as the investment services or activities, ancillary services and financial instruments to be provided by the latter. Other information required to be notified by investment firms wishing to provide investment services and activities on a cross-border basis are not required from credit institutions. The further information required from investment firms will therefore not affect credit institutions.
The deadline to submit response is 17 February 2023.
Packaged Retail and Insurance-based Investment Products (PRIIPs)
ESAs update questions and answers (Q&A) on the PRIIPs Key Information Document (KID) (14/11/2022)
On 14 November 2022, European Supervisory Authorities (ESAs) updated questions and answers (Q&A) on the PRIIPs Key Information Document (KID) (14/11/2022).
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 both Q&As that relate to the rules originally included in Commission Delegated Regulation (EU) 2017/653 of 8 March 2017, and Q&As that relate to the amendments introduced in Commission Delegated Regulation (EU) 2021/2268 that are only applicable on 1 January 2023. Where a new Q&A relates to the amendments in Commission Delegated Regulation (EU) 2021/2268, this is specifically indicated underneath the question.
Prudential Requirements for Investment Firms Directive & Regulation (IFD / IFR)
EBA publishes final technical standards on the measurement of liquidity risks for investment firms
On 14 November 2022, the European Banking Authority (EBA) published final technical standards on the measurement of liquidity risks for investment firms.
These RTS will ensure that all competent authorities follow the same harmonised approach when adopting the decision to impose further liquidity requirements to an investment firm. The IFD allows competent authorities to increase an investment firm’s liquidity requirements if, following the assessment of liquidity risk in accordance with the supervisory review and evaluation process (SREP), they conclude that the investment firm is exposed to material liquidity risks, which are not sufficiently covered by the minimum liquidity requirements set out in the Investment Firms Regulation (IFR).
In order to have a harmonised application of the specific liquidity requirements, these RTS address in detail the main elements that may affect the liquidity risk of an investment firm. In particular, competent authorities will have to assess:
- all elements specific to each service provided by the investment firm under the Markets in Financial Instruments Directive (MiFID);
- other elements that could have a material impact, such as external factors, group structure, operational or reputational risks.
For small and non-interconnected investment firms, competent authorities are expected to assess only a limited set of those elements. This aims at preserving the proportional approach envisaged by the IFR and IFD.
The EBA has developed these RTS in accordance with Article 42(6) of Directive (EU) 2019/2034 (IFD) that mandates the EBA to develop draft RTS to specify in a manner that is appropriate to the size, the structure and the internal organisation of investment firms and the nature, scope and complexity of their activities how the liquidity risk and elements of liquidity risk are to be measured. The minimum liquidity requirements for all investment firms are set out in Part Five of Regulation 2019/2033 (IFR).
Regulation on digital operational resilience for the financial sector (DORA)
Council of the EU adopts the Digital Operational Resilience Act (DORA)
On 10 November 2022, the European Parliament and Council of the EU adopted the text of Digital Operational Resilience Act (Dora).
The adopted text by the does not materially differ from the technical agreement from the agreement in June.
The DORA will require firms to adopt a broader business view of resilience, with accountability clearly established at the senior management level. It applies to the vast majority of FS firms operating in the EU and establishes binding rules for ICT risk management, incident reporting, resilience testing and third-party risk management (TPRM).
The DORA also establishes the world’s first framework that allows FS supervisors to oversee Critical ICT Third Party Providers (CTPPs) including Cloud Service Providers (CSPs).
Now that the DORA proposal is formally adopted, aspects that require national transposition will be passed into law by each EU member state. At the same time, the relevant European Supervisory Authorities (ESAs), such as the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA), will develop technical standards for all financial services institutions to abide by, from banking to insurance to asset management. The respective national competent authorities will take the role of compliance oversight and enforce the regulation as necessary.
Sustainable Finance / Green Finance
Council of the EU publishes draft Commission Delegated Regulation amending SFDR Level 2 RTS to include disclosures on investments in taxonomy-aligned gas and nuclear economic activities
Council of the EU published draft Commission Delegated Regulation amending SFDR Level 2 RTS to include disclosures on investments in taxonomy-aligned gas and nuclear economic activities.
After the ESAs report and the publication of the draft by the European Commission, the Council of the EU published the draft Commission Delegated Regulation.
The amendments are based on ESAs report where they proposed to add specific disclosures to provide transparency about investments in taxonomy-aligned gas and nuclear economic activities. These disclosures, which are in line with the definitions in the Complementary Climate Delegated Act, will help investors make informed decisions.
Specifically, the disclosures:
- add a yes/no question in the financial product templates of the SFDR Delegated Regulation to identify whether the financial product intends to invest in such activities; if the answer was yes, a graphical representation of the proportion of investments in such activities would be required; and
- implement minor technical revisions to the Delegated Regulation to correct inconsistencies observed after its publication.
The ESAs consider the existing disclosures in the SFDR Delegated Regulation sufficient for fossil gas or nuclear energy investments by financial products that are not covered by the EU Taxonomy.
Council of the EU gives final green light to Corporate Sustainability Reporting Directive (CSRD)
On 28 November 2022, the Council of the EU gave the final green light to corporate sustainability reporting directive.
The CSRD strengthens the existing rules on non-financial reporting introduced in the Accounting Directive by the 2014 non-financial reporting directive (NFRD), which are no longer tailored to the EU's transition to a sustainable economy.
The CSRD introduces more detailed reporting requirements and ensures that large companies and listed SMEs are required to report on sustainability matters such as environmental rights, social rights, human rights and governance factors.
The new sustainability reporting rules will apply to all large companies and to all companies listed on regulated markets except listed micro undertakings. These companies are also responsible for assessing the information applicable to their subsidiaries.
The rules also apply to listed SMEs, taking into account their specific characteristics. An opt-out will be possible for listed SMEs during a transitional period, exempting them 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 exceeding certain thresholds. These companies must provide a report on their environmental, social and governance (ESG) impacts, as defined in this directive.
The European Financial Reporting Advisory Group (EFRAG) will be responsible for developing draft European standards. The European Commission will adopt the final version of the standards as a delegated act, following consultations with EU member states and a number of European bodies.
The application of the regulation will take place in four stages:
- reporting in 2025 on the financial year 2024 for companies already subject to the NFRD;
- reporting in 2026 on the financial year 2025 for large companies that are not currently subject to the NFRD;
- reporting in 2027 on the financial year 2026 for listed SMEs (except micro undertakings), small and non-complex credit institutions and captive insurance undertakings;
- reporting in 2029 on the financial year 2028 for third-country undertakings with net turnover above 150 million in the EU if they have at least one subsidiary or branch in the EU exceeding certain thresholds.
Following the Council’s approval today of the European Parliament's position, the legislative act was adopted.
After being signed by the President of the European Parliament and the President of the Council, it will be published in the Official Journal of the European Union and will enter into force 20 days afterwards. The new rules will need to be implemented by member states 18 months later.
ESAs publish letter to European Commission on the delay in SFDR mandate
On 14 November 2022, the European Supervisory Authorities (ESAs) published a letter to European Commission on the delay in SFDR mandate.
The ESAs have identified significant challenges to deliver the required input in the time requested. These challenges relate to the substantial number of technical components to the work under this mandate to deliver the desired changes to the SFDR Delegated Regulation and the need to seek input from a range of expert bodies or agencies as stated in the mandate.
The ESAs informed that it will not be possible to meet the original deadline of 28 April 2023 as set in the EC's mandate. The ESAs notified the Commision of up to a six month delay for the delivery of this mandate.
ESAs launch joint Call for Evidence on greenwashing
On 15 November 2022, European Supervisory Authorities (ESAs) launched joint Call for Evidence on greenwashing.
The call for evidence aims to gather input from stakeholders on how to understand the key features, drivers and risks associated with greenwashing and to collect examples of potential greenwashing practices.
Due to the growing demand for sustainability-related products and the rapidly evolving regulatory regimes and sustainability-related product offerings, the call is also motivated by the need to better understand which areas may become more prone to greenwashing risks. In addition, the call seeks input on potential greenwashing practices relevant to various segments of the sustainable investment value chain and of the financial product lifecycle.
Obtaining a more granular understanding of greenwashing will help inform policy making and supervision and will help foster the reliability of sustainability-related claims. In the context of this call, the term “greenwashing” is broadly used, recognising that sustainability-related claims can be linked to all aspects of the ESG spectrum.
All interested parties are welcome to contribute to the survey, including financial institutions under the remit of the three ESAs and other stakeholders ranging from retail investors and consumers’ associations to NGOs and academia. Contributions should focus on greenwashing risks and occurrences arising in the financial sector and affecting financial products or services, which are under the scope of the ESAs.
We draw attention to the fact that the survey contains a section common to the three Authorities, which includes cross-sectoral questions on greenwashing and separate sections relevant to each ESA.
This Call for Evidence was issued in the context of the mandates received from the European Commission in May 2022.
ESAs publish Q&As on the SFDR Delegated Regulation (17/11/2022)
On 17 November 2022, European Supervisory Authorities (ESAs) published Questions and answers (Q&A) on the SFDR Delegated Regulation 2022/1288).
The ESAs' Q&A provides clarification on the following topics:
- Current value of all investments in PAI and Taxonomy-aligned disclosures.
- PAI disclosures
- Financial product disclosures
- Multi-option products
- Taxonomy-aligned investment disclosures
- Financial advisers and execution-only FMPs
EFRAG delivers a first set of draft European Sustainability Reporting Standards (ESRS) to the European Commission
On 23 November 2022, the European Financial Reporting Advisory Group (EFRAG) delivered the first set of Draft European Sustainability Reporting Standards (ESRS) to the European Commission.
This first set, approved by the EFRAG SRB, supported by the EFRAG Sustainability Reporting Technical Expert Group (EFRAG SR TEG), takes into consideration the input from the public consultation on the draft ESRS Exposure Drafts (EDs).
The European Commission will now consult EU bodies and Member States on the draft standards, before adopting the final standards as delegated acts in June 2023, followed by a scrutiny period by the European Parliament and Council.
The reporting requirements will be phased in over time for different kinds of companies. The first companies will have to apply the standards in financial year 2024, for reports published in 2025. Listed SMEs are obliged to report as from 2026, with a further possibility of voluntary opt-out until 2028, and will be able to report according to separate, proportionate standards that EFRAG will develop next year.
This first set of 12 draft ESRS is composed of:
- Cross-cutting standards: with Draft ESRS 1 General requirements, and Draft ESRS 2 General disclosures; and
- Topical standards: Environment (Draft ESRS E1 to E5), Social (Draft ESRS S1 to S4), and Governance (Draft ESRS G1).
EFRAG will focus in the next months on set 2 of draft ESRS which are draft sector specific standards:
- 5 sectors covered by GRI: agriculture, coal mining, mining, oil+gas (upstream), oil+gas (mid-to downstream)
- 5 high-impact sectors: energy production, road transport, motor vehicle production, food/beverages, textiles.
Set 2 will include as well ESRS standards for SMEs.
Council of the EU adopts its negotiating position ('general approach') on the Corporate Sustainability Due Diligence Directive (CSDDD)
On 1 December 2022, the Council of the EU adopted its negotiating position ('general approach') on the Corporate Sustainability Due Diligence Directive (CSDDD).
The due diligence directive lays down rules on obligations for large companies regarding actual and potential adverse impacts on human rights and the environment, with respect to their own operations, those of their subsidiaries, and those carried out by their business partners. It also lays down rules on penalties and civil liability for violating those obligations. Lastly, it lays down obligations for companies to adopt a plan ensuring their business model and strategy are compatible with the Paris Agreement.
The directive will help the EU to transition towards a more climate-neutral and green economy as described in the European Green Deal and the UN Sustainable Development Goals.
The rules of the due diligence directive apply to large EU companies and to non-EU companies active in the EU.
- For EU companies, the criteria that determine whether a company falls within the scope of the directive are based on the number of employees and the company’s net worldwide turnover, whereas in the case of non-EU companies the criterion is related to the net turnover generated in the EU.
- If a non-EU company fulfils the criterion regarding net turnover generated in the EU, it will fall under the scope of the due diligence directive, irrespective of whether it has a branch or a subsidiary in the EU.
The Council’s text has introduced a phase-in approach regarding the application of the rules laid down in the directive. The rules would first apply to very large companies that have more than 1000 employees and EUR 300 million net worldwide turnover or, for non-EU companies, EUR 300 million net turnover generated in the EU, 3 years from the entry into force of the directive.
