CACEIS February 2024




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

EU publishes Regulation 2024/595 on AML/CFT Central Database (EuReCA Database)


  • On February 16 2024, the European Union published a Commission Delegated Regulation (EU) 2024/595 of November 9 2023 supplementing Regulation (EU) No 1093/2010 of the European Parliament and of the Council with regard to regulatory technical standards (RTS) specifying the materiality of weaknesses, the type of information collected, the practical implementation of the information collection and the analysis and dissemination of the information contained in the anti-money laundering and counter terrorist financing (AML/CFT) central database referred to in Article 9a(2) of that Regulation.

    Article 9a(2) of Regulation (EU) No 1093/2010 requires the European Banking Authority (EBA) to establish and keep up to date a central database of information collected in accordance with Article 9a(1), point (a), of that Regulation. As a result, specifying how information is to be analysed and made available to reporting authorities on a need-to-know and confidential basis, as required by Article 9a(3) of that Regulation, inevitably relates to the specification of details for setting up that central database.

    It is necessary to specify the corresponding situations where weaknesses may occur. Supervision includes all relevant activities, without prejudice to national competences, of all reporting authorities to be carried out pursuant to the sectoral legislative acts, and is, hence, diverse. Therefore, the corresponding situations should be specified having regard to the supervisory activities performed by the different reporting authorities.

    To determine the materiality of a weakness, it is necessary to set out its general definition and a non-exhaustive list of criteria to specify that definition further. Such definition and list of criteria are necessary to achieve on the one hand a harmonised approach in the application of that general definition, while on the other hand to ensure that all material weaknesses, within the meaning of the general definition, are captured taking into account the specific context.

    Prudential authorities should, as part of the general information that they are to report, provide information on the result of the relevant risk assessment of any supervisory review process and of any other similar process affected by the money laundering and terrorist financing risk of the financial sector operator together with information on any negative final assessment or negative decision on applications for authorisation, where such assessment or decision is also based on the grounds of money laundering and terrorist financing risks.

    This Regulation enters into force on March 7 2024.

  • EU Council and EP reach deal on AMLA seat in Frankfurt


  • On February 22 2024, the Council of the European Union and the European Parliament reached a deal on the European authority for anti-money laundering and countering terrorist financing (AMLA) seat in Frankfurt.

    AMLA will begin operations mid-2025. It will have over 400 staff members.

    The new authority is the centrepiece of the reform of the EU’s anti-money laundering framework. AMLA will have direct and indirect supervisory powers over obliged entities and the power to impose sanctions and measures.

    Regarding the location of the authority, the Council and the Parliament worked together to ensure a selection process that is transparent, fair and equitable to all candidates.

    The location of the seat will be included in the AMLA regulation and formally adopted as part of the text.

  • Data protection / General Data Protection Regulation (GDPR) / ePrivacy Regulation (ePR)

    EDPB launches coordinated enforcement action on GDPR right of access


  • On February 28 2024, the European Data Protection Board (EDPB) launched a coordinated enforcement action on the right of access.

    Throughout the year, 31 Data Protection Authorities (DPAs), including 7 German State-level DPAs, across the EEA will take part in this initiative on the implementation of the right of access.

    During its October 2023 plenary, the EDPB selected the right of access for its third coordinated enforcement action, as it is at the heart of data protection and one of the most frequently exercised data protection rights, and one which DPAs receive many complaints about. In particular, it enables individuals to check whether their personal data is processed in a compliant manner by organisations. In addition, it often enables the exercise of the other data protection rights, such as the right to rectification and erasure.

    In 2023, the EDPB adopted Guidelines on data subject rights - Right of access to help organisations respond to data access requests from individuals in line with the requirements set out in the General Data Protection Regulation (GDPR). 

    To gauge how organisations are complying with the right of access in practice, participating DPAs will implement the Coordinated Enforcement Framework (CEF) in a number of ways:

    • organisations will be sent questionnaires to aid fact-finding exercises or to identify if a formal investigation is warranted;
    • commencement of a formal investigation; and/or
    • follow-up of ongoing formal investigations.

    The results of the joint initiative will be analysed in a coordinated manner and the DPAs will decide on possible further supervision and enforcement actions. In addition, all results will be aggregated, generating deeper insight into the topic and allowing targeted follow-up at EU level. The EDPB will publish a report on the outcome of this analysis once the actions are concluded.

  • European Market Infrastructure Regulation (EMIR)

    ESMA updates Q&As on EMIR


  • On February 2 2024, the European Securities and Markets Authority (ESMA) updated its Q&As on European Market Infrastructure Regulation (EMIR).

    The Q&As are as follows:

    • Question: Which parties have to report ETD contracts?
    • Answer: One of the main purposes of the EMIR reporting obligation is to enable the authorities to identify and analyse risk positions, although the reports will have other uses as well. Therefore, an authority analysing EMIR reports would expect to see the counterparties where the risk lies once the contract has been concluded.

    Under the principal clearing model, upon clearing, the risk lies on the clearing member (“CM”) vis-à-vis the CCP and on the client of the CM vis-à-vis the CM. Under this clearing model, when the client of the CM is an investment firm, the latter bears the risk arising from the derivative transaction vis-a-vis the CM, regardless of the investment service provided to its own clients.

    • Question: Guidelines on reporting under EMIR REFIT clarify that under Collateralise-to-Market model (CTM) the counterparties should report total variation margin and total collateral, whereas under the Settle-to-Market model the counterparties should report the daily change in the variation margin and the collateral. In which field counterparties should report whether the portfolio of cleared derivatives is collateralised under CTM or STM model?
    • Answer: There is no separate field to report which model has been used for a given portfolio. In order to ensure that data users can interpret correctly the reported values, the counterparties should indicate it as part of the collateral portfolio name by using prefix ‘STM’ where the Settle-to-Market model is used.
    • Question: Are the reporting counterparties and entities responsible for reporting expected to update during the transition period any client codes not compliant with the requirements set out under EMIR REFIT?
    • Answer: Yes, counterparties and entities responsible for reporting are expected to update all fields (except for UTIs) at the latest by the end of the 180-day transition period, or earlier whenever a relevant lifecycle event needs to be reported.

    Given that the modification of a client code once it has been reported is not allowed, the counterparties and entities responsible for reporting should apply in this case the procedure for the update of the identifier set out in the Article 8 of the ITS on reporting and described in the ‘Procedure when a counterparty undergoes a corporate action’ Section in the Guidelines. TRs may reach proactively to their clients to coordinate and facilitate update of the client codes. It should be noted that the procedure for update of client codes concerns only outstanding derivatives. If counterparties need to revive a derivative with a legacy client code, they should do so (it is allowed under the validation rules) and subsequently request the TR to update the client code in line with the procedure.

    • - Question: How should a counterparty falling within scope of Article 1(4)(a) and (b) of Regulation (EU) No 648/2012 be reported under Field 11 of Table 1 of the RTS on reporting under EMIR REFIT, ‘Nature of Counterparty 2’?
    • Answer: In the eventuality that a counterparty falling within scope of Article 1(4)(a) and (b) of EMIR is identified as the ‘Other Counterparty’, they should be classified as ‘Other’ in Field 11 of Table 1 of the RTS on reporting under EMIR REFIT, ‘Nature of Counterparty 2’.
    • Question: As clarified in the Guidelines on transfer of data between Trade Repositories under EMIR and SFTR , in the case of transfer of data requested by a TR participant the TRs should transfer only the latest state of the outstanding derivatives (‘Trade State Report’, TSR). Are the TRs expected to follow this guideline with regards to the notional schedules, given that the TSR will not contain the full schedules (for the notional quantity, amount etc.) but only the currently applicable value?
    • Answer: Yes, TRs should follow the Guidelines on transfer of data also with regards to the schedule information and port only the TSR which does not include the entire schedule information.

    To ensure accurate representation of the schedule values in the TSR generated by the new TR, a counterparty should report to the new TR a modification containing the complete schedule information which will enable the new TR to update the TSR with the relevant values.

    • Question: Table 102 of the Guidelines specifies that GLEIF database should be used to determine the access rights of the relevant members of the ESCB, including the ECB in carrying out its tasks within a single supervisory mechanism, when applying the filtering for the fields 2.144 ‘Reference entity’, 1.4 ‘Counterparty 1 (Reporting counterparty’, 1.9 ‘Counterparty 2’, 1.15 ‘Broker ID’ and 1.16 ‘Clearing member’. Should the authorities in question have also access to the derivatives involving subsidiaries of the relevant entities and, if so, how the access rights should be determined?
    • Answer: Yes, the members of ESCB, as well as any other authority covered under Article 2(11) and 2(13) of RTS 151/2013, should have access to transaction data on derivatives in which the subsidiaries of the entities falling under their supervision are involved. To determine whether an entity is a subsidiary of a supervised entity, the trade repositories should use the relationship data (so called Level 2 data) in GLEIF database.
  • EU Council and EP reach Provisional Agreement on EMIR 3.0


  • On February 7 2024, the Council of the European Union and the European Parliament reached a provisional agreement on review of European Market Infrastructure Regulation (EMIR) 3.0.

    The review aims to make the EU clearing landscape more attractive and resilient, to support the EU’s open strategic autonomy and to preserve the EU’s financial stability.

    The EMIR lays down rules on over-the-counter (OTC) derivatives, central counterparties (CCPs) and trade repositories. The proposed EMIR review contains several legislative measures to improve EU clearing services, notably by streamlining and shortening procedures, improving consistency between rules, strengthening CCP supervision and requiring market participants of substantial systemic importance, who are subject to a clearing obligation, to have an operationally active account at an EU CCP.

    The Council and Parliament ensured that in practice it is feasible for supervisory authorities to apply streamlined supervisory processes, such as authorisation and validation procedures.

    The provisional agreement strengthens cooperation, coordination and information sharing among supervisors and ESMA, while ensuring an appropriate division of tasks between national authorities and ESMA.

    The agreement also strengthens the role of ESMA providing it with a coordination role in emergency situations, while providing clarity that ultimate decision making powers are the responsibility of the national competent authorities.

    ESMA will also take the role of co-chair of supervisory colleges together with the relevant national competent authorities, who will keep ultimate decision making powers. Furthermore, ESMA will be informed about and may request to be invited to on-site examinations and provide opinions in an extended range of areas.

    The provisional agreement sets a solid active account requirement (AAR) that will require certain financial and non-financial counterparties to have an account at an EU CCP, which includes operational elements such as the ability to handle the counterparty’s transactions at short notice if need be and activity elements so that the account is effectively used.

    This is ensured by a number of requirements, which have to be fulfilled by these accounts, including requirements for counterparties above a certain threshold to clear trades in the most relevant sub-categories of derivatives of substantial systemic importance defined in terms of class of derivative, size and maturity. Furthermore, a Joint Monitoring Mechanism is created to keep track of this new requirement.

    The provisional political agreement is subject to approval by the Council and the Parliament before going through the formal adoption procedure and entering into force.

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

    EU Council and EP reach Provisional Agreement on AIFMD II and UCITSD VI


  • On February 7 2024, the European Parliament and EU Council confirmed deal on Alternative Investment Fund Managers Directive (AIFMD) and to the Directive relating to undertakings for collective investment in transferable securities (UCITSD).

    The updates will strengthen investor protection, improve company’s access to finance from sources other than banks, better tackle greenwashing, and help complete the customs market union by limiting national approaches, when it comes to the marketing of alternative investment funds (AIFs).

    The updated legislation also contributes to the agenda of completing the capital markets union in that it removes provisions which allowed member states to adopt their own rules, leading to discrepancies across the EU. For example, MEPs insisted and secured that the rules on funds that make loans should apply differently for funds that part-own the companies in question – so-called shareholder loans. This will ensure a uniform exemption across the EU. Members of the European Parliament (MEPs) also secured harmonised rules regarding the notifications to be made concerning the use of liquidity management tools.

    The updates improve protection of investor interests by ensuring that the investment fund managers, which delegate their functions to third parties, adhere to the same high standards applicable across the Union. There will also be more information automatically provided at the time of a fund manager's authorisation about the delegation arrangements they intend to put in place.

    The rules will also facilitate liquidity risk management by managers of open-ended alternative investment funds and retail funds, requiring them generally to have at least two liquidity management tools to cover situations when liquidity issues arise (such as when many investors wish to redeem their investments at the same time).

    The updates also seek to fight ‘greenwashing’ and ensure that investors are not misled into investing into funds that pretend to be ‘green’ but are not so. ESMA is tasked to produce guidelines on when the names of funds could be unfair, unclear or misleading to the investor.

    The new rules introduce common minimal rules regarding direct lending by AIFs to companies. These rules will allow loan-originating funds to operate cross-border and ensure that they can be an alternative source of funding for companies in addition to bank lending. The updates foster growth and competitiveness of loan industry in Europe to have a better market with clear-targeted rules.

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

    EU Council adopts MiFIR II and MiFID III


  • On February 20 2024, the Council of the European Union adopted the new rules on Markets in Financial Instruments Directive/Regulation (MiFID/R).

    The new rules will give investors better access to the market data necessary to invest in financial instruments and increase the global competitiveness of the EU’s capital markets and ensure a level playing field.

    Currently, trading data is scattered across multiple platforms, such as stock exchanges and investment banks, making it difficult for investors to access the accurate and up-to-date information they need to take decisions.

    The rules adopted establish EU-level ‘consolidated tapes’, or centralised data feeds for different kinds of assets, bringing together market data provided by platforms on which financial instruments are traded in the EU. The consolidated tapes will aim to publish the information as close as possible to real time.

    As a result, investors will have access to up-to-date transaction information for the whole of the EU. This will make it easier for both professional and retail investors to access key information such as the price of instruments and the volume and time of transactions.

    The new rules also impose a general ban on ‘payment for order flow’ (PFOF), a practice through which brokers receive payments for forwarding client orders to certain trading platforms. Member states where the practice of PFOF already existed may allow investment firms under its jurisdiction to be exempt from the ban, provided that PFOF is only provided to clients in that member state. However, this practice must be phased out by June 30 2026.

    The review also introduces new rules on commodity derivatives.

    This is the final step of the adoption procedure. The texts will be published in the EU’s Official Journal and enter into force 20 days later. The regulation will apply immediately in all EU countries, whereas the member states will have 18 months to bring into force the laws, regulations and administrative provisions necessary to comply with the directive.

  • ESMA updates Q&As on MiFIR


  • On February 2 2024, the European Securities and Markets Authority (ESMA) updated its Q&As on Markets in Financial Instruments Regulation (MiFIR).

    The question is as follows:

    • How are different national identifiers specified in Annex II of RTS represented?

    Answer: The table shows the list of national client identifiers for natural persons to be used in transaction reports pursuant to the priority specified in Annex II of the Commission Delegated Regulation (EU) 2017/590. Information related to the format of the identifier is not provided in the case of CONCAT, since the procedure for generating such identifier is defined in Articles 6(1) and 6(4) of the Commission Delegated Regulation (EU) 2017/590.

  • ESMA clarifies Best Execution Reporting Requirement under MiFID II


  • On February 13 2024, the European Securities and Markets Authority (ESMA) published a public statement on deprioritisation of supervisory actions on the obligation to publish Regulatory Technical Standards (RTS) reports in light of the agreement on the Markets in Financial Instruments Directive/Regulation (MiFID II/MiFIR) review.

    Through this new public statement, ESMA aims at promoting coordinated action by National Competent Authorities (NCAs) in relation to the obligation by investment firm to publish some reports on best execution in accordance with Article 27(6) MiFID II.

    In particular, Article 27(6) MiFID II requires investment firms to make public the top five execution venues where they executed client orders in the preceding year and information on the quality of execution obtained. This Public Statement is adopted in the context of the agreement on the MiFID II/MiFIR review between the Council of the European Union and the European Parliament, which results in the deletion of Article 27(6) MiFID II.

    On June 29 2023, the Council of the European Union and the European Parliament reached a political agreement concerning the MiFID II/MiFIR review. In its plenary meeting on January 16 2024, the European Parliament adopted the agreed MiFID II/MiFiR review Level 1 texts. The adopted text of the MiFID II review includes the deletion of the reporting obligation for investment firms set out in Article 27(6) of MiFID II to publish annually information on the identity of execution venues and on the quality of execution. 

    The so-called RTS 28 further specifies the content and format of this information (RTS 28 reports). Originally RTS 28 reports intended to provide investors with information on the execution quality which investment firms have actually achieved. However, according to Recital 8 of the MiFID II review amending Directive, evidence and feedback from stakeholders have shown that those reports are hardly read and do not enable investors or other users of those reports to make meaningful comparisons based on the information provided in them.

    After the date of entry into force of the new Directive amending MiFID II, Member States will have 18 months to transpose it into national law. Consequently, despite the deletion of the RTS 28 reporting obligation on the basis of the rationale explained by Recital 8 of the amending Directive, investment firms may still need to make public these reports in 2024 and until the date of transposition of the directive in the respective Member State.

    In light of this the public statement provides that ESMA expects NCAs not to prioritise supervisory actions towards investment firms relating to the obligation to publish RTS 28 reports.

  • ESMA updates Q&A on MiFID II


  • On February 12 2024, the European Securities and Markets Authority (ESMA) updated its Q&A on Markets in Financial Instruments Directive II (MiFID II).

    The question is as follows:

    • Are there technical circumstances related to securitised derivatives under which it can be considered that a market maker posting one-way quotes is considered to meet the obligations on market making agreements set out in Article 2 of RTS 8?

    The ESMA’s answer is as follows:

    • Article 2 of RTS 8 establishes a series of obligations for market makers including to post “simultaneous two-way quotes” in at least one financial instrument for at least 50% of daily trading hours during which continuous trading takes place.

    ESMA notes that for securitised derivatives there are instances where it is not technically possible for the market makers to offer both bid and offer quotes. This is the case where all the issued securities have been sold and no more securities can be issued under the prospectus, thus the market maker’s inventory is sold out. In such cases, the market maker is in the position to only post bid quotes for a securitised derivative. Only under this limited circumstance, the requirement to post “simultaneous two-way quotes” under Article 2 of RTS 8 is considered to be met.

    This is without prejudice to the exceptional circumstances referred to in Article 3 of RTS 8, under which market makers could provide one-way quotes.

  • Regulation on Credit Rating Agencies (CRAR)

    ESMA updates Q&As on CRA Regulation


  • On February 2 2024, the European Securities and Markets Authority (ESMA) updated its Q&As on the Credit Rating Agencies (CRA) Regulation.

    The Q&As are as follows:

    • Question: How should a CRA ensure a sufficient level of transparency when a credit rating is discontinued in accordance with Article 10(1)?
    • Answer: The discontinuation of a credit rating should be accompanied by an appropriate level of disclosure that includes the full reasons for the discontinuation. This information should be disclosed on a timely basis and in a non-selective manner.
    • Question: Is a different level of transparency expected when a credit rating is withdrawn?
    • Answer: ESMA expects that the level of transparency accompanying a withdrawal would not be less than that provided when a credit rating is discontinued. All credit ratings and rating outlooks should be presented and processed in accordance with the requirements of Section D of Annex I of the CRA Regulation. 
  • Regulation on digital operational resilience for the financial sector (DORA)

    EC publishes Draft Regulation (EU) supplementing DORA by specifying criteria for designation of ICT third-party service providers as critical for financial entities


  • On February 22 2024, the European Commission published a Commission Delegated Regulation (EU) supplementing Digital Operational Resilience Act  (DORA) by specifying the criteria for the designation of ICT third-party service providers as critical for financial entities.

    Article 1 specifies that supervisory costs borne by the EBA will be recovered. 

    Article 2 specifies how the annual supervisory fee will be determined for issuers of significant ARTs and EMTs.

    Article 3 specifies how fees are to be adjusted if there is a surplus or a deficit. 

    Article 4 provides for the general modalities of payment of the EBA fees. 

    Article 5 provides for the reimbursement of competent authorities if they undertake supervisory tasks allocated to them by the EBA. 

    Article 6 lays down the date of entry into force of the delegated act.

  • Regulation on Markets in Crypto-Assets (MiCA)

    ESMA updates Q&As on MiCA


  • On February 2 2024, the European Securities and Markets Authority (ESMA) updated its Q&As on Markets in Crypto Assets (MiCA).

    The questions and answers are as follows:

    • Question: Does Article 143 allow for new CASPs established between MiCA’s entry into force (June 2022) and December 30 2024 to continue providing crypto-asset services (under national applicable law) until July 1 2026 (assuming the MS allows the full duration of the grandfathering period)?
    • Answer: Yes. Article 143(3) of MiCA allows entities providing crypto services to benefit from grandfathering if they provided their services in accordance with applicable national law before 30 December 2024. There is no effective ‘date of initiation’ related to entry into force or other temporal constraint (i.e., if the entity providing crypto services began offering services in 2014, it would still be eligible for grandfathering).

    For those entities offering crypto services who did not provide such services (or exist as a legal entity) under any applicable laws before 30 December 2024, they will not benefit from grandfathering. To provide services in the transitional period (and after), they must acquire a MiCA authorisation.

    • Question: 1) Are entities benefiting from grandfathering eligible to passport their crypto services to other Member States? 2) Can an entity grandfathered to provide crypto services in one Member State provide cross-border activities in another Member State that has elected not to allow grandfathering (i.e., shortened or opted out of the transitional period)?
    • Answer: 1) No. Grandfathered entities do not benefit from an EU passport (unless they were to acquire a MiCA license starting from 2025 and therefore cease being a ‘grandfathered’ entity). Cross-border activities by an entity benefiting from grandfathering may occur only if the entity complies with relevant legislation applicable in both the home and host Member States. The provision of crypto-asset services during the transitional period should in any case always comply with the applicable national laws in the Member State where the services are provided.

    Indeed, the Anti-Money Laundering framework (AMLD5) does not offer a harmonised passporting regime, but certain Member States might allow in their national law the provision of crypto services from an entity established in another Member State.

    Therefore, during the transitional period of MiCA, the only possibility to offer cross-border services (beyond MiCA authorisation of course) would be in the scenario in which the national regimes of the home and host Member States (i.e., the Member State where the service is provided) allows.

    2) No. Entities benefiting from grand-fathering will be forbidden from conducting cross-border activities in Member States where the grandfathering clause is not (or no longer) applicable.

    For those entities offering crypto services who did not provide such services (or exist as a legal entity) under any applicable laws before 30 December 2024, they will not benefit from grandfathering. To provide services in the transitional period (and after), they must acquire a MiCA authorisation.

    • Question: Does the prohibition set out under Article 80(2) to receive "remuneration, discount or non-monetary benefit in return for routing orders received from clients" apply to the crypto-asset services of receiving and transmitting orders on behalf of clients as well as the execution of orders on behalf of clients?
    • Answer: Yes. Article 80(2) provides that “crypto-asset service providers receiving and transmitting orders for crypto-assets on behalf of clients shall not receive any remuneration, discount or non monetary benefit in return for routing orders received from clients [… ] to another crypto asset service provider”, meaning that it is prohibited to receive payments or benefits when providing the service of receiving and transmitting orders for crypto-assets on behalf of clients.

    In addition, Article 80(2) provides that “crypto-asset service providers receiving and transmitting orders for crypto-assets on behalf of clients shall not receive any remuneration, discount or non-monetary benefit in return for routing orders received from clients to a particular trading platform for crypto-assets…” meaning that it is prohibited to receive payments or benefits when providing the service of executing orders for crypto-assets on behalf of clients.

    • Question: What crypto-asset services can a credit institution provide under the notification procedure set out in Article 60 of MiCA?
    • Answer: A credit institution can provide any crypto-asset services on the basis of an Article 60 notification. 

    A credit institution however needs to submit a notification to its competent authority, including all the information listed in Article 60(7) (e.g. a program of operations, internal control mechanisms, procedures for segregation, custody, AML and ICT). In practice, if a credit institution holds no license for a type of service (e.g. custody), it may have difficulties to provide the information required in relation to this service.

    • Question: To which NCA should the notification foreseen under Article 60 of MiCA be submitted?
    • Answer: Article 60 notifications should be provided to the MiCA competent authority, namely the competent authority in charge of authorising crypto-asset service providers under Article 62. The notification may in addition be provided to the authority that authorised them under the relevant other EU financial legislation.
  • Securitisation Regulation

    EU publishes Regulation (EU) 2024/584 amending RTS laid down in Regulation (EU) 2019/1851 as regards homogeneity of underlying exposures in STS securitisations


  • On February 15 2024, the European Union published a Commission Delegated Regulation (EU) 2024/584 of November 7 2023 amending the regulatory technical standards laid down in Delegated Regulation (EU) 2019/1851 as regards the homogeneity of the underlying exposures in simple, transparent and standardised securitisations.

    Commission Delegated Regulation (EU) 2019/1851 lays down uniform criteria to determine the homogeneity of underlying exposures in simple, transparent and standardised (STS) securitisations.

    Regulation (EU) 2021/557 of the European Parliament and of the Council amended Regulation (EU) 2017/2402 to ensure that the Union securitisation framework provides for an additional tool to foster economic recovery in the aftermath of the COVID-19 crisis, inter alia, by introducing the possibility for on-balance-sheet securitisations to be recognised as STS securitisations.

    Unlike traditional securitisations, securitised exposures in an on-balance-sheet securitisation always remain on the originator’s balance sheet. In order for the exposures in a securitisation to be deemed homogeneous in accordance with the homogeneity criterion referred to in Article 1, point (c), of Delegated Regulation (EU) 2019/1851, the securitised exposures should be subject to similar servicing procedures, including monitoring, collecting and administering cash receivables, irrespective of whether they remain on the originator’s balance sheet, as in the case of on-balance-sheet securitisations, or on the SSPE’s balance sheet, as in the case of traditional securitisations. For this reason, the reference to ‘the asset side of the SSPE’ should be deleted in Article 1, point (c), of Delegated Regulation (EU) 2019/1851.

    Where the underlying exposures share similar characteristics and the associated underlying risks of exposures to enterprises and exposures to individuals are assessed on the basis of common methodologies and parameters, those exposures should be grouped in the same asset type.

    Originators or original lenders may assess the credit risk of auto loans and leases, and of credit card receivables granted to enterprises, using an approach more similar to that applied to exposures to individuals rather than corporate exposures. For that reason, it is necessary to amend the list of homogeneity factors related to the type of obligors for those asset types.

    This Regulation should apply to securitisations issued on or after March 6 2024. However, in order not to interfere with existing contracts concluded before the establishment of the amended homogeneity criteria, it is necessary to provide for a transitional regime for those contracts.

    One of the main principles underlying the amendment of Regulation (EU) 2017/2402 by Regulation (EU) 2021/557 was to ensure a high degree of consistency between the STS requirements for on-balance-sheet STS securitisations and the already existing STS requirements for asset-backed commercial paper (ABCP) and non-ABCP securitisations. It follows that rules for determining the homogeneity of the underlying exposures in on-balance-sheet STS securitisations should be aligned as much as possible with the rules that already exist for ABCP and non-ABCP STS securitisations. To facilitate a comprehensive assessment of all rules for determining the homogeneity of underlying exposures, and to provide easy access to those rules to the parties subject to the corresponding obligations, it is necessary to combine the regulatory technical standards on homogeneity for non-ABCP, ABCP and on-balance-sheet STS securitisations in a single Regulation.

    This Regulation enters into force and application on March 6 2024.

