CACEIS September 2022


CONTENT

CACEIS

EUROPEAN UNION

Central Securities Depositary Regulation (CSDR)

AFME publishes paper titled "T+1 Settlement in Europe: Potential Benefits and Challenges"

CACEIS

  • On 21 September 2022, Association for Financial Markets in Europe (AFME) published a paper titled "T+1 Settlement in Europe: Potential Benefits and Challenges".

    The Association for Financial Markets in Europe (AFME) has published a new paper discussing whether Europe should move to a one-day settlement cycle (known as T+1). In Europe, the current settlement cycle for most transactions in equities and fixed income markets is two business days (‘T+2’). The paper follows announcements by the US and other jurisdictions earlier this year of their intention to move to shorter settlement cycles.

    The paper, “T+1 Settlement in Europe: Potential Benefits and Challenges” highlights the key benefits of moving to a shorter settlement cycle, including:

    • Reduction of risk: shortening the number of days between trade execution and settlement will reduce counterparty, market and credit