According to the Council’s text, the rules of the directive will apply to a company’s ‘chain of activities’, which covers a company’s upstream and in a limited manner also downstream business partners as it leaves out the phase of the use of the company’s products or the provision of services. The Council’s text also strengthens the risk-based approach and the rules on the prioritisation of the adverse impacts to ensure that carrying out due diligence obligations is feasible for companies.
The Council's text provides more clarity to the conditions of civil liability, a provision that ensures full compensation for damages resulting from a company's failure to comply with the due diligence obligations.
The general approach reached today completes the negotiating position agreed by the Council. It provides the Council presidency with a mandate to start negotiations with the European Parliament.
Financial Market Infrastructure (FMI)
AMF publishes communication on stock exchange orders / L'AMF publie une communication sur les ordres de bourse
On 3 November 2022, the Autorité des marchés financiers (AMF) published a communication titled "Stock market orders: a financial institution may reject an order that it deems to be "aberrant"".
Alongside Euronext’s authority to cancel certain transactions that have already been executed, especially when the price of the order is considered to be “aberrant”, account-keeping institutions may also reject a client’s order when the limit set by the client is too far from the last known price. However, in order to avoid misunderstandings or even disputes, the client must be made aware of this, as illustrated by the case the AMF is presenting.
Le 3 novembre 2022, l'Autorité des marchés financiers (AMF) a publié une communication intitulée "Ordres de bourse : un établissement financier peut rejeter un ordre qu'il juge "aberrant"".
Outre la faculté d'Euronext d'annuler certaines transactions déjà exécutées, notamment lorsque le prix de l'ordre est jugé « aberrant », les établissements teneurs de compte peuvent également rejeter l'ordre d'un client lorsque la limite fixée par le client est trop éloignée du dernier prix connu. Toutefois, afin d'éviter des malentendus voire des litiges, le client doit en être sensibilisé, comme l'illustre le cas présenté par l'AMF.
Investment Funds / Collective Investment Schemes (CIS) / Asset Management
AMF completes its doctrine on liquidity management tools / L'AMF complète sa doctrine sur les outils de gestion de la liquidité
On 24 November 2022, the Autorité des marchés financiers (AMF) completed its doctrine on liquidity management tools, following the update of its doctrine specifying its requirements on the operation of liquidity management tools in undertakings for collective investment (UCIs) and following the approval of the amendments to its General Regulation.
New information requirements: these elements provide for new obligations in the absence of introduction, in the regulatory documentation of UCIs, of a mechanism for capping redemption requests (gates) and/or a mechanism to offset or reduce the costs of portfolio reorganization borne by all holders on the occasion of subscriptions and redemptions (swing pricing or adjustable rights acquired). As part of the incentives for management companies to provide the UCIs they manage with such tools, these new requirements apply now for new UCIs and must be complied with by 31 December 2023 for existing UCIs, where those new or existing UCIs do not have such mechanisms in their regulatory documents. Employee savings funds will be affected by the new gate requirements as of 1 January 2024. In the meantime, the AMF encourages employee savings players to evolve their tools to provide them with functionalities to make the activation of gates possible. In addition, the AMF specifies in its doctrine the procedures for recourse for the UCIs concerned to swing pricing mechanisms or acquired adjustable rights. Finally, the AMF encourages AMCs wishing to introduce one of these liquidity management tools to approach their depositaries and centralisers in order to ensure that all the players concerned are informed as soon as they are introduced, and to agree with them on the operational implementation procedures.
Measures applicable in the absence of the introduction of gates: in the event that a management company decides not to introduce gates in one of the UCIs it manages and in order to rebalance the information obligations, the General Regulation and the doctrine strengthen the methods of informing investors, and making managers responsible for compliance with their professional obligations in terms of managing the liquidity risk of UCIs. In this context, management companies will have to carry out some formalities.
Measures related to the introduction or not of swing pricing mechanisms or acquired adjustable rights: in order to better regulate the use by management companies of these mechanisms, the AMF has supplemented instruction DOC-2017-05 by adding new provisions relating to the introduction of the swing pricing mechanism or adjustable rights acquired in the UCIs concerned. In addition, to be able to justify that the most relevant funds have adequate liquidity management tools, management companies that do not introduce a swing pricing or acquired rights mechanism in the regulatory documents of their mutual funds must: state the reasons for the failure to introduce one of these mechanisms, and provide the AMF with a statement on the recognition of the risks incurred by the mutual fund and its investors; and regularly verify, as part of the liquidity stress tests that management companies are required to carry out in accordance with the ESMA guidelines with which the AMF comply, the validity of the analysis that led them not to introduce one of these tools.
Under these new provisions, management companies will have to provide several types of information to the AMF. The modalities of this sending will be specified through the ROSA extranet.
Le 24 novembre 2022, l'Autorité des marchés financiers (AMF) a complété sa doctrine sur les outils de gestion de la liquidité, suite à la mise à jour de sa doctrine précisant ses exigences sur le fonctionnement des outils de gestion de la liquidité dans les organismes de placement collectif (OPC) et suite à l'approbation des amendements à son règlement général.
Nouvelles exigences d'information : ces éléments prévoient de nouvelles obligations en l'absence d'introduction, dans la documentation réglementaire des OPC, d'un mécanisme de plafonnement des demandes de rachat (gates) et/ou d'un mécanisme de compensation ou de réduction des coûts de réorganisation du portefeuille supportés par tous porteurs à l'occasion de souscriptions et de rachats (swing pricing ou droits ajustables acquis). Dans le cadre des incitations pour les sociétés de gestion à doter les OPC qu'elles gèrent de tels outils, ces nouvelles exigences s'appliquent dès à présent aux nouveaux OPC et doivent être respectées d'ici le 31 décembre 2023 pour les OPC existants, lorsque ces OPC nouveaux ou existants ne disposent pas de tels mécanismes. dans leurs documents réglementaires. Les fonds d'épargne salariale seront concernés par les nouvelles exigences du gate à compter du 1er janvier 2024. En attendant, l'AMF encourage les acteurs de l'épargne salariale à faire évoluer leurs outils pour leur apporter des fonctionnalités permettant l'activation des gates. Par ailleurs, l'AMF précise dans sa doctrine les modalités de recours des OPC concernés aux mécanismes de swing pricing ou aux droits ajustables acquis. Enfin, l'AMF invite les SGP souhaitant mettre en place l'un de ces outils de gestion de la liquidité à se rapprocher de leurs dépositaires et centralisateurs afin de s'assurer que tous les acteurs concernés sont informés dès leur mise en place et de convenir avec eux des modalités opérationnelles de mise en œuvre.
Mesures applicables en l'absence de mise en place de gates : dans le cas où une société de gestion décide de ne pas mettre en place de gates dans l'un des OPC qu'elle gère et afin de rééquilibrer les obligations d'information, le Règlement général et la doctrine renforcent les modalités d'information investisseurs, et responsabiliser les gérants sur le respect de leurs obligations professionnelles en matière de gestion du risque de liquidité des OPC. Dans ce cadre, les sociétés de gestion devront accomplir certaines formalités.
Mesures liées à la mise en place ou non de mécanismes de swing pricing ou de droits acquis ajustables : afin de mieux encadrer l'utilisation par les sociétés de gestion de ces mécanismes, l'AMF a complété l'instruction DOC-2017-05 en ajoutant de nouvelles dispositions relatives à la mise en place du mécanisme de swing pricing ou droits modulables acquis dans les OPC concernés. En outre, pour pouvoir justifier que les fonds les plus pertinents disposent d'outils de gestion de la liquidité adéquats, les sociétés de gestion qui n'introduisent pas de mécanisme de swing pricing ou de droits acquis dans les documents réglementaires de leurs FCP doivent : indiquer les raisons de la non-introduction l'un de ces mécanismes et fournir à l'AMF une déclaration sur la reconnaissance des risques encourus par le FCP et ses souscripteurs ; et vérifier régulièrement, dans le cadre des stress tests de liquidité que les sociétés de gestion sont tenues de réaliser conformément aux orientations de l'ESMA auxquelles l'AMF se conforme, le bien-fondé de l'analyse les ayant conduites à ne pas mettre en place l'un de ces outils.
Dans le cadre de ces nouvelles dispositions, les sociétés de gestion devront fournir plusieurs types d'informations à l'AMF. Les modalités de cet envoi seront précisées via l'extranet ROSA.
Sustainable Finance / Green Finance
AMF modifies its policy to facilitate the implementation by asset management companies of the SFDR RTS / L'AMF modifie sa politique pour faciliter la mise en œuvre par les sociétés de gestion de portefeuille du SFDR RTS
On 10 November 2022, the Autorité des marchés financiers (AMF) amended its policy (Instructions 2011-19, 2011-20, 2011-21, 2011-22 and 2011-23) to facilitate the entry into application of the Sustainable Finance Disclosure Regulation (SFDR) Delegated Regulation for asset management companies.
The Regulatory Technical Standards (RTS) of SFDR will enter into application on 1 January 2023. Their transparency requirements for non-financial strategies of Article 8 and 9 funds will lead to the publication of new non-financial engagements in these funds’ precontractual documentation, such as minimum proportion of sustainable investment or minimum Taxonomy alignment.
With the current applicable doctrine, any modification of a Undertaking for Collective Investment's (UCI) non-financial criteria requires sending a specific information to investors (an investors’ letter). The AMF modified its doctrine to avoid a situation where on 1 January 2023 an excessive number of investor letters will have to be sent for Article 8 and 9 funds that have actually not modified their underlying non-financial strategy. This policy modification aligns the fundholders’ information requirements applicable to non-financial changes with the ones on risk/return by defining significant non-financial changes that require an investor letter. Any other change in funds’ non-financial criteria is considered non-significant and only requires and information of investors by any means.
The following non-financial deteriorations or modifications are deemed significant and require sending an investor letter:
- Deterioration of the SFDR classification (change from an Article 9 category to an Article 8 or 6 category; change from an Article 8 to an Article 6 category), unless the deterioration does not lead to any modifications in the product’s non-financial criteria;
- Reduction of the non-financial communication level based on the AMF policy DOC-2020-03 requirements;
- Reduction of more than 10% in relative value and 500 points in absolute value of the fund’s minimum percentage of Taxonomy alignment or its minimum percentage of sustainable investment whose publications are required by SFDR. For example, the reduction of the fund’s minimum percentage of Taxonomy alignment or sustainable investment from 15% to 13.5% does not require an investors’ letter since the reduction is inferior to 10% in relative value and 500 points in absolute value. This also applies for a reduction of the minimum percentage of Taxonomy or sustainable investment from 70% to 64% that is above 500 points but below 10% in relative value. However a reduction of the minimum percentage from 60% to 53% requires an investor letter since it is superior to 10% and 500 points;
- The UCI stops considering principal adverse impact (PAI) at product level (article 7 of the SFDR regulation).
Le 10 novembre 2022, l'Autorité des marchés financiers (AMF) a modifié sa politique (instructions 2011-19, 2011-20, 2011-21, 2011-22 et 2011-23) pour faciliter l'entrée en application de l'Information sur la finance durable Règlement (SFDR) Règlement Délégué pour les sociétés de gestion de portefeuille.
Les Normes Techniques de Réglementation (RTS) de SFDR entreront en application au 1er janvier 2023. Leurs exigences de transparence sur les stratégies extra-financières des fonds de l'article 8 et 9 conduiront à la publication de nouveaux engagements extra-financiers dans la documentation précontractuelle de ces fonds, telles qu'une proportion minimale d'investissement durable ou un alignement minimal sur la taxonomie.
Selon la doctrine en vigueur, toute modification des critères extra-financiers d'un Organisme de Placement Collectif (OPC) nécessite l'envoi d'une information spécifique aux investisseurs (une lettre aux investisseurs). L'AMF a modifié sa doctrine pour éviter qu'au 1er janvier 2023 un nombre excessif de lettres d'investisseurs devra être envoyé pour les fonds des articles 8 et 9 qui n'ont effectivement pas modifié leur stratégie extra-financière sous-jacente. Cette modification de la politique aligne les exigences d'information des porteurs de fonds applicables aux changements non financiers avec celles en matière de risque/rendement en définissant les changements non financiers importants qui nécessitent une lettre aux investisseurs. Toute autre modification des critères extra-financiers des fonds est considérée comme non significative et ne nécessite que l'information des investisseurs par tous moyens.