  • Sustainable Finance / Green Finance

    EU Council and EP reach provisional agreement on proposal for a regulation on ESG rating activities


  • On February 5 2024, the Council of the European Union and the European Parliament reached a provisional agreement on a proposal for a regulation on environmental, social and governance (ESG) rating activities.

    The proposal aims to boost investor confidence in sustainable products.

    ESG ratings provide an opinion on a company’s or a financial instrument’s sustainability profile, by assessing its exposure to sustainability risks and its impact on society and the environment. ESG ratings have an increasingly important impact on the operation of capital markets and on investor trust in sustainable products.

    The new rules aim to strengthen the reliability and comparability of ESG ratings by improving the transparency and integrity of the operations of ESG ratings providers and preventing potential conflicts of interests.

    Under the new rules, ESG rating providers will need to be authorised and supervised by the European Securities and Markets Authority (ESMA) and comply with transparency requirements, in particular with regard to their methodology and sources of information.

    The Council and the Parliament clarified the circumstances under which ESG ratings fall under the scope of the regulation, providing further details on the applicable exclusions. The agreement also clarifies the territorial scope of the regulation, by setting out what constitutes operating in the EU.

    The Council and Parliament agreed that if financial market participants or financial advisers disclose ESG ratings as part of their marketing communications, they will include information about the methodologies used in such ESG ratings on their website. This was done through an amendment of the Sustainable Finance Disclosure Regulation.

    The agreement clarifies that ESG ratings encompass environmental, social and human rights or governance factors. The agreement foresees the possibility to provide separate E, S and G ratings. However, if a single rating is provided, the weighting of the E, S and G factors should be explicit.

    ESG rating providers established in the EU will need to obtain an authorisation from ESMA. ESG rating providers established outside the EU that wish to operate in the EU will need to obtain an endorsement of their ESG ratings by an EU authorised ESG rating provider, a recognition based on a quantitative criterion or be included in the EU registry of ESG rating providers on the basis of an equivalence decision in relation to the country of its origin and following a dialogue held between ESMA and the relevant third-country competent authority.

    The Council and Parliament introduced a lighter, temporary and optional registration regime of three years for small undertakings and groups providing ESG ratings. Small ESG rating providers who opt in under the lighter regime will be exempted of paying ESMA supervisory fees. They will have to comply with some general organisational and governance principles, as well as transparency requirements vis-à-vis the public and users. They will also be subject to the powers of ESMA to request information and conduct investigations and on-site inspections. Upon exiting this temporary regime, small ESG rating providers will need to comply with all the provisions outlined in the regulation, including the requirements regarding governance and supervisory fees.

    For small ESG ratings providers, the agreement also provides that if the conditions are met, ESMA could decide to exempt an ESG rating provider from some of the requirements but only in duly justified cases and based on the nature, scale and complexity of the business of the ESG rating provider and the nature and range of the issuance of ESG ratings.

    The agreement introduces as a principle a separation of business and activities, with a possibility for ESG ratings providers not to set up a separate legal entity for certain activities, provided that there is a clear separation between activities and that they put in place measures to avoid potential conflicts of interests. However, this derogation would not apply to ESG rating providers that carry out consulting activities, audit activities and credit rating activities. ESG rating providers may nevertheless develop benchmarks if ESMA considers that sufficient measures have been put in place to address conflicts of interests.   

    The provisional political agreement is subject to approval by the Council and the Parliament before going through the formal adoption procedure. The regulation will start applying 18 months after its entry into force.



    Belgium publishes Royal Decree on rules of individual conduct referred to in Article 4§3 of Law on the establishment of an oath and a banking disciplinary regime


  • On February 7 2024, Belgium published a Royal Decree on the rules of individual conduct referred to in Article 4, § 3 of the Law of April 22 2019 on the establishment of an oath and a banking disciplinary regime.

    The Royal Decree published provides for the entry into force of this new system:

    • January 15 2025 for Fit & Proper persons and responsible managers active within credit institutions; and
    • July 15 2026 for Fit & Proper individuals and senior executives active in banking and investment banking agents; individual banking and investment services agents; and persons who, within credit institutions or agents in banking and investment services, take part directly in the exercise of banking activities on Belgian territory or provide banking services there.

    These persons will be required to comply with the ethical rules established by this order. They will also have to take an oath within a deadline to be set by a regulation of the Financial Services and Markets Authority (FSMA).

    The ethical rules place the concepts of honesty, integrity, competence and professionalism, as well as the interests of clients and their fair treatment.

    Banking service providers will, on the one hand, be subject to a common set of rules. For example, a banking service provider will not be able to conceal information that is useful to the customer or misrepresent the potential earnings associated with a banking product.

    On the other hand, responsible managers and fit & proper individuals will have to comply with requirements specific to their supervisory role. For example, they will have to refrain from inciting any behaviour that may infringe the requirements applicable to banking service providers or act appropriately if they become aware of such behaviour.

  • FSMA publishes Q&A on Banking Oath


  • On February 7 2024, the Financial Services and Markets Authority (FSMA) published its Q&A on the Banking Oath.

    The frequently asked questions and answers on the Banking Oath and the Disciplinary Regime for Banking Service Providers are as follows:

    • Who is affected?
    • Who are the persons who take direct part in the exercise of banking activities on Belgian territory or provide banking services there (Category 4)?
    • Who are the responsible managers (Category 2)?
    • What are banking service providers required to do?
    • What sanctions can be imposed on banking service providers?
    • Who pronounces disciplinary sanctions?
    • When is a disciplinary procedure initiated?
    • Who can make a complaint?
    • How does the disciplinary procedure work?
    • What does the Central Register of Disciplinary Sanctions and Professional Prohibitions contain?
    • What are the entities concerned required to do?
    • What is the list of banking service providers?
    • What sanctions can be imposed on the targeted entities?
    • When does this new disciplinary regime come into force?
  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    FSMA publishes Notice on designation of a depositary for UCITS


  • On February 28 2024, the Financial Services and Markets Authority (FSMA) published a Notice on the designation of a depositary for Undertakings for Collective Investment in Transferable Securities (UCITS).

    This Notice is addressed to undertakings for collective investment with variable number of units under Belgian law which meet the conditions of Directive 2009/65/EC.

    The applicable legislation requires the fund manager to designate a depositary for each UCITS it manages. The depositary function includes various tasks, some of which relate to the safekeeping of assets and the monitoring of the cash flows and assets of the UCITS.

    In order to act as a depositary, several conditions must be met. There must be a written contract between the custodian and the manager. This contract will govern certain aspects of their collaboration. In addition, the custodian must be adequately organised, taking into account the type of assets in its custody, in order to be able to carry out its legal duties.

    The FSMA has drawn up a questionnaire which sets out the aspects that it will take into account when assessing the designation of the UCITS depositary.

    The purpose of the questionnaire is to collect information from all managers on the following topics, among others:

    • The identification data of the depositary and the UCITS
    • The organization of the custodian
    • The content of the contract concluded with the custodian
    • The manner in which the custodian carries out the tasks assigned to him
    • The existence of possible delegation regimes

    Some questions were drafted from the custodian's point of view, others from the manager's point of view. The FSMA expects both parties to work closely together to complete this questionnaire.

  • FSMA amends registration and maintenance fees for UCITS and AIFs marketed in Belgium


  • On February 13 2024, the Financial Services and Markets Authority (FSMA) amended the registration and maintenance fees for UCITS and AIFs marketed in Belgium.

    The fees levied by FSMA in Belgium to cover their operational costs are governed by the Royal Decree of May 17 2012, as amended by the Royal Decree of March 28 2014. The FSMA has applied the 224 index to the registration and maintenance fees applicable to foreign UCITS and AIFs registered in Belgium. 

    Annual maintenance fees are to be paid within one month of the receipt of the FSMA invoice. Funds or sub-funds that are still authorised/notified for marketing in Belgium as of January 1 of the same year are subject to this fee.

    Initial registration fee for UCITS sub-fund distributed to retail investors is 471 euro, whereas to professional investors is 0 euro. Annual maintenance fee per UCITS sub-fund is 3,222 euro.

    Initial registration fee for AIF sub-fund distributed to retail investors is 471 euro, whereas to professional investors is 0 euro.

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

    FSMA publishes Survey Results on DORA


  • On February 2 2024, the Financial Services and Markets Authority (FSMA) published the survey results on the Digital Operational Resilience Act (DORA).

    A recent survey conducted by the FSMA aimed to enable the entities under its supervision to carry out an initial self-assessment of their readiness for the requirements of DORA, which entered into force on January 16 2023 and will apply from January 27 2025. This regulation is the new cornerstone of cybersecurity in the financial sector. Its objective is to enable financial entities to better manage their information and communication technology (ICT) risks in order to increase their resilience to cyber threats.

    The Commission's mixed assessment is that with an overall participation rate of around 50%, a significant proportion of the entities concerned have shown interest in these provisions and their commitment to integrate them into their organisation. The responses to this first survey were based on a self-assessment.

    Digital operational resilience seems to be a concept known to a significant proportion of the entities supervised by the FSMA. Preparatory work even seems to be well underway in some sectors of activity. Although a majority of financial entities appear to be aware of ICT risk, fewer financial entities report being able to detect, manage and, where appropriate, report any ICT-related incidents.

    Neither the establishment of an ICT risk management framework nor the definition of ICT risk management policies and procedures alone can ensure the digital operational resilience of a financial entity. Identifying vulnerabilities and ICT risks is therefore fundamental to ensure the effectiveness of the measures put in place. However, most companies do not yet have a comprehensive digital operational resilience testing program.

    Around 90% of respondents say they have a policy in place to ensure the continuity of their ICT activities. As part of its new supervisory powers, the FSMA will evaluate these policies and in particular ensure that they effectively resolve ICT-related incidents.

    94% of responding entities say they use external ICT service providers. Of those, however, half say they do not have a risk strategy for these providers.

    In particular, the FSMA will use these initial findings to guide future actions to support supervised entities in their preparation for this new regulatory framework. In particular, the FSMA will be able to carry out more detailed investigations to further assess the compliance of entities with the requirements of DORA. These initiatives will aim to measure and strengthen the digital operational resilience of financial sector players.


    Audit matter

    CVM issues Accounting and Audit Regulatory Agenda 2024


  • On February 27 2024, the Brazilian Securities and Exchange Commission (CVM) issued the Accounting and Audit Regulatory Agenda 2024.

    CVM's regulatory plan includes the enactment of three standards in 2024. One of them is the update and revision of CPC 09 through CVM Resolution 199. Later this year, CVM's Regulatory Agenda foresees:

    • the update and revision of CPC 18 (R2).
    • the edition of OCPC 10 - Accounting for Carbon Credits.

    In addition, the Regulatory Agenda also presents the topics that will go to public consultation without a Regulatory Impact Analysis (RIA):

    • Update and revision of ICPC 09
    • General Requirements for Disclosure of Financial Information related to Sustainability (standard converged to IFRS S1)
    • Climate-related disclosure (IFRS S2 converged standard)
    • Primary Financial Statements (standard converged to IFRS 18)
    • Changes in the Classification and Measurement of Financial Instruments (convergence to changes in IFRS 9 and IFRS 7)
    • Non-Public Interest Subsidiaries: Disclosure (IFRS 19 convergent standard)

    The planning for 2024 also foresees the development of other themes:

    • preparation of a Circular Letter to guide the market regarding aspects of investment fund accounting, in accordance with CVM Resolution 175
    • preparation of a Comment Letter to the IASB's Exposure Drafts, on the following subjects:
      1. Financial Instruments with Characteristics of Equity (IFRS 9 and IAS 32)
      2. Business Combinations - Disclosure, Goodwill and Impairment (IFRS 3 and IAS 36)
      3. Equity Method (IAS 28)
      4. Provisions - Targeted Improvements (IAS 37 and IFRIC 21)
      5. Use of a Hyperinflationary Presentation Currency by a Non-hyperinflationary Entity (IAS 21)
      6. Updating the Subsidiaries without Public Accountability: Disclosure Standard (IFRS 19)
      7. Power Purchase Agreements (IFRS 9)
  • Financial institutions

    ANBIMA supports research on social, racial and gender profile of largest financial institutions


  • On February 21 2024, the Brazilian Financial and Capital Markets Association (ANBIMA) published an article expressing its support to the research on the social, racial and gender profile of the largest financial institutions. 

    The initiative is part of the activities of the ANBIMA Diversity and Inclusion Network and the consolidation of its strategy on this topic.

    The survey analyzes the composition of the teams and the affirmative actions of the companies in relation to various criteria of diversity, equity and inclusion.

    The questionnaire seeks to map data on team composition by gender, race, age group, level of education and presence of people with disabilities, as well as on the implementation of general or specific affirmative policies and actions for the participation of women, black people, people with disabilities and those over 45 years of age. In addition, it brings a chapter on the manager's perception of the presence of people from minority groups in companies and includes analyses by experts in diversity and inclusion.

    The survey is anonymous, and the consolidated data that is released allows the houses to identify areas of improvement within each social marker. The publication of the study serves to foster debates and encourage good practices in companies in favor of the advancement of diversity. 

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

    ANBIMA informs on Fund Industry Revenues


  • On February 7 2024, the Brazilian Financial and Capital Markets Association (ANBIMA) informed on the Fund Industry's revenues.

    The Fund Industry achieved the best funding since April 2022.

    Investment funds recorded positive net inflows of BRL 49.8 billion in January, the best monthly result since April 2022, according to ANBIMA. In 2023, the industry ended the year with net redemptions of BRL 109.6 billion.

    However, the industry's result is still being driven mainly by the performance of the fixed income fund class, which recorded net inflows of R$67.3 billion in January, compared to outflows of R$47.5 billion in December last year. The types of fixed income funds that attracted the most funds were those that invest in short-term government securities (sovereign low-duration fixed income), with funding of R$36.6 billion, and those that invest in fixed income assets and derivatives (investment-grade free-duration fixed income), which received net inflows of R$8.3 billion.

    Pension funds recorded the second best net inflow in January, in the amount of R$2.4 billion. This is followed by FIDCs (Credit Rights Investment Funds), with a positive balance of R$2.1 billion, and FIPs (Private Equity Investment Funds), with R$705.2 million.

    Equity funds, on the other hand, recorded net redemptions of R$942.2 million in January, compared to a positive inflow of R$20.1 billion in December of the previous year. The type of equity fund that suffered the most losses, in the amount of R$ 921 million, was the active index, which aims to outperform the benchmark index of the stock market.

    Multimarket funds also suffered redemptions in the amount of R$20 billion. In December 2023, losses reached BRL 30.7 billion.

    Among all types of funds, foreign exchange funds had the best return in January, registering a gain of 2.28%, in line with the 1.8% rise of the dollar in the period.

    Among the fixed income class, the highlight was external debt funds, which reached a return of 1.73%.

    On the other hand, the strategy that achieved the best return among the multimarket funds was the neutral long short (focused on operations of assets and derivatives linked to the variable income market, setting up long and short positions), with products of this type registering a gain of 1.34%.

  • ANBIMA updates 2024 Priorities


  • On February 15 2024, the Brazilian Financial and Capital Markets Association (ANBIMA) published an update of its priorities in 2024.

    ANBIMA in Action is divided into four major agendas: Investor Centrality, Structuring, Services and Market Development.

    The investor has been gaining importance year after year in strategic agenda, ceasing to be a transversal agenda to take the leading role in the work of the Association. This new agenda concentrates four major initiatives that look specifically at the needs of investors as agents of transformation in the investment industry, whether individuals or institutional investors. The four pillars of Investor Centrality are:

    1. improve the investor's journey and experience
    2. conduct a study to harmonize the transparency of investment products
    3. contribute to the connection between Open Investment and the Open Capital Market
    4. establish an action plan for the development of long-term savings on two fronts: literacy and investments

    On the Structuring Agenda are topics with the potential to transform the industry and make an impact on the business of the investment industry. They are: sustainability, innovation and education.

    The first provides for the implementation of the agenda of the ANBIMA Sustainability Network, launched in September. The Network has established four major themes on which it will direct efforts: climate change and diversity; human rights; governance and leadership; ESG financial instruments. To move forward, the group must make use of instruments such as: cooperation with other entities; education and literacy; tools, such as manuals and dashboards; self-regulation and advocacy work.

    The Innovation Agenda consists of four main initiatives:

    • Launch the ANBIMA Innovation Network - Creation of a collaborative group of market and innovation experts to support strategy in new technologies, acting as a bridge between the market and the innovation ecosystem.
    • Develop the blockchain network design for the capital market - Structure and test a standardized, multi-asset, and interoperable DLT network for the capital market, with the aim of democratizing access, stimulating innovation, and accelerating the achievement of the benefits of tokenization for the entire market.
    • 2024 cycle of the Open Innovation Journey - Develop a new cycle of the open innovation journey, to train institutions in innovation management and open innovation, in addition to connecting them with startups that can help solve various corporate challenges.
    • Support the Drex pilot - Working together with the Selic (agreement between ANBIMA and the Central Bank) in the implementation of Drex.

    In the third pillar of the Structuring Agenda are the education agendas, concentrated in three initiatives:

    • Strengthened the ANBIMA Education Network, with the creation of spaces for the construction of knowledge among members, accelerating the education agenda in institutions as a way to improve more and more the technical training of financial market professionals;
    • Implement the Association's social responsibility strategy through educational actions in schools and universities throughout Brazil – including the volunteer program with members.
    • Apply the impact assessment methodology in all education projects and initiatives.
  • CVM publishes Circular Letter on understanding Article 42 of Law 14,754 on Real Estate Funds


  • On February 22 2024, the Comissão de Valores Mobiliários (CVM) published the Circular Letter nº 1/2024/CVM/SSE on the understanding of the technical area on the application of Article 42 of Law 14,754 to Real Estate Investment Funds (REIF).

    The objective is to disseminate the understanding of the technical area on the application of Article 42 of Law 14,754 to Real Estate Investment Funds (FIIs), which allowed the constitution of real encumbrances on real estate or the provision of guarantees, with the purpose of guaranteeing obligations assumed by FIIs or their shareholders.

    The document points out that the use of the powers provided for in Article 42 of Law 14,754 remains prohibited until a specific rule is issued and changes the current regulation.

  • Sustainable Finance / Green Finance

    BCB announces Alliance with IDB, Treasury, and MMA to mobilize foreign capital and promote green investments


  • On February 26 2024, the Banco Central do Brasil (BCB) announced an alliance with Inter-American Development Bank (IDB), the Treasury, and the Ministry of the Environment (MMA) to mobilize foreign capital and promote green investments while mitigating exchange rate risks.

    Currency risk is a factor hindering investments in emerging markets such as Brazil, contributing to the current deficit in investment in sustainable infrastructure and other large-scale green projects.

    The efforts announced today aim to encourage investment and offer currency protection to projects that promote ecological transformation and the transition to sustainable practices and technologies.

    The IDB will support the Foreign Exchange Private Capital Mobilization and Exchange Protection Program, under the National Fund on Climate Change, with a $2 billion credit line and technical support.

    With the Central Bank, the IDB will support the development, liquidity and efficiency of the country's long-term foreign currency hedging market by making available to the Program a $3.4 billion limit for currency hedging, its ability to acquire derivatives for hedging on better terms, facilitated by its AAA rating, and its Treasury services. This support will provide the Central Bank and financial institutions with more access and lower costs to foreign exchange protections.

    The Program also introduces financial innovations that seek to offer investors interested in Brazil alternatives to improve the prospects of their investments, including a long-term liquidity facility operated by the National Fund on Climate Change, which will be able to rely on resources from the IDB's credit line.


    Consumer protection

    AMF publishes communication for investment service providers to strengthen systems for handling customer claims / L'AMF publie une communication aux prestataires de services d'investissement à propos du traitement des réclamations des clients


  • On February 6 2024, the Autorité des marchés financiers (AMF) published a communication encouraging investment service providers to strengthen their system for handling customer claims.

    On the occasion of a series of short thematic checks carried out with 5 establishments, the AMF noted some deficiencies in compliance with the applicable requirements. In a summary document, it reviews the regulations, explains its expectations, and highlights the good and bad practices observed.

    The main focal points for the AMF are the following:

    1. The definition adopted by establishments  for claims
    2. The organization and management of the claim processing
    3. The access to information regarding claim processing
    4. Establishments' engagements regarding the timeliness of the response and the process being free of charge
    5. The availability of information on recourse options for clients
    6. Control mechanisms and constant improvement

    The document also highlights best practices seen in the industry as follows:

    1. Ensure the monitoring of social medias and consider this channel as a possible source for clients to raise a claim
    2. Make employees  that are qualified and/or dedicated to claim handling available  to increase quality of service
    3. Schedule the intervention of experts depending on the source of the claim raised to help the service in charge of processing
    4. Offer regular trainings to the client claims team
    5. Make sure that when controls are applied, they effectively assess the quality of responses to claims in order to avoid standardized responses and ensure client satisfaction 

    Version française

    Le 6 février 2024, l'Autorité des marchés financiers (AMF) a publié une communication incitant les prestataires de services d'investissement à renforcer leur dispositif de traitement des réclamations des clients.

    A l'occasion d'une série de contrôles thématiques courts réalisés auprès de 5 établissements, l'AMF a constaté quelques manquements au respect des exigences applicables. Dans un document de synthèse, elle passe en revue la réglementation, explique ses attentes et met en avant les bonnes et mauvaises pratiques observées.

    Les principaux points de contact de l'AMF sont les suivants :

    1. La définition adoptée par les établissements pour les sinistres
    2. L'organisation et la gestion du traitement des réclamations
    3. L'accès aux informations concernant le traitement des réclamations
    4. Engagements des établissements sur la rapidité de réponse et la gratuité du processus
    5. La disponibilité des informations sur les options de recours pour les clients
    6. Mécanismes de contrôle et amélioration constante

    Le document met également en évidence les meilleures pratiques observées dans l’industrie comme suit :

    1. Assurer la veille des réseaux sociaux et considérer ce canal comme une source possible de réclamation pour les clients
    2. Mettre à disposition des collaborateurs qualifiés et/ou dédiés au traitement des sinistres pour augmenter la qualité de service
    3. Programmer l'intervention d'experts en fonction de l'origine de la réclamation soulevée pour aider le service en charge du traitement
    4. Proposer des formations régulières à l'équipe des réclamations clients
    5. S'assurer que lorsque les contrôles sont appliqués, ils évaluent efficacement la qualité des réponses aux réclamations afin d'éviter les réponses standardisées et assurer la satisfaction des clients
  • Cybersecurity

    AMF publishes communication on DORA / L'AMF publie une communication sur DORA


  • On February 1 2024, the Autorité des marchés financiers (AMF) published a communication for financial players to prepare for the implementation of the European DORA regulation.

    The European regulation on digital operational resilience for the financial sector (Digital Operational Resilience Act or DORA) establishes rules for cybersecurity and information risk management for a large number of financial entities. It will be implemented on January 17 2025. In order to assist professionals in the application of this text, the AMF recalls the main provisions, one year before their implementation.

    DORA aims to harmonize the provisions in regards to cybersecurity, and ICT risk management in the financial sector. The scope extends to any financial entity as well as ICT third-party service providers. A proportionality principle applies which allows certain entities to benefit from a simplified regime.

    The DORA regulation imposes the following rules on financial entities:

    The set-up of an ICT risk management framework including internal controls and governance dispositions. 

    To notify relevant national authorities of major ICT incidents.

    To conduct digital and operational resilience tests.

    To manage third-party ICT service providers risk.

    To voluntarily share operational data in relation to cyberthreats and vulnerabilities between financial sector players.

    The regulation also imposes a supervision on a European level of ICT third-party providers that are considered "critical" meaning they could impact the stability, continuity or quality of financial services supply.

    Version française

    Le 1er février 2024, l'Autorité des marchés financiers (AMF) a publié une communication destinée aux acteurs financiers pour préparer la mise en œuvre du règlement européen DORA.

    Le règlement européen sur la résilience opérationnelle numérique pour le secteur financier (Digital Operational Resilience Act ou DORA) établit des règles de cybersécurité et de gestion des risques informationnels pour un grand nombre d’entités financières. Il sera mis en œuvre le 17 janvier 2025. Afin d'aider les professionnels dans l'application de ce texte, l'AMF rappelle les principales dispositions, un an avant leur mise en œuvre.

    DORA vise à harmoniser les dispositions en matière de cybersécurité et de gestion des risques TIC dans le secteur financier. Le champ d’application s’étend à toute entité financière ainsi qu’aux prestataires de services TIC tiers. Un principe de proportionnalité s'applique qui permet à certaines entités de bénéficier d'un régime simplifié.

    Le règlement DORA impose les règles suivantes aux entités financières :

    La mise en place d'un cadre de gestion des risques liés aux TIC, comprenant des contrôles internes et des dispositions en matière de gouvernance.

    Informer les autorités nationales compétentes des incidents informatiques majeurs.

    Réaliser des tests de résilience numérique et opérationnelle.

    Gérer les risques liés aux fournisseurs de services TIC tiers.

    Partager volontairement des données opérationnelles relatives aux cybermenaces et aux vulnérabilités entre les acteurs du secteur financier.

    Le règlement impose également une surveillance au niveau européen des prestataires tiers de TIC qui sont considérés comme « critiques », ce qui signifie qu'ils pourraient avoir un impact sur la stabilité, la continuité ou la qualité de la fourniture de services financiers.

  • European Market Infrastructure Regulation (EMIR)

    AMF informs of updated EMIR notification forms on AMF website / L'AMF informe de la mise à jour des formulaires de notification EMIR sur son site


  • On February 12 2024, the Autorité des marchés financiers (AMF) published a communication on the update of the EMIR Refit notification forms on its website.

    On January 26, 2024, the AMF declared that it is complying with the guidelines of the European Securities and Markets Authority (ESMA) regarding declarations under the EMIR regulation.

    In this context, the AMF wishes to specify the notification methods for errors and omissions under Article 9 of the implementing regulation (EU) 2022/1860 defining technical implementation standards for the application of the EMIR Refit regulation. This article provides for a formal notification mechanism by declarants to the competent authority, via a form on the ESMA's website, of errors and omissions that could potentially concern a significant number of committed declarations.

    The notification model to be used by reporting entities is available on the ESMA's website at the following address:

    The paragraphs 380 and following of the ESMA's guidelines regarding declarations under the EMIR regulation also determine the calculation methods of the significant nature of erroneous declarations.

    Once filled out, this form should be emailed to the following address: with the filename: "EMIR EO" followed by a space and then the declaration date in the format "dd-mm-yyyy", then another space and the identifier (LEI) of the entity responsible for the reporting. Please note that the filename should also be repeated in the subject of the email.

    Version française

    Le 12 février 2024, l'Autorité des marchés financiers (AMF) a publié sur son site internet une communication relative à la mise à jour des formulaires de notification EMIR Refit.

    Le 26 janvier 2024, l'AMF a déclaré se conformer aux lignes directrices de l'Autorité européenne des marchés financiers (ESMA) concernant les déclarations au titre du règlement EMIR.

    Dans ce contexte, l'AMF souhaite préciser les modalités de notification des erreurs et omissions au titre de l'article 9 du règlement d'application (UE) 2022/1860 définissant les normes techniques de mise en œuvre pour l'application du règlement EMIR Refit. Cet article prévoit un mécanisme formel de notification par les déclarants à l'autorité compétente, via un formulaire disponible sur le site Internet de l'ESMA, des erreurs et omissions pouvant potentiellement concerner un nombre important de déclarations engagées.