Les détériorations ou modifications extra-financières suivantes sont jugées significatives et nécessitent l'envoi d'un courrier aux investisseurs :
- Dégradation du classement SFDR (passage d'une catégorie Article 9 à une catégorie Article 8 ou 6 ; passage d'une catégorie Article 8 à une catégorie Article 6), sauf si la dégradation n'entraîne pas de modification des critères extra-financiers du produit ;
- Réduction du niveau de communication extra-financière sur la base des exigences de la politique AMF DOC-2020-03 ;
- Diminution de plus de 10% en valeur relative et de 500 points en valeur absolue du pourcentage minimum d'alignement Taxonomie du fonds ou de son pourcentage minimum d'investissement durable dont les publications sont exigées par SFDR. Par exemple, la réduction du pourcentage minimum d'alignement taxonomique ou d'investissement durable du fonds de 15% à 13,5% ne nécessite pas de lettre d'investisseur puisque la réduction est inférieure à 10% en valeur relative et 500 points en valeur absolue. Ceci s'applique également pour une réduction du pourcentage minimum de taxonomie ou d'investissement durable de 70% à 64% supérieur à 500 points mais inférieur à 10% en valeur relative. Cependant une réduction du pourcentage minimum de 60% à 53% nécessite une lettre d'investisseur puisqu'il est supérieur à 10% et 500 points ;
- L'UCI cesse de considérer l'impact négatif principal (PAI) au niveau du produit (article 7 du règlement SFDR).
Anti-money laundering / Combating the financing of terrorism (AML / CFT)
SPF announces the temporary suspension of public access to beneficial ownership information
On 23 November 2022, the SPF Finances published a communication on the temporary suspension of public access to beneficial ownership information.
Following the judgment of 22 November 2022 by the Court of Justice of the European Union, access for members of the general public to beneficial ownership information is temporarily suspended. A solution allowing access to data in accordance with the above-mentioned judgment will be communicated shortly. Access for competent authorities and obliged entities is maintained.
Cryptoasset / Cryptocurrency / Virtual Currency
FSMA publishes communication 2022_25 on the qualification of crypto-assets as transferable securities, investment instruments or financial instruments
On 22 November 2022, the Financial Services and Markets Authority (FSMA) published communication 2022_25 on the qualification of crypto-assets as transferable securities, investment instruments or financial instruments.
With this communication, the FSMA wishes to provide explanations on the most common cases in which crypto-assets could fall within the scope of the Prospectus Regulation and/or the MiFID conduct of business rules.
Directive on the protection of persons who report breaches of Union law (Whistleblowers Directive)
Chambre des représentants adopts Draft law on the protection of persons who report breaches of EU or national law found within a legal entity in the private sector
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 mentioning the key European and CSSF publications before addressing the particular FAQs. They focus on four main points:
- Updated of prospectiuses/ issuing documents.
- Website disclosures.
- Pre-contractual disclosures.
- Periodic disclosures
Germany publishes ordinances on notification for outsourcing under KWG, ZAG, KAGB and VersAusgl-AnzV
On 28 November 2022, Germany published ordinances on notification for outsourcing under KWG, ZAG, KAGB and VersAusgl-AnzV.
The following ordinances were published:
- Fourth Ordinance amending the Advertising Ordinance (KWG),
- Second Ordinance amending the ZAG Notification Ordinance (ZAG),
- Ordinance on notifications and submission of documents pursuant to § 36 of the German Investment Code (KAGB-Auslagerungsanzeigenverordnung – KAGBAuslAnzV), and
- Ordinance on the Notifications of Insurance Companies and Pension Funds for the Outsourcing of Functions and Insurance Activities (Insurance Spin-off Notification Ordinance – VersAusgl-AnzV).
Investment Funds / Collective Investment Schemes (CIS) / Asset Management
SFC publishes Circular on the Mutual Recognition of Funds between Thailand and Hong Kong
On 15 November 2022, the Securities and Futures Commission (SFC) published Circular on the Mutual Recognition of Funds (MRF) between Thailand and Hong Kong.
The SFC and the Securities and Exchange Commission of Thailand (SEC) signed a Memorandum of Understanding concerning Mutual Recognition of Covered Funds and Covered Management Companies and related cooperation (Memorandum) on 20 January 2021 (as amended from time to time).
In this circular, Thai domiciled funds that are eligible for SFC authorisation and/or have received SFC authorisation under the MRF are denoted as “Thai Covered Funds” while Thai management companies that are eligible to manage Thai Covered Funds are denoted as “Thai Covered Management Companies”.
HKMA alerts the public to a fraudulent website with the domain name hxxps://hkma-gov[.]com/
On 17 November 2022, the Hong Kong Monetary Authority (HKMA) alerted the public to a fraudulent website with the domain name hxxps://hkma-gov[.]com/.
The public should be aware that the website has no relationship with the HKMA. The HKMA has referred the case to the Hong Kong Police Force for further investigation. Anyone who has provided his or her personal information to the website or suspects that he/she has become victim of any fraudulent acts should contact any local Police Station or the Crime Wing Information Centre of the Hong Kong Police Force at 2860 5012.
The HKMA’s official website is at: www.hkma.gov.hk.
Investment Funds / Collective Investment Schemes (CIS) / Asset Management
CBI publishes information note “Sustainable finance and the asset management sector: Disclosures, investment processes & risk management”
On 14 November 2022, Central Bank of Ireland (CBI) published information note “Sustainable finance and the asset management sector: Disclosures, investment processes & risk management”.
This paper sets out the findings of a gatekeeper review of fund documentation which was carried out to assess the implementation of the SFDR (level 1) and Taxonomy Regulation. The aim of the paper is to assist market participants by informing them of the main disclosure issues encountered and outlines risks that the CBI has observed in terms of potential greenwashing or areas where there has been a lack of transparency or clarity. The note also sets out CBI's expectations around the implementation of the next phase of SFDR (level 2) and provides a roadmap for how the CBI will supervise these requirements in the future.
CBI publishes macroprudential policy framework for irish property funds and the feedback statement to consultation paper 145 on macroprudential measures for the Irish property fund sector
On 24 November 2022, Central Bank of Ireland (CBI) published macroprudential policy framework for Irish property funds and the feedback statement to consultation paper 145 on macroprudential measures for the Irish property fund sector.
Irish-authorised funds investing in Irish property have become a key participant in the Irish commercial real estate market. Given the growth in these funds, the resilience of this form of financial intermediation matters more today for the functioning of the overall CRE market than it did a decade ago. In turn, dislocations in the CRE market have the potential to cause and/or amplify adverse macro-economic or financial stability shocks, through a range of channels. As such the CBI is introducing macroprudential measures by way of i) imposition of a leverage limit for authorised investment funds that invest fifty per cent or more of their assets under management directly or indirectly in Irish property; and ii) CBI Guidance on liquidity timeframes for such funds.
The CBI has also published its Feedback Statement in response to Consultation Paper 145 (CP145) on macroprudential measures for the Irish property fund sector; together with the individual responses to CP145.
CBI publishes Industry Letter on Liability Driven Investment Funds
On 30 November 2022, Central Bank of Ireland published Industry Letter on Liability Driven Investment Funds.
Throughout this period, the CBI and CSSF (“the NCAs”) engaged proactively with the managers of LDI Funds with a focus on LDI Funds denominated in Great British Pounds (“GBP”). The resilience of GBP LDI Funds across Europe has subsequently improved, with an average Yield Buffer in the region of 300-400 basis points being built up. Given the current market outlook, the NCAs expect that levels of resilience and the reduced risk profile of GBP LDI Funds are now maintained, and do not consider that any reduction in the resilience at individual sub-fund level is appropriate at this juncture.
To the extent that you might consider it necessary to advertently reduce an individual GBP LDI Fund’s resilience below the levels that were achieved in the period following the dislocation in the UK gilt market, you should:
1) Inform in advance the NCA supervising the investment fund manager and, in case of cross-border setups, the NCA in the country where the LDI Funds are domiciled, of the proposal to advertently reduce an individual GBP LDI Fund’s resilience and of the level; and
2) Complete the following actions prior to making any reductions (with such documents to be made available to the above-mentioned NCAs upon request): a. Undertake and document a detailed analysis justifying the need to reduce the GBP LDI Fund’s current resilience. b. Complete and document a risk assessment with relevant modelling of how the proposed reduction in the GBP LDI Fund’s resilience will not impact the orderly functioning of the GBP LDI Fund in the current and in stressed environments. c. Detail and document a step-by-step plan for returning the GBP LDI Fund to current levels of resilience in the event of increased market volatility, noting any assumptions that the framework is based on.
Anti-money laundering / Combating the financing of terrorism (AML / CFT)
Luxembourg publishes law on the procedure of administrative dissolution without liquidation / Le Luxembourg publie une loi sur la procédure de dissolution administrative sans liquidation
On 4 November 2022, Legilux (Journal Officiel du Grand-Duché de Luxembourg) published law on the procedure of administrative dissolution without liquidation and amending:
1° the Commercial Code;
2° the New Code of Civil Procedure;
3° the amended law of 19 December 2002 concerning the trade and companies register as well as the accounting and annual accounts of companies;
4° the amended Law of 19 December 2008 on inter-administrative and judicial cooperation and the strengthening of the resources of the Luxembourg Inland Revenue (Inland Contributions), the Registration and Estates Administration and the Customs and Excise Administration and amending
- the amended law of 12 February 1979 on value added tax;
- the General Tax Act ("Abgabenordnung");
- the amended law of 17 April 1964 on the reorganisation of the Luxembourg Inland Revenue;
- the amended law of 20 March 1970 reorganizing the Registration and Estates Authority;
- the amended law of 27 November 1933 concerning the collection of direct contributions and social insurance contributions;
5° the amended law of 25 March 2020 establishing a central electronic data retrieval system concerning payment accounts and bank accounts identified by an IBAN number and safes.
This new law aims to introduce a simplified procedure which aims to eliminate the many commercial companies under Luxembourg law which have for several years been non-compliant with the applicable law (and which therefore fulfil the condition for opening a compulsory liquidation), and which moreover have neither assets nor employees.
The procedure of administrative dissolution without liquidation is an administrative procedure, initiated by the Public Prosecutor's Office, but managed by the manager of the Trade and Companies Register, which makes it possible to evacuate efficiently and quickly these "empty shells" from the Trade and Companies Register without incurring significant costs for the State and without having to go through a traditional judicial liquidation procedure.
This new procedure is important in the context of the fight against money laundering to prevent these "empty shells" from being diverted to illegal purposes in the future, and to maintain Luxembourg's good reputation.
"Le 4 novembre 2022, Legilux (Journal Officiel du Grand-Duché de Luxembourg) a publié la loi relative à la procédure de dissolution administrative sans liquidation et modifiant :
1° le Code de commerce ;
2° le Nouveau Code de Procédure Civile ;
3° la loi modifiée du 19 décembre 2002 concernant le registre de commerce et des sociétés ainsi que la comptabilité et les comptes annuels des sociétés ;
4° la loi modifiée du 19 décembre 2008 relative à la coopération inter-administrative et judiciaire et au renforcement des moyens de la Recette des Impôts du Luxembourg (contributions intérieures), de l'Administration de l'Enregistrement et des Domaines et de l'Administration des Douanes et Accises et modifiant
- la loi modifiée du 12 février 1979 relative à la taxe sur la valeur ajoutée ;
- la loi générale sur les impôts (" Abgabenordnung ") ;
- la loi modifiée du 17 avril 1964 portant réorganisation de l'Administration fiscale luxembourgeoise ;
- la loi modifiée du 20 mars 1970 portant réorganisation de l'Administration de l'Enregistrement et des Domaines ;
- la loi modifiée du 27 novembre 1933 concernant la perception des contributions directes et des cotisations d'assurances sociales ;
5° la loi modifiée du 25 mars 2020 portant création d'un système central de recherche électronique de données concernant les comptes de paiement et les comptes bancaires identifiés par un numéro IBAN et les coffres-forts.
Cette nouvelle loi vise à mettre en place une procédure simplifiée qui a pour but d'éliminer les nombreuses sociétés commerciales de droit luxembourgeois qui sont depuis plusieurs années non conformes au droit applicable (et qui remplissent donc la condition d'ouverture d'une liquidation judiciaire), et qui par ailleurs n'ont ni actifs ni employés.
La procédure de dissolution administrative sans liquidation est une procédure administrative, initiée par le Ministère public, mais gérée par le gestionnaire du Registre du Commerce et des Sociétés, qui permet d'évacuer efficacement et rapidement ces "coquilles vides" du Registre du Commerce et des Sociétés sans engendrer de coûts importants pour l'Etat et sans devoir passer par une procédure de liquidation judiciaire classique.
Cette nouvelle procédure est importante dans le cadre de la lutte contre le blanchiment d'argent pour éviter que ces "coquilles vides" ne soient détournées à l'avenir à des fins illégales, et pour maintenir la bonne réputation du Luxembourg."
Luxembourg publishes GD Regulation of 14/11/2022 on the implementation of restrictive measures in financial matters/ Le Luxembourg publie le Règlement grand-ducal du 14 novembre 2022 relative à la mise en œuvre de mesures restrictives en matière financièr
On 14 November 2022, Grand-ducal regulation of 14 November 2022 clarifying the law of 19 December 2020 on the implementation of restrictive measures in financial matters was published in Legilux (Journal Officiel du Grand-Duché de Luxembourg).
The Grand-Ducal Regulation provides that:
- the restrictive measures provided for by the law of 19 December 2020 relating to the implementation of restrictive measures in financial matters (Sanctions Law) shall be executed by the natural and legal persons obliged to apply them without delay and without prior notification;
- the natural and legal persons who are obliged to execute the restrictive measures provided for by the Sanctions Law shall inform the Minister of Finance of the execution of each restrictive measure taken with regard to a State, a natural or legal person, entity or group designated in accordance with the Sanction Law and the implementing regulations, including attempted transactions, without delay; and
- the Grand Ducal Regulation of 29 October 2010 regarding the application of the law of 27 October 2010 regarding sanctions is repealed.
The Grand Ducal Regulation entered into force on 14 November 2022.
Le 14 novembre 2022, le règlement grand-ducal du 14 novembre 2022 clarifiant la loi du 19 décembre 2020 relative à l'exécution de mesures restrictives en matière financière a été publié au Legilux (Journal Officiel du Grand-Duché de Luxembourg).
Le règlement grand-ducal prévoit que :
- les mesures restrictives prévues par la loi du 19 décembre 2020 relative à l'application de mesures restrictives en matière financière (loi des sanctions) sont exécutées par les personnes physiques et morales tenues de les appliquer sans délai et sans mise en demeure préalable ;
- les personnes physiques et morales tenues d'exécuter les mesures restrictives prévues par la loi sur les sanctions informent le ministre des finances de l'exécution de chaque mesure restrictive prise à l'égard d'un Etat, d'une personne physique ou morale, d'une entité ou d'un groupement désigné conformément à la loi sur les sanctions et aux règlements d'application, y compris les tentatives d'opérations, sans délai ; et
- le règlement grand-ducal du 29 octobre 2010 relatif à l'application de la loi du 27 octobre 2010 relative aux sanctions est abrogé.
Le règlement grand-ducal est entré en vigueur le 14 novembre 2022.
ChD announces access to the register of beneficial owners is temporarily suspended / ChD annonce que l'accès au registre des bénéficiaires effectifs est temporairement suspendu
On 23 November 2022, the Chambre des députés - Luxembourg announced that the access to the register of beneficial owners (RBO) is temporarily suspended.
The Minister of Justice explained that according to the finding of the Court of Justice of the European Union, the access of the general public to the RBO under the Anti-Money Laundering Directive would constitute "a serious interference with the fundamental rights to respect for private life and the protection of personal data". However, the Minister also assured MPs that access to the RBO for professionals would be available again as soon as possible. It would be important at this point to define more precisely the concept of legitimate interest in access to the register.
Members of the European Parliament (MEPs) generally welcomed these explanations. They were more concretely interested in the professional profiles that would again receive access to the RBO. One MEP asked whether it would also be journalists since the press could have an important role in detecting money laundering cases and stressed that it could also be important for civil society to have access in order to be able to detect such cases.
The Minister confirmed that journalists and civil society certainly have their roles in this context, but that professionals working in the prevention of money laundering, such as lawyers and notaries, should first be granted access again.
In addition, one MEP also asked what the consequences would have been if public access to the RBE had not been suspended immediately. The Minister of Justice drew attention to the fact that in this case, the Luxembourg State could have been prosecuted.
Le 23 novembre 2022, la Chambre des députés - Luxembourg a annoncé que l'accès au registre des bénéficiaires effectifs (RBE) est temporairement suspendu.
Le garde des sceaux a expliqué que selon le constat de la Cour de justice de l'Union européenne, l'accès du grand public au RBE au titre de la directive anti-blanchiment constituerait "une atteinte grave aux droits fondamentaux au respect de la vie privée et la protection des données personnelles". Toutefois, le ministre a également assuré aux députés que l'accès au RBE pour les professionnels serait à nouveau disponible dès que possible. Il serait important à ce stade de définir plus précisément la notion d'intérêt légitime à l'accès au registre.
Les députés européens ont généralement bien accueilli ces explications. Ils étaient plus concrètement intéressés par les profils professionnels qui auraient à nouveau accès au RBE. Un député européen a demandé s'il s'agirait également de journalistes puisque la presse pourrait jouer un rôle important dans la détection des cas de blanchiment d'argent et a souligné qu'il pourrait également être important pour la société civile d'y avoir accès afin de pouvoir détecter de tels cas.
Le ministre a confirmé que les journalistes et la société civile ont certes leur rôle dans ce contexte, mais que les professionnels travaillant dans la prévention du blanchiment d'argent, tels que les avocats et les notaires, devraient d'abord être à nouveau autorisés à y accéder.
Par ailleurs, un député européen a également demandé quelles auraient été les conséquences si l'accès du public au RBE n'avait pas été suspendu immédiatement. Le garde des sceaux a attiré l'attention sur le fait que dans cette affaire, l'Etat luxembourgeois aurait pu être poursuivi.
European Crowdfunding Service Providers (ECSP) Regulation
CSSF updates application form – Crowdfunding service providers (17/11/2022) / CSSF met à jour le formulaire de demande – Prestataires de services de financement participatif (17/11/2022)
On 17 November 2022, Commission de Surveillance du secteur financier (CSSF) updated application form – Crowdfunding service providers.
Prospective crowdfunding service providers (“applicants”) shall set out the relevant information or make reference to the relevant annexes to the application containing the information on the following. When notifying changes to the information provided in the application for authorisation, applicants shall set out only the information for which a change is notified. Where relevant, applicants shall clearly indicate, in the updated version of the relevant annexes which form part of the application, the changes that have been made to the information initially provided.
Le 17 novembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour le formulaire de demande - Prestataires de services de financement participatif.
Les prestataires potentiels de services de financement participatif («candidats») doivent indiquer les informations pertinentes ou faire référence aux annexes pertinentes de la candidature contenant les informations suivantes. Lorsqu'ils notifient des modifications des informations fournies dans la demande d'autorisation, les demandeurs ne mentionnent que les informations pour lesquelles une modification est notifiée. Le cas échéant, les demandeurs indiquent clairement, dans la version mise à jour des annexes pertinentes qui font partie de la demande, les modifications apportées aux informations initialement fournies.
CSSF publishes communication relating to crowdfunding service providers / La CSSF publie une communication relative aux prestataires de services de crowdfunding
On 25 November 2022, the Commission de Surveillance du secteur financier (CSSF) published a communication relating to crowdfunding service providers.
This communication follows up the “Press release 22/13”, published by the CSSF as per 10 June 2022 with regard to Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European Crowdfunding Service Providers for business and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 (ECSP Regulation), which is directly applicable in all Member States since 10 November 2021.
The CSSF draws the attention of the persons concerned by the Regulation to the Commission Delegated Regulation (EU) 2022/1988 of 12 July 2022 extending the transitional period for continuing to provide crowdfunding services in accordance with national law as referred to in Article 48(1) of Regulation (EU) 2020/1503 of the European Parliament and of the Council, according to which the transitional period referred to in Article 48(1) of Regulation (EU) 2020/1503 is extended until 10 November 2023.
Accordingly, existing crowdfunding service providers operating under national law may continue to provide services within the meaning of the ECSP Regulation until they obtain the authorisation in accordance with the ECSP Regulation until 10 November 2023 at the latest.
It should be reminded that any legal person incorporated in Luxembourg which intends to provide crowdfunding services within the meaning of the ECSP Regulation, and which has not been active before 10 November 2021, must have been duly authorised by the CSSF before providing any crowdfunding service.
The CSSF further draws the attention to the delegated regulations adopted by the European Commission, published in the official journal of the European Union as per 8 November 2022, with regard to regulatory technical standards specifying the requirements of the Regulation.
Le 25 novembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié une communication relative aux prestataires de services de financement participatif.
Cette communication fait suite au « Communiqué de presse 22/13 », publié par la CSSF en date du 10 juin 2022 concernant le règlement (UE) 2020/1503 du Parlement européen et du Conseil du 7 octobre 2020 sur les prestataires européens de services de financement participatif pour et modifiant le règlement (UE) 2017/1129 et la directive (UE) 2019/1937 (règlement ECSP), qui est directement applicable dans tous les États membres depuis le 10 novembre 2021.
La CSSF attire l'attention des personnes concernées par le règlement sur le règlement délégué (UE) 2022/1988 de la Commission du 12 juillet 2022 prorogeant la période transitoire pour continuer à fournir des services de financement participatif conformément au droit national tel que visé à l'article 48(1) ) du règlement (UE) 2020/1503 du Parlement européen et du Conseil, selon lequel la période transitoire visée à l'article 48, paragraphe 1, du règlement (UE) 2020/1503 est prorogée jusqu'au 10 novembre 2023.
En conséquence, les prestataires de services de financement participatif existants opérant en vertu du droit national peuvent continuer à fournir des services au sens du règlement ECSP jusqu'à ce qu'ils obtiennent l'agrément conformément au règlement ECSP jusqu'au 10 novembre 2023 au plus tard.
Il est rappelé que toute personne morale constituée au Luxembourg qui a l'intention de fournir des services de financement participatif au sens du règlement ECSP, et qui n'a pas été active avant le 10 novembre 2021, doit avoir été dûment autorisée par la CSSF avant de fournir tout service de financement participatif.
La CSSF attire en outre l'attention sur les règlements délégués adoptés par la Commission européenne, publiés au journal officiel de l'Union européenne en date du 8 novembre 2022, en matière de normes techniques de réglementation précisant les exigences du Règlement.
CSSF updates directory and email addresses for specific purposes / La CSSF met à jour le répertoire et les adresses e-mail à des fins spécifiques
On 28 November 2022, the Commission de Surveillance du secteur financier (CSSF) updated the directory and email addresses for specific purposes.
Le 28 novembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour le répertoire et les adresses électroniques à des fins spécifiques.
Investment Funds / Collective Investment Schemes (CIS) / Asset Management
CSSF reminds fund managers to adequately apply AML/CFT controls for the purpose of preventing tax offences/ La CSSF rappelle aux gestionnaires de fonds d'appliquer de manière adéquate les contrôles LAB/CFT dans le but de prévenir les infractions fiscales
On 8 November 2022, the Commission de Surveillance du secteur financier (CSSF) reminded fund managers to adequately apply AML/CFT controls for the purpose of preventing tax offences.
In application of the criminal provisions laid down in the Law of 23 December 2016, the money laundering offence was extended in order to encompass aggravated tax fraud (fraude fiscale aggravée) and tax evasion (escroquerie fiscale). As a consequence, professionals subject to the obligations with respect to money laundering and terrorist financing shall take into account the predicate tax crimes within the scope of their professional obligations, notably customer due diligence and cooperation with authorities.
In this context the CSSF’s “UCI On-site Inspection” department carried out in November and December 2021 a thematic review in relation to the AML/CFT controls applied in terms of preventing tax offences, as further described by Circular CSSF 17/650, as amended by Circular CSSF 20/744. The thematic review targeted different types and sizes of market participants (hereafter the IFMs) and included five Luxembourg IFMs.
The main takeaway of the review was that the overall understanding of the risks associated with ML/TF linked predicate tax offences as well as the related mitigation measures put in place by the entities inspected were satisfactory. Nevertheless, the thematic review brought out the following key findings:
- Weaknesses with regard to risk assessment: In some cases, the risk assessment did not cover all relevant aspects of Circular CSSF 20/744. The CSSF reminds IFMs that Circular CSSF 20/744, dated 3 July 2020, complemented Circular CSSF 17/650 in particular by providing a list of indicators specific to the collective investment activities and specified the CSSF expectation for the entities under its AML/CFT supervision. IFMs must ensure that their risk assessment includes all relevant tax specific indicators concerning their collective investment activities mentioned by Circular CSSF 17/650, as amended by Circular CSSF 20/744.