    Le modèle de notification à utiliser par les entités déclarantes est disponible sur le site internet de l'ESMA à l'adresse suivante :

    Les paragraphes 380 et suivants des lignes directrices de l'ESMA concernant les déclarations au titre du règlement EMIR déterminent également les modalités de calcul du caractère significatif des déclarations erronées.

    Une fois rempli, ce formulaire est à envoyer par email à l'adresse suivante : avec le nom du fichier : « EMIR EO » suivi d'un espace puis de la date de déclaration au format « jj-mm-aaaa », puis un autre espace et l'identifiant (LEI) de l'entité responsable du reporting. Veuillez noter que le nom du fichier doit également être répété dans l'objet de l'e-mail.

  • European Single Access Point for financial and non-financial information (ESAP)

    AMF informs on ESAP implementation / L'AMF informe sur la mise en œuvre de l'ESAP


  • On February 12 2024, the Autorité des marchés financiers (AMF) published a communication to announce the implementation of ESAP.

    The ESAP regulation and associated texts have been published in the Official Journal of the European Union. The regulations stipulate that the platform should be accessible no later than July 10, 2027. Some of the technical features of the project are open to public consultation until March 8, 2024.

    The European single access point project for financial and non-financial information of European entities is one of the first tangible achievements of the European Commission's action plan for capital markets from September 2020. This project also contributes to the Commission's strategy on digital finance and the European Green Deal.

    The publication in the official journal of the European Union on December 20, 2023, of the ESAP regulation as well as the directive and the regulation amending certain regulations associated with it (together the "ESAP legislative package") launches the preparation phase of the project.

    This phase aims to achieve the following objectives:

    1. Provide a direct and centralized access to regulated data
    2. Increase the data visibility
    3. Define the technical characteristics of the project
    4. Set-up the data collection process
    5. The progressive extension of the scope of the data collected and made available
    6. Contribute to the definition of the European Single Access Point

    Version française

    Le 12 février 2024, l'Autorité des marchés financiers (AMF) a publié une communication annonçant la mise en place de l'ESAP.

    Le règlement ESAP et les textes associés ont été publiés au Journal officiel de l'Union européenne. La réglementation prévoit que la plateforme devra être accessible au plus tard le 10 juillet 2027. Certaines caractéristiques techniques du projet sont ouvertes à la consultation publique jusqu'au 8 mars 2024.

    Le projet de point d'accès unique européen aux informations financières et non financières des entités européennes est l'une des premières réalisations tangibles du plan d'action de la Commission européenne pour les marchés de capitaux de septembre 2020. Ce projet contribue également à la stratégie de la Commission en matière de finance numérique et à l'Union européenne. Pacte vert.

    La publication au journal officiel de l'Union européenne le 20 décembre 2023 du règlement ESAP ainsi que de la directive et du règlement modifiant certains règlements qui lui sont associés (ensemble le « paquet législatif ESAP ») lance la phase de préparation du projet .

    Cette phase vise à atteindre les objectifs suivants :

    1. Offrir un accès direct et centralisé aux données réglementées
    2. Augmentez la visibilité des données
    3. Définir les caractéristiques techniques du projet
    4. Mettre en place le processus de collecte de données
    5. L’extension progressive du champ des données collectées et mises à disposition
    6. Contribuer à la définition du point d'accès unique européen
  • Exchange-traded funds (ETFs)

    France publishes Decree No. 2024-151 amending Monetary and Financial Code regarding Asset Management / La France publie le décret n° 2024-151 modifiant le Code monétaire et financier relatif à la gestion d'actifs


  • On February 27 2024, France published the decree No. 2024-151 of February 27, 2024, amending the monetary and financial code regarding asset management.

    The text aims to permit the admission for trading on a regulated market of financial instruments and on a multilateral trading system of units or shares of active management collective investment schemes (active ETFs).

    It will enter into force the day after its publication.

    Active ETFs are discretionary managed investment funds whose units or shares are admitted for trading on a regulated market or multilateral trading system. These products, which are growing rapidly in the United States, could potentially extend the distribution channels of active management funds in Europe. However, national law does not allow such products to be listed in France, without any reasons related to savings protection or market integrity justifying this limitation. The monetary and financial code only allows the listing of the units or shares of a collective investment scheme on the condition that it follows a systematic and non-discretionary management objective. The decree modifies articles D. 214-22-1 and D. 214-32-31 of the monetary and financial code to remove this condition and thus allow the issuance and trading of active ETFs in France. This measure will contribute to the modernization of the range of savings products and the competitiveness of the Paris marketplace.

    Version française

    Le 27 février 2024, la France a publié le décret n° 2024-151 du 27 février 2024 modifiant le code monétaire et financier en matière de gestion de patrimoine.

    Le texte vise à permettre l'admission aux négociations sur un marché réglementé d'instruments financiers et sur un système multilatéral de négociation de parts ou d'actions d'organismes de placement collectif à gestion active (ETF actifs).

    Il entrera en vigueur le lendemain de sa publication.

    Les ETF actifs sont des fonds d'investissement à gestion discrétionnaire dont les parts ou actions sont admises à la négociation sur un marché réglementé ou un système de négociation multilatéral. Ces produits, en forte croissance aux Etats-Unis, pourraient potentiellement étendre les canaux de distribution des fonds de gestion active en Europe. Toutefois, la législation nationale n'autorise pas la cotation de tels produits en France, sans qu'aucune raison liée à la protection de l'épargne ou à l'intégrité du marché ne justifie cette limitation. Le code monétaire et financier n'autorise la cotation des parts ou actions d'un organisme de placement collectif qu'à la condition qu'il suive un objectif de gestion systématique et non discrétionnaire. Le décret modifie les articles D. 214-22-1 et D. 214-32-31 du code monétaire et financier pour supprimer cette condition et permettre ainsi l'émission et la négociation d'ETF actifs en France. Cette mesure contribuera à la modernisation de l'offre de produits d'épargne et à la compétitivité de la place parisienne.

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

    AMF reminds investment firms of rules for identifying retail investors when reporting transactions / L'AMF rappelle aux entreprises d'investissement les règles d'identification des investisseurs particuliers lors de la déclaration des opérations


  • On February 1 2024, the Autorité des marchés financiers (AMF) published a communication reminding the MiFIR transaction rules for retail investors.

    The AMF is conducting a campaign to verify the quality of transaction reporting data under MiFIR relating to individual investors. The AMF notes that there are frequent mistakes, in particular in relation to the identification code (CONCAT code in France), the first and last name as well as the date of birth of the buyer and seller. The data must be accurate and complete in accordance with precise norms.

    Article 26 of the European regulation on Financial Instruments Markets (MiFIR) introduced into transaction reporting the identification of the investor, whether a legal entity or a natural person. This information allows for a more precise detection of market abuses and also a detailed study of the behavior of individual investors, something that the AMF regularly does as part of its mission to protect savers.

    In this regard, the AMF is leading a campaign aimed at improving the data quality of reporting fields related to individual investors. The goal of this campaign is to remind that this data must be accurate and filled out according to precise standards.

    Compliance officers of investment service providers and teams in charge of this reporting are invited to become aware of this and to verify the quality of their declarations.

    Version française

    Le 1er février 2024, l'Autorité des marchés financiers (AMF) a publié une communication rappelant les règles de transaction MiFIR pour les investisseurs particuliers.

    L'AMF mène une campagne de vérification de la qualité des données de déclaration des opérations au titre du MiFIR relatives aux investisseurs particuliers. L'AMF constate que des erreurs sont fréquentes, notamment sur le code d'identification (code CONCAT en France), le prénom et le nom ainsi que la date de naissance de l'acheteur et du vendeur. Les données doivent être exactes et complètes selon des normes précises.

    L'article 26 du règlement européen sur les marchés d'instruments financiers (MiFIR) a introduit dans le reporting des transactions l'identification de l'investisseur, qu'il soit personne morale ou personne physique. Ces informations permettent une détection plus précise des abus de marché mais également une étude fine du comportement des investisseurs individuels, ce que fait régulièrement l'AMF dans le cadre de sa mission de protection des épargnants.

    À cet égard, l’AMF mène une campagne visant à améliorer la qualité des données des champs de reporting liés aux investisseurs particuliers. Le but de cette campagne est de rappeler que ces données doivent être exactes et renseignées selon des normes précises.

    Les responsables de la conformité des prestataires de services d'investissement et les équipes en charge de ce reporting sont invités à en prendre connaissance et à vérifier la qualité de leurs déclarations.

  • AMF updates Doctrine on definition of investment advisory services / L'AMF met à jour sa doctrine sur la définition du conseil en investissement


  • On February 13 2024, the Autorité des marchés financiers (AMF) publishes a press release on the update of their definition of investment advisory services.

    On July 11, 2023, ESMA published a "Supervisory briefing" providing clarification on the definition of investment advisory service in terms of the revised directive on Financial Instruments Markets (MiFID 2), in order to replace the Q&A document on the same subject published in 2010 by the European Committee of Market Regulators (Committee of European Securities Regulators, CESR).

    Until now, the elements developed in this Q&A document from CESR were partially incorporated in position DOC-2008-23, which provided further details, especially to take into account French specifics, particularly regarding the provision of this service for Financial Investment Advisors. To facilitate understanding by market participants of the qualification conditions for this investment service, the AMF has combined the main elements required to verify whether each of the cumulative conditions is met in a single document (the position DOC-2008-23, as updated).

    Position DOC-2018-03 on non-guaranteed placement, investment advice, and balance sheet advice has also been updated to replace references to the CESR Q&A document.

    It is important to note that the boundaries for qualifying the investment advisory service have not been substantively changed through these updates. The elements contained therein have already been implemented by the AMF for several years.

    These updated positions are applicable from today. To support professionals in understanding the changes made to the doctrine, a version with revision marks is also published. 

    Version française

    Le 13 février 2024, l'Autorité des marchés financiers (AMF) publie un communiqué faisant état de la mise à jour de sa définition du conseil en investissement.

    Le 11 juillet 2023, l'ESMA a publié un « Supervisory briefing » apportant des précisions sur la définition du service de conseil en investissement au sens de la directive révisée sur les marchés d'instruments financiers (MiFID 2), afin de remplacer le document de questions-réponses sur le même sujet publié dans 2010 par le Comité européen des régulateurs des marchés (Committee of European Securities Regulators, CESR).

    Jusqu'à présent, les éléments développés dans ce document de questions-réponses du CESR étaient partiellement repris dans la position DOC-2008-23, qui apportait des précisions complémentaires, notamment pour tenir compte des spécificités françaises, notamment en ce qui concerne la fourniture de ce service aux Conseillers en Investissements Financiers. Afin de faciliter la compréhension par les acteurs du marché des conditions d'admissibilité à ce service d'investissement, l'AMF a regroupé les principaux éléments nécessaires pour vérifier si chacune des conditions cumulatives est remplie dans un document unique (la position DOC-2008-23, telle que mise à jour).

    La position DOC-2018-03 relative au placement non garanti, au conseil en investissement et au conseil en bilan a également été mise à jour pour remplacer les références au document questions-réponses du CESR.

    Il est important de noter que les limites d’admissibilité au service de conseil en investissement n’ont pas été substantiellement modifiées par ces mises à jour. Les éléments qui y sont contenus sont déjà mis en œuvre par l'AMF depuis plusieurs années.

    Ces postes mis à jour sont applicables à partir d’aujourd’hui. Pour accompagner les professionnels dans la compréhension des évolutions apportées à la doctrine, une version avec des notes de révision est également publiée.

  • Sustainable Finance / Green Finance

    AMF publishes Educational Guide for undertakings to report on transition plans under CSRD / L'AMF publie un guide pédagogique à l'usage des entreprises pour communiquer leurs projets de transition sous CSRD


  • On February 9 2024, the Autorité des marchés financiers (AMF) published an educational guide on companies' climate transition plans developed by its Climate and Sustainable Finance Commission.

    In anticipation of the first publication of transition plans required by the European directive on sustainability reporting (CSRD), this guide reiterates the significance of transition plans in mitigating climate change, the importance of short and medium-term goals, the resources allocated, and the governance of the plan.

    Beyond transparency obligations, the implementation of the transition plan aims to have companies reflect on the evolution of their business models as well as their alignment with the global warming limitation efforts.

    After a reminder of the regulation on a topic by topic basis, the guide analyses investor expectations, the company practices, difficulties and the possibilities found in existing methods in order to produce higher quality and more relevant sustainability reports.

    Version française

    Le 9 février 2024, l'Autorité des marchés financiers (AMF) a publié un guide pédagogique sur les plans de transition climatique des entreprises élaboré par sa commission Climat et finance durable.

    En prévision de la première publication des plans de transition exigée par la directive européenne sur le reporting développement durable (CSRD), ce guide rappelle l'importance des plans de transition dans l'atténuation du changement climatique, l'importance des objectifs à court et moyen terme, les ressources allouées et la gouvernance du régime.

    Au-delà des obligations de transparence, la mise en œuvre du plan de transition vise à amener les entreprises à réfléchir à l'évolution de leurs modèles économiques ainsi qu'à leur alignement sur les efforts de limitation du réchauffement climatique.

    Après un rappel thématique par thème de la réglementation, le guide analyse les attentes des investisseurs, les pratiques des entreprises, les difficultés et les possibilités des méthodes existantes afin de produire des rapports de développement durable plus qualitatifs et plus pertinents.


    Bank Recovery and Resolution Directive (BRRD)

    BaFin publishes Three Circulars improving resolvability of institutions and group entities


  • On February 16 2024, the Federal Financial Supervisory Authority (BaFin) published three circulars with the aim to improve the resolvability of institutions and group entities.

    The requirements provided for in the circulars apply to institutions and group entities under BaFin’s remit as resolution authority. The requirements do not apply to institutions and group entities for which the resolution plan foresees a liquidation under normal insolvency proceedings, meaning they apply to:

    • All entities within the meaning of Article 2 of the Single Resolution Mechanism Regulation (SRMR) 
    • Entities within the meaning of section 1 (1) no. 1 to 3 of the German Recovery and Resolution Act (Gesetz zur Sanierung und Abwicklung von Instituten und Finanzgruppen – SAG) in the Federal Republic of Germany that do not fall under the field of competence of the Single Resolution Board (SRB) in accordance with Article 7(2), (4)(b), or (5) of the SRMR.

    The circulars are as follows:

    • MaResolvablity
      The circular was amended by the addition of a comprehensive introduction. Its objective is to strengthen the public’s as well as relevant insitutions’ understanding of the resolution planning process for less significant institutions. In particular, the new introduction demonstrates how the circulars that contain more detailed requirements are linked. In the main body of the document, BaFin included and updated references to those circulars. The new version replaces circular 08/2022. This circular is based on the SRB Expectations for Banks in order to ensure their application within the banking union. If national requirements differ from those of the SRB, a reference is made in the respective chapter. It is also intended to implement the EBA Resolvability Guidelines in national administrative practice. Where requirements of the EBA Resolvability Guidelines may go beyond the SRB Expectations for Banks, a corresponding reference is made. A corresponding note is made where the requirements of the EBA Resolvability Guidelines may go beyond the SRB Expectations for Banks.
    • MaBail-in
      The fourth version of the circular MaBail-in (minimum requirements for the implementation of a bail-in) contains new requirements regarding the preparation of a bail-in playbook. It further expands the existing data set through the addition of new data points which serve the external bail-in execution of structured notes. BaFin also revised data point definitions and extended the annex on „frequently asked questions“. The new version replaces circular 14/2021. Winding down an institution, requires quick action for the resolution authority and the information for a decision on write-downs of liabilities and/or any necessary recapitalization through the conversion of liabilities are necessary for such action. Therefore, the Circular sets out the minimum requirements with regard to information to be provided at short notice in the event of (imminent) settlement and with regard to the technical and organizational equipment that ensures short-term provision (cf. Article 29 of DelVO (EU) 2016/1075). 
    • MaStructural Resolution Tools
      The new circular MaStructural Resolution Tools deals with resolution tools that foresee a sale of business (asset and share deal), a transfer to a bridge institution (asset and share deal), or a transfer to an asset management vehicle. The circular outlines the various types of transfers. The requirements differ depending on the resolution tool as well as the type of transfer (asset or share deal). It also provides a stylised example of an index of a transfer playbook for each type of resolution tool. Such playbooks need to be prepared by the relevant institutions in the course of resolution planning. It also describes BaFin's basic expectations of what is to be provided; Data, information and processes in the event of a crisis as well as preparatory measures in resolution planning in connection with the implementation of structural resolution instruments. BaFin may deviate from the stated requirements and, in particular, impose further requirements and request further information if this is necessary in the individual case. 
  • Data protection / General Data Protection Regulation (GDPR) / ePrivacy Regulation (ePR)

    Bundesrat publishes Draft Act amending Federal Data Protection Act


  • On February 9 2024, the Bundesrat published the Draft Act amending the Federal Data Protection Act.

    This draft act aims to implement results resulting from the evaluation of the Federal Data Protection Act (BDSG).

    In the course of the evaluation, the Federal Ministry of the Interior and Community (BMI) reviewed the BDSG and identified the following need for amendment with regard to parts 1 and 2 of the BDSG:

    • Paragraph 1(4) requires clarification in order to make it clear that the BDSG is applicable only if the data processing has a domestic element. The standard is also reformulated in such a way that it is clear that the standard only addresses non-public bodies
    • The regulation on video surveillance of publicly accessible spaces (§ 4) needs to be revised with regard to non-public bodies
    • Article 17 needs to be supplemented in order to avoid vacancies in the Deputy of the Joint Representative on the European Data Protection Board (EDPB).
    • Sections 19 and 40 are supplemented by clarifications on the competent lead data protection supervisory authority.
    • Drafting changes must be made to Paragraphs 27 and 29.
    • Paragraph 34 clarifies that the right of access under Article 15 of Regulation (EU) 2016/679 may not be restricted on the basis of private statutes, but only on the basis of public law statutes. Section 34 should also restrict the right to information pursuant to Article 15 of Regulation (EU) 2016/679 with regard to confidentiality interests and also provide for an obligation on federal authorities to inform data subjects of the possibility under Section 34 (3) that the provision of information to the Federal Commissioner for Data Protection and Freedom of Information (BfDI) may be requested.
    • In the regulation on automated decision-making in individual cases (§ 37), a declaration is required.

    Parts 1 and 2 of the BDSG are amended. Further amendments are reserved for a further legislative project.

    With § 16a, the Data Protection Conference (DSK) is institutionalized in the BDSG. According to its rules of procedure, the DSK aims to uphold and protect fundamental data protection rights as well as to achieve a uniform application of European and national data protection law and to jointly advocate its further development. This law does not contain any provision on the legally binding nature of decisions of the DSK, as this would affect constitutional limits due to the prohibition of mixed administration.

    In principle, there are no compliance costs for businesses. Article 1(14) results in a change in the annual compliance costs for businesses of around compliance costs of around 346,000 euros (of which 346,000 euros are attributable to bureaucratic costs from information obligations). Overall, there will be one-off costs in the category "Introduction or adaptation of digital processes" of around €131,000.

    The National Regulatory Control Council finds that the regulatory consequences is comprehensible and methodologically correct. It raises no objections to this within the scope of its statutory mandate. However, in its opinion, the potential of an amendment to data protection law with the aim of enabling a more coherent interpretation is not fully utilised with the present draft. As the proposed regulation does not provide for a binding resolution by the Data Protection Conference (DSK), no substantial improvement of the status quo is to be expected. Based on legal opinions during the consultation process, the National Regulatory Control Council sees the possibility of realising this within the existing legal framework. Also, the DSK could already record DSK decisions and court proceedings in the area of data protection in an externally and court proceedings in the area of data protection in which its members are involved. This would lead to more transparency for all parties involved and in particular relieve companies in particular, as they would be able to make their own data protection considerations and business decisions more quickly on the basis of previous decisions. On the other hand, as the Federal Government has only been able to adopt legally binding resolutions of the DSK only via an amendment to the Basic Law, the NKR suggests initiating the discussion process in a timely manner.

  • Digital Finance Package

    Gemany publishes Draft Financial Market Digitalisation Act (FinmadiG)


  • On February 7 2024, the Bundestag published the draft Financial Market Digitalisation Act (FinmadiG).

    Digital financial services are an integral part of a future-oriented and competitive economy. With the use of innovative technologies, such as distributed ledger technology, efficiencies can be increased and costs reduced. At the same time, measures must be taken to increase digital resilience and counteract new money laundering risks in order to strengthen trust in new digital financial infrastructures. This also serves the integrity and stability of the financial system. This requires uniform solutions in a European internal market. For this reason, the European Commission presented a Digital Finance Strategy in 2020. In particular, this strategy aims to promote Europe's competitiveness and innovation in the financial sector. The EU package to this regard consists of:

    • Regulation (EU) 2023/1114 (MiCA), which establishes a comprehensive framework for both primary and secondary markets for crypto-assets,
    • Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets and amending Directive (EU) 2015/849 recasts the previous Regulation (EU) 2015/847 (Transfer of Funds Regulation),
    • Regulation (EU) 2022/2554 (DORA) and Directive (EU) 2022/2556, which aim to increase the digital operational resilience of financial entities and subsequently strengthen the cybersecurity of the financial sector as a whole.

    The Financial Market Digitalisation Act lays down implementing provisions for Regulations (EU) 2023/1114, (EU) 2023/1113 and (EU) 2022/2554 as well as provisions for the implementation of Directive (EU) 2022/2556. 

    In order to implement Regulation (EU) 2023/1114, a new Crypto Market Supervision Act (KMAG) will be enacted. The creation of an independent specialised law takes into account the alternative relationship between financial instruments within the meaning of Directive 2014/65/EU and crypto-assets within the scope of Regulation (EU) 2023/1114 created by Regulation (EU) 2023/1114 and serves the simple application of the law. Regulation (EU) 2023/1114 directly lays down the substantive requirements for the activities it regulates. There is no need for further legal transposition of these provisions into national law. The regulation contains extensive regulatory mandates for the member states with regard to the powers of the competent authority and for sanctioning violations of Regulation (EU) 2023/1114. The German legislature fulfils these regulatory mandates with the present draft law.

    In addition, the present draft law transfers the previous national regulation of banking transactions and financial services with regard to crypto-assets, namely in the German Banking Act (KWG), into the new legal framework of Regulation (EU) 2023/1114 and, where necessary, adapts it to the specifics of the crypto markets. Institutions that currently conduct or provide banking business and financial services in relation to crypto-assets under national law are to be transferred to this new legal framework as easily as possible.

    In order to implement Regulation (EU) 2023/1113, amendments to the Anti-Money Laundering Act (AMLA) are necessary with regard to transfers of crypto-assets. This includes, in particular, the determination of the supervisory responsibility of the Federal Financial Supervisory Authority (BaFin) for monitoring compliance with the requirements by providers of crypto-asset services. In addition, the transfer of the previous regulation from the German Banking Act (KWG) to the 

    Crypto Market Supervision Act (KMAG) makes it necessary to recognise providers of crypto asset services in the AMLA as 

    obliged entities under money laundering law. In addition, issuers of asset-referenced tokens will be newly included as persons subject to anti-money laundering obligations, provided that settlement does not take place exclusively via a provider of crypto asset services. 

    In order to implement Regulation (EU) 2022/2554 and Directive (EU) 2022/2556, selective adjustments are required in the relevant specialist laws. These relate in particular to the responsibilities and supervisory powers of the respective supervisory authorities, including the sanctioning of breaches of Regulation (EU) 2022/2554. 

    Where there is a need for implementation of Directive (EU) 2022/2556, this relates to amendments and additions to the German Investment Code (KAGB), the German Restructuring Act (Sanierungsgesetzbuch) and the German Capital Investment Code (KAGB).

    There is a change in the fulfillment cost for the economy of approximately +605,000 Euros. Around 292,000 Euros of this sum arise from information obligations. The generation of the fulfillment cost primarily results from the direct implementation of the regulations (EU) 2023/1113, (EU) 2023/1114, (EU) 2022/2554 or the direct implementation of the directive (EU) 2022/2556. Therefore, this cost had already been considered in the European Commission's impact assessment for the entire European Union. In this context, the "one in one out" rule decided by the Federal Government does not apply. However, there is an "In" of 332,000 Euros as part of the Federal Government's "one in one out" rule.

  • FinTech / RegTech / BigTech / SupTech / Digital Economy

    BaFin publishes List of crypto securities according to eWpG


  • On February 23 2024, the Federal Financial Supervisory Authority (BaFin) published a list of crypto securities according to the German Electronic Securities Act (eWpG).

    Pursuant to section 20 (3) of the eWpG, BaFin maintains a public list on the Internet of publications notified to it pursuant to section 20 (1) sentence 2 of the eWpG regarding the entry of crypto securities in the Federal Gazette. The publication of this list is intended to make it easy for legal transactions to obtain a simple overview of the publications associated with a crypto security. The information in the list is based on the publications made by the issuers in the Federal Gazette.

    The list contains the  details of the issuer, the registrar, the relevant crypto security, the date of entry in the crypto securities register and, in the event of a change, the date of the change and the main content of the respective amendment.

    The list was last updated on February 27 2024.

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

    BaFin publishes FAQs on ELTIF Regulation


  • On February 1 2024, the Federal Financial Supervisory Authority (BaFin) published frequently asked questions (FAQs) on European Long-Term Investment Fund (ELTIF) Regulation.

    This letter sets out frequently asked questions about the ELIF Regulation and their relationship to the German Investment Code for investment management (KAGB). The FAQ catalogue will be continuously updated and, if necessary, supplemented with further questions.

    The FAQs relate to the following areas:

    • Admission procedure;
    • Structure of the ELTIF;
    • Duration of the ELTIF;
    • Minimum Holding Period;
    • Investment Conditions;
    • Transparency requirements;
    • Distribution;
    • Miscellaneous.
  • BaFin publishes Study on collection and handling of ESG data and rating procedures by asset managers


  • On February 14 2024, the Federal Financial Supervisory Authority (BaFin) published a study on how asset management companies assess data and ratings on sustainability.

    In its study, BaFin surveyed 30 German asset management companies (KVGens) and 6 environmental, social and governance (ESG) rating providers.

    Many of the asset management companies surveyed (83 percent) use ESG data and ratings from external providers. Of these, more than two-thirds use multiple providers. When selecting them, they pay particular attention to ensuring that the data provided by the providers is high-quality and complete, and that the methodology used is transparent. Costs, service and the reputation of the service providers are just as relevant.

    Furthermore, the survey results show that the KVGen's planned budget for ESG data and ratings increased steadily from 2022 to 2024. This increasing trend illustrates that ESG data and ratings already have a high priority in the investment process and their importance is likely to continue to increase.

    87% of the asset management companies surveyed consider the costs of the ESG ratings provided to them to be unreasonably high. The majority complains that some of the data on which the ratings are based are incomplete, of poor quality and not up-to-date. When it comes to ESG ratings, they criticize the poor comparability. Above all, different evaluation criteria and weightings are problematic. 64 percent are also dissatisfied with how their rating providers respond to queries. Above all, they want faster answers.

    87% of KVGen checks the quality and plausibility of externally sourced ESG data and ratings using various mechanisms. However, only 20% of KVGen, who carry out a plausibility check stated that they had already found implausible data. In addition, 70% of the KVGen stated that adjustments had been made to the calculation methodology of ESG data and ratings from external providers.

    Concerning comparability, KVGen sees the lack of it as particularly problematic. 

    Only around 38% of KVGen consider the quality of externally collected ESG data and ratings as “high”, while 62% of KVGen do not share this assessment. The reasons given are, in addition to the sometimes poor data coverage, the inadequate period between the availability of new information and the updating of ESG data and ratings by the providers.

    The majority of KVGen faces a variety of different challengeswhen collecting and handling ESG data and ratings. Among the largest challenges include:

    • the partial lack of quality, 
    • the partial poor data coverage, 
    • the lack of timeliness, and
    • the low comparability and transparency of the data and of the underlying rating methodology. 

    The results of the study also show that the majority of the KVGen surveyed have already established review mechanisms to ensure the plausibility of external ESG data and ratings to check and understand the methodology of the individual providers. However, the scope of the review varies greatly. Given these differences, it will be necessary to consider at European level whether minimum standards should be defined for KVGen in collecting and dealing with ESG data and ratings.

    Finally, the Regulatory Outlook is also contained.

  • IT Outsourcing

    BaFin publishes Supervisory Notice on outsourcing to cloud providers


  • On Feburary 1 2024, the Federal Financial Supervisory Authority (BaFin) published a supervisory notice on outsourcing to cloud providers.

    The notice is based on the guidance from November 2018. This supervisory notice is to be understood as a guide in which BaFin and the Deutsche Bundesbank communicate their joint assessment of outsourcing to cloud providers. However, they do not impose any new requirements, but rather reflect the current supervisory assessment in such outsourcing cases. The supervisory communication is intended in particular to make the supervisory assessment of various wordings in contractual clauses transparent, as well as information on monitoring and control of cloud outsourcing and the requirements to be ensured by the supervised companies. In addition, the supervisory notice provides one Outlook on the requirements for contractual agreements on the use of information and communication technologies (ICT) between supervised companies and ICT third-party service providers regulated by the Regulation of the European Parliament and of the Council on digital resilience in the financial sector (Digital Operational Resilience Act – DORA). 

    The German supervisory authority is not aware of all types of cloud outsourcing nor all (standard) contracts or additional contractual agreements, so the supervisory report does not claim to be complete. The supervisory notice is aimed at companies supervised in the financial sector (including Credit institutions, financial services institutions, insurance companies, institutions of the company pension schemes, pension funds, securities institutions, other securities service companies, asset management companies, payment institutions and electronic money institutions). 

    In recent years, BaFin has gained a great deal of knowledge on the topic of the cloud from audits of supervised entities and in dialogue with representatives of supervised entities and IT service providers. On this basis, it has updated content on the governance of cloud outsourcing, implementation processes and minimum contractual standards in its supervisory communication. In addition, BaFin has added two new chapters. They provide supervised entities with guidance on development, operations, and cybersecurity in the cloud, as well as how to specifically monitor and control the cloud provider's performance and security.

    In the new chapter on secure application development and IT operations in the cloud, BaFin points out architectural principles for cloud development, such as the restriction and ongoing monitoring of cloud environments. Particular attention is paid to cybersecurity, as the cloud is commonly used over the internet. For this reason, it is particularly affected by network-based attack scenarios – i.e. the risk of data being unintentionally leaked or the cloud environment being manipulated.

    The second new chapter provides information on how BaFin believes that the cloud provider's service provision should be monitored and controlled. In particular, BaFin has included references to the shared responsibility model (Chapter V.1), the monitoring of the quality of service (Chapter V.2.1) as well as the topics of information security (Chapter V.3) and IT incidents (Chapter V.3.2). The focus is on whether the process and information chains between the cloud provider and the supervised company are coordinated with each other through appropriate technical and organizational measures.

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

    BaFin revises Circular on minimum requirements for compliance function and other conduct, organisation and transparency obligations (MaComp)


  • On February 28 2024, the Federal Financial Supervisory Authority (BaFin) revised the Circular 05/2018 (WA) - Minimum requirements for the compliance function and other obligations of conduct, organisation and transparency-MaComp.

    The European Securities and Markets Authority (ESMA) published Guidelines on "some aspects of the MiFID II remuneration requirements" (ESMA/35-43-3565). BaFin has now transferred these to the special part (BT) 8 of MaComp, 'Requirements for remuneration schemes relating to the provision of investment services and ancillary investment services'.

    The ESMA guidelines, the content of which has been adopted unchanged in MaComp, contain requirements for remuneration. It is intended to avoid conflicts of interest and to ensure rules of conduct and good corporate governance. The new ESMA Guidelines have replaced the Remuneration Principles and Procedures (MiFID) (ESMA/2013/606).

  • Pension Schemes

    BVI publishes Press Release on Private Pension Provision Reform


  • On February 13 2024, the German Investment Fund and Asset Managers Association (BVI) published a press release on the reform of private pension provision.

    According to the BVI, politicians must act on pension provision and more specifically:

    • Pension provision: Implement the focus group's proposals 
    • Infrastructure: Exploit the potential of funds 
    • Sustainability: Introduce product classification at EU level
    • Distribution: Give small investors access to the capital market

    The BVI appeals to the Federal Government to implement the recommendations of the focus group for the reform of private pension provision. In addition, funds should be able to participate more in the financing of infrastructure. Both projects must come in 2024.

    In the summer of 2023, the focus group set up by the federal government voted by a large majority in favour of more return opportunities and freedom of choice and rejected the guarantee and annuity requirement prescribed for Riester products. Without guarantees, more can be invested in stocks. In addition, if savers have various options available for the withdrawal phase, they can adapt the withdrawals to their individual requirements. The recommendations of the focus group must also be applied to the Riester pension. This can be implemented quickly and with minimal effort.

    State-owned fund belongs in the first pillar. The BVI and the vast majority of the focus group reject a standard state fund in the third pillar. However, with the state's leap of faith and cost advantage, the state product would have an unassailable competitive advantage over the other funds in the private market. The BVI is therefore calling for mandatory contributions and state-mandated solutions to remain in the first pillar. In Sweden, which is often cited as a model for Germany, the funded supplementary pension is also part of the statutory pension scheme. In addition, the Federal Government is already planning a state-organised capital-funded component of the statutory pension insurance scheme in the form of generational capital.

    Funds that make it possible to finance infrastructure could make a significant contribution to the development of infrastructure. However, infrastructure and open-ended real estate funds are still not allowed to invest sufficiently in renewable energies.

    There is also a need for tax arrangements for special investment funds, which are mainly held by institutional investors. These funds must also be able to exploit their potential, for example for investments in rooftop solar systems. The Growth Opportunities Act provides for an increase in the limit for income from electricity generation from 10 to 20 percent for special investment funds.

    The BVI supports the EU Commission's considerations to introduce a classification system for sustainable products. This could mean fundamental changes for products under Articles 8 and 9 of the Disclosure Regulation. Among other things, a product category for sustainable transformation will be discussed. This would enable investors to distinguish funds that invest in green assets from those that support the transition from brown to green business models.

    The BVI rejects the partial ban on commissions and the cost benchmark planned by the EU Commission as part of the retail investor strategy. The Commission wants to reduce the cost of products by prohibiting commissions. It expects this to increase returns for investors. However, a study by the BVI, for which data from the European Central Bank and the British statistics authority was evaluated, shows that a ban on commission advice does not lead to higher returns and even prevents private investors from participating more in the capital markets.

    For the time being, the EU Commission has refrained from imposing a complete ban on commissions. But it's not off the table yet. As a first step, it plans to ban commissions in non-consulting sales. However, just like a complete ban, this will not lead to the result sought by the EU Commission. Instead of commissions, distribution costs would be invoiced separately. This would keep retail investors out of the capital markets and prevent attractive offers.

  • Prospectus Regulation

    BaFin updates on prospectus preparation and approval procedure


  • On February 28 2024, the Federal Financial Supervisory Authority (BaFin) issued an update on the prospectus preparation and the approval procedure.

    Before preparing the prospectus, it may be advisable to contact BaFin to clarify individual questions, such as the existence of a possible blind pool or the presentation of an unusual business model. Often, existing questions about prospectus requirements can be clarified in advance. Such preliminary requests can speed up the approval process.

    The prospectus must begin with a cover page that must contain a clear indication that the accuracy of the information in the prospectus is not the subject of examination by BaFin. In addition, no other information is permitted that weakens this notice, in particular advertising information and misleading images are to be avoided. In the prospectus, neither the term "fund" nor any term containing this term may be used to designate the offeror, issuer or investment. The prospectus may only relate to a specific investment at a time, whereby sales prospectuses for different investments of the same issuer can be combined in one document for printing purposes.

    The prospectus must have a table of contents. It must be marked with the date of its establishment and with the company, the commercial register number and the business address of the provider. The main factual and legal risks associated with the investment must be presented in a separate section containing only this information. In particular, liquidity risks, risks associated with the use of borrowed capital, risks of possible debt financing by the investor as well as the risk that the contractual or investment conditions will be changed in such a way or that the issuer's activities will change in such a way that it becomes an investment fund within the meaning of the Securities and Exchange Commission. German Investment Code (KAGB) and BaFin can order the reversal of the transactions. The maximum risk to be borne by the investor must be described in full in a prominent position in the prospectus.

    Information that includes a forecast must be clearly identified as forecasts. In addition, the prospectus must contain detailed information about the investment (including the main characteristics of the shares, the term of the investment and any notice periods). In the case of participations in the result of a company within the meaning of section 1 (2) no. 1 Asset Investment Act (VermAnlG), the articles of association, the participation agreement, if applicable, the trust agreement or the agreement on the control of the use of funds and the last one for the specific investment pursuant to section 5c (2) VermAnlG are also the report of the controller of the use of funds or the other contract relevant to the investment relationship. In addition, the prospectus must contain information about the issuer (e.g. date of incorporation and business address) and about the founding shareholders and the shareholders at the time of the prospectus preparation (e.g. profit-sharing and withdrawal rights). Among other things, the issuer's business activities must include the dependence on patents, licenses, contracts and information on current investments.

    With regard to the investment strategy, investment policy and investment objectives of the investments, it must be stated that:

    • for which specific projects the net income from the offer is to be used,
    • the degree of implementation of these projects that have already been achieved,
    • whether the net income alone is sufficient for this purpose, and
    • for which other purposes the net income is used.

    The prospectus must contain the last annual financial statements prepared and audited in accordance with Sections 24 and 25 of the VermAnlG, including the date on which they were adopted, the last management report prepared and audited in accordance with these provisions, on the net assets, financial position and results of operations of the issuer.

    The prospectus, together with the investment information sheet, must be submitted to the responsible unit WA 34 exclusively via the Reporting and Publication Platform (MVP) in an electronically searchable format.


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

    HKMA publishes Circular on effective execution of risk-based approach for customer due diligence


  • On February 8 2024, the Hong Kong Monetary Authority (HKMA) published a Circular on effective execution of risk-based approach (RBA) for customer due diligence (CDD).

    Since implementation of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) in 2012, the HKMA has provided considerable guidance, feedback and training material on balanced and effective anti-money laundering and counter-financing of terrorism (AML/CFT) measures. This circular reiterates the key principles of RBA and the importance of effective execution, especially for areas where customer feedback or complaints are received from time to time.

    To promote Authorized Institutions’ (AIs) efforts in striking the right balance and achieving effective execution, the HKMA is taking this opportunity to remind AIs of the guiding principles of RBA in relation to CDD (i.e. risk differentiation, proportionality, and not a “zero failure” regime) as set out in the circular “De-risking and Financial Inclusion”. Based on industry and customer feedback, the HKMA also shared some smart tips for private banking in March 2023 , covering principles which are relevant to all AIs, especially in the context of establishing the source of wealth and source of funds for Politically Exposed Persons (PEPs).

    AIs should review existing HKMA guidance to ensure their CDD policies and procedures accurately reflect the legal and regulatory requirements and that execution of the RBA is aligned with the balanced regulatory framework and customer-centric practices. AIs are also reminded that CDD measures which are disproportionate to ML/TF risks are not consistent with the legal and regulatory requirements and should not be communicated to customers as such.

    The HKMA will continue to maintain close engagement with the industry and provide further guidance where appropriate. Specifically, following the latest amendment to the AMLO, the HKMA is preparing new practical guidance on PEP-related AML/CFT controls, focusing on how to apply RBA on former PEPs. 

  • HKMA publishes Circular on AML/CFT Surveillance Capability Enhancement Project


  • On February 7 2024, the Hong Kong Monetary Authority (HKMA) published a Circular on anti-money laundering and counter-financing of terrorism (AML/CFT) Surveillance Capability Enhancement Project.

    The AML/CFT Surveillance Capability Enhancement Project” (AMLS Project) through which the HKMA has transformed its risk-based AML supervision leveraging data and Supervisory Technology (Suptech). The AMLS Project is part of the broader digital transformation under the HKMA’s “Fintech 2025” strategy and responds to the need, as advocated by the Financial Action Task Force, to modernise AML supervision in light of the risks and opportunities from new and emerging technologies, and the increasingly borderless and fast-moving nature of financial crime.

    The AMLS Project has delivered more proactive and collaborative AML supervision which has helped Authorized Institutions (AIs) to accelerate the transition from a focus on regulatory compliance towards effectiveness and outcomes in managing fraud, money laundering and financial crime risks.

    These changes have had a number of implications for the HKMA’s AML supervision, which has become more targeted towards higher risks. Automation and process re engineering has led to many supervisory activities being streamlined, replaced or eradicated completely, allowing a focus on higher value activities. A dedicated Macro Analytics capability, underpinned by built-for-purpose data infrastructure and access to more granular data, is unlocking new insights on ML/TF risks. A dedicated horizon scanning capability supports a more forward-looking approach to threat identification and response.

    The AMLS Project also recognises the deep inter-dependency between effective AML supervision and industry Regtech adoption, and a variety of engagements with theecosystem have been used to foster collaboration and a greater collective focus on ‘outcome-based’ AML work. To maintain the good momentum in the digitalisation of AIs’ AML systems, in 2024 the HKMA will roll out the next phase of its Regtech engagement, including more targeted AMLabs, focusing on use cases providing the greatest impact to the overall ecosystem, including anti-fraud work. Based on the latest supervisory insights, the HKMA will also issue practical guidance to the industry to support the responsible use of Artificial Intelligence in AML work, for screening and transaction monitoring in particular.

  • Financial supervision

    HKMA publishes Circular on Portfolio-based Approach to Suitability Assessment


  • On February 28 2024, the Hong Kong Monetary Authority (HKMA) published a Circular on portfolio-based approach to suitability assessment (PBA).

    In its ongoing dialogue with the industry, the HKMA has come across enquiries and feedbacks on the application of the portfolio-based approach to suitability assessment (PBA) in providing investment advisory and trade execution services. The HKMA notes that while some banks have adopted PBA, some banks might have hesitation in doing so having regard to various considerations, including possible questions on the expected standards in the adoption. 

    The HKMA has therefore conducted a review on the supervisory requirements, and updated and consolidated the guidance on PBA for registered institutions (RIs) as set out in Annex 1. No new supervisory requirements for adoption of PBA is imposed. Instead, in response to enquiries from the industry, clarifications in the form of frequently asked questions on the consideration of a customer’s risk tolerance level, investment horizon and concentration risk, and the calculation of a customer’s investment portfolio are provided in Annex 2, with a view to facilitating adoption of PBA.

    In gist, PBA may be considered as front-loaded suitability assessment through setting up at the outset an investment agreement that sets out the key elements of an investment portfolio suitable for the customer taking into account the customer’s circumstances.

    In gist, PBA may be considered as front-loaded suitability assessment through setting up at the outset an investment agreement that sets out the key elements of an investment portfolio suitable for the customer taking into account the customer’s circumstances.

    Through the use of PBA:

    • at a transaction level, the RI may solicit, recommend, advise or execute a transaction on an investment product for the customer (including product with a lower or higher risk level) so long as the outcome of the customer’s portfolio is consistent with the investment agreement. Occasions of mis-matches or exceptions in individual transactions which would trigger relevant control procedures may therefore be reduced; and
    • there is no need for the RI to record the rationale for the recommendation at the transaction level.
  • SFC publishes Notice specifying electronic licensing forms to be submitted under Part V of SFO and Securities and Futures (Licensing and Registration) (Information) Rules (Chapter 571S)


  • On February 23 2024, the Securities and Futures Commission (SFC) published a Notice specifying electronic licensing forms to be submitted under Part V of the SFO and the Securities and Futures (Licensing and Registration) (Information) Rules (Chapter 571S).

    Notice is given that pursuant to section 402 of the SFO, the Securities and Futures Commission specifies that the electronic forms published on the Commission’s website and accessible through WINGS with effect from March 1 2024 shall supersede all previous versions of such forms serving the same purposes and shall be used for the purposes of submitting licensing applications and notifications (as applicable) under the above-mentioned ordinance and rules.

  • FinTech / RegTech / BigTech / SupTech / Digital Economy

    HKMA publishes Circular on sale and distribution of tokenised products


  • On February 20 2024, the Hong Kong Monetary Authority (HKMA) published a Circular on sale and distribution of tokenised products.

    The HKMA is writing to set out the supervisory standards expected of authorized institutions (AIs) in the sale and distribution of tokenised products to their customers.

    This circular covers tokenised products which, for the purpose of this circular, refer to digital representation of real-world assets using distributed ledger or similar technology, but does not apply to those regulated under the Securities and Futures Ordinance (SFO) and governed by the relevant requirements issued by the Securities and Futures Commission (SFC) and the HKMA from time to time.

    The HKMA is supportive of AIs’ initiatives on tokenisation, and is encouraged by the progress the industry has made so far. The HKMA considers it timely to provide guidance on activities related to tokenised products, thereby providing the banking industry with regulatory clarity to support continued innovation and realisation of benefits that may be brought by tokenisation, with appropriate safeguards from consumer/investor protection perspective.

    As a general principle, the prevailing supervisory requirements and consumer/investor protection measures for the sale and distribution of a product are also applicable to its tokenised form as it has terms, features and risks (other than any risks arising from tokenisation itself) similar to those of the underlying product.

    While some tokenised products are basically traditional products with a tokenisation wrapper, there could be situations where the nature, features and risks of a tokenised product are altered by how the product is structured and arranged in the tokenisation process.

    AIs should ensure that they evaluate and understand the terms, features and risks of each tokenised product, and should exercise professional judgment to ascertain the applicable legal and regulatory requirements. In addition to the expected standards set out in this circular, AIs are reminded to also comply with all the applicable legal and regulatory requirements when selling and distributing tokenised products. Before selling and distributing a tokenised product to customers, AIs should put in place adequate systems and controls to ensure that all the applicable requirements are complied with, and implement appropriate additional internal controls to address the specific risks and unique nature of the tokenised product.

    In line with the requirements for the underlying products, AIs should conduct adequate due diligence and fully understand the tokenised products before offering them to customers and on a continuous basis at appropriate intervals, having regard to the nature, features and risks of the products.

    AIs are expected to act in the best interests of their customers and make adequate disclosure of the relevant material information about a tokenised product, including key terms, features and risks, to enable the customer to make an informed decision. When offering a tokenised product, AIs should disclose material information on the tokenisation arrangement according to the circumstances of the tokenised product.

    Proper policies, procedures, systems and controls should be put in place to identify and mitigate the risks arising from tokenised product-related activities. AIs should ensure that appropriate risk management frameworks for the selling activities in respect of tokenised products are in place, which should include policies and procedures for risk management, internal control, complaint handling, compliance, internal audit and business contingency planning.

    AIs that are also providing custodial services of tokenised products should meet the expected standards on digital asset custody as issued by the HKMA from time to time.

  • HKMA publishes Circular on provision of custodial services for digital assets


  • On February 20 2024, the Hong Kong Monetary Authority (HKMA) published a circular on provision of custodial services for digital assets.

    As the digital asset sector continues to grow, the HKMA has seen authorized institutions (AIs) increasingly interested in digital asset-related activities, in particular provision of custodial services for digital assets for clients.

    To ensure that such client digital assets held by AIs in custody are adequately safeguarded and that the risks involved are properly managed, the HKMA considers it necessary to provide guidance on AIs’ provision of digital asset custodial services.

    With reference to international standards and practices, the HKMA sets out the expected standards in the Annex, which have incorporated flexibility for AIs to put in place operational arrangements that are commensurate with the nature, features and risks of the digital assets under custody. AIs should apply these standards in safeguarding client digital assets, whether the assets are received in the course of conducting virtual asset (VA)-related activities as an intermediary, distributing tokenised products, or providing standalone custodial services.

    This circular applies to AIs and subsidiaries of locally incorporated AIs that conduct digital asset custodial activities. The locally incorporated AIs should ensure that the business conduct, practices and controls of such subsidiaries comply with this circular and the Annex.

    Prior to launching custodial services for digital assets, an AI should undertake a comprehensive risk assessment to identify and understand the associated risks. The AI should put in place appropriate policies, procedures and control measures to manage and mitigate the identified risks, taking into account applicable legal and regulatory requirements. The board and senior management of the AI should exercise effective oversight of the risk management process to ensure that the risks associated with the custodial activities are identified, assessed, managed and mitigated both before the engagement in the custodial activities and on an ongoing basis.

    An AI should hold client digital assets in separate client accounts that are segregated from the AI’s own assets to ensure that client digital assets are protected from claims of the AI’s creditors in the event of an insolvency or resolution of the AI. 

    An AI should maintain appropriate books and records for each customer to track and record ownership of client digital assets, including the amount and the kind of assets owed to the client as well as the movement of the assets to and from the client’s account. Regular and frequent reconciliation of client digital assets should be conducted on a client-by client basis, taking into account both relevant off-chain and on-chain records. Any discrepancies noted should be addressed and escalated to senior management as appropriate in a timely manner.

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

    SFC publishes Press Release on regulatory status of virtual asset trading platforms as transition period will end soon


  • On February 5 2024, the Securities and Futures Commission (SFC) published a press release on the regulatory status of virtual asset trading platforms (VATPs) as transition period will end soon.

    In particular, investors should check whether a VATP is on the “List of licensed virtual asset trading platforms” or on the “List of virtual asset trading platform applicants”. VATPs on the "List of licensed virtual asset trading platforms” are formally licensed by the SFC. VATPs on the “List of virtual asset trading platform applicants” include VATPs operating in Hong Kong which have submitted licence applications to the SFC on or before February 29 2024.   

    Investors should check the regulatory status of a VATP from time to time and in any event on March 1 2024. This is because VATPs operating in Hong Kong which have not submitted their licence applications to the SFC by February 29 2024 MUST close down their businesses in Hong Kong by May 31 2024 pursuant to the transitional arrangements under the SFC’s regulatory regime for VATPs.

    For investors dealing with VATPs operating in Hong Kong which are NOT on the "List of licensed virtual asset trading platforms” or on the "List of virtual asset trading platform applicants” (Note 3), they are urged to make preparations early, before May 31 2024, such as by closing their accounts with these VATPs or transferring to SFC-licensed VATPs for trading virtual assets.

    The SFC, however, reminds the public that the applications submitted by applicants on the "List of virtual asset trading platform applicants” are still being processed and they may – or may not – be approved; hence, trading on these platforms carries a risk.

    The SFC strongly urges investors to trade virtual assets only on SFC-licensed VATPs because they may leave themselves unprotected by trading on unlicensed platforms.  

  • SFC publishes Circular to licensed corporations engaged in asset and wealth management activities to participate in 2023 survey


  • On February 22 2024, the Securities and Futures Commission published a Circular to licensed corporations engaged in asset and wealth management activities to participate in the survey for 2023.

    As an annual exercise to collect information on asset and wealth management activities in Hong Kong for regulatory and market facilitation purposes and to better understand the state of the asset and wealth management industry in Hong Kong, the SFC has now commenced the Asset and Wealth Management Activities Survey 2023 (AWMAS). The SFC would appreciate continued cooperation, as in previous years, by completing the questionnaire through the online submission system on or before April 19 2024.

    For those licensed corporations which had gross operating income derived from asset management, giving advice on funds / portfolios and / or private banking / private wealth management during the year of 2023, should complete the whole questionnaire. If the corporation did not engage in any of the activities covered in the survey throughout the year, they should fill in the part of General Information in the questionnaire.

  • Sustainable Finance / Green Finance

    SFC updates on new GHG emissions calculation and estimation tools to support sustainability reporting


  • On February 21 2024, the Securities and Futures Commission (SFC) published a press release on new greenhouse gas (GHG) emissions calculation and estimation tools to support sustainability reporting.

    The Green and Sustainable Finance Cross-Agency Steering Group and the Hong Kong University of Science and Technology (HKUST) launched two GHG emissions tools to facilitate sustainability reporting by corporates and financial institutions in Hong Kong.

    With clearly disclosed methodologies and data sources, the tools will enhance the availability and quality of sustainability-related data in the real economy and support decarbonisation efforts by the private sector.  

    The new tools, available for free public access on the website of the Steering Group, include:

    • a calculation tool that enables users, especially small and medium-sized enterprises (SMEs), to calculate their own GHG emissions based on actual activity levels; and  
    • an estimation tool that enables users, primarily financial institutions, to estimate the GHG emissions of their investees or borrowers where data of underlying companies is limited.

    Financial supervision

    CBI publishes Financial Regulation Priorities Letter and new Regulatory and Supervisory Outlook


  • On February 29 2024, the Central Bank of Ireland (CBI) publishes the Financial Regulation Priorities Letter and its new Regulatory and Supervisory Outlook.

    The Regulatory and Supervisory Outlook 2024 (RSO) sets out the CBI’s view on the key trends and risks facing the financial sector, along with the regulatory and supervisory priorities it has set in the context of those risks.

    These risks have shaped the Central Bank’s financial regulation and supervision priorities for 2024 – including six overarching supervisory priorities, complemented by more detailed supervisory strategies for each of the financial sectors within the Central Bank’s remit, providing firms with detail on the Central Bank’s expectations of their sector, as well as what the sector can expect in terms of focused supervisory work.

    Risk Theme A: Risks that are predominantly driven by the macroeconomic and geopolitical environment

    Interest rate and inflation risks

    • Asset valuation and market risks
    • Liquidity and leverage risks
    • Credit and counterparty risks

    Risk Theme B: Risks that are predominantly driven by the way regulated entities operate and respond to the evolution of their marketplace and today’s changing world

    • Consumer and investor detriment risks
    • Operational risks and resilience
    • Risk management practices and risk transfer
    • Data deficiencies and modelling risks

    Risk Theme C: Risks that are driven by the longer term structural forces at play

    • Climate and other environmental-related risks
    • Financial crime risks
    • Strategic risks

    Supervisory Priority 1: Proactive risk management and consumer-centric leadership of firms

    Supervisory Priority 2: Firms are resilient to the challenging macro environment

    Supervisory Priority 3: Firms address operating framework deficiencies

    Supervisory Priority 4: Firms manage change effectively

    Supervisory Priority 5: Climate change and Net Zero transition are addressed

    Supervisory Priority 6: The Central Bank enhances how it regulates and supervises

    Additionally, the CBI specified the below focus points:

    • Working with the Department of Finance on priority policy areas including,  continuing implementation of the Retail Banking Review; access to cash; the National Payments Strategy; the completion of the 2030 Funds Review and the National Financial Literacy Strategy
    • Putting in place a revised and modernised Consumer Protection Code to ensure consumers are protected in a more digitalised financial services sector
    • Continuing to progress work both internationally and domestically to address systemic risks from the non-bank sector and deepening our analysis and understanding of macroprudential risks in this sector
    • Implementing the Individual Accountability Framework (including within our supervision of firms) and supporting external stakeholders to embed the new standards
  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    IF publishes response to CP23/26 Implementing the Overseas Funds Regime


  • In February 2024, the Irish Funds Industry (IF) published their response to CP23/26 Implementing the Overseas Funds Regime.