- Shortcomings in the control functions environment: the CSSF noted weaknesses regarding verifications performed by the control functions in the context of the AML/CFT predicated tax offences, as in some cases these were not sufficiently covered at the level of the compliance monitoring plan and/or at the level of the internal audit plan. The CSSF reminds IFMs to ensure that tax matters are included on a risk-based approach in the compliance monitoring plan as well in the internal audit works, and to ensure that when designing risk mitigation measures these will include in a proportionate manner all relevant tax specific indicators concerning collective investment activities mentioned by Circular CSSF 17/650, as amended by Circular CSSF 20/744.
- Tax calculation, filing and reporting: the CSSF noted weaknesses with regard to delegated subscription tax calculation and filing as well as investor tax reporting, where the IFM was not systematically part of the related contractual arrangements. In another case, the CSSF noted that the IFM did not appropriately monitor the tax risks arising from securities lending activities, whereby the entity was not part of the contractual arrangements with the lending agent. Besides, the agreements did not contain any clause relating to the prevention of tax fraud. In these instances, we noted that the processes surrounding tax compliance were not sufficiently documented. The CSSF reminds IFMs to adequately mention their tax compliance obligations (such as with regard to investor tax reporting calculation and filing of the subscription tax declarations to the Administration des Enregistrements et Domaines) in their procedures and to perform adequate monitoring where such activities are delegated.
In the context of the inspection, the CSSF also noted best practices for some of the IFMs such as in particular:
- a tax due diligence was performed, documented and endorsed by the governing body of several IFMs prior to performing complex investments;
- risk assessments made in relation with Circular CSSF 20/744 were reported to and endorsed by the governing body.
Le 8 novembre 2022, la Commission de Surveillance du secteur financier (CSSF) a rappelé aux gestionnaires de fonds d'appliquer de manière adéquate les contrôles LAB/CFT dans le but de prévenir les infractions fiscales.
Dans ce contexte, le service « Inspection sur place OPC » de la CSSF a réalisé en novembre et décembre 2021 une revue thématique en relation avec les contrôles LBC/FT appliqués en matière de prévention des infractions fiscales, tel que décrit plus en détail par la circulaire CSSF 17/650, comme modifiée par la circulaire CSSF 20/744. L'examen thématique ciblait différents types et tailles d'acteurs du marché (ci-après les GFI) et comprenait cinq GFI luxembourgeois.
La principale conclusion de l'examen était que la compréhension globale des risques associés aux infractions fiscales sous-jacentes liées au BC/FT ainsi que les mesures d'atténuation connexes mises en place par les entités inspectées étaient satisfaisantes. Néanmoins, l'examen thématique a fait ressortir les principales conclusions suivantes :
- Faiblesses concernant l'évaluation des risques : Dans certains cas, l'évaluation des risques n'a pas couvert tous les aspects pertinents de la circulaire CSSF 20/744. La CSSF rappelle aux GFI que la circulaire CSSF 20/744, en date du 3 juillet 2020, a complété la circulaire CSSF 17/650 notamment en fournissant une liste d'indicateurs spécifiques aux activités de placement collectif et a précisé l'attente de la CSSF pour les entités sous sa surveillance LBC/FT. Les GFI doivent s'assurer que leur évaluation des risques inclut tous les indicateurs spécifiques fiscaux pertinents concernant leurs activités de placement collectif mentionnés par la circulaire CSSF 17/650, telle que modifiée par la circulaire CSSF 20/744.
- Lacunes dans l'environnement des fonctions de contrôle : la CSSF a relevé des faiblesses concernant les vérifications effectuées par les fonctions de contrôle dans le cadre des infractions fiscales sous-jacentes LBC/FT, celles-ci n'étant dans certains cas pas suffisamment couvertes au niveau du plan de surveillance de la conformité et/ou au niveau du plan d'audit interne. La CSSF rappelle aux GFI de s'assurer que les questions fiscales sont incluses selon une approche basée sur les risques dans le plan de surveillance de la conformité ainsi que dans les travaux d'audit interne, et de s'assurer que lors de la conception des mesures d'atténuation des risques, celles-ci incluront de manière proportionnée tous les indicateurs spécifiques probants en matière fiscale concernant les activités de placement collectif mentionnés par la circulaire CSSF 17/650, telle que modifiée par la circulaire CSSF 20/744.
- Calcul, déclaration et déclaration de la taxe : la CSSF a constaté des faiblesses en matière de calcul et de déclaration de la taxe d'abonnement déléguée ainsi que de la déclaration fiscale des investisseurs, où le GFI ne faisait pas systématiquement partie des dispositifs contractuels y afférents. Dans un autre cas, la CSSF a constaté que le GFI ne surveillait pas de manière appropriée les risques fiscaux découlant des activités de prêt de titres, l'entité ne faisant pas partie des arrangements contractuels avec l'agent prêteur. Par ailleurs, les conventions ne contenaient aucune clause relative à la prévention de la fraude fiscale. Dans ces cas, nous avons constaté que les processus entourant la conformité fiscale n'étaient pas suffisamment documentés. et Domaines) dans leurs procédures et d'effectuer un contrôle adéquat lorsque ces activités sont déléguées.
Dans le cadre de l'inspection, la CSSF a également relevé des bonnes pratiques pour certains des GFI telles que notamment :
- une due diligence fiscale a été réalisée, documentée et avalisée par l'organe de gouvernance de plusieurs GFI préalablement à la réalisation d'investissements complexes ;
- les évaluations des risques effectuées en relation avec la circulaire CSSF 20/744 ont été rapportées et avalisées par l'organe de gouvernance.
CSSF updates the investment fund industry on SFDR RTS confirmation letter / La CSSF informe l'industrie des fonds d'investissement sur la lettre de confirmation des SFDR RTS
On 9 November 2022, Commission de Surveillance du secteur financier (CSSF) updated on communication to the investment fund industry on SFDR RTS confirmation letter.
After expiry of the deadline of 31 October 2022 and taking into account the imminent application date (1.1.2023) of the Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/2088, the CSSF would like to confirm that Luxembourg-based UCITS, SIFs, SICARs and UCIs Part II which still need or wish to update their prospectus/issuing document shall follow the instructions set forth in the CSSF communication dated 6 September 2022 for the filing of the prospectuses/issuing documents.
Requests duly accompanied by the confirmation letter referred to in the above-mentioned CSSF communication and notably updates limited to comply with the aforementioned Commission Delegated Regulation will be processed on a best effort basis in view that the respective investment funds comply with the Commission Delegated Regulation from its date of application.
Le 9 novembre 2022, la Commission de Surveillance du secteur financier (CSSF) a fait le point sur la communication à l'industrie des fonds d'investissement sur la lettre de confirmation SFDR RTS.
Après l'expiration du délai du 31 octobre 2022 et compte tenu de la date d'application imminente (1.1.2023) du règlement délégué (UE) 2022/1288 de la Commission du 6 avril 2022 complétant le règlement (UE) 2019/2088, la CSSF souhaite de confirmer que les OPCVM, FIS, SICAR et OPC de droit luxembourgeois Partie II qui doivent ou souhaitent encore mettre à jour leur prospectus/document d'émission doivent suivre les instructions énoncées dans la communication de la CSSF du 6 septembre 2022 pour le dépôt des prospectus/documents d'émission.
Les demandes dûment accompagnées de la lettre de confirmation visée dans la communication CSSF susmentionnée et notamment les mises à jour limitées pour se conformer au règlement délégué de la Commission susmentionné seront traitées dans la mesure du possible afin que les fonds d'investissement respectifs se conforment au règlement délégué de la Commission dès sa date d'application.
CSSF launched a "Standardised Model Prospectus" for UCITS / La CSSF lance un « Modèle de prospectus standardisé » pour les OPCVM
On 17 November 2022, Commission de Surveillance du secteur financier (CSSF) launched a Standardised Model Prospectus – a new proposal to support the examination of the prospectus in attachment of an application for approval of a new UCITS.
The CSSF announced about the availability of a Standardised Model Prospectus that applicants can use when submitting an application for approval of a new UCITS.
The Standardised Model Prospectus has been developed with the aim to facilitate the drafting of a conventional prospectus for a UCITS project of average complexity and to facilitate through standardisation its examination by the CSSF during the processing of the application file.
While the Model Prospectus is set up to reflect current and up-to-date practice, the content is composed of information of a universal nature and will need customisation to suit the context and circumstances of any specific fund project.
The Standardised Model Prospectus provides freedom to add or alter text, however limited to the extent to not override the benefit of standardisation.
The Standardised Model Prospectus shall not be considered as a new regulatory requirement or a guarantee for the approval. The current authorisation process covering the submission of a request, the exchange of comments where relevant and the approval process of a UCITS remains unchanged as described on the webpage “Authorisation of a UCITS”.
The dedicated Standardised Model Prospectus page on the CSSF website for further information on the scope, conditions of use and practical guidance in respect to the new proposal could be found here: www.cssf.lu/en/standardised-model-prospectus-for-ucits/
Le 17 novembre 2022, la Commission de Surveillance du secteur financier (CSSF) a lancé un modèle de prospectus standardisé - une nouvelle proposition pour soutenir l'examen du prospectus en pièce jointe d'une demande d'agrément d'un nouvel OPCVM.
La CSSF a annoncé la disponibilité d'un modèle de prospectus standardisé que les candidats peuvent utiliser lors de la soumission d'une demande d'agrément d'un nouvel OPCVM.
Le Modèle de Prospectus Standardisé a été élaboré dans le but de faciliter la rédaction d'un prospectus conventionnel pour un projet d'OPCVM de complexité moyenne et de faciliter par la standardisation son examen par la CSSF lors du traitement du dossier de demande.
Bien que le modèle de prospectus soit conçu pour refléter les pratiques actuelles et à jour, le contenu est composé d'informations de nature universelle et devra être personnalisé pour s'adapter au contexte et aux circonstances de tout projet de fonds spécifique.
Le modèle de prospectus standardisé offre la liberté d'ajouter ou de modifier du texte, toutefois limité dans la mesure où il ne prévaut pas sur l'avantage de la normalisation.
Le Modèle de Prospectus Standardisé ne doit pas être considéré comme une nouvelle exigence réglementaire ou une garantie d'approbation. Le processus d'agrément actuel couvrant la soumission d'une demande, l'échange de commentaires le cas échéant et le processus d'agrément d'un OPCVM reste inchangé tel que décrit sur la page Internet « Agrément d'un OPCVM ».
La page dédiée au modèle de prospectus standardisé sur le site Internet de la CSSF pour plus d'informations sur le champ d'application, les conditions d'utilisation et les conseils pratiques concernant la nouvelle proposition peut être trouvée ici : www.cssf.lu/en/standardised-model- prospectus-pour-OPCVM/
CSSF updates authorisation as UCI administrator form (09/11/2022) / La CSSF met à jour le formulaire d'habilitation en tant qu'administrateur d'OPC (09/11/2022)
On 9 November 2022, Commission de Surveillance du secteur financier (CSSF) updated authorisation as UCI administrator form.
Le 9 novembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour le formulaire d'agrément en tant qu'administrateur d'OPC.
CSSF updates notification letter for pre-marketing by non-EU AIFMs to professional investors / La CSSF met à jour la lettre de notification de pré-commercialisation par les gestionnaires de FIA non-UE aux investisseurs professionnels
On 15 November 2022, Commission de Surveillance du secteur financier (CSSF) updated notification letter for pre-marketing by non-EU AIFMs to potential professional investors in Luxembourg.
The CBDF Directive mentions that national laws, regulations and administrative provisions necessary to comply with the AIFMD and, in particular, with harmonised rules on pre-marketing, should not in any way disadvantage EU AIFMs vis-à-vis non-EU AIFMs. Consequently, and in order to create a level playing field between EU AIFMs and non-EU AIFMs, the CSSF considers that the same conditions and notification procedure as mentioned in Article 30a of the AIFMD, and as explained in section I. above, apply to non-EU AIFMs when they engage in pre-marketing to potential professional investors in Luxembourg.
Non-EU AIFMs engaging in pre-marketing to potential professional investors in Luxembourg shall send a duly completed and signed Pre-Marketing Notification Letter, within two weeks of it having begun pre-marketing, to the CSSF.
The Pre-Marketing Notification Letter or any changes thereto must be sent to the following email address: firstname.lastname@example.org.
Le 15 novembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour la lettre de notification de pré-commercialisation par des AIFM non-UE aux investisseurs professionnels potentiels au Luxembourg.