    There are 3,984 Irish domiciled funds registered in the UK and 374 UK promoters actively engaged in the promotion and management of Irish domiciled funds. 

    While CP23/26 (the consultation) is silent on the timing and allocation of landing slots, Irish Funds would urge the FCA to ensure that fund managers (managers) in the TMPR are afforded sufficient time following publication of data requirements for an OFR application to collate the necessary information in advance of the allocation of landing slots. Much of the information is detailed, class specific, and will not be readily available. In addition, managers will need to resource the collation of this data, which exercise can only be started following publication of the final policy statement and final Handbook rules, which is anticipated in Q2 2024.

    Irish Funds is concerned that the intention to apply a 30-day prior notice requirement for certain actions and proposed changes will have unintended consequences for the ability of managers to exercise their responsibilities and duties effectively.

    Irish Funds is uncertain as to whether the proposals relating to the 30-day notice period are intended to apply to the marketing of new share classes in the UK. In the opinion of Irish Funds, this notice period has unfairly disadvantaged registered sub-funds, which must wait 30 days to launch new share classes, in comparison to the speed in which new sub-funds can be brought to market across the EEA. Irish Funds believes that the 30-day period notice for marketing additional share classes in the EEA is an unintended consequence of the CBDD. IF would therefore similarly raise this as an area of concern with the FCA in relation to the operation of the OFR and would urge that no delay be imposed on the marketing of additional share classes in sub-funds which are registered the UK.

    Irish Funds would welcome clarification regarding the location of required disclaimers. 5.16 of the consultation notes that Alternative Dispute Resolution (ADR) and compensation disclaimers are required to be included in the fund prospectus. Irish Funds notes this requirement and understands the rationale for same. As the FCA will be aware, European UCITS marketed in UK are required to maintain a UK country supplement which includes details of UK facilities agent. Noting that funds are generally distributed internationally and are therefore required to comply with multiple jurisdictions regulatory requirements, the IF recommendation would be to allow the required disclaimers to be included in the fund prospectus or the UK country supplement (but not both) given that both are pre-contractual documents which must be delivered to UK investors in advance of investment. Similarly, Irish Funds would question the requirement to include the disclaimers again in the Key Investor Information Documents (KIID). 

    Irish Funds is concerned at the potential differences between the current and further future divergence between the Sustainability Disclosure Requirements (SDR) and investment labels and those that are required as part of the Sustainable Finance Disclosure Regulation.

    Irish Funds is particularly concerned with how the UK naming rules will interact with the upcoming ESMA Fund Naming Guidelines particularly in relation to the use of the word (and derivations of it) ‘sustainability’. Under the UK rules, the word ‘sustainability’ is limited to those funds adhering to a label. An EU Article 8 Fund that uses that ‘sustainability’ in its name and commits to investing in at least 50% of sustainable investments under SFDR will continue to be able to use the name provided they meet the ESMA Guidelines. However, as the UK labels require at least 70% of assets, this EU fund won’t be able to meet the label requirements. Urgent clarity is required on whether it is expected that these funds will have to change their name as part of the extension of SDR to overseas funds.

    The consultation expresses the FCA’s view that it is not appropriate to have an OFR recognised scheme or sub-fund with a name that is identical to that of a UK authorised scheme or sub-fund, on the basis that it would give rise to confusion, and that if an application were to be received for a scheme whose name was identical to the name of an already authorised UK scheme, the FCA would be unlikely to recognise the scheme. It is the experience of Irish Funds that there are a variety of reasons why the sub-funds of two different schemes may employ the same investment strategy. These reasons can relate to succession in product offerings, the need for scale thresholds by particular investor types that may not be available in the UK-domiciled vehicle, and the desire of investors to maintain their exposure to the strategy in a particular sub-fund for tax reasons. Feedback to Irish Funds members from UK distributors and wealth managers who have clients in identical sub-funds across two different schemes has been that it is in fact differences in the names of funds in these scenarios that sows most confusion, and fund managers have been proactively aligning sub-fund names to satisfy this client preference. Irish Funds would also like further clarification on what the rationale is for the FCAs concerns here and what would be acceptable to differentiate the schemes – the inclusion of a country index in the fund name for example.


    Capital Markets Union (CMU)

    Camera dei Deputati publishes measures to support capital competitiveness


  • On February 2 2024, the Camera dei Deputati published measures to support capital competitiveness.

    In drawing up the measures contained in this Bill, the Government aims at stimulating the growth of the Italian capital market by facilitating the access and permanence of companies in the financial markets.

    Over the last ten years, an average of less than four companies per year have been listed on the regulated market of the Italian Stock Exchange and the country's market capitalization, as a percentage of GDP, has been significantly below that of its European counterparts. At the same time, in 2018, the total number of corporate bonds issued, in Italy and abroad, by Italian non-financial corporations was equal to about 6% of all European issuances, about half of Italy's share of European GDP. In addition, 90% of all Italian corporate bonds were listed on a foreign stock exchange while, at the end of 2017, only 7% of Italian institutional investors' portfolios were invested in shares and corporate bonds issued by Italian companies, a figure that highlights the small size of the Italian market. On the other hand, Italian investors had allocated around €190 billion to venture capital investments by cross-border companies, both directly and indirectly through foreign investment funds: in terms of value, this is a sum representative of almost two-thirds of the total free-float-adjusted market capitalisation of all listed Italian companies. Finally, Italian stocks accounted for only 3.6% of the MSCI Europe Index, where French stocks accounted for about 18%.

    The present Bill is split in 5 chapters:

    Chapter 1: Simplification of access to and access to capital markets

    Chapter 2: Regulation on NCAs

    Chapter 3: Measures to promote financial inclusion

    Chapter 4: Amendments to the Regulation of Destined Heritage (Patrimonio Destinato)

    Chapter 5: Financial Provisions

    Those 5 chapters are organized into the following macro-areas:

    • Improvement of the legal and regulatory environment
    • Support for small and medium-sized enterprises
    • Innovation and internationalization
    • Investor protection
  • European Market Infrastructure Regulation (EMIR)

    Banca d'Italia publishes press release on complying with ESMA guidelines on CCPRRR and EMIR


  • On February 20 2024, the Banca d'Italia published a press release on complying with European Securities and Markets Authority (ESMA) Guidelines on the Central Counterparty Recovery and Resolution Regulation (CCPRRR) and European Market Infrastructure Regulation (EMIR).

    The Bank of Italy and Consob, as competent authorities for the supervision of Italian Central Counterparty's (CCP), comply with the Guidelines on the consistent application of the conditions for the use of early intervention measures (Article 18(8) of the CCPRRR), the Guidelines on the application of situations in which a CCP is considered to be failing or likely to fail (Article 22, paragraph 6 of the CCPRRR) and the Guidance on further specification of temporary restrictions in the event of a significant event other than default under Article 45a of EMIR, issued by ESMA, integrating them into their supervisory practices.

    The Bank of Italy, as the resolution authority designated pursuant to Article 3 of the CCPRRR, also complies with the Guidelines on the methodology to be used by the resolution authority to determine the value of contracts before their termination in accordance with Article 29(1) of the CCPRRR, as well as the Guidelines issued pursuant to Article 22(6), integrating them into the national resolution framework.

    The Guidelines aim to further specify certain provisions of the CCPRRR and EMIR in order to ensure their common, uniform and consistent application.

    Pursuant to Regulation (EU) No 1095/2010, ESMA has been informed of the decision to comply with the above-mentioned Guidelines.


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

    JFSC publishes 2023 AML/CFT/CPF and other supervisory risk data collection exercise


  • On February 5 2024, the Jersey Financial Services Commission (JFSC) published the 2023 Anti-Money Laundering / Combating the Financing of Terrorism / Countering the Financing of Proliferation (AML/CFT/CPF) and other supervisory risk data collection exercise.

    The deadline for supervised businesses to submit their 2023 data is May 31 2024.

    This data informs JFSC approach for risk-based supervision and its financial crime examination process. It will also be used in aggregated form to refresh the JFSC’s risk model and national risk assessments.

    The data asked is expanded for this year and it includes:

    • Additional financial crime questions applicable to all supervised businesses
    • New conduct questions applicable to regulated businesses; and
    • Questions on legal persons and arrangements applicable to trust company service providers.

    The sector-specific information they are asking for remains largely the same.

    For further information on the scope of the additional questions can be found in ANBIMA feedback paper on the additional supervisory risk data consultation.

  • JFSC publishes Travel Rule Guidance for VASPs


  • On February 5 2024, the Jersey Financial Services Commission (JFSC) published the Travel Rule guidance for virtual asset service providers (VASPs).

    JFSC's approach is to support innovation while ensuring Jersey meets international standards in the fight against financial crime.

    To help prevent money laundering, terrorist financing and proliferation financing, the Financial Action Taskforce (FATF) has called on jurisdictions to swiftly implement its “Travel Rule”, which requires transfers of virtual assets to be accompanied by accurate originator and beneficiary information.

    New guidance note explains how Jersey virtual asset service providers (VASPs) should implement the Travel Rule. JSFC recognises the challenges presented by different jurisdictions being at different stages of adoption and implementation of the rule. The guidance therefore sets out how VASPs can ensure compliance with the Travel Rule under a range of circumstances.

    Among other areas, the note covers:

    • Required information to accompany transfers between VASPs
    • What to do when transferring virtual assets to and from jurisdictions without the Travel Rule
    • Determining transaction values
    • Transfers between different legal entities within the same group
    • Transfers to and from non-VASPs
  • JFSC informs on Deposit-taking Business Code of Practice


  • On February 23 2024, the Jersey Financial Services Commission (JFSC) published an industry update on the deposit-taking business code of practice.

    Following feedback from industry, JFSC has updated its Deposit-taking Business Code of Practice to reflect the wider scope of its Anti-Money Laundering / Combating the Financing of Terrorism / Countering the Financing of Proliferation (AML/CFT/CPF) Handbook and to improve user experience.

    No material changes have been made to the code.

    Updates are the following:

    • References of “AML/CFT” to “AML/CFT/CPF”, reflecting the wider scope of the AML/CFT/CPF Handbook;
    • The Depositor Compensation Scheme (DCS) disclosure requirement in section 7.11 of the Main Body, removing transitional provisions that are no longer applicable.

    The updated Code is effective from 23 February 2024 in the conduct of:

    • Deposit-taking business, as defined by the Banking Law
    • Money service business, as defined by the FS(J)L, when carried on by a prescribed person meeting the definition of an exempt person in Article 5(1) of the Financial Services (Money Service Business (Exemptions)) (Jersey) Order 2007.

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

    PFI issues Survey on Professionals' Satisfaction with AML/CFT Prevention and Awareness Measures / PFI publie une enquête sur la satisfaction des professionnels à l'égard des mesures de prévention et de sensibilisation en matière de BC/FT


  • On February 1 2024, the Luxembourg Tax Authority - Portail de la fiscalité indirecte (PFI) issued the Money Laundering – Survey: Professionals' Satisfaction with AML/CFT Prevention and Awareness Measures.

    As part of its mission of prevention and awareness-raising, the Registration, Estates and VAT Authority (AED) wishes to determine the satisfaction of professionals with regard to the prevention and awareness-raising measures put in place by the AED via AML/CFT publications (guides, technical sheets, questionnaires, forms, circulars, etc.).

    This voluntary survey allows the AED to strengthen its AML/CFT prevention and awareness-raising mission.

    Version française

    Le 1er février 2024, l'Administration fiscale luxembourgeoise - Portail de la fiscalité indirecte (PFI) a publié l'Enquête sur le blanchiment d'argent : Satisfaction des professionnels à l'égard des mesures de prévention et de sensibilisation en matière de LBC/FT.

    Dans le cadre de sa mission de prévention et de sensibilisation, l'Autorité de l'Immatriculation, des Domaines et de la TVA (AED) souhaite déterminer la satisfaction des professionnels au regard des mesures de prévention et de sensibilisation mises en place par l'AED via les publications LBC/FT. (guides, fiches techniques, questionnaires, formulaires, circulaires, etc.).

    Cette enquête volontaire permet à l'AED de renforcer sa mission de prévention et de sensibilisation en matière de LBC/FT.

  • CSSF publishes Circular letter and User Guide on 2023 Questionnaire on financial crime / La CSSF publie une lettre circulaire et un guide de l'utilisateur sur le questionnaire 2023 sur la criminalité financière


  • On February 8 2024, the Commission de Surveillance du secteur financier (CSSF) published a Circular letter on the 2023 Questionnaire on financial crime.

    The annual online questionnaire for the year 2023 collecting standardised key information concerning money laundering and terrorism financing (ML/TF) risks to which the professionals under supervision are exposed and the implementation of related risk mitigation and targeted financial sanctions measures was launched on February 19 2024.

    The entities in scope are Credit institutions, Investment firms, Investment fund managers including registered AIFMs, Luxembourg branches of investment fund managers, SIAG (self-managed UCITS), FIAAG (internally managed AIFs with a full AIFMD authorisation) and investment funds which did not designate an investment fund manager, Payment institutions and electronic money institutions, Virtual Asset Service Providers (VASP), Specialised professionals of the financial sector (PFS), Central Securities Depositories (CSD) incorporated under Luxembourg law, and all their Luxembourg branches having their registered office in an EU country or a third country.

    In substance, the 2023 questionnaire remains mostly unchanged compared to the previous year. However, some questions have been removed, added, or amended. The new questions have been highlighted in the questionnaire.

    Answers to the questions will have to be submitted through the CSSF eDesk portal by April 2 2024 (at the latest).

    For the 2023 Financial Crime questionnaire campaign the CSSF will provide a new Application Programming Interface (“API”) solution allowing to pre-populate the questionnaire in order to ease the process. The API solution is based on the use of a structured exchange file (json format) to be transmitted to the CSSF via the S3 (“simple storage service”) protocol. This file will then pre-fill the questionnaire available on the CSSF eDesk platform. The entity will also be able to update the data prefilled directly in eDesk through S3. The manual input of the responses remains possible directly in the eDesk online form.

    The dedicated user guide is available (Questionnaire on financial crime – User guide), which includes technical details (json schema, naming convention) as well as information on the enrolment process. The enrolment at CSSF will only be required once entities are ready to test their developments.

    The questionnaire must still be submitted within the CSSF eDesk portal by:

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

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

    Version française

    Le 8 février 2024, la Commission de Surveillance du secteur financier (CSSF) a publié une Lettre circulaire relative au Questionnaire 2023 sur la criminalité financière.

    Le questionnaire annuel en ligne pour l'année 2023 collectant des informations clés standardisées concernant les risques de blanchiment d'argent et de financement du terrorisme (BC/FT) auxquels sont exposés les professionnels sous surveillance et la mise en œuvre de mesures d'atténuation des risques et de sanctions financières ciblées y afférentes a été lancé le 19 février 2024. .

    Les entités concernées sont les établissements de crédit, les entreprises d'investissement, les gestionnaires de fonds d'investissement y compris les gestionnaires de fonds d'investissement enregistrés, les succursales luxembourgeoises de gestionnaires de fonds d'investissement, les SIAG (OPCVM autogérés), les FIAAG (FIA gérés en interne avec un agrément AIFMD complet) et les fonds d'investissement qui n'ont pas désigner un gestionnaire de fonds d'investissement, les établissements de paiement et les établissements de monnaie électronique, les prestataires de services sur actifs virtuels (VASP), les professionnels spécialisés du secteur financier (PFS), les dépositaires centraux de titres (CSD) de droit luxembourgeois, ainsi que toutes leurs succursales luxembourgeoises ayant leur siège social bureau dans un pays de l’UE ou un pays tiers.

    Sur le fond, le questionnaire 2023 reste quasiment inchangé par rapport à l’année précédente. Cependant, certaines questions ont été supprimées, ajoutées ou modifiées. Les nouvelles questions ont été mises en évidence dans le questionnaire.

    Les réponses aux questions devront être soumises via le portail CSSF eDesk au plus tard le 2 avril 2024.

    Pour la campagne 2023 de questionnaires sur la criminalité financière, la CSSF fournira une nouvelle solution d'interface de programmation d'application (« API ») permettant de pré-remplir le questionnaire afin de faciliter le processus. La solution API repose sur l’utilisation d’un fichier d’échange structuré (format json) à transmettre à la CSSF via le protocole S3 (« simple storage service »). Ce fichier pré-remplira ensuite le questionnaire disponible sur la plateforme CSSF eDesk. L'entité pourra également mettre à jour les données préremplies directement dans eDesk via S3. La saisie manuelle des réponses reste possible directement dans le formulaire en ligne eDesk.

    Le guide utilisateur dédié est disponible (Questionnaire sur la criminalité financière – Guide utilisateur), qui comprend des détails techniques (schéma json, convention de dénomination) ainsi que des informations sur le processus d'inscription. L'inscription à la CSSF ne sera requise que lorsque les entités seront prêtes à tester leurs développements.

    Le questionnaire doit toujours être soumis au sein du portail CSSF eDesk par :

    • le responsable du contrôle du respect des obligations professionnelles (« RC ») chargé du contrôle du respect des obligations professionnelles, ou
    • le responsable du respect des obligations professionnelles (« RR »).

    Le remplissage du questionnaire peut toutefois être confié au sein du portail CSSF eDesk à un autre employé de l'entité ou à un tiers, tout en gardant à l'esprit que la responsabilité ultime du bon remplissage du questionnaire incombe au « RC » ou au "RR".

  • CSSF updates on Private Banking Sub-Sector ML/TF Risk Assessment / Mises à jour de la CSSF sur l’évaluation des risques de BC/FT du sous-secteur de la banque privée


  • On February 7 2024, the Commission de Surveillance du Secteur Financier (CSSF) published the updated Private Banking Sub-Sector Risk Assessment (PBSSRA) 2023. 

    With assistance from the members of the Expert Working Group on Private Banking (EWG PB), which includes representatives of the private banking sector, the ABBL, the FIU and the CSSF, the CSSF updated its Private Banking Sub-Sector Risk Assessment (PBSSRA) of 2019.

    The sub-sector has been highlighted as having a “very high” inherent ML risk in the 2018 National Risk Assessment (NRA), and again in the updated NRA of 2020. Consequently, the CSSF completed a first, dedicated Private Banking Sub-Sector Risk Assessment (PBSSRA) in December 2019, to identify more precisely which aspects of private banking activities are particularly exposed to money laundering/terrorism financing (ML/TF). Since the publication of the first PBSSRA, Luxembourg has made several important publications relating to AML/CFT. A revised National Risk Assessment of Money Laundering and Terrorist Financing and a Vertical Risk Assessment on Virtual Asset Service Providers were published in 2020. Furthermore, a Vertical Risk Assessment on Legal Persons and Legal Arrangements and a Vertical Risk Assessment on Terrorist Financing were published in 2022. 

    This risk assessment revisits, and updates where necessary, the conclusions of the 2019 assessment, includes several new sections (e.g., on the terrorist financing risk in private banking as well as new or developing risks) and provides updated recommendations to the private banking sub-sector. To elaborate:

    • Revised section on TF risk is included;
    • TF-linked threats in private banking have been reassessed in section 4.3 in light of the 2022 publications of the updated SNRA and Luxembourg’s first Terrorism Financing Vertical Risk Assessment (TFVRA), in line with a recommendation by the FATF;
    • A new Chapter 7 has been inserted, to address emerging and increasing areas of ML/TF risk identified by CSSF, including a section focusing on financial sanctions;
    • Further areas that were reviewed include outsourcing, new technologies and virtual assets;
    • Section 7.5 draws attention to professional money launderers, who insert themselves in the money laundering process as an additional layer, thus rendering detection even more difficult; and
    • Chapter 8 revisits and updates the recommendations for the private sector, based on conclusions from CSSF’s supervision, and highlights some of CSSF’s present and future initiatives.

    In line with AML/CFT Law, regulations and recently published circulars, CSSF has identified in this assessment a number of key recommendations for private banks. These apply equally to investment firms conducting the activities described in this document. CSSF will therefore monitor investment firms’ adherence to this assessment’s recommendations as part of its ongoing supervisory activities. Therefore, the CSSF expects all supervised entities engaging in private banking activities to integrate the findings, conclusions and recommendations resulting from this sub-sector risk assessment into their AML/CFT frameworks to ensure they remain appropriate to effectively mitigate ML/FT risks. 

    Version française

    Le 7 février 2024, la Commission de Surveillance du Secteur Financier (CSSF) a publié la mise à jour de l'évaluation des risques du sous-secteur de la banque privée (PBSSRA) 2023.

    Avec l’aide des membres du Groupe de travail d’experts sur la banque privée (EWG PB), qui comprend des représentants du secteur de la banque privée, de l’ABBL, de la CRF et de la CSSF, la CSSF a mis à jour son évaluation des risques du sous-secteur de la banque privée (PBSSRA). de 2019.

    Le sous-secteur a été souligné comme présentant un risque de blanchiment inhérent « très élevé » dans l’évaluation nationale des risques (NRA) de 2018, puis à nouveau dans l’ENR actualisée de 2020. Par conséquent, la CSSF a réalisé un premier sous-secteur dédié à la banque privée. Risk Assessment (PBSSRA) en décembre 2019, pour identifier plus précisément quels aspects des activités de banque privée sont particulièrement exposés au blanchiment d’argent/financement du terrorisme (BC/FT). Depuis la publication du premier PBSSRA, le Luxembourg a réalisé plusieurs publications importantes relatives à la LBC/FT. Une évaluation nationale révisée des risques liés au blanchiment d'argent et au financement du terrorisme et une évaluation verticale des risques liés aux fournisseurs de services d'actifs virtuels ont été publiées en 2020. En outre, une évaluation verticale des risques liés aux personnes morales et aux constructions juridiques et une évaluation verticale des risques liés au financement du terrorisme ont été publiées en 2022. .

    Cette évaluation des risques revisite et met à jour si nécessaire les conclusions de l'évaluation de 2019, comprend plusieurs nouvelles sections (par exemple sur le risque de financement du terrorisme dans la banque privée ainsi que les risques nouveaux ou en développement) et fournit des recommandations mises à jour à la sous-direction de la banque privée. secteur. Élaborer:

    • une section révisée sur le risque de FT est incluse ;
    • les menaces liées au FT dans la banque privée ont été réévaluées dans la section 4.3 à la lumière des publications 2022 du SNRA actualisé et de la première évaluation du risque vertical de financement du terrorisme (TFVRA) du Luxembourg, conformément à une recommandation du GAFI ;
    • un nouveau chapitre 7 a été inséré, pour aborder les domaines émergents et croissants de risque de BC/FT identifiés par la CSSF, y compris une section axée sur les sanctions financières ;
    • d''autres domaines examinés comprennent l'externalisation, les nouvelles technologies et les actifs virtuels ;
    • la section 7.5 attire l'attention sur les blanchisseurs d'argent professionnels, qui s'insèrent dans le processus de blanchiment d'argent en tant que niveau supplémentaire, rendant ainsi leur détection encore plus difficile ; et
    • le chapitre 8 revisite et met à jour les recommandations destinées au secteur privé, sur la base des conclusions de la surveillance de la CSSF, et met en lumière certaines des initiatives actuelles et futures de la CSSF.

    Conformément à la loi LAB/CFT, à la réglementation et aux circulaires récemment publiées, la CSSF a identifié dans cette évaluation un certain nombre de recommandations clés pour les banques privées. Celles-ci s'appliquent également aux entreprises d'investissement exerçant les activités décrites dans le présent document. La CSSF contrôlera donc le respect par les entreprises d’investissement des recommandations de cette évaluation dans le cadre de ses activités de surveillance continues. Par conséquent, la CSSF attend de toutes les entités surveillées exerçant des activités de banque privée qu’elles intègrent les constatations, conclusions et recommandations résultant de cette évaluation des risques sous-sectoriels dans leurs cadres de LBC/FT afin de garantir qu’ils restent appropriés pour atténuer efficacement les risques de BC/FT.

  • Accounting

    LuxCMA publishes Best Practice Guidance Note for Board Members on Financial Statements & Disclosures FVCs / LuxCMA publie une note d'orientation pour des membres du conseil d'administration en matière d'états financiers et d'informations à fournir


  • On February 8 2024, the Luxembourg Capital Markets Association (LuxCMA) published a Best Practice Guidance Note for Board Members on Financial Statements & Disclosures of Financial Vehicle Corporations (FVCs).

    In the absence of clear market standards on the sufficiency and level of detail of key disclosures for a securitisation vehicle when it comes to financial statements, the publication aims to provide clarity and advice to stakeholders using the financial statements of FVCs. It also aims to harmonise the level of disclosure in the financial statements of FVCs across the market.

    One of the key features of the Securitisation Law is a possibility to create compartments in a securitisation company and in a securitisation fund.

    In multi-compartment structures, it may be the case that the compartments have transactions between one another. Such transactions usually occur due to recharging of the operational and other external expenses from the general/capital compartment, which pays for such expenses, to the operational compartments, which benefit from these services. 

    A reconciliation mismatch may arise when in a note to the financial statements the sum of the compartment balances does not equal the amount in the combined balance sheet or profit and loss account. To address this mismatch, a disclosure note will need to show the elimination of these inter-compartment balances.

    In addition to the disclosure of movements in the portfolio of underlying assets during the year required by law (i.e. opening balance, additions, disposals, value adjustments, etc.), it is best market practice to disclose the nature of the underlying assets. The level of detail varies and may include maturities, names of individual borrowers (for loan portfolios), currency composition, interest rate range, available guarantees, and any other information that meets the needs of a wide range of users.

    Best market practice is to disclose the major terms and conditions of the financial instruments issued and their nature including, but not limited to, maturity, currency, interest per annum and periodicity in which principal and interest are (re)paid to investors. 

    Version française

    Le 8 février 2024, l'Association luxembourgeoise des marchés de capitaux (LuxCMA) a publié une note d'orientation sur les meilleures pratiques à l'intention des membres du conseil d'administration en matière d'états financiers et d'informations à fournir sur les sociétés de véhicules financiers (FVC).

    En l’absence de normes de marché claires sur le caractère suffisant et le niveau de détail des informations clés à fournir pour un véhicule de titrisation en matière d’états financiers, la publication vise à apporter de la clarté et des conseils aux parties prenantes utilisant les états financiers des sociétés-écrans. Il vise également à harmoniser le niveau d’information dans les états financiers des sociétés-écrans sur l’ensemble du marché.

    L'une des caractéristiques clés de la loi sur la titrisation est la possibilité de créer des compartiments dans une société de titrisation et dans un fonds de titrisation.

    Dans les structures multi-compartiments, il peut arriver que les compartiments aient des transactions entre eux. De telles transactions se produisent généralement en raison de la recharge des dépenses opérationnelles et autres dépenses externes du compartiment général/capital, qui paie ces dépenses, vers les compartiments opérationnels, qui bénéficient de ces services.

    Un écart de rapprochement peut survenir lorsque, dans une note aux états financiers, la somme des soldes des compartiments n'est pas égale au montant du bilan combiné ou du compte de profits et pertes. Pour remédier à cette asymétrie, une note d’information devra montrer l’élimination de ces soldes inter-compartiments.

    Outre la divulgation des mouvements du portefeuille d'actifs sous-jacents au cours de l'année requis par la loi (c'est-à-dire le solde d'ouverture, les ajouts, les cessions, les corrections de valeur, etc.), il est de bonne pratique de marché de divulguer la nature des actifs sous-jacents. Le niveau de détail varie et peut inclure les échéances, les noms des emprunteurs individuels (pour les portefeuilles de prêts), la composition des devises, la fourchette des taux d'intérêt, les garanties disponibles et toute autre information répondant aux besoins d'un large éventail d'utilisateurs.

    La meilleure pratique du marché consiste à divulguer les principales conditions générales des instruments financiers émis et leur nature, y compris, mais sans s'y limiter, l'échéance, la devise, les intérêts annuels et la périodicité selon laquelle le principal et les intérêts sont (re)payés aux investisseurs.

  • LuxCMA publishes Guidance Note for Board Members on Accounting for Structured Products / La LuxCMA publie une note d'orientation à l'intention des membres du conseil d'administration sur la comptabilisation des produits structurés


  • On February 21 2024, the Luxembourg Capital Markets Association (LuxCMA) published a Guidance Note for Board Members on Accounting for Structured Products.

    Under LUX GAAP, the securitisation vehicle (FVC) can opt to choose from different accounting frameworks for the initial and subsequent accounting treatment of the valuation of the assets. 

    The FVC which is set up to issue structured products mostly opts for the LUX GAAP valuation model using the Fair Value Option (FVO), as this methodology is the most appropriate to ensure a true and fair view of the financial statements.

    Version française

    Le 21 février 2024, l'Association luxembourgeoise des marchés de capitaux (LuxCMA) a publié une note d'orientation destinée aux membres du conseil d'administration sur la comptabilité des produits structurés.

    Selon LUX GAAP, le véhicule de titrisation (FVC) peut choisir parmi différents référentiels comptables pour le traitement comptable initial et ultérieur de la valorisation des actifs.

    La FVC qui est créée pour émettre des produits structurés opte majoritairement pour le modèle de valorisation LUX GAAP utilisant la Fair Value Option (FVO), car cette méthodologie est la plus appropriée pour garantir une image fidèle des états financiers.

  • Investment firms /MiFID firms

    CSSF publishes Circular CSSF 24/853 on Long Form Report for investment firms / La CSSF publie la Circulaire CSSF 24/853 relative au compte rendu analytique révisé pour les entreprises d'investissement


  • On February 6 2024, the Commission de Surveillance du secteur financier (CSSF) published the Circular CSSF 24/853 on the Long Form Report – Practical rules concerning the self-assessment questionnaire to be submitted by investment firms – Mission and related reports of the réviseurs d’entreprises agréés (approved statutory auditors).

    The Circular CSSF 24/853 revising the framework of the long form report applicable to investment firms and amending the scope of application of Circular CSSF 03/113. The revised long form report now focuses on central administration, internal governance, risk management requirements as well as MiFID and AML/CFT regulations.

    Under the revised approach, investment firms shall provide annually self-certifications on key aspects of Circular CSSF 20/758 as well as MiFID regulations via a self-assessment questionnaire (SAQ), taking into consideration the nature, size and complexity of their business model. Their réviseur d’entreprises agréé (REA) shall provide dedicated reports allowing the CSSF to assess the investment firm’s compliance with relevant MiFID aspects, including provisions on the protection of financial instruments and funds belonging to clients as required under Article 7 of the Grand-ducal Regulation of May 30 2018, and the relevant AML/CFT laws and regulations.

    The long form report can be submitted to the CSSF via the following channels:

    • An online solution via eDesk procedure for manual input by the investment firms.
    • An API solution based on the submission of a structured file (json format) through S3 (“simple storage service”) protocol, allowing to pre-populate the questionnaire in order to ease the process. This file will then pre-fill the questionnaire available on the CSSF eDesk platform. The entity will also be able to update directly in eDesk the data prefilled through S3.

    In order to allow for a gradual implementation of the revised framework, Circular CSSF 24/853 will become applicable in a staggered manner:

    • For the financial year ending December 31 2023, all Class 2 IF incorporated under Luxembourg law, including their branches (full prudential requirements set out in the IFR and IFD) and certain Class 3 IF (Class 3 firms do not conduct investment services with a high risk for clients) will be required to submit the revised LFR, whereas all other investment firms will remain subject to Circular CSSF 03/113.
    • For financial years ending after December 31 2023, all investment firms will have to submit the revised LFR in accordance with Circular CSSF 24/853.

    Version française

    Le 6 février 2024, la Commission de Surveillance du secteur financier (CSSF) a publié la Circulaire CSSF 24/853 relative au Long Form Report – Règles pratiques concernant le questionnaire d'auto-évaluation à soumettre par les entreprises d'investissement – Mission et rapports associés des réviseurs d'entreprises agréés.

    La Circulaire CSSF 24/853 révisant le cadre du rapport détaillé applicable aux entreprises d'investissement et modifiant le champ d'application de la Circulaire CSSF 03/113. Le rapport détaillé révisé se concentre désormais sur l'administration centrale, la gouvernance interne, les exigences en matière de gestion des risques ainsi que les réglementations MiFID et LAB/CFT.

    Dans le cadre de l'approche révisée, les entreprises d'investissement doivent fournir chaque année des autocertifications sur les aspects clés de la circulaire CSSF 20/758 ainsi que de la réglementation MiFID via un questionnaire d'auto-évaluation (SAQ), en tenant compte de la nature, de la taille et de la complexité de leur modèle économique. . Leur réviseur d'entreprises agréé (REA) fournit des rapports dédiés permettant à la CSSF d'évaluer la conformité de l'entreprise d'investissement aux aspects pertinents de MiFID, y compris les dispositions relatives à la protection des instruments financiers et des fonds appartenant aux clients, comme l'exige l'article 7 du Règlement grand-ducal. Règlement du 30 mai 2018, ainsi que les lois et réglementations LAB/CFT pertinentes.

    Le rapport détaillé peut être soumis à la CSSF via les canaux suivants :

    • une solution en ligne via la procédure eDesk pour la saisie manuelle par les entreprises d'investissement.
    • une solution API basée sur la soumission d'un fichier structuré (format json) via le protocole S3 (« simple storage service »), permettant de pré-remplir le questionnaire afin de faciliter le processus. Ce fichier pré-remplira ensuite le questionnaire disponible sur la plateforme CSSF eDesk. L'entité pourra également mettre à jour directement dans eDesk les données préremplies via S3.

    Afin de permettre une mise en œuvre progressive du cadre révisé, la circulaire CSSF 24/853 deviendra applicable de manière échelonnée :

    • pour l'exercice clos le 31 décembre 2023, tous les FI de classe 2 de droit luxembourgeois, y compris leurs succursales (exigences prudentielles complètes énoncées dans l'IFR et l'IFD) et certains FI de classe 3 (les sociétés de classe 3 ne fournissent pas de services d'investissement avec un à risque élevé pour les clients) seront tenues de soumettre le LFR révisé, tandis que toutes les autres entreprises d'investissement resteront soumises à la circulaire CSSF 03/113.
    • pour les exercices clos après le 31 décembre 2023, toutes les entreprises d'investissement devront soumettre le LFR révisé conformément à la circulaire CSSF 24/853.
  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    CSSF updates FAQ on Virtual Assets for UCIs /


  • On February 22 2024, the Commission de Surveillance du secteur financier (CSSF) updated the FAQ Virtual Assets – Undertakings for collective investment.

    The update refers to Q1 and Q2 and to the marketing of UCIs investing directly or indirectly in virtual assets. AIFs may now invest directly (and indirectly) in virtual assets under the condition that their units are only marketed to well-informed investors.

    UCITS, UCIs addressing customers other than well-informed investors and pension funds are thus not allowed to invest directly or indirectly in virtual assets.

    Any assets that qualify as financial instruments, such as shares of companies active in the virtual asset ecosystem, are not subject to the above position and could potentially fall within the scope of eligible investments for UCITS.

    Investments in financial instruments such as derivatives or transferable securities with underlying virtual assets, are to be considered as indirect investments in virtual assets. Should such an AIF be managed by a Luxembourg-authorised AIFM, the latter must obtain an authorisation extension from the CSSF for this new investment strategy.

    Virtual assets present specificities such as their volatility, liquidity and technological risk which could significantly affect the risk profile of the investment vehicle. The CSSF draws attention to the integration phase of virtual assets in the investment policy and reiterates the importance of having adequate internal control functions with their key role in the approval of new products/investment strategies.

    Version française

    Le 22 février 2024, la Commission de Surveillance du secteur financier (CSSF) a mis à jour la FAQ Actifs virtuels – Organismes de placement collectif.

    La mise à jour porte sur les premier et deuxième trimestres ainsi que sur la commercialisation des OPC investissant directement ou indirectement dans des actifs virtuels. Les FIA peuvent désormais investir directement (et indirectement) dans des actifs virtuels à condition que leurs parts soient commercialisées uniquement auprès d'investisseurs avertis.

    Les OPCVM, les OPC s'adressant à une clientèle autre que des investisseurs avertis et des fonds de pension ne sont ainsi pas autorisés à investir directement ou indirectement dans des actifs virtuels.

    Tous les actifs qualifiés d'instruments financiers, tels que les actions de sociétés actives dans l'écosystème des actifs virtuels, ne sont pas soumis à la position ci-dessus et pourraient potentiellement entrer dans le champ des investissements éligibles aux OPCVM.

    Les investissements dans des instruments financiers tels que des produits dérivés ou des valeurs mobilières avec des actifs virtuels sous-jacents doivent être considérés comme des investissements indirects dans des actifs virtuels. Dans le cas où un tel FIA serait géré par un gestionnaire agréé luxembourgeois, ce dernier devra obtenir une extension d'agrément auprès de la CSSF pour cette nouvelle stratégie d'investissement.

    Les actifs virtuels présentent des spécificités telles que leur volatilité, leur liquidité et leur risque technologique qui pourraient affecter de manière significative le profil de risque du véhicule d'investissement. La CSSF attire l’attention sur la phase d’intégration des actifs virtuels dans la politique d’investissement et réitère l’importance de disposer de fonctions de contrôle interne adéquates avec leur rôle clé dans l’approbation de nouveaux produits/stratégies d’investissement.

  • CSSF informs of deactivation of IFM notifications on fund issues and large redemptions / La CSSF informe de la désactivation des notifications IFM sur les émissions de fonds et rachats importants


  • On February 28 2023, the Commission de Surveillance du secteur financier (CSSF) informed of the deactivation of the notifications on fund issues and large redemptions via eDesk and of the reporting Early Warning on Large Redemptions for investment fund managers (IFMs) who are exposed to significant risks as a result of the prevailing market conditions relating to the situation in Ukraine / Russia.

    In view of the recent evolution of financial markets in general and investment funds/IFMs, the CSSF decided to end this ad hoc reporting at the end of February 2024. As a result, the relevant IFMs should provide the last reporting for the reference date February 29 2024.

    In this context, the CSSF reminds that IFMs should proactively inform the CSSF through the usual communication channels of any significant developments/issues affecting their functioning or the investment funds managed.

    The reporting “Early Warning on large redemptions”, which is only applicable to a limited number of UCITS that have in the past been contacted directly by the CSSF, will not be reinstated for the time being: this reporting is deactivated with immediate effect.

    Version française

    Le 28 février 2023, la Commission de Surveillance du secteur financier (CSSF) a informé de la désactivation des notifications d'émissions de fonds et de rachats importants via eDesk et du reporting Early Warning on Large Rachats pour les gestionnaires de fonds d'investissement (GFI) qui sont exposés à des risques importants en raison des conditions de marché actuelles liées à la situation en Ukraine/Russie.

    Compte tenu de l'évolution récente des marchés financiers en général et des fonds d'investissement/GFI, la CSSF a décidé de mettre fin à ce reporting ad hoc fin février 2024. En conséquence, les GFI concernés devraient fournir le dernier reporting pour la date de référence 29 février 2024.

    Dans ce contexte, la CSSF rappelle que les GFI doivent informer la CSSF de manière proactive, par les canaux de communication habituels, de tout développement/problème significatif affectant leur fonctionnement ou les fonds d'investissement gérés.

    Le reporting « Early Warning on large rachats », qui n’est applicable qu’à un nombre limité d’OPCVM par le passé contactés directement par la CSSF, ne sera pas rétabli pour le moment : ce reporting est désactivé avec effet immédiat.

  • CSSF issues Circular CSSF 24/854 and FAQ on Guidelines on AML/CFT Summary Report RC (SRRC) / La CSSF publie la circulaire CSSF 24/854 et la FAQ sur les lignes directrices sur le rapport de synthèse LAB/CFT RC (SRRC)



    The purpose of this circular is to provide guidance on the SRRC to be prepared by the “Responsable du Contrôle” (RC) and submitted to the CSSF by the “Responsable du Respect” (RR) in accordance with Article 42(7) of CSSF Regulation No 12-02 of December 14 2012 on the fight against money laundering and terrorist financing, as amended (RCSSF 12-02).

    In accordance with Article 42(7) of RCSSF 12-02, the submission to the CSSF of the SRRC is waived for “Luxembourg investment funds which designated a Luxembourg management company submitting this annual report.” Consequently, these funds do not fall within the scope of this circular.


    On February 29 2024, the Commission de Surveillance du secteur financier (CSSF) issued the Circular CSSF 24/854 on the Guidelines for the collective investment sector on the AML/CFT Summary Report “Responsable du Contrôle” (RC) (SRRC) and updated the template.

    The Circular is addressed to all Luxembourg investment fund managers including registered AIFMs, Luxembourg branches of foreign investment fund managers and all Luxembourg investment funds supervised by the CSSF for AML/CFT purposes.

    The new SRRC template is taking into account the existing market practices and shall be read without prejudice of any other AML/CFT requirements applicable to the entities in scope (e.g. EBA Guidelines, etc.). It focuses on key data points relevant for the CSSF’s supervision regarding the fight against money laundering and countering the financing of terrorism (“AML/CFT”) and is in line with its strategy of digitalisation and data driven supervision. 


    The SRRC shall be submitted by the “Responsable du Respect” (i.e. the person responsible for compliance with the AML/CFT professional obligations at the level of the authorised management or Board of Directors), on an annual basis, within five months after the closing of the annual accounts of the supervised entity in scope. 

    The SRRC can be submitted through two different channels:

    • via an online form available on the eDesk platform;
    • via the S3 system by using a structured exchange file.

    The mandatory file naming convention for .zip files is SRRC-ENNNNNNNN-YYYY-MM-DD-UUID.ext

    The RR can delegate the technical submission of the SRRC to another person, however, the RR shall remain ultimately responsible for the submission. Only for the closing ending on 31 December 2023, an extension of two extra months is granted for the submission.

    The provisions of this circular have to be complied with for the financial years ending on or after December 31 2023. 

    Version française


    L’objet de la présente circulaire est de fournir des orientations sur le SRRC qui doit être préparé par le « Responsable du Contrôle » (RC) et soumis à la CSSF par le « Responsable du Respect » (RR) conformément à l’article 42(7) de la CSSF. Règlement n° 12-02 du 14 décembre 2012 relatif à la lutte contre le blanchiment de capitaux et le financement du terrorisme modifié (RCSSF 12-02).

    Conformément à l’article 42(7) du RCSSF 12-02, la soumission à la CSSF du SRRC est dispensée pour les « fonds d’investissement luxembourgeois qui ont désigné une société de gestion luxembourgeoise soumettant ce rapport annuel ». Par conséquent, ces fonds n’entrent pas dans le champ d’application de la présente circulaire.


    Le 29 février 2024, la Commission de Surveillance du secteur financier (CSSF) a publié la Circulaire CSSF 24/854 relative aux Orientations pour le secteur des placements collectifs sur le rapport de synthèse LBC/FT « Responsable du Contrôle » (RC) (SRRC) et a mis à jour le gabarit.

    La Circulaire s’adresse à tous les gestionnaires de fonds d’investissement luxembourgeois, y compris les gestionnaires de fonds d’investissement enregistrés, les succursales luxembourgeoises de gestionnaires de fonds d’investissement étrangers et tous les fonds d’investissement luxembourgeois supervisés par la CSSF à des fins de LBC/FT.

    Le nouveau modèle SRRC prend en compte les pratiques de marché existantes et doit être lu sans préjudice de toute autre exigence LAB/CFT applicable aux entités concernées (par exemple les lignes directrices de l'ABE, etc.). Il se concentre sur les données clés pertinentes pour la surveillance de la CSSF en matière de lutte contre le blanchiment d’argent et le financement du terrorisme (« LAB/CFT ») et s’inscrit dans sa stratégie de numérisation et de surveillance axée sur les données.


    Le SRRC sera soumis par le « Responsable du Respect » (c'est-à-dire la personne responsable du respect des obligations professionnelles LBC/FT au niveau de la direction autorisée ou du conseil d'administration), sur une base annuelle, dans les cinq mois suivant la clôture. des comptes annuels de l'entité surveillée concernée.

    Le SRRC peut être soumis via deux canaux différents :

    • via un formulaire en ligne disponible sur la plateforme eDesk ;
    • via le système S3 en utilisant un fichier d'échange structuré.

    La convention de dénomination obligatoire des fichiers .zip est SRRC-ENNNNNNNN-YYYY-MM-DD-UUID.ext.

    Le RR peut déléguer la soumission technique du SRRC à une autre personne, cependant, le RR restera responsable en dernier ressort de la soumission. Uniquement pour la clôture se terminant le 31 décembre 2023, une prolongation de deux mois supplémentaires est accordée pour la soumission.

    Les dispositions de la présente circulaire doivent être respectées pour les exercices clos à compter du 31 décembre 2023.

  • Regulation on Markets in Crypto-Assets (MiCA)

    CSSF informs about authorisation under MiCA / La CSSF informe sur l'authorisation sous MiCA


  • On February 28 2024, the Commission de Surveillance du secteur financier (CSSF) issued a Communiqué on MiCA (Markets in crypto-assets).

    The CSSF invites entities considering a notification or submission of an authorisation file with a view to the provision of CASP services, or the issuance of ART (asset-referenced token) or EMT (e-money token) to contact the CSSF now to initiate a preliminary dialogue.

    The targeted entities are those with concrete projects to provide services on crypto-assets (CASP license) or issue ART or EMT falling under the MiCA regulation (EU) 2023/1114 entering into application on June 30 2024 and December 30 2024.

    Entities supervised by the CSSF are invited to contact their usual point of contact/réviseur. Entities not supervised by the CSSF may contact

    Version française

    Le 28 février 2024, la Commission de Surveillance du secteur financier (CSSF) a publié un Communiqué sur les MiCA (Marchés des crypto-actifs).

    La CSSF invite les entités envisageant une notification ou le dépôt d'un dossier d'autorisation en vue de la fourniture de services CASP, ou de l'émission d'ART (asset-referenced token) ou d'EMT (e-money token) à contacter dès maintenant la CSSF pour initier une dialogue préliminaire.

    Les entités ciblées sont celles qui ont des projets concrets de fourniture de services sur crypto-actifs (licence CASP) ou d'émission d'ART ou d'EMT relevant du règlement MiCA (UE) 2023/1114 entrant en application le 30 juin 2024 et le 30 décembre 2024.

    Les entités surveillées par la CSSF sont invitées à contacter leur point de contact/réviseur habituel. Les entités non surveillées par la CSSF peuvent contacter

  • Regulation on screening of foreign direct investments (FDI Screening Regulation)

    CBL publishes Annual Foreign Direct Investment Survey / La CBL publie une enquête annuelle sur les investissements directs étrangers


  • On February 27 2024, the Central Bank of Luxembourg (CBL) published its Annual Foreign Direct Investment Survey due by June 21, 2024.

    The survey is addressed to any credit institution established in the territory of Luxembourg.

    Any direct or indirect link between a resident of Luxembourg and a company established in foreign territory or between a non-resident established outside Luxembourg and a company established on the national territory which allows this resident or non-resident - the direct investor - to have a significant influence in the management of the company concerned - the direct investment company - and which accounts for a lasting interest of the direct investor in the said company. 

    There is a presumption of the existence of a direct investment relationship when the direct investor holds at least 10% of the capital or 10% of the voting rights in the company.

    Version française

    Le 27 février 2024, la Banque centrale du Luxembourg (CBL) a publié son enquête annuelle sur les investissements directs étrangers, attendue avant le 21 juin 2024.

    L'enquête s'adresse à tout établissement de crédit établi sur le territoire luxembourgeois.

    Tout lien direct ou indirect entre un résident du Luxembourg et une société établie sur le territoire étranger ou entre un non-résident établi hors du Luxembourg et une société établie sur le territoire national qui permet à ce résident ou non-résident - l'investisseur direct - d'avoir un influence notable dans la gestion de la société concernée - la société d'investissement direct - et qui justifie un intérêt durable de l'investisseur direct dans ladite société.

    Il existe une présomption d'existence d'une relation d'investissement direct lorsque l'investisseur direct détient au moins 10 % du capital ou 10 % des droits de vote de la société.

  • Sustainable Finance / Green Finance

    CSSF publishes 2022 Climate-related disclosures: Gap analysis / La CSSF publie les informations liées au climat 2022 : Analyse des écarts


  • On February 2 2024, the Commission de Surveillance du secteur financier (CSSF) published the 2022 Climate-related disclosures: Gap analysis.

    The CSSF has carried out a thematic review to examine the current reporting practices for 2022 for a selection of the largest issuers with a potential material impact of climate change under its supervision and falling within the scope of the NFRD.

    In order to gain a preliminary understanding of the gap that remains to be addressed by issuers with regard to the transition from the NFRD to the CSRD, in terms of sustainability disclosures, the CSSF presents a snapshot of certain climate-related information as well as some more general related disclosures that issuers already publish. In addition, the CSSF takes the opportunity to issue some recommendations to the issuers concerned in light of certain of the new requirements that will come into force as from 2024 for publication in 2025.

    The CSSF encourages issuers to provide relevant details on the scope of consolidation and on the boundaries of the upstream and downstream value chain information in their future non-financial disclosures.

    Issuers need to consider more thoroughly the role of boards and management in relation to sustainability matters and how to ensure that appropriate skills and expertise are available or will be developed in order to fulfil this role effectively. 

    The CSSF urges issuers to provide more specific information on sustainability-related performance criteria when disclosing remuneration policies for members of the management.

    Issuers shall consider expanding their disclosures regarding risk management and internal controls in order to better factor sustainability matters.

    When carrying out their materiality assessment on sustainability topics, issuers are to consider the double materiality tenet. They should provide a comprehensive description of their materiality assessment process, including how it is integrated in their respective strategies and business models.

    Issuers must develop and properly disclose their transition plans for climate change mitigation together with the progress towards achieving such transition plans and explain how the transition plans fit in their overall business strategies and financial planning. The CSSF wishes to stress the importance of adequately disclosing the investments required and underlying funding needs for the implementations of issuers’ transition plans. The CSSF urges issuers not only to disclose their GHG emission reduction targets but also to show how these are compatible with limiting global warming to 1.5°C, in line with the Paris Agreement. Finally, issuers, which do not have transition plans in place, should disclose whether and, if so, when, they intend to adopt such.

    The CSSF recommends issuers to start providing information regarding the resilience of their business model in relation to climate change, including climate scenario analyses.

    Issuers are encouraged to:

    • strengthen their process to identify and assess climate-related IRO;
    • in particular, use science-based climate-related scenario analysis to inform the identification and assessment of physical and transition risks and opportunities over the short-, medium- and long-term time horizons;
    • enhance their disclosures of the aforementioned process, in addition to communicating on the outcome of applying it, so that the readers of the sustainability report could gain an in-depth understanding of how issuers arrive at the disclosed conclusions.

    The CSSF highlights the importance of disclosing policies adopted to manage material IROs related to climate change mitigation and adaptation and of explaining how measures taken in this context fit in such policies.

    Issuers should be conscious of the importance of disclosing their climate change mitigation and adaptation actions and the resources allocated (Capex and Opex) for their implementation.

    The CSSF encourages issuers to provide relevant detail on the climate-related targets they have adopted in their future sustainable disclosures, by notably disclosing the following information:

    • the defined GHG emission reduction targets (for Scope 1, 2 and 3) for 2030 (and, if available, for 2050) in absolute value and, if deemed meaningful, in intensity value, including an explanation on how the consistency of these targets with the GHG inventory boundaries is ensured;
    • the baseline value and base year from which progress is measured;
    • the methodologies and significant assumptions used to define targets, including where applicable, the selected scenario, data sources, alignment with national, EU or international policy goals and how the targets consider the wider context of sustainable development and/or local situation in which impacts take place;
    • whether the targets related to environmental matters are based on conclusive scientific evidence.

    The CSSF urges issuers to provide far more granular metrics related to their energy consumption by notably disaggregating by sources (fossil, nuclear…) and indicate the share of renewable energy in their overall energy mix.

    Issuers operating in sectors with a high impact on the climate should already be aware that they will have to provide even more specific quantitative information, notably a disaggregation of their total energy consumption from fossil sources, indication about the share of renewable energy and non-renewable energy in their overall energy production and specific information on the energy intensity based on net revenue.

    The CSSF would like to remind issuers that this disclosure is crucial for measuring progress toward reducing GHG emissions, understanding climate-related transition risks, and ensuring comparability between reporting periods.

    The CSSF would like to emphasise the significance of this disclosure in order to understand the undertaking’s efforts to permanently remove GHG and assessing the quality of carbon credits for potential GHG neutrality claims.

    Issuers should be mindful that the new reporting requirements under CSRD/ESRS are far more granular and extensive than those of the NFRD (underlying guidelines of the European Commission). Notably, stakeholders expect entity-specific disclosures on transition plans as well as climate-related targets, actions and progress.

    While the first companies that will have to apply the ESRS in financial year 2024, for reports published in 2025, are those that report today under the NFRD (with the addition of large listed EU subsidiaries of listed parents, exempted under the NFRD), the scope of entities concerned will increase in subsequent years.

    Moreover, sector-specific standards will later supplement the first set of standards published in 2023. Last October, the European Commission proposed a 2-year delay of the date of adoption of this second set of ESRS, therefore now required from 2026.

    Finally, the CSSF reminds that issuers should take all necessary measures to keep themselves informed on the transposition of the CSRD into Luxemburgish law, which should occur by July 6 2024.

    Version française

    Le 2 février 2024, la Commission de Surveillance du secteur financier (CSSF) a publié les informations 2022 liées au Climat : Analyse des écarts.

    La CSSF a procédé à une revue thématique afin d’examiner les pratiques de reporting actuelles pour 2022 pour une sélection des plus grands émetteurs ayant un impact potentiel matériel sur le changement climatique sous sa surveillance et entrant dans le champ d’application du NFRD.

    Afin d’avoir une première compréhension du manque qui reste à combler par les émetteurs dans le cadre du passage du NFRD au CSRD, en termes d’informations en matière de durabilité, la CSSF présente un instantané de certaines informations liées au climat ainsi que quelques informations connexes plus générales que les émetteurs publient déjà. Par ailleurs, la CSSF profite de l'occasion pour émettre quelques recommandations aux émetteurs concernés au vu de certaines des nouvelles exigences qui entreront en vigueur à partir de 2024 pour une publication en 2025.