La directive CBDF mentionne que les dispositions législatives, réglementaires et administratives nationales nécessaires pour se conformer à l'AIFMD et, en particulier, aux règles harmonisées en matière de précommercialisation, ne doivent en aucun cas désavantager les gestionnaires de FIA de l'UE par rapport aux gestionnaires de FIA de pays tiers. Par conséquent, et afin de créer des conditions de concurrence équitables entre les gestionnaires de FIA de l'UE et les gestionnaires de FIA hors de l'UE, la CSSF considère que les mêmes conditions et procédure de notification que celles mentionnées à l'article 30 bis de l'AIFMD, et comme expliqué à la section I. ci-dessus, s'appliquent aux les gestionnaires de FIA hors UE lorsqu'ils effectuent une pré-commercialisation auprès d'investisseurs professionnels potentiels au Luxembourg.
Les gestionnaires de FIA non-UE qui effectuent une pré-commercialisation auprès d'investisseurs professionnels potentiels au Luxembourg doivent envoyer une lettre de notification de pré-commercialisation dûment complétée et signée, dans les deux semaines suivant le début de la pré-commercialisation, à la CSSF.
La lettre de notification de pré-commercialisation ou toute modification de celle-ci doit être envoyée à l'adresse e-mail suivante : email@example.com.
Sustainable Finance / Green Finance
CSSF publishes communication on product governance requirements under MiFID rules related to sustainability / La CSSF publie une communication sur les exigences de gouvernance des produits en vertu des règles MiFID liées à la durabilité
On 24 November 2022, the CSSF published a communication on the application of product governance requirements under MiFID rules related to sustainability.
The CSSF reminded supervised entities that from 22 November 2022 onwards, the date of application of the Grand-ducal Regulation of 27 July 2022, entities are required to take into account sustainability factors when specifying the target markets for the financial instruments and structured deposits they manufacture and/or distribute.
The European Securities and Markets Authority (ESMA) is currently finalising the update of its “Guidelines on MiFID II product governance requirements” in order to take into consideration these amendments. These guidelines will provide firms with further guidance on the application of the new requirements.
As a reminder, according to Commission Delegated Regulation 2021/1253, since 2 August 2022, providers of investment advisory and discretionary portfolio management services are required to obtain specific information on their clients’ preferences regarding sustainability and meet such preferences, while also meeting their other investment objectives and taking into account their financial situation and knowledge and experience.
Le 24 novembre 2022, la CSSF a publié une communication sur l'application des exigences de gouvernance des produits dans le cadre des règles MiFID liées à la durabilité.
La CSSF a rappelé aux entités surveillées qu'à partir du 22 novembre 2022, date d'application du règlement grand-ducal du 27 juillet 2022, les entités sont tenues de prendre en compte des facteurs de durabilité lors de la spécification des marchés cibles pour les instruments financiers et les dépôts structurés qu'elles fabriquent et/ou distribuer.
L'Autorité européenne des marchés financiers (ESMA) finalise actuellement la mise à jour de ses « Lignes directrices sur les exigences de gouvernance des produits MiFID II » afin de prendre en considération ces amendements. Ces lignes directrices fourniront aux entreprises des indications supplémentaires sur l'application des nouvelles exigences.
Pour rappel, selon le règlement délégué 2021/1253 de la Commission, depuis le 2 août 2022, les prestataires de services de conseil en investissement et de gestion discrétionnaire de portefeuille sont tenus d'obtenir des informations spécifiques sur les préférences de leurs clients en matière de développement durable et de respecter ces préférences, tout en respectant leurs autres objectifs d'investissement et compte tenu de leur situation financière, de leurs connaissances et de leur expérience.
CSSF publishes the first set of FAQs on SFDR (02/12/2022) / La CSSF publie la première FAQ sur 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).
These CSSF FAQs should be read with the questions and answers of the European Commission on SFDR. They should guide stakeholders in the context of SFDR by bringing clarifications to supplement the European Supervisory Authorities (ESAs) on SFDR and other CSSF Communiqués on SFDR. Despite this, in the Section I of the FAQ, the CSSF ambitions to consolidate all these information and draw attention to relevant publications on SFDR.
Section II covers any additional clarifications provided by the CSSF:
- Updated of prospectiuses/ issuing documents.
- Website disclosures.
- Pre-contractual disclosures.
- Periodic disclosures
Commission Delegated Regulation (EU) of 2022/1288 of 6 April 2022 supplementing Regulation (EU)
2019/2088 of 27 November 2019 on sustainabilityrelated disclosures in the financial services sector ("SFDR RTS") should apply from 1 january 2023.
Financial market participants (FMPs) should use these clarifications for complying with the requirements set in the SFDR RTS.
Finally, FMPs should regularly check the website of the CSSF in relation to any matter of importance to you to see if questions have been added and/or positions have been adapted.
Les FAQ visent à clarifier davantage certains aspects du règlement (UE) 2019/2088 sur les informations à fournir en matière de développement durable dans le secteur financier (SFDR).
Les FAQ de la CSSF sont à lire conjointement avec les questions et réponses de la Commission européenne sur SFDR. Elles visent à aider les acteurs en apportant un complément de clarifications aux documents déjà publiés par les Autorités européennes de surveillance (AES) ou antérieurement par la CSSF sur SFDR. Ainsi la Section I des FAQ vise d’une part à consolider ces informations et d’autre part à attirer l’attention sur les publications importantes sur la SFDR.
La section II porte sur les éventuelles précisions complémentaires apportées par la CSSF :
- Mise à jour des prospectus/documents d'émission.
- Divulgations du site Web.
- Divulgations précontractuelles.
- Divulgations périodiques
Règlement délégué (UE) de la Commission du 2022/1288 du 6 avril 2022 complétant le règlement (UE)
2019/2088 du 27 novembre 2019 sur les informations à fournir en matière de développement durable dans le secteur des services financiers (« SFDR RTS ») devrait s'appliquer à partir du 1er janvier 2023.
Les acteurs des marchés financiers (FMP) doivent utiliser ces clarifications pour se conformer aux exigences fixées dans le SFDR RTS.
Enfin, les FMP doivent consulter régulièrement le site Internet de la CSSF pour toute question importante pour vous afin de voir si des questions ont été ajoutées et/ou des positions ont été adaptées.
Anti-money laundering / Combating the financing of terrorism (AML / CFT)
Federal Council updates FINMA-AMLO / Le Conseil fédéral met à jour FINMA-AMLO
On 23 November 2023, the Federal Council updated the FINMA Anti-Money Laundering Ordinance (AMLO) to take account of the latest revisions to the AML Act and the Federal Council’s AML Ordinance which will enter into force on 1 January 2023.
As announced in Federal Council's press release of 2 November 2022, the mandatory checking of the identity of the beneficial owner and periodic checking that client data is up to date do not need to be set out in detail at ordinance level. However, the provision stating that financial intermediaries must regulate the modalities for updating and checking customer records in an internal directive will remain. Furthermore, the FINMA-AMLO is being extended to cover distributed ledger trading facilities.
Moreover, FINMA stands by the rule that technical measures are needed to prevent the threshold of CHF 1000 from being exceeded for linked transactions within thirty days (and not just per day). However, this duty only applies to exchange transactions of virtual currencies for cash or other anonymous means of payment.
More specifically, the changes are the following:
- The FINMA may require a supervised institution that they introduce a computerised transaction monitoring system where necessary for effective supervision.
- Information to the authorities and documentation: a financial intermediary must inform FINMA or the Money Laundering Reporting Office Switzerland (MROS) concerning business relationships involving significant assets. In particular, it informs FINMA or the MROS if it is reasonable to believe, in the circumstances, that the matter giving rise to the disclosure will have consequences for the reputation of the financial intermediary or financial centre. If the financial intermediary does not make a communication because it itself has been able to dismiss any suspicion after having made further clarifications, it must document the reasons.
- Internal directives must address updating client documents.
- In the case of cash payments or acceptance of other anonymous payment instruments for the sale or purchase of virtual currencies, the financial intermediary shall take technical measures to prevent the mentionned threshold is exceeded within 30 days by interrelated transactions.
- If the identity of the other party could not be verified, the financial intermediary shall refuse to establish a business relationship or terminate it.
- It is not necessary to request a declaration relating to the beneficial owner where the contracting party is a financial intermediary with a registered office abroad, who carries out an activity in accordance with Art. 2 para. 2 let. d, AMLA, which administers accounts itself and is subject to equivalent supervision and regulation; if doubts persist as to the accuracy of the other party's declaration and cannot be resolved by further clarification, the financial intermediary shall refuse to establish a business relationship or terminate it.
- For persons within the meaning of Art. 1bLB1 who meet the conditions for obtaining relief in risk management and compliance under Art. 14e, paragraph 5, of the Ordinance of 30 April 2014 on banks, the specialized unit for combating money-laundering shall only perform the tasks mentioned in Art. 24. Where appropriate, these duties may also be performed by management or a member of management. The activities to be controlled cannot be controlled by a person who is directly responsible for the business relationship concerned.
The FINMA AML Ordinance will enter into force on 1 January 2023. The financial intermediary is obliged to implement the technical measures within six months of the entry into force of this Ordinance.
Le 23 novembre 2023, le Conseil fédéral a mis à jour l'Ordonnance anti-blanchiment de la FINMA (OLBA) pour tenir compte des dernières révisions de la loi LBC et de l'Ordonnance LBC du Conseil fédéral qui entrera en vigueur le 1er janvier 2023.
Comme annoncé dans le communiqué de presse du Conseil fédéral du 2 novembre 2022, le contrôle obligatoire de l'identité de l'ayant droit économique et le contrôle périodique de l'actualité des données des clients n'ont pas besoin d'être précisés au niveau de l'ordonnance. Toutefois, la disposition stipulant que les intermédiaires financiers doivent réglementer les modalités de mise à jour et de vérification des fichiers clients dans une directive interne sera maintenue. En outre, l'AMLO-FINMA est étendu aux systèmes de négoce du registre distribué.
De plus, la FINMA s'en tient à la règle selon laquelle des mesures techniques sont nécessaires pour éviter que le seuil de CHF 1000 ne soit dépassé pour les transactions liées dans les trente jours (et pas seulement par jour). Toutefois, cette obligation ne s'applique qu'aux transactions d'échange de monnaies virtuelles contre des espèces ou d'autres moyens de paiement anonymes.
Plus précisément, les changements sont les suivants :
- La FINMA peut exiger d'un établissement assujetti qu'il mette en place un système informatisé de surveillance des transactions lorsque cela est nécessaire pour une surveillance efficace.
- Information aux autorités et documentation : un intermédiaire financier doit informer la FINMA ou le Bureau de communication en matière de blanchiment d'argent (MROS) des relations d'affaires portant sur des valeurs patrimoniales importantes. En particulier, elle informe la FINMA ou le MROS s'il est raisonnable de penser, dans les circonstances, que le fait qui a donné lieu à la divulgation aura des conséquences pour la réputation de l'intermédiaire financier ou de la place financière. Si l'intermédiaire financier ne fait pas de communication parce qu'il a lui-même pu écarter tout soupçon après avoir apporté des éclaircissements complémentaires, il doit documenter les raisons.
- Les directives internes doivent traiter de la mise à jour des documents clients.
- En cas de paiement en espèces ou d'acceptation d'autres instruments de paiement anonymes pour la vente ou l'achat de monnaies virtuelles, l'intermédiaire financier prendra des mesures techniques pour éviter que le seuil mentionné ne soit dépassé dans les 30 jours par des transactions interdépendantes.
- Si l'identité de l'autre partie n'a pu être vérifiée, l'intermédiaire financier doit refuser d'établir une relation d'affaires ou y mettre fin.
- Il n'est pas nécessaire de demander une déclaration relative à l'ayant droit économique lorsque le cocontractant est un intermédiaire financier ayant son siège à l'étranger, qui exerce une activité conformément à l'art. 2 al. 2 let. d, LBA, qui gère elle-même les comptes et est soumise à une surveillance et une réglementation équivalentes ; si des doutes persistent quant à l'exactitude de la déclaration de l'autre partie et ne peuvent être résolus par des éclaircissements supplémentaires, l'intermédiaire financier refuse d'établir une relation d'affaires ou y met fin.
- Pour les personnes au sens de l'art. 1bLB1 qui remplissent les conditions d'obtention d'une dispense en matière de gestion des risques et de conformité selon l'art. 14e, alinéa 5, de l'ordonnance du 30 avril 2014 sur les banques, la cellule spécialisée dans la lutte contre le blanchiment d'argent n'exerce que les missions mentionnées à l'art. 24. Le cas échéant, ces fonctions peuvent également être exercées par la direction ou un membre de la direction. Les activités à contrôler ne peuvent être contrôlées par une personne directement responsable de la relation d'affaires concernée.