    La CSSF encourage les émetteurs à fournir des détails pertinents sur le périmètre de consolidation et sur les limites des informations sur la chaîne de valeur en amont et en aval dans leurs futures informations extra-financières.

    Les émetteurs doivent réfléchir plus minutieusement au rôle des conseils d’administration et de la direction en ce qui concerne les questions de développement durable et à la manière de garantir que les compétences et l’expertise appropriées sont disponibles ou seront développées afin de remplir efficacement ce rôle.

    La CSSF invite les émetteurs à fournir des informations plus spécifiques sur les critères de performance liés au développement durable lors de la publication des politiques de rémunération des membres de la direction.

    Les émetteurs envisageront d’élargir leurs informations concernant la gestion des risques et les contrôles internes afin de mieux prendre en compte les questions de durabilité.

    Lorsqu’ils effectuent leur évaluation de la matérialité sur des sujets liés au développement durable, les émetteurs doivent tenir compte du principe de la double matérialité. Ils doivent fournir une description complète de leur processus d’évaluation de l’importance relative, y compris la manière dont il est intégré dans leurs stratégies et modèles commerciaux respectifs.

    Les émetteurs doivent élaborer et divulguer correctement leurs plans de transition pour l'atténuation du changement climatique ainsi que les progrès réalisés vers la réalisation de ces plans de transition et expliquer comment les plans de transition s'intègrent dans leurs stratégies commerciales globales et leur planification financière. La CSSF souhaite souligner l’importance de divulguer de manière adéquate les investissements requis et les besoins de financement sous-jacents à la mise en œuvre des plans de transition des émetteurs. La CSSF invite les émetteurs non seulement à divulguer leurs objectifs de réduction des émissions de GES mais également à montrer en quoi ceux-ci sont compatibles avec la limitation du réchauffement climatique à 1,5°C, conformément à l'Accord de Paris. Enfin, les émetteurs qui n’ont pas mis en place de plans de transition devraient indiquer s’ils ont l’intention d’en adopter un et, le cas échéant, quand.

    La CSSF recommande aux émetteurs de commencer à fournir des informations sur la résilience de leur modèle économique face au changement climatique, y compris des analyses de scénarios climatiques.

    Les émetteurs sont encouragés à :

    • renforcer leur processus d'identification et d'évaluation des IRO liés au climat ;
    • en particulier, utiliser une analyse scientifique de scénarios liés au climat pour éclairer l'identification et l'évaluation des risques et opportunités physiques et de transition à des horizons temporels à court, moyen et long terme ;
    • améliorer leurs informations sur le processus susmentionné, en plus de communiquer sur les résultats de son application, afin que les lecteurs du rapport de développement durable puissent acquérir une compréhension approfondie de la manière dont les émetteurs arrivent aux conclusions publiées.

    La CSSF souligne l’importance de divulguer les politiques adoptées pour gérer les IRO importants liés à l’atténuation et à l’adaptation au changement climatique et d’expliquer comment les mesures prises dans ce contexte s’intègrent dans ces politiques.

    Les émetteurs doivent être conscients de l’importance de divulguer leurs actions d’atténuation et d’adaptation au changement climatique ainsi que les ressources allouées (Capex et Opex) pour leur mise en œuvre.

    La CSSF encourage les émetteurs à fournir des détails pertinents sur les objectifs liés au climat qu’ils ont adoptés dans leurs futures informations en matière de développement durable, en publiant notamment les informations suivantes :

    • les objectifs de réduction des émissions de GES définis (pour les Scope 1, 2 et 3) pour 2030 (et, si disponibles, pour 2050) en valeur absolue et, si cela est jugé significatif, en valeur d'intensité, y compris une explication sur la manière dont la cohérence de ces objectifs avec les limites de l'inventaire des GES est assurée ;
    • la valeur de référence et l'année de référence à partir desquelles les progrès sont mesurés ;
    • les méthodologies et hypothèses importantes utilisées pour définir les objectifs, y compris, le cas échéant, le scénario sélectionné, les sources de données, l'alignement sur les objectifs politiques nationaux, européens ou internationaux et la manière dont les objectifs prennent en compte le contexte plus large du développement durable et/ou la situation locale dans laquelle les impacts prend place;
    • si les objectifs liés aux questions environnementales reposent sur des preuves scientifiques concluantes.

    La CSSF invite les émetteurs à fournir des indicateurs beaucoup plus précis liés à leur consommation énergétique.


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

    BNM publishes Policy Document on AML/CFT/CPF and TFS for FIs


  • On February 5 2024, the Bank Negara Malaysia (BNM) published a Policy Document on Anti-Money Laundering, Countering Financing of Terrorism, Countering Proliferation Financing and Targeted Financial Sanctions for Financial Institutions.

    Money laundering and terrorism financing (ML/TF) are financial crimes with far reaching and deleterious socio-economic effects. Criminal networks, money launderers and terrorist financiers are highly adaptive and quick to exploit any weak links within an increasingly borderless world to obscure detection of such illicit funds. The globalization and advancement in technology, including the emergence of new players and innovative products, pose challenges to regulators and law enforcement agencies alike in curbing criminal activities.

    In line with the international standards established by the Financial Action Task Force (FATF), the anti-money laundering, countering financing of terrorism and countering proliferation financing (AML/CFT/CPF) reporting obligations imposed on reporting institutions are risk-informed, and subject to periodic review in tandem with any material changes to the international standards or the evolving risk of ML/TF and proliferation financing (PF) situation in Malaysia.

    In view of potential development opportunities brought about by the era of digitalization, enhancements to the existing AML/CFT/CPF reporting obligations are important to ensure areas of higher risk are subject to enhanced controls, while areas of low risk are accorded some policy accommodation, to ensure that the integrity of the financial system is preserved, just as development objectives are facilitated.

    This policy document is intended to set out:

    • Obligations of reporting institutions with respect to the requirements imposed under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA); 
    • Requirements on reporting institutions in implementing a comprehensive risk-based approach in managing ML/TF/PF risks; and
    • Targeted financial sanctions requirements on financial institutions regulated or supervised by Bank Negara Malaysia.

    This policy document consolidates:

    • AML/CFT/CPF standards and guidance that are applicable to all reporting institutions in the financial sector regulated or supervised by Bank Negara Malaysia; and
    • Targeted financial sanctions requirements that are applicable to all financial institutions regulated or supervised by Bank Negara Malaysia. 

    Where a reporting institution is subject to more than one document relating to AML/CFT/CPF matters issued pursuant to the AMLA, the more stringent requirement shall apply.

    Where necessary, Bank Negara Malaysia may issue guidelines, circulars or notices to vary, delete, add to, substitute or modify this policy document.

    This policy document came into effect on February 6 2024.

    Compliance to the requirements outlined in this policy document shall take effect immediately, unless otherwise specified by Bank Negara Malaysia.

  • Financial Market Infrastructure (FMI)

    SC Malaysia introduces FSA Approach to gatekeeping to advance CMIs and RMOs


  • On February 6 2024, the Securities Commission Malaysia (SC Malaysia) introduced the Focused Scope Assessment (FSA) approach to gatekeeping to advance Capital Market Intermediaries (CMIs) and Recognised Market Operators (RMOs).

    The FSA, which takes effect immediately via amendments to the Guidelines on Recognised Markets, is part of the regulator’s new gatekeeping approach in light of the capital market’s growing maturity and evolving regulatory standards.

    The FSA evaluates the applicant’s operational and regulatory readiness in a more targeted and efficient manner. It aims to shorten the time to market for Capital Market Intermediaries (CMIs) and Recognised Market Operators (RMOs) to three months, where previously it could take more than six months. 

    The FSA will also require applicants to have an independent party validating their business policies and procedures as part of their submission to the SC. This will give the applicant more control in ensuring efficiency and encouraging readiness to observe the requirements to undertake a regulated activity.

    Notwithstanding the above requirement, the SC continues its regulatory obligation in assessing applicants on critical areas including fit and properness, governance and key risk areas.

    Amendments to the Guidelines on Recognised Markets were also made to set the stage for a level playing field for all RMOs, particularly in ensuring the adequacy of financial resources to commence operations in a fair and orderly manner. Notably, the capital requirement of RM5 million is now extended to new operators of Equity Crowd Funding.

    Additionally, amendments to the Guidelines on Recognised Markets include the strengthening of practices against financial crimes, such as money laundering and terrorist financing.

  • SC Malaysia publishes Technical Note on application of provisions in Capital Markets and Services Act 2007 (CMSA)


  • On February 5 2024, the Securities Commission Malaysia (SC Malaysia) published a technical note on the clarification or operationalisation of the Capital Markets and Services Act 2007 (CMSA) provisions in relation to approval and prospectus requirements, licensed persons, registered persons and unit trust schemes.

    The SC has received many queries from the industry seeking clarification on the application of the provisions in the CMSA. In this regard, this Technical Note intends to aid the industry’s understanding of the SC’s policy intention and facilitate compliance of securities laws provisions. It also stays true to the SC’s commitment towards an efficient and effective regulatory environment by adopting an approach that facilitates development yet remains fit for purpose. This Technical Note should be read together with the relevant Schedules in the CMSA, and guidelines issued by the SC.

    This Technical Note consists of the following sections:

    • Section A: Provides for the clarification or operationalisation of CMSA provisions relating to the approval of capital market products under section 212 of the CMSA, disclosure document requirements under paragraph 212(5)(b) and prospectus requirements under section 232 of the CMSA.
    • Section B: Provides for the clarification or operationalisation of CMSA provisions relating to licensed and registered persons under paragraph 2(e) of Schedule 4 of the CMSA on Islamic banks to carry out the regulated activity of advising on corporate finance and Regulation 7 and Schedule 1 of the Capital Markets and Services Regulations 2012 on incidental activities.
    • Section C: Provides for the clarification or operationalisation of CMSA provisions relating to unit trust schemes
  • SC Malaysia publishes Technical Note on clarification on offering of capital market goods


  • On February 5 2024, the Securities Commission Malaysia (SC Malaysia) published a technical note No. 1/2024 on the clarification on offering of capital product goods to persons under paragraph 1(b) and14(b) of schedule 5 and paragraph 11 of schedules 6 and 7 of the Capital Markets and Services Act 2007 (CMSA).

    This Technical Note should be read together with the revised Schedules 5, 6 and 7 of the CMSA as amended by the Capital Markets and Services (Amendment of Schedules 5, 6 and 7) Order 2024.

    Clarification to Schedules 5, 6 and 7 of the CMSA on the RM250,000 investment ticket size for subsequent investment in the same product:

    Paragraphs 1(b) and 14(b) of Schedule 5, and paragraph 11 of the respective Schedules 6 and 7 provide an exemption from the requirements under sections 212 and 232 CMSA in relation to a person who acquires a capital market product, where the consideration for the acquisition of the capital market product is not less than RM250,000 or its equivalent in foreign currencies for each transaction.

    This exemption is provided on the basis that a person who is able to invest RM250,000 should also be able to appoint a professional to advise on the transaction or should have the means to take the necessary action in the event the product no longer meets the investor’s investment objective.

    The SC wishes to clarify that this exemption shall continue to apply to investment made by such person subsequent to the initial investment transaction even if the consideration for the subsequent investment is less than RM250,000 or its equivalent in foreign currencies (the Threshold Amount), subject to the following:

    • The person’s initial investment amount to acquire the product was for a consideration of not less than the Threshold Amount (first time purchase of the product);
    • Any redemption or disposal by such person prior to the subsequent investment does not result in the initial investment amount to fall below the Threshold Amount; and

    The subsequent investment at less than the Threshold Amount is made with respect to the same product.

  • FinTech / RegTech / BigTech / SupTech / Digital Economy

    BNM publishes policy document on Financial Technology Regulatory Sandbox Framework


  • On February 29 2024, the Bank Negara Malaysia (BNM) published a policy document on the Financial Technology Regulatory Sandbox Framework.

    The Financial Technology Regulatory Sandbox Framework was first introduced in October 2016 to provide a regulatory environment that is conducive for the deployment of financial technology (fintech) and to facilitate meaningful innovation in the Malaysian financial sector. Through the regulatory sandbox (sandbox), regulatory flexibilities may be granted to applicants to allow experimentation of fintech solutions in a live environment, subject to appropriate safeguards and regulatory requirements.

    The sandbox has played an important role in advancing digital innovation for both incumbents and start-ups, with over 110 applications received over six years since it began operation. The sandbox has enabled the testing of various new technologies (e.g., electronic Know-Your-Customer) and business models (e.g., digital insurance, peer-to-peer family takaful, buy-now-pay-later, digital remittance) in the market which has helped inform the Bank’s developmental policy considerations and contributed to several policy enhancements. The sandbox also strengthened collaborative efforts between stakeholders in the fintech ecosystem by acting as a platform for active and open engagements with the Bank.

    Past sandbox experiences have provided key learnings in anticipating future development and ensuring objectives of proportionate requirements and responsible innovation are met. In particular, two key insights have been helpful in formulating policies and appropriate regulatory requirements:

    • A one-size-fit-all type of framework for sandbox may be less suited to foster financial innovation in the current market given growing innovation capabilities and appetite within the financial sector to conduct the test-and-learn approach; and 
    • Based on engagements with sandbox applicants thus far, it is noted that the past sandbox eligibility assessment may be challenging for early stage fintech startups to navigate. This could potentially lead to challenges for applicants to secure the necessary resources to support further development of their solutions.

    Reflecting on the feedback received, the Bank is introducing two key enhancements to the Framework issued in October 2016, as follows: 

    • Simplification of the Stage 1 eligibility assessment criteria of the Standard Sandbox pathway (Stage 1 – Eligibility Stage); and 
    • Introduction of a risk-proportionate accelerated track under the Framework, referred to as the Green Lane, to facilitate faster testing of innovative solutions by granting regulatory flexibility to financial institutions, with strong track record in risk management, governance, and compliance capabilities. 

    It should be emphasised that while the enhancements are intended to accelerate testing via the sandbox, it cannot be used to circumvent existing laws and regulations merely for the purpose of facilitating market entry of new entrants.

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

    SC Malaysia announces widened sophisticated investor categories to increase capital market accessibility


  • On February 5 2024, the Securities Commission Malaysia (SC Malaysia) announced that it has widened sophisticated investor categories in a move to increase capital market accessibility.

    The new “Guidelines on Categories of Sophisticated Investors” reinforces the SC’s commitment to maintain capital market competitiveness and vibrancy, while promoting greater investor participation.

    Key features of the expansion include a new category that takes into account the knowledge and experience of sophisticated investors. In addition, enhancements to current categories are made, allowing flexibilities of existing financial thresholds for high net worth individuals.

    The new ‘Knowledge and Experience’ category will benefit individuals who do not meet financial tests but are able to demonstrate financial knowledge sophistication to participate in relevant market offerings.

    This category assesses potential investors based on their education, recognised financial association membership, and practical experience in relevant sectors such as banking, capital markets or insurance.

    Another key change is the inclusion of an investor's primary residence value, up to a cap of RM1 million, in assessing their qualification as a sophisticated investor.

    The definition of a joint account is also expanded to incorporate accounts with a spouse or child, including total net joint annual income and investment portfolios. This expansion will better depict a family's collective financial status and investment potential.

    The “Guidelines on Categories of Sophisticated Investors” are now available on the SC website here. Consequently, all relevant guidelines have also been updated in relation to reference to sophisticated investors.

  • SC Malaysia publishes Guidelines on categories of sophisticated investors


  • On February 5 2024, the Securities Commission Malaysia (SC Malaysia) published a technical note on categories of high-net worth individuals and high-net worth entities under schedules 6 and 7 of the Capital Markets and Services Act 2007.

    These Guidelines set out the categories of sophisticated investors for purposes of securities laws. In this regard, these Guidelines set out the relevant criteria for different categories of sophisticated investors. 

    They are applicable to an issuer of a capital market product or a capital market intermediary who wishes to make available, offer for subscription or purchase, or issue an invitation to subscribe or purchase, a capital market product to a sophisticated investor.

    These Guidelines are in addition to and not in derogation of any other requirements provided for under securities laws or any other guidelines issued by the SC. For avoidance of doubt, compliance with these Guidelines do not relieve any person from other obligations which may be imposed on the person under any other written law or by any other relevant regulator.

    The following persons are specified to be a sophisticated investor:

    • Accredited Investor
    • High-Net Worth Entity (HNWE)
    • High-Net Worth Individual (HNWI)
  • SC Malaysia announces Extension to Deadline for issuing REITs Annual Reports


  • On February 26 2024, the Securities Commission Malaysia (SC Malaysia) announced an extension to the deadline for issuing a Real Estate Investment Trusts (REITs) annual reports.

    Previously set at two months, the new timeline allows for four months after its financial year end.

    This adjustment aligns the reporting timeline for listed REITs with that of public-listed companies (PLCs) on Bursa Malaysia Securities Berhad (Bursa Malaysia), granting them equal time for annual report issuance. Recognising the similarities in content requirements, this move ensures consistency across both types of entities.

    Despite the extended timeline, unit holders of listed REITs will still receive financial information within two months after the REIT’s financial year end through its quarterly announcements on Bursa Malaysia.

  • Rules of conduct

    BNM publishes Exposure Draft on Product Transparency and Disclosure


  • On February 29 2024, the Bank Negara Malaysia (BNM) published a policy document on the exposure draft on Product Transparency and Disclosure.

    Financial consumers are constantly challenged by the increasing diversity and complexity when acquiring financial products and services. Consequently, there is a need to enhance product specific transparency and disclosure in ensuring financial consumers are making informed decisions. Given the greater use of financial products and services, financial consumers need to be provided with relevant, timely, reliable and comparable information that enable them to select financial products that best meet their financial circumstances and needs.

    This Policy Document establishes minimum requirements for enhanced consistency and comprehensive transparency aimed at improving information disclosure on financial products offered by financial service providers (FSPs).

    This Policy Document sets out the timing and content on disclosure of information on financial products to financial consumers.

    The objectives of this Policy Document are to:

    • Promote financial consumers’ awareness and understanding of financial products offered by FSPs;
    • Ensure consistency in disclosure of essential information on financial products to enable comparison by financial consumers; 
    • Minimise mis-selling of financial products and ensure that financial products sold are suitable to the needs and financial circumstances of financial consumers; 
    • Promote informed decision-making by financial consumers; and 
    • Facilitate financial consumers in safeguarding their own best interests.
  • Sustainable Finance / Green Finance

    SC Malaysia publishes ASEAN Taxonomy for Sustainable Finance


  • On February 19 2024, the Securities Commission Malaysia (SC Malaysia) published the Association of Southeast Asian Nations (ASEAN) Taxonomy for Sustainable Finance.

    Rapid industrialisation in the ASEAN has led to social and environmental challenges, including climate change impacts, poor air quality, and waste management. The ASEAN Taxonomy Board (ATB) was established in March 2021 to develop, maintain, and promote an ASEAN Taxonomy to be science-based, inclusive method of classifying Activities according to their contribution to the environment in the region.

    Version 1 of the ASEAN Taxonomy was published in November 2021. The ATB called for stakeholder consultations after publication of Version 1. Over 80% of respondents emphasised the need for a common language. The lack of standardised and credible data was seen as the greatest challenge to successful implementation. International investors want ASEAN to align with international green investment standards, but the process is complex and tailoring the ASEAN Taxonomy to individual countries could be beneficial. National taxonomies in ASEAN have also been developed. These national taxonomies have varying scopes and approaches, with some establishing defined criteria and others emphasising a principles-based approach.

    The ASEAN Taxonomy is a guide designed to enable a just transition towards sustainable finance adoption by ASEAN Member States (AMS). It provides alignment on underlying principles and helps harmonise the classification of sustainable activities and assets across ASEAN. The taxonomy was conceived based on five principles and offers two assessment approaches:

    • the Foundation Framework (FF); and 
    • Plus Standard (PS) - to cater to diverse potential users across the AMS. 

    Six Focus Sectors and three Enabling Sectors have been identified as being particularly important in the ASEAN sustainability journey and are covered under the PS.

    The ASEAN Taxonomy is based on four Environmental Objectives (EOs): 

    • Climate Change Mitigation;
    • Climate Change Adaptation;
    • Protection of Healthy Ecosystems and Biodiversity; and 
    • Resource Resilience and the Transition to a Circular Economy.

    To be classified under the ASEAN Taxonomy, any Activity must demonstrate that it contributes to at least one of these EOs and does not have any adverse effects to other EOs. EO1 focuses on decarbonisation pathways for Activities, requiring them to align with decarbonisation trajectories in line with the Paris Agreement. EO2 concentrates on reducing the negative effects of climate change and increasing resilience through implementing processes or actions. EO3 concentrates on protecting the natural ecosystem and biodiversity, promoting sustainable use of natural resources, and minimising adverse impacts on the environment. EO4 focuses on promoting resource resilience and the transition to a circular economy through principles such as minimising resource use, optimising resource yield, and closing resource loops through effective waste management, which can be achieved by adjusting business operations and implementing circular economy principles via adapted products, production, technologies, and processes.

    The ASEAN Taxonomy requires any Activity to fulfil three Essential Criteria (EC) for classification: 

    • Do No Significant Harm (DNSH);
    • Remedial Measures to Transition (RMT); and 
    • Social Aspects (SA).

    ASEAN Taxonomy Version 2 centres around the classification of Activities. An Activity takes place when resources such as capital, goods, labour, manufacturing techniques or intermediary 14 products are combined to produce specific goods or services. An Activity is not the same as the facilities used to conduct the Activity.

    Technical Screening Criteria (TSC) classify Activities based on their contributions to EOs using quantitative, qualitative, or nature of Activity-based criteria.

    The ATB is responsible for maintaining the ASEAN Taxonomy, including consultation with representatives from AMS, delegation of tasks, and approval of any changes to the ASEAN Taxonomy. The ATB also sets TSC for each Tier of each defined Activity in a manner that will allow flexibility for individual AMS while representing a decarbonisation framework for ASEAN that balances ambition for sustainability with economic and technical realities.

    The PS in future versions of the ASEAN Taxonomy will expand their coverage to a wider list of Activities across all focus sectors identified in Version 1, with subsequent versions incorporating qualitative process and/or practice-based criteria.

    ASEAN Taxonomy has diverse potential users including member states, regulators, banking institutions, users of capital, and rating agencies.

    Future versions will expand the coverage of Activities in all focus sectors and provide more qualitative process and/or practice-based criteria.

  • BNM informs on Climate Risk Stress Testing Methodology


  • On February 29 2024, the Bank Negara Malaysia (BNM) informed on the Climate Risk Stress Testing Methodology.

    Climate change and its impact on the environment and economic agents may pose material risks to the safety and soundness of financial institutions, giving rise to broader implications to the economy and financial system. Recognising the risk from climate change to the financial system in Malaysia, financial institutions are required to conduct climate risk stress testing to assess potential vulnerabilities to various climate scenarios. 

    The 2024 Climate Risk Stress Test (CRST) exercise is primarily intended to facilitate financial institutions’ learning and capacity building in addressing risks from climate change. Financial institutions must aim to gain vital hands-on experience in measuring the impact of climate-related risks on their assets, insurance/takaful liabilities and business operations through the 2024 CRST exercise. Although current risk measurement approaches may not yet be sufficiently comprehensive and accurate to produce robust estimates of climate-related risks impact, the 2024 CRST exercise will provide financial institutions an opportunity to refine their existing risk management strategy and explore new stress testing approaches that are relevant for assessing climate-related risks. 

    More specifically, the 2024 CRST exercise aims to enhance financial institutions’ capabilities in the following areas: 

    • Improve understanding and appreciation among board, senior management, and staff of financial institutions on how the business and operations of the financial institutions could be impacted by climate-related risks; 
    • Explore novel approaches that could lead to better identification and measurement of financial institutions’ exposures at risk to climate change; and 
    • Identify current gaps, specifically those related to data, measurement, methodology, technology, and capabilities, as well as potential solutions to these challenges.

    Given the uncertainty surrounding future climate pathways and evolving approaches for identifying and measuring climate-related risks, the Bank expects the climate risk stress test to become a recurring exercise moving forward. Therefore, financial institutions are expected to continue investing in and improving on the foundations that they have built in preparation for the 2024 CRST exercise.


    Capital requirements / CRD / CRR / Basel III/IV

    Spain publishes Circular 1/2024 of the Bank of Spain to banks, credit cooperatives and other supervised entities on information on capital structure


  • On February 1 2024, Spain published the Circular 1/2024 of January 26 2024 of the Bank of Spain to banks, credit cooperatives and other supervised entities on information on capital structure.

    The circular updates and harmonises the regulations in relation to the information that banks and credit cooperatives have to communicate to the Bank of Spain in accordance with Law 10/2014 of June 26 2014 on the regulation, supervision and solvency of credit institutions and Royal Decree 84/2015 of February 13 2015.

    This Circular consists of five rules, a transitional provision, a repealing provision and two final provisions. In addition, it includes two Annexes. 

    Chapter I contains the general provisions governing the subject matter and scope of this circular. The purpose of this circular is to establish information requirements on acquisitions, increases and reductions of holdings in entities and their capital structure. 

    Chapter II regulates the information that in-scope entities must send on acquisitions, increases and reductions of shareholdings in them, and the information that they must submit on their capital structure. By means of these rules, in-scope entities are obliged to report to the Bank of Spain certain acquisitions, increases and reductions of holdings in them, as soon as they become aware of them. They must also periodically submit to the Bank of Spain information on the holders of shares, shares or contributions to their share capital.

    Chapter III sets out the rules applicable to the submission of the information to be sent to the Bank of Spain on the basis of this Circular.

    A transitional regime will be followed until the definitive application of the provisions of this Circular. Chapters I and III, as well as Annexes I, II, III and V, of Circular 1/2009 are repealed. The sixth rule of Circular 1/2009 is also amended.

    Annex I sets out the information that must be sent when certain holdings are acquired, increased or reduced. Annex II sets out the information that must be periodically reported to the Bank of Spain on the capital structure.

    The Circular entered into force on February 21 2024.

  • Exchange-traded funds (ETFs)

    Spain publishes Resolution of January 31, 2024 approving screening model of foreign investments in Spain and Spanish investments abroad


  • On February 1 2024, Spain published the Resolution of January 31, 2024 approving the screening model for foreign investments in Spain and Spanish investments abroad.

    Foreign investments in Spain and Spanish investments abroad are regulated by the Royal Decree 571/2023, of July 4, 2023, on foreign investments, developed by Order ECM/57/2024, of January 29, 2024, which establishes the applicable procedures for declarations of foreign investments. 

    These rules lay down the provisions applicable to the processing and declaration of such investments, providing for the use for this purpose of certain forms whose approval is referred to a lower-ranking standard. The Order empowers the Directorate-General for Trade and Investment to issue the necessary resolutions and to approve the forms for the processing and declaration of foreign investments in Spain and Spanish investments abroad. This resolution approves the forms for the declaration of foreign investments in Spain and Spanish investments abroad and the annual reports.

    The standard form templates are published as annexes.