L'Ordonnance LBC de la FINMA entrera en vigueur le 1er janvier 2023. L'intermédiaire financier est tenu de mettre en œuvre les mesures techniques dans les six mois suivant l'entrée en vigueur de la présente Ordonnance.
DNB publishes overview of supervision priorities in 2022-2023
On 22 November 2022, De Nederlandsche Bank (DNB) published overview of supervision priorities in 2022-2023.
The annual publication indicated on what De Nederlandsche Bank pays extra attention to in its supervision of the financial sector in the Netherlands.
DNB introduces new UFR method as of 1 January 2023
On 30 November 2022, De Nederlandsche Bank (DNB) introduced new UFR method as of 1 January 2023.
The so-called interest rate term structure with which pension funds calculate the value of their future pension liabilities will be based on new UFR parameters from 1 January next. This has been decided by De Nederlandsche Bank (DNB). In doing so, DNB is following the advice of the Parameters Committee, about which Minister Schouten (Poverty Policy, Participation and Pensions) informed the House of Representatives today.
Part of the advice of the Parameters Committee is to determine the parameters of the so-called Ultimate Forward Rate (UFR) method. Together with the swap rates, the UFR method forms the term structure. DNB has the statutory task of determining which interest rate structure and therefore which UFR method pension funds should use to determine the value of their future liabilities. DNB endorses the Commission's advice on the adaptation of the UFR method.
DNB will base the interest rate term structure until 1 January 2023 on the current system and from 1 January 2023 on the recommended new UFR parameters.
DNB publishes feedback on the results of the (second) inquiry about the transition to a new pension scheme
On 21 November 2022, De Nederlandsche Bank (DNB) published feedback on the results of the (second) inquiry about the transition to a new pension scheme.
The general picture is that the majority of the sector has got off to a good start, has made a plan and will start determining the risk attitude next year. Most funds will implement a solidarity contribution scheme and more than half of the funds want to make use of the transition FTK. In terms of timing, most funds expect to enter in 2025. (It should be noted that after the deadline for submitting the answers to the questioning, it was announced that the entry into force of the Future Pensions Act will be postponed to 1 July 2023. This may therefore affect the timeline of funds.)
But there are also funds that still have to make significant strides. In addition, there are sector-wide points for attention, for example, of ensuring data quality, guaranteeing sufficient time, knowledge and skills to make good decisions, the necessary adjustments to IT systems and guaranteeing an adequate connection between pension management and asset management.
DNB will include the results of the second survey in our risk-based supervision. The information received may be a reason to revise the risk profile of an institution and/or discuss this with a firm, conduct an in-depth investigation or send a letter with the points for attention.
DNB sees 4 phases in the transition. DNB is currently in the preparatory phase (first phase): DNB gains insights through inquiries about the transition to a new pension scheme, conduct supervisory discussions with institutions on this subject and, where necessary, conduct in-depth research. DNB is also working on finalizing its draft external guidance, such as factsheets, Q&As and good practices.
After the preparation phase comes the decision-making phase (second phase), in which DNB will focus on the assessment of the entry decision and the implementation plan. In the third phase, DNB monitors whether the established implementation plan has actually been followed. And in the final phase, DNB supervises the new reality: the implementation of the new pension scheme.
AFM publishes communication on reporting for listed companies
On 7 November 2022, Autoriteit Financiële Markten (AFM) published communication on reporting for listed companies.
The listed companies need to ay extra attention to a number of important elements when preparing their reporting for 2022. These relate, among other things, to the connectivity between the non-financial statement and the other components of the financial reporting, including the annual accounts. The AFM will in any event pay specific attention to these points in its supervision of the reporting for 2022.
The points for attention mentioned are important for the listed companies that prepare their reporting for 2022, but also for the audit committees that supervise the reporting process and audit firms that monitor the reporting. The AFM bases its points of attention on, among other things, findings from thematic research in 2022 into connectivity in reporting.
Depositor protection rules
PRA publishes PS10/22 on Depositor Protection
On 28 November 2022, the Prudential Regulation Authority (PRA) published Policy Statement (PS) 10/22 on Depositor Protection.
In this PS, the PRA sets out its final rules proceeding on the basis it consulted on albeit that it has amended some typographical errors that were in its consultation proposals.
The PRA is also deleting the Dormant Account Scheme Statement of Policy aimed at the Financial Services Compensation Scheme. The intention to delete the Statement of Policy was mistakenly omitted in CP9/22. However, there is little impact from this error as the Statement of Policy would become obsolete once the DAS rules are deleted.
The PRA will reflect all the changes to SS18/15 resulting from the CP9/22 consultation process, (including those to reflect changes to the COA rules and DAS rules that are set out in PS10/22), after the whole CP9/22 process has concluded.
The changes to the Depositor Protection Part of the PRA Rulebook and DAS rules will come into effect on 30 November 2022. The Statement of Policy will also be deleted on the 30 November 2022.
FCA publishes PS22/12: pensions dashboards rules for pension providers
On 1 November 2022, Financial Conduct Authority (FCA) published PS22/12: pensions dashboards rules for pension providers.
FCA sets out final rules and guidance requiring FCA regulated pension providers to provide and enable information about personal and stakeholder pensions for pensions dashboards. FCA also responds to feedback on CP22/3.
The FCA's final rules require that FCA regulated pension providers must:
- complete connection to the digital architecture operated by the Pensions Dashboard Programme – which is a function of the Money and Pensions Service (MaPS)
- be ready to receive requests to find pensions, and search records for data matches
- be ready to return pensions information to the consumer’s chosen pensions dashboard.
Making these final rules satisfies a statutory duty placed on us by the Pension Schemes Act 2021. Together with the Government’s regulations (which contain corresponding requirements for trustees of occupational pension schemes) and the MaPS’ standards published by Pensions Dashboard Programme, our rules contribute to making pensions dashboards a reality.
Pensions dashboards are secure digital interfaces that enable consumers to find and view simple information about their pensions that are not yet in payment. By equipping people with basic information about the pensions they have, consumers may find it easier to plan for retirement, get advice or guidance, and ultimately make informed decisions.
Firms must implement our final rules by 31 August 2023. Firms that intend to use the later implementation date transitional provision must notify us by 30 April 2023.
The Pensions Dashboard Programme, which is a function of MaPS, will soon publish updated versions of the standards that pension providers must adhere to under our final rules.
Later in 2022, the FCA will consult on its proposed regulatory framework for commercial parties offering a pensions dashboard service. Subject to consultation outcome, we aim to open the authorisations gateway in Summer 2023.
UK Legislation publishes the Occupational Pensions (Revaluation) Order 2022
On 30 November 2022, UK Legislation published the Occupational Pensions (Revaluation) Order 2022.
Section 84 of the Pension Schemes Act 1993 (c. 48) requires certain pensions and other benefits under occupational pension schemes to be revalued by the final salary method (which is dealt with in Schedule 3 to that Act). For the purpose of the revaluation of benefits payable to or in respect of persons who attain their scheme’s normal pension age in 2023, and as required by paragraph 2 of Schedule 3 to that Act, this Order specifies the necessary revaluation percentages for each of the revaluation periods between 1st January 1986 and 31st December 2022. It is not necessary to specify a lower revaluation percentage for revaluation periods which start before 1st January 2009.
This Order amends an existing regulatory regime by a pre-determined formula, and the administrative impact of its implementation is negligible. A full impact assessment has not been produced for this Order as no, or no significant, impact on the private, voluntary or public sector is foreseen.
Sustainable Finance / Green Finance
FRC publishes Annual Review of Corporate Governance Reporting
On 3 November 2022, Financial Reporting Council (FRC) published the Annual Review of Corporate Governance Reporting.
The Financial Reporting Council today published its Annual Review of Corporate Governance Reporting which found an improvement in the quality of reporting against the UK Corporate Governance Code.
FRC has seen year-on-year improvements in reporting, and importantly more companies are disclosing the areas within the Code that they have chosen to explain rather than comply. However, the report also found that too few companies are providing meaningful explanations.
A common theme throughout the report is the lack of disclosure in relation to the outcomes and impacts of governance policies and practices. Companies need to demonstrate, within their reporting how their governance has been improved.
The FRC was also disappointed to see minimal disclosure about board engagement with major shareholders - with some companies simply stating that there had been meetings without providing further information on their engagement and its outcome. Such explanations are important to give investors and the public information which is critical for market confidence and lowering the cost of capital.
The assessment, which comprised 100 randomly chosen FTSE 350 and Small Cap companies, supports the FRC’s growing body of evidence on those areas where companies report well and where improvements could be made. That evidence will help inform the work of the FRC as it consults on revisions to the Corporate Governance Code next year.
Investment Funds / Collective Investment Schemes (CIS) / Asset Management
SEC adopts rules to enhance proxy voting disclosure by registered investment funds and require disclosure of “Say-on-Pay” votes for institutional investment managers
On 2 November 2022, U.S. Securities and Exchange Commission (SEC) adopted rules to enhance proxy voting disclosure by registered investment funds and require disclosure of “Say-on-Pay” votes for institutional investment managers.
The amendments will make these funds’ proxy voting records more usable and easier to analyze, improving investors’ ability to monitor how their funds vote and compare different funds’ voting records. The rulemaking will also newly require institutional investment managers to disclose how they voted on executive compensation, or so-called “say-on-pay” matters, which fulfills one of the remaining rulemaking mandates under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
For nearly 20 years, registered funds have been required to disclose their proxy voting records on Form N-PX, but, prior to today’s amendments, investors have faced difficulties analyzing these reports. For example, funds were not previously required to disclose votes in a consistent manner or in a format that is machine-readable.
To enhance proxy vote reporting, the amendments will require funds and managers to categorize each matter by type and, where a form of proxy or “proxy card” subject to the Commission’s proxy rules is available, tie the description and order of voting matters to the issuer’s form of proxy to help investors identify votes of interest and compare voting records. The changes also prescribe how funds and managers must organize their reports and require them to use a structured data language to make the filings easier to analyze. Funds and managers will also be required to disclose the number of shares that were voted or instructed to be voted, as well as the number of shares loaned and not recalled and thus not voted. This latter requirement is designed to provide shareholders with context to understand how securities lending activities could affect a fund’s or manager’s proxy voting practices.
The new rules and form amendments will be effective for votes occurring on or after July 1, 2023, with the first filings subject to the amendments due in 2024.
ANBIMA publishes Guide to Hiring Third Parties and the Cloud
On 30 November 2022, Brazilian Financial and Capital Markets Association (ANBIMA) published Guide to Hiring Third Parties and the Cloud.
The document was created to guide institutions to reduce risks by hiring external data storage services and external collaborators for the information technology area.
The new environment, whose use was intensified during the covid-19 pandemic, accelerated the trend of contracting cloud computing services by institutions around the world and turned on the yellow light from regulators in several countries, increasingly concerned about the security of data stored and computed virtually.
The guide is not mandatory compliance but is an ally in the selection of providers of this type of service. With language accessible not only to IT professionals, but the material also reinforces general concepts about cloud computing, deployment models, and existing service types. Also included was a due diligence questionnaire template that institutions can apply to their suppliers before, during and after contracting the service. The list contains topics to attest that the service provider conducts periodic backup testing and employee-facing information awareness actions, as well as verifying that it has a cybersecurity incident response plan.
BACEN publishes CMN Resolution No. 5,043 on Discipline participation in the country and abroad, and the installation of dependencies, abroad, by financial institutions and other institutions
On 25 November 2022, Banco Central do Brasil (BACEN) published CMN Resolution No. 5,043 on discipline participation in the country and abroad, and the installation of dependencies, abroad, by financial institutions and other institutions.
This Resolution regulates participation in the country and abroad, and the installation of dependencies, abroad, by financial institutions and other institutions authorised to operate by the Central Bank of Brazil.
§ 1 resolution does not apply to credit unions.
§ 2 To effects of the provisions of this Resolution, overseas dependencies are considered to be the agencies and representative offices.
Art. 2nd The provisions of Chapters II, III, IV and VI of this Resolution shall not apply:
I - the typical equity holdings of investment portfolios maintained by investment banks, investment banks, development agencies and by multiple banks with a portfolio of investment or development;
II - equity interests in the country, temporary assets, not recorded in permanent and unconsolidated assets, in the form of existing regulations; and
III - equity interests in financial institutions and institutions, abroad, carried out in the exclusively for the purpose of gaining access to financing instruments export and international transfer of resources.