    1. Foreign investments in Spain consist of the following models: 

    • DP-1: Prior Declaration of Foreign Investment from Non-Cooperative Jurisdictions in Companies, Branches, Collective Investment Schemes and Other Forms of Investment
    • DP-2: Prior Declaration of Foreign Investment from Non-Cooperative Jurisdictions in Real Estate
    • D-1A: Declaration of Foreign Investment in Corporations, Branches, Collective Investment Schemes and Other Forms of Investment
    • D-1B: Declaration of Foreign Divestment in Corporations, Branches, Collective Investment Schemes and Other Forms of Investment
    • D-2A: Declaration of Foreign Investment in Real Property
    • D-2B: Declaration of Foreign Divestment in Real Property
    • D-4: Annual Report on Foreign Investment in Spain

    2. Spanish investments abroad consist of the following models:

    • DP-3: Prior declaration of Spanish investment in non-cooperative jurisdictions in companies, branches, collective investment schemes and other forms of investment 
    • DP-4: Prior declaration of Spanish investment in non-cooperative jurisdictions in real estate
    • D-5A: Declaration of Spanish investment in foreign companies, branches, collective investment schemes and other forms of investment
    • D-5B: Declaration of Spanish divestment in foreign companies, branches, collective investment schemes and other forms of investment
    • D-7A: Declaration of Spanish investment in real estate
    • D-7B: Declaration of Spanish divestment in real estate
    • D-8: Annual Report on Spanish Investment Abroad

    The modification of the data declared to the Foreign Investment Registry that does not constitute a rectification of errors or imply the obligation to declare a new investment or a divestment, such as the modification of the company name or any corporate operation that, without having mediated an investment operation, implies a modification of the percentage of foreign or Spanish participation, depending on the case, shall be declared in form CM1 'Other communications to the Investment Register' in Annex IV.

  • Financial supervision

    CNMV publishes 2024 activity plan


  • On February 27 2024, the Comisión Nacional del Mercado de Valores (CNMV) published its 2024 activity plan.

    The plan includes 42 specific initiatives or actions that CNMV will develop this year. In the plan, the CNMV confirms the strategic lines defined for the 2023 and 2024 financial years:

    • Rigorous supervision of securities markets with a focus on financial stability. It will focus on the processes of identification and risk analysis of securities markets and ensure the resilience and robustness of market infrastructures and investment service providers.
    • Strengthen the framework for protecting retail investors in the face of new challenges. The focus will be on products and services that promote environmental, social and governance (ESG) characteristics, and on the most complex and long-term impact, as well as on the marketing of fixed income products.
    • Revitalize capital markets to support growth and transition to a sustainable economy. The CNMV will continue to streamline the authorisation procedures of different entities and will support projects aimed at channelling investment through professionalised management, with a focus on the European Union's Retail Investment Strategy. 
    • Monitor the effects of financial and technological innovation on markets of values. Of particular relevance will be the entry into force of the MiCA Regulation in December 2024, which aims to regulate the issuance of cryptoassets and the entities that offer services related to them. Attention will also be paid to cybersecurity risks and adaptation to the future European regulations set out in the DORA Regulation, which will apply from January 17 2025, to the main players in the financial system. The CNMV also intends to explore advances related to artificial intelligence.
    • A supervisor who is more accessible and connected to society. Proactive, comprehensible and close communication will be promoted, in order to improve the impact and dissemination of messages.

    Collective Investment Schemes

    Swiss Federal Council amends CISA / Le Conseil fédéral modifie la LPCC


  • On February 1 2024, the Swiss Federal Council amended parts of the Collective Investment Schemes Act.

    The legislation offers numerous details about the Limited Qualified Investor Fund (L-QIF). Principally, the L-QIF is a type of collective investment scheme that is exclusively available to qualified investors. Notably, these L-QIFs do not require the authorization or approval from the Swiss Financial Market Supervisory Authority (FINMA) and are not subjected to its surveillance.

    There have been specific modifications in the rules governing L-QIFs. If a collective investment scheme already has either an authorization or approval from FINMA, it can be revoked under specific conditions i.e., if the scheme satisfies all conditions stipulated in clauses 'a' to 'c' of Article 118a and provided that the investors' interests are guaranteed.

    In the case of legal forms, it is mentioned that the L-QIF can take the form of a contractual investment fund, an Investment Company with Variable Capital (SICAV) or a Limited Partnership for Collective Investment (SCmPC). Furthermore, the legislation outlines that investment-related regulations and various FINMA surveillance-related provisions do not apply to L-QIFs.

    Specific attention has also been given towards managing L-QIFs. The management of these funds for investors' accounts, independently and in their name, follows the regulations stipulated in Article 15 of the Law on Collective Investment Schemes.

    Moreover, changes in the management of an L-QIF should adhere to a contract transfer's validity requirements, including the prior agreement of the custodian bank and appropriate communication to all investors.

    In terms of documentation and publicity, the first page of documents related to an L-QIF along with any publicity must contain key details about the L-QIF, including its status related to FINMA. Furthermore, the corporate title of an L-QIF, when taking the form of a SICAV or SCmPC, must contain the phrase "Limited Qualified Investor Fund" or the acronym "L-QIF".

    Version française

    Le 1er février 2024, le Conseil fédéral a modifié certaines parties de la loi sur les placements collectifs de capitaux.

    La législation offre de nombreux détails sur le Limited Qualified Investor Fund (L-QIF). Principalement, le L-QIF est un type d’organisme de placement collectif réservé exclusivement aux investisseurs qualifiés. Notamment, ces L-QIF ne nécessitent pas l'autorisation ou l'approbation de l'Autorité fédérale de surveillance des marchés financiers (FINMA) et ne sont pas soumis à sa surveillance.

    Des modifications spécifiques ont été apportées aux règles régissant les L-QIF. Si un placement collectif dispose déjà d'une autorisation ou d'un agrément de la FINMA, celui-ci peut être révoqué dans certaines conditions, c'est-à-dire si le placement remplit toutes les conditions stipulées aux lettres « a » à « c » de l'article 118a et pour autant que les intérêts des investisseurs sont garantis.

    Dans le cas des formes juridiques, il est mentionné que la L-QIF peut prendre la forme d'un fonds d'investissement contractuel, d'une société d'investissement à capital variable (SICAV) ou d'une société en commandite de placement collectif (SCmPC). En outre, la législation précise que les réglementations relatives aux investissements et diverses dispositions liées à la surveillance de la FINMA ne s'appliquent pas aux L-QIF.

    Une attention particulière a également été accordée à la gestion des L-QIF. La gestion de ces fonds pour le compte d'investisseurs, de manière indépendante et en leur nom, suit la réglementation prévue à l'article 15 de la loi sur les organismes de placement collectif.

    De plus, les changements dans la gestion d'un L-QIF doivent respecter les exigences de validité d'un transfert de contrat, y compris l'accord préalable de la banque dépositaire et une communication appropriée à tous les investisseurs.

    En termes de documentation et de publicité, la première page des documents relatifs à un L-QIF ainsi que toute publicité doivent contenir des détails clés sur le L-QIF, y compris son statut par rapport à la FINMA. Par ailleurs, la dénomination sociale d'un L-QIF, lorsqu'il prend la forme d'une SICAV ou d'une SCmPC, doit contenir la mention « Limited Qualified Investor Fund » ou l'acronyme « L-QIF ».

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

    FINMA exempts L-QIF category from authorisation and supervision / La FINMA exempte la catégorie L-QIF de son autorisation et de sa surveillance


  • On February 23 2024, the Eidgenössische Finanzmarktaufsicht (FINMA) exempted the Limited Qualified Investor Fund (L-QIF) category from their authorisation and supervision.

    The Swiss parliament voted to introduce a new fund category, the Limited Qualified Investor Fund (L-QIF), in December 2021 and amended the Collective Investment Schemes Act (CISA) accordingly. The Federal Council put these changes into effect on March 1 2024. L-QIFs are collective investment schemes that do not require FINMA authorisation or approval and are not supervised by FINMA. To be eligible, these funds must be offered solely to qualified investors and managed by entities that are supervised by FINMA.

    The institutions managing L-QIFs are responsible for complying with the L-QIF rules themselves. To ensure transparency, the fund must be designated on the front page of the fund documents and in advertising as a Limited Qualified Investor Fund or L-QIF. The fund’s exemption from authorisation, approval and supervision by FINMA also needs to be made clear to investors. The Federal Department of Finance (FDF) will maintain a public register of all L-QIFs. FINMA is not responsible for questions of interpretation in relation to an L-QIF or for issuing L-QIF-specific rules.

    The Collective Investment Schemes Act (CISA) and Collective Investment Schemes Ordinance (CISO) have also been amended in other areas to implement international standards, keep up to date with market developments and increase legal certainty.

    In particular, the revised legislation creates a legal basis for domestic exchange-traded funds (ETFs) including new disclosure requirements. In line with international standards it also makes collective investment schemes more resilient by introducing additional regulations on liquidity. These are designed to ensure that a collective investment scheme’s liquidity position is appropriate for its asset class, investment policy, risk diversification, investor type and redemption frequency. Further liquidity requirements when managing collective investment schemes will also be added to the CISO.

    The creation of “side pockets” is being put on a statutory basis. This involves segregating individual assets within an open-ended collective investment scheme that have become illiquid. Another provision stipulates the required procedure and notification requirements if a scheme’s investment rules are actively breached.

    The new provisions in the CISA and CISO enter into force on March 1 2024 and are applicable to new collective investment schemes from this date. However, two-year transitional periods will apply in certain areas to collective investment schemes that have already been authorised or approved, for example in relation to the new disclosure requirements for securities lending and repurchase transactions and Swiss ETFs. The liquidity requirements must also be met by existing collective investment schemes within two years of the changes entering into force, while new collective investment schemes (including L-QIFs) will have to fulfil the rules from their inception date. 

    Version française

    Le 23 février 2024, l'Eidgenössische Finanzmarktaufsicht (FINMA) a exempté la catégorie Limited Qualified Investor Fund (L-QIF) de leur agrément et de leur surveillance.

    Le Parlement suisse a voté en décembre 2021 l'introduction d'une nouvelle catégorie de fonds, le Limited Qualified Investor Fund (L-QIF), et a modifié en conséquence la loi sur les placements collectifs (LPCC). Le Conseil fédéral a mis en vigueur ces modifications le 1er mars 2024. Les L-QIF sont des placements collectifs qui ne nécessitent ni autorisation ni approbation de la FINMA et ne sont pas surveillés par la FINMA. Pour être éligibles, ces fonds doivent être proposés uniquement à des investisseurs qualifiés et gérés par des entités surveillées par la FINMA.

    Les établissements gérant les L-QIF sont responsables du respect eux-mêmes des règles des L-QIF. Pour garantir la transparence, le fonds doit être désigné sur la première page des documents du fonds et dans la publicité en tant que Fonds d'investisseur qualifié limité ou L-QIF. L’exemption du fonds à l’autorisation, à l’approbation et à la surveillance de la FINMA doit également être clairement indiquée aux investisseurs. Le Département fédéral des finances (DFF) tiendra un registre public de tous les L-QIF. La FINMA n'est pas responsable des questions d'interprétation liées à un L-QIF ni de l'édiction de règles spécifiques au L-QIF.

    La loi sur les placements collectifs (LPCC) et l'ordonnance sur les placements collectifs (OPC) ont également été modifiées dans d'autres domaines afin de mettre en œuvre les normes internationales, de suivre l'évolution du marché et d'accroître la sécurité juridique.

    En particulier, la législation révisée crée une base juridique pour les fonds négociés en bourse (ETF) nationaux, y compris de nouvelles exigences de divulgation. Conformément aux normes internationales, il rend également les organismes de placement collectif plus résilients en introduisant des réglementations supplémentaires en matière de liquidité. Celles-ci visent à garantir que la position de liquidité d’un organisme de placement collectif est adaptée à sa classe d’actifs, sa politique d’investissement, sa diversification des risques, son type d’investisseur et sa fréquence de rachat. Des exigences supplémentaires en matière de liquidité lors de la gestion de placements collectifs seront également ajoutées au RSSI.

    La création de « poches latérales » est inscrite dans la loi. Il s’agit de séparer les actifs individuels devenus illiquides au sein d’un OPCVM ouvert. Une autre disposition précise la procédure requise et les exigences de notification en cas de violation flagrante des règles d’investissement d’un système.

    Les nouvelles dispositions de la LPCC et de l'OPC entrent en vigueur le 1er mars 2024 et sont applicables aux nouveaux placements collectifs à partir de cette date. Toutefois, des périodes transitoires de deux ans s'appliqueront dans certains domaines aux placements collectifs de capitaux déjà autorisés ou agréés, par exemple en ce qui concerne les nouvelles exigences de publicité pour les opérations de prêt et de mise en pension de titres et les ETF suisses. Les exigences de liquidité doivent également être remplies par les organismes de placement collectif existants dans les deux ans suivant l'entrée en vigueur des changements, tandis que les nouveaux organismes de placement collectif (y compris les L-QIF) devront remplir les règles dès leur date de création.

  • Trusts

    FINMA updates on licensing process and supervision of portfolio managers and trustees / La FINMA fait le point sur la procédure d'agrément et de la surveillance des gestionnaires de portefeuille et des trustees


  • On February 2 2024, the Eidgenössische Finanzmarktaufsicht (FINMA) published information on the status of the licensing process and supervision for portfolio managers and trustees.

    The Guidance also sets out a new approach to thresholds for operating as a trustee on a commercial basis.

    FINMA’s Guidance 01/2024 notes that at December 31 2023 it has approved 1,149 (70%) of the licence applications from portfolio managers and trustees received before December 31 2022, while 63 institutions (4%) have withdrawn their applications. The remaining 487 applications (26%) are more complex and will take longer to finalise. If an institution that is continuously affiliated to a self-regulatory organisation has submitted its licence application to FINMA together with proof of its affiliation with a supervisory organisation (SO) before the end of the transitional period, it may continue to operate.

    A large number of change requests requiring authorisation (994) were submitted in 2023, implying a significant workload for FINMA.

    FINMA also reports that from now on trustees will be deemed to be operating on a commercial basis and require a licence if the trust assets exceed CHF 5 million at any time, because trust assets are economically separate from the trustee, i.e. they are assets belonging to third parties. Trustees who are henceforth obliged to obtain a licence in accordance with FinIA are required to submit a licence application before the end of 2024.

    In the two-tier supervisory model for portfolio managers and trustees, the SOs are responsible for carrying out the ongoing supervision of portfolio managers and trustees. FINMA is responsible for approving any changes that affect licensing requirements, exercising intensive supervision and taking remedial action to restore the supervised institutions’ compliance with the law. This division of responsibilities requires a considerable degree of coordination, particularly with five SOs currently authorised. The supervisory levy reflects the work by FINMA inherent in the two-tier supervisory model.

    Version française

    Le 2 février 2024, l'Eidgenössische Finanzmarktaufsicht (FINMA) a publié des informations sur l'état de la procédure d'agrément et de surveillance des gestionnaires de portefeuille et des fiduciaires.

    Les lignes directrices présentent également une nouvelle approche en matière de seuils pour exercer en tant que fiduciaire sur une base commerciale.

    Le Guide 01/2024 de la FINMA indique qu’au 31 décembre 2023, elle a approuvé 1’149 (70%) des demandes d’agrément des gestionnaires de portefeuille et trustees reçues avant le 31 décembre 2022, tandis que 63 établissements (4%) ont retiré leur demande. Les 487 demandes restantes (26 %) sont plus complexes et prendront plus de temps à finaliser. Si un établissement affilié de manière continue à un organisme d'autoréglementation a soumis à la FINMA sa demande d'agrément accompagnée de la preuve de son affiliation à un organisme de surveillance (OS) avant la fin de la période transitoire, il peut continuer son activité.

    Un grand nombre de demandes de modification soumises à autorisation (994) ont été déposées en 2023, ce qui implique une charge de travail importante pour la FINMA.

    La FINMA indique également que les fiduciaires seront désormais réputés exercer leurs activités sur une base commerciale et auront besoin d'une autorisation si les actifs du trust dépassent à tout moment CHF 5 millions, car les actifs du trust sont économiquement séparés du trustee, c'est-à-dire qu'ils appartiennent à des tiers. Les syndics qui sont désormais tenus d’obtenir une autorisation selon la LFin doivent introduire une demande d’autorisation avant la fin 2024.

    Dans le modèle de surveillance à deux niveaux pour les gestionnaires de portefeuille et les fiduciaires, les SO sont chargés d'assurer la surveillance continue des gestionnaires de portefeuille et des fiduciaires. La FINMA est chargée d’approuver les modifications ayant une incidence sur les exigences d’autorisation, d’exercer une surveillance intensive et de prendre des mesures correctives pour rétablir la conformité légale des établissements assujettis. Cette répartition des responsabilités nécessite un degré considérable de coordination, notamment avec cinq OS actuellement autorisés. La taxe de surveillance reflète le travail de la FINMA inhérent au modèle de surveillance à deux niveaux.


    Consumer protection

    FCA requests information from firms about delivery of ongoing advice services and Consumer Duty


  • On February 15 2024, the Financial Conduct Authority (FCA) requested information from firms about delivery of their ongoing advice services and the Consumer Duty.

    In its survey, the FCA asks if firms have assessed their ongoing services in response to the introduction of the Consumer Duty, and whether they have made any changes as a result.

    It also asks for data on the number of clients due a review of the ongoing suitability of the advice as part of the service, how many received that review, and how many paid for ongoing advice but whose fee was refunded as the suitability review did not happen.

    The FCA is collecting this information to assess what, if any, further regulatory work it may undertake in this area. The FCA anticipates providing a further update having considered the firms’ responses.

    Around 20 of the largest advice firms are receiving the survey so the widest possible understanding of market practice is achieved. Their selection is not based on any particular concerns with those firms.

  • FCA publishes Press Release on stopping misleading ads and promotions


  • On February 14 2024, the Financial Conduct Authority (FCA) published a press release on stopping misleading ads and promotions.

    Over 10,000 financial adverts and other promotions were withdrawn or changed in 2023 following intervention from the FCA, an increase of 17%, year-on-year.

    The FCA also published 2,285 alerts to help prevent consumers from losing their money to scams, up from 1,800 in 2022. After being given new powers by the Government, the FCA has focused on illegal cryptoasset promotions to UK consumers, issuing 450 consumer alerts between October 8 2023 and December 31 2023.

    The FCA has highlighted its concern at the rise of influencers promoting financial products, including credit and investments on social media which often targets younger age groups.

    As of February 7 2024, authorised firms need permission from the FCA if they want to approve promotions for unregulated persons. This makes sure firms approving financial promotions have the required competence and expertise for the promotions being offered.  

    This is underpinned by the Consumer Duty which came into force in July 2023. The Consumer Duty requires firms to demonstrate that they are providing consumers with information which helps them to make effective and informed decisions about financial products and services.

  • FCA updates on Consumer Duty implementation


  • On February 20 2024, the Financial Conduct Authority (FCA) published an article on good practice and areas for improvement for Consumer Duty implementation, as well as the results of Consumer Duty firm survey.

    The article contains insights on good and poor practices. These findings will be useful for firms to consider as part of their closed product implementation plans and in relation to the preparation of the first Duty Board Report due at the end of July 2024. The article is divided into six thematic areas:

    • Culture, governance and monitoring: the FCA warns that some firms are not discussing the Duty at the Board level and urges them to embed a focus on positive customer outcomes across all levels. It notes that some firms are reactive rather than proactive in addressing issues, emphasizing the Duty's requirement for proactive risk identification and mitigation. Additionally, the FCA highlights the need for better data and monitoring strategies to understand customer outcomes effectively.
    • Consumers in vulnerable circumstances: the FCA warns against automatically labeling consumers as vulnerable based on age, unnecessary requests for evidence, and repeated inquiries about personal details.
    • Products and services: the FCA notes some firms aren't sharing information effectively within supply chains, hindering their ability to prevent consumer harm. Firms should prioritize sharing relevant information for positive customer outcomes and understand their role and responsibilities in distribution chains.
    • Price and value: the FCA warns that some firms fail to justify fair value to retail customers or adequately disclose fees along distribution chains. Some charge for unused services and prioritize their benefits over customer value. Additionally, insufficient information sharing hinders assessing value for end customers.
    • Consumer understanding: the FCA identifies areas for improvement including firms pushing high-risk or complex products, unclear disclosure of charges, and insufficient reference to the Consumer Duty in financial promotions.
    • Consumer support: the FCA warns about inadequate staff training for complex customer conversations, business practices resembling 'gamification' in online trading platforms causing harm, and stresses the need for robust systems to protect consumers from investment loss, fraud, or cyber-attacks.

    Regarding the survey, the FCA found that 43% of small firms surveyed are not finding any aspects of the Duty difficult to implement. Outcomes monitoring was identified as the most difficult aspect of the Duty to be implemented.

    If the FCA finds any shortcomings with Consumer Duty implementation, it plans to take assertive action in the form of thematic and multi-firm work, followed by sector or firm specific interventions.

  • Financial supervision

    UK Government updates list of made Smarter Regulatory Framework Statutory Instruments


  • On February 9 2024, the UK Government updated its list of made Smarter Regulatory Framework statutory instruments.

    The update relates to the addition of the Data Reporting Services Regulations 2024, the Securitisation Regulations 2024 and the Public Offers and Admissions to Trading Regulations 2024.

    The current list of made Smarter Regulatory Framework statutory instruments is as follows:

    • The Financial Services and Markets Act 2023 (Commencement No. 1) Regulations 2023
    • The Electronic Money, Payment Card Interchange Fee and Payment Services (Amendment) Regulations 2023
    • The Financial Services and Markets Act 2023 (Benchmarks and Capital Requirements) (Amendment) Regulations 2023
    • The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2023
    • The Financial Services and Markets Act 2023 (Commencement No. 4 and Transitional and Saving Provisions) (Amendment) Regulations 2023
    • The Data Reporting Services Regulations 2024
    • The Securitisation Regulations 2024
    • The Public Offers and Admissions to Trading Regulations 2024
  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    FRC informs of successful signatories to UK Stewardship Code


  • On February 21 2024, the Financial Reporting Council (FRC) published a press release on successful signatories to UK Stewardship Code.

    There are now 273 signatories to the Code, representing £43.3 trillion assets under management. This includes 188 asset managers, 66 asset owners and 19 service providers. 81 organisations successfully renewed their signatory status and one organisation was added.

    The FRC welcomes improvements in outcomes-based reporting, and the successful submissions to the Code reflect the general improvement of stewardship practice seen across asset classes from asset owners, asset managers and service providers. The FRC continues to see increased reporting on key stewardship themes, including human rights issues in supply chains, nature-based solutions and biodiversity, while climate change continues to be a key area of engagement and focus.

    The Stewardship Code, which the FRC has committed to reviewing this year, aims to enhance the quality of engagement between investors and companies to help improve long-term returns to shareholders and efficient exercise of governance responsibilities.

    A short document collating previously published guidance has also been published to help signatories and applicants to the Code prepare fair, balanced and understandable reports in 2024. It provides recommendations to help organisations produce high-quality stewardship reports that demonstrate how they have applied the Code's principles across areas such as investment research, decision-making, monitoring, engagement, and exercising voting rights.

  • FRC publishes Statement on Launch of UK Stewardship Code 2020 Review


  • On February 27 2024, the Financial Reporting Council (FRC) published a statement on the launch of the UK Stewardship Code 2020 review.

    As stated in the FRC’s Policy Statement in November 2023, and now that the revised Corporate Governance Code has been published, the FRC is undertaking a fundamental review of the UK Stewardship Code 2020 to ensure it supports growth and the UK’s competitiveness. As part of the review process, the FRC is seeking views from all stakeholders on whether the Code, in its current format, is being used by asset managers, asset owners and other signatories to the Code in a manner that drives better stewardship outcomes from engagement with issuers across all asset classes.

    The Code is an important part of the investment stewardship eco-system in the UK, safeguarding the interests of the public and pension holders by promoting transparency and accountability, and is also adopted by global investors. The principles are designed to encourage alignment of incentives through the investment chain for the benefit of the ultimate investment beneficiary and contributes to the UK’s well-deserved reputation as an attractive investment destination for global capital.

    The Code was last revised in 2019 and a revision due to take place in 2024. Following feedback received during the 2023 consultation to the Corporate Governance Code, it’s clear that now is an opportune moment for a fundamental review process to ensure that that the principles of the Code are still driving the right stewardship outcomes for investors while not unduly contributing to reporting burdens.

    The review will focus on, amongst other topics, the extent to which the Code:

    • supports long term value creation through appropriate investor-issuer engagement that drives issuers’ prospects and performance
    • creates reporting burdens on issuers as well as Code signatories and
    • has led to any unintended consequences, such as short-termism in targets and outlook for issuers.

    The review will be undertaken in three phases:

    • The first phase will be a targeted outreach, focused around the four main groups affected by the Code’s principles and application – issuers, asset managers, asset owners and service providers, on the topics outlined above. The FRC expects these outreach discussions to uncover a range of issues that will inform the second phase.
    • The second phase will be a public consultation, which is planned to launch after the 2024 AGM voting season during the summer months.
    • The revised Code will be most likely published in early 2025.

    The current Code will operate as usual throughout the review process, with existing signatories required to submit their renewal application to remain a signatory. Once the revised Code is updated, the FRC will set out a clear implementation pathway and ensure the effective date allows current signatories sufficient time to respond to any changes.

  • UK Financial Services Act

    UK publishes Financial Services and Markets Act 2023 (Commencement No. 5) Regulations 2024


  • On February 29 2024, the Financial Services and Markets Act 2023 (Commencement No. 5) Regulations 2024 were made and published on

    This statutory instrument (SI) contains the fifth set of commencement regulations made under the Financial Services and Markets Act 2023 (FSMA 2023).

    The explanatory note to the SI provides further information on those provisions of FSMA 2023 that are being brought into force, including:

    • The provisions relating to the Bank of England levy, which are brought fully into force on March 1 2024 by the SI.
    • Provisions concerning the accountability of the Payment Systems Regulator, which are brought into force on varying dates as set out in the SI.
    • More
    • UK publishes Financial Services and Markets Act 2023 (Commencement No. 5) Regulations 2024

    Derivative Financial Instruments (Derivatives)

    ISDA updates OTC Derivatives Compliance Calendar


  • On February 29 2024, the International Swaps and Derivatives Association (ISDA) updated its OTC derivatives compliance calendar.

    The update relates to the global calendar of compliance deadlines and regulatory dates for the OTC derivatives space.

  • Sustainable Finance / Green Finance

    UNEP FI publishes Call to Action to asset management industry serving asset owner clients through climate stewardship


  • On February 6 2024, the United Nations Environmental Programme Finance Initiative (UNEP FI) published a call to action to asset management industry.

    This call to action draws out four critical implementation principles for asset manager leadership:  

    • Bring the focus of addressing the systemic risk of climate change to the entirety of investments and operations; 
    • Support a consistent, clear, and accountable proxy voting landscape (for public equity); 
    • Align lobbying activities with asset manager’s own stated climate-related commitments do the same for portfolio companies; and 
    • Ensure that climate engagement is more systematic and transparent (especially on its own limitations). 

    For the approach to be systematic in nature, the Alliance underlines that asset managers must individually implement all four of the above-mentioned principles and their underlying activities (as detailed in the associated Alliance guidelines). 

    Implementing these not only protects the long-term financial interests of both the asset managers and their asset owner clients, but it would also increase the ability of asset managers to win mandates from asset owners committed to net zero, which are growing in numbers. 


    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)
    Aude Levant, Group Compliance
    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)
    Alessandra Cremonesi, Head of Legal (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

    Photos credit
    CACEIS, Adobe Stock

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