They are revoked:
I - Resolution No. 2,723 ofMay 31, 2000;
II - Resolution No. 4,062, March 29, 2012;
III - Resolution No. 4,403, 26 March 2015; and
IV - Resolution No. 4,777, January 29, 2020.
This Resolution enters into force on 1 January 2023.
Foreign Exchange Market (FOREX, FX)
BACEN publishes CMN Resolution No. 5,042 on guidelines for operations in the foreign exchange market
On 25 November 2022, Banco Central do Brasil (BACEN) published CMN Resolution No. 5,042 on guidelines for operations in the foreign exchange market.
It establishes the guidelines that must be observed for the execution of operations in the foreign exchange market.
The provisions of this Resolution also comprises the guidelines on the entry into the country or the departure of the country of foreign currency by means of an institution authorized to operate on the exchange rate.
I - the Circular No. 24 of February 25, 1966;
II - Resolution No. 4,033 of November 30, 2011; and
III - art. 3 of CMN Resolution No. 4,948 of September 30, 2021.
This Resolution enters into force on 31 December 2022.
Investment Funds / Collective Investment Schemes (CIS) / Asset Management
BACEN publishes BCB Resolution No. 256 on Available Electronic Transfer (TED)
On 1 November 2022, Banco Central do Brasil (BACEN) published BCB Resolution No. 256 on Available Electronic Transfer (TED).
This Resolution regulates Available Electronic Transfer (TED), order of transfer of funds.
Order for the transfer of funds, for the purposes of this Resolution, is the order by which it is commanded, in a system of settlement of the transfer of funds, the transfer between accounts of liquidation of participants.
They are revoked:
I - the Circular No. 3,115 of April 18, 2002;
II - the § 1 of Art. 3 of Circular No. 3,335, 2006;
III - the arts. 3rd and 4th of Circular No. 3,439 of March 2, 2009;
IV - the Circular No. 3,534 of May 6, 2011;
V - a Circular No. 3,552 of July 26, 2011; and
VI - the Circular No. 3,710 of July 21, 2014.
This Resolution enters into force on 1 December 2022.
BACEN publishes BCB Resolution No. 267 amending the Regulation annexed to Circular No. 3,743 of January 8, 2015
On 25 November 2022, Banco Central do Brasil (BACEN) published BCB Resolution No. 267 amending the Regulation annexed to Circular No. 3,743 of January 8, 2015.
It amends the Regulation annexed to Circular No. 3,743 of January 8, 2015, discipling the requirement of governance structure for interoperability between registration systems that offer the registration of the same type of financial asset to create burdens and encumbrances on these assets.
§ 1 of Article 1 of the Regulation annexed to Circular No. 3,743 is revoked, 2015.
This Resolution enters into force on December 1, 2022.
CVM publishes CVM Resolution 172 on disclosing the statement of composition and portfolio diversification
On 1 November 2022, Comissão de Valores Mobiliários (CVM) published CVM Resolution 172 on disclosing the statement of composition and portfolio diversification.
The Brazilian Securities and Exchange Commission (CVM) publishes today, 1/11/2022, CVM Resolution 172, which promotes temporary changes, on an experimental basis, in regulatory requirements related to the sending and advertising of the portfolio composition and diversification statement (CDA) provided for in CVM Instruction 555.
The easing applies only to investment funds classified as shares – assets and as equity pension stakes – active shares, as defined in the Rules and Procedures for Classifying Funds 555, prepared by ANBIMA.
Such funds may omit, for up to 180 days, the identification and quantity of securities in the CDA, without the need to send a reasoned request to cvm to promote concealment (in the form of Art. 56, § 3, II, CVM Instruction 555).
In addition, the CDA sent to cvm pursuant to Article 59, II, "b", cvm instruction 555, will be made available on the CVM website, on a quarterly basis (civil calendar basis), and the obligation to send the CDA monthly remains unchanged.
Important: this new periodicity will become effective only after the implementation of adjustments in the system that welcomes this document, which will be the subject of communication by the Superintendence of Supervision of Institutional Investors (SIN).
Entry into force
The term of CVM Resolution 172 begins on 1/12/22, except for the quarterly disclosure of the CDA, provided for in art. 3, sole paragraph, of CVM Resolution 172.
CVM publishes CVM/SIN Circular Letter 8/2022
On 9 November 2022, Comissão de Valores Mobiliários (CVM) published CVM/SIN Circular Letter 8/2022.
The objective is to disseminate the interpretation of the technical area on the application of Art. 47, I, of CVM Instruction 555, which exempts the holding of general meetings of quota holders for changes in regulation in some cases. Among them, registration updates of service providers or to adapt to regulatory changes of the CVM itself and self-regulators.
New calendar for the regular operation of B3 environments
According to the technical area, the document provides clarification after B3, through its self-regulation, to change the criterion of operation of its trading environments. In practice, they will operate on municipal or state holiday days that impact São Paulo. The first specific case will take place on 1/25/2023.
In this context, SIN clarifies its interpretation that the use of the prerogative provided for in Art. 47, I of CVM Instruction 555 is appropriate in order to adjust, by the administrator's own act, the definition existing in the regulations of investment funds as a holiday on such days. Thus, the regulations may also consider as business day the opening dates for trading of the stock markets in which the fund act without convening an assembly to do so.
CVM publishes Circular Letter CVM/SIN/SSE 03/22
On 30 November 2022, Comissão de Valores Mobiliários (CVM) published Circular Letter CVM/SIN/SSE 03/22.
The Brazilian Securities and Exchange Commission (CVM) and the Brazilian Internal Revenue Service (RFB) today, 11/30/2022, announced the system for the Registration of Foreign Investors and Investment Funds via Redesim. The measure streamlines the process of granting CNPJ to non-residents and funds and marks the first complete integration of a federal agency with Redesim, an online registration service.
CVM has already been using exclusively the platform for registration of foreigners and, from 12/12/2022, also the API for the registration of investment funds. The new application will allow the CNPJ to be obtained in real time, that is, throughout the process of registration of the investor or fund in the CVM.
How it's going to work?
Representative of the non-resident investor (INR) or fund administrator makes the application for registration with cvm.
Internally, CVM activates the application of the RFB with the data sent.
Application returns the CNPJ.
CNPJ granted appears on the investor's registration screen for the representative, or from the fund to the administrator.
ANBIMA publishes deadline for FIP managers to resubmit data to ANBIMA
On 30 November 2022, Brazilian Financial and Capital Markets Association (ANBIMA) published deadline for FIP managers to resubmit data to ANBIMA.
From January 2, 2023, FIP (Equity Investment Funds) managers should send their quarterly and annual data to ANBIMA. Currently, this industry has more than R$ 614.8 billion in equity and about 1,500 funds.
Provided in the Third Party Resource Management Code, the reports had been suspended in March 2022 for the reformulation of the shipping system and the database. The restructuring will allow the data sent by the managers to be consolidated and enriched, resulting in the production of reports and studies.
Managers have until February 28 to forward annual data for 2022 and the four quarters of last year. Then, reports must be made every three months, always based on the previous quarter – deadlines will still be set. Shipments, with registration data of the invested companies and details about the investment vehicle and its quota holders, must be made by the receiving system ANBIMA Input.
The new base will reduce the cost of compliance (expenses to meet regulatory and self-regulatory obligations) of the market, as managers will invest less time in filling the fields.
ANBIMA Input will be the data sending system used by the players. It was defined by future search users with nearly 400 managers able to manage FIPs that follow the rules of our code. With simple and intuitive layout, the tool has real-time analysis and tells you, in seconds, whether the uploaded file differs from the formatting and filling rules. The platform also generates reports, which facilitate the debugging and correction of data without the need to receive questions and letters from the Association, thus reducing any fines for error.
ANBIMA also publishes the list with the required fields for completion and a preview of the operational manual of the new base. Later this year, after the end of the pilot project, ANBIMA will disseminate the complete guidance material that institutions will be able to access whenever necessary.
Listing / Trading rules
CVM publishes CVM Resolution 173 on amendments after the revision of the regulatory framework of public offerings for the distribution of securities
On 30 November 2022, Comissão de Valores Mobiliários (CVM) published CVM Resolution 173 on amendments after the revision of the regulatory framework of public offerings for the distribution of securities.
The Brazilian Securities and Exchange Commission (CVM) today, 11/29/2022, publishes CVM Resolution 173, which amends CVM Resolutions 80, 160 and 161, promoting specific corrections to these rules, due to interactions with market participants after the reform of the rules of public offerings for the distribution of securities, which occurred in July of this year.
CVM Resolution 173 modifies the rules in force in four points:
Amendment of CVM Resolution 80: so that issuers are not required to resubmit the reference form when making a public offer subject to the rite of automatic registration that is intended for professional investors. Thus, the procedure that is already observed in relation to offers governed by CVM Instruction 476 is maintained.
Adjustments in CVM Resolutions 160 and 161:to replace the term "related parties" with "related persons", which is already employed in the standard with similar objective, in addition to bringing greater clarity about the agents included in the definition of "linked persons".
Adjustments to CVM Resolution 160:
i) to clarify the scope of the fence to the trading of securities subject to public offering, without modifying the merits of this fence, in the way historically interpreted by cvm.
ii) to allow the benefit of the automatic registration rite originally provided for encouraged debentures issued by specific purpose companies may be applied to debentures issued by all agents capable of issuing such debentures, pursuant to Law 12,431.
Because it involves only punctual and low-impact changes, CVM Resolution 173 was not submitted to public consultation or regulatory impact analysis.
CVM Resolution 173 enters into force on 1/2/2023.
Sustainable Finance / Green Finance
BACEN publishes BCB Normative Instruction No. 328 on Instructions for completion and layout of the code document 2030 - Document of Social, Environmental and Climatic Risk (DRSAC)
On 23 November 2022, Banco Central do Brasil (BACEN) published BCB Normative Instruction No. 328 on Instructions for completion and layout of the code document 2030 - Document of Social, Environmental and Climatic Risk (DRSAC).
It changes the Instructions for completion and the Layout of the code document 2030 - Document Social, Environmental and Climate Risk (DRSAC), which deals with the BCB Regulation No. 222 of December 28, 2021.
The Social, Environmental and Climate Risk Document (DRSAC), regulated by BCB Normative Instruction No. 222 of December 28, 2011. 2021, on the basis of BCB Resolution No. 151 of 6 October 2021, is based on to capture data related to social risk, environmental risk and social risk. climate risk incurred by the institution in its exposures in securities, and their respective debtors.
The present IN BCB establishes changes that make drsac layout leaner while avoiding replication of risk exposure information to sectors of activity economic, brings adjustments to the filling instructions for these changes, as well as promotes the correction of some fields (tags) and layout attributes. In the previous version of the Layout, information on exposure to risk related to the client's economic sector was declared together with the other information of each client, which caused the the repetition of the same information relating to an economic sector by multiple times, if there was more than one customer in the same economic sector.
In the layout proposed in this IN BCB, information on exposure to the risk of economic sectors were moved to a specific section, in which each sector is declared only once, allowing customers belonging to the to that sector refer them through their CNAE (National Classification Economic Activities) in common. The adjustments implemented here in place are punctual and do not bring any innovation in relation to the information currently required.
This Normative Instruction shall enter into force on 1 December 2022.
CVM publishes CVM/SEP Circular Letter 05/2022 on sending of the Integrated Report through the Empresas.NET system
On 23 November 2022, Comissão de Valores Mobiliários (CVM) published CVM/SEP Circular Letter 05/2022 on sending of the Integrated Report through the Empresas.NET system.
The Superintendence of Business Relations (SEP) of the Brazilian Securities and Exchange Commission (CVM) today, 11/23/2022, the CVM/SEP Circular Letter 05/2022, which advises on the sending of the Integrated Report through the Empresas.NET system.
Starting today, companies must forward the document through the new category, called Integrated Reporting, created specifically for sending this file, provided for in CVM Resolution 14. Previously, companies disclosed the information through other categories, such as the so-called "Sustainability Report".
Other reports or specific documents related to ASG issues may continue to be disclosed as previously.
About Integrated Reporting
With the edition of CVM Resolution 14, Guidance CPC 09 – Integrated Report, issued by the Accounting Pronouncements Committee (CPC), became mandatory for publicly held companies, when deciding on the preparation and disclosure of the Integrated Report (which should be subject to limited assurance by an independent auditor registered with cvm).
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.
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
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)
CACEIS Group Communications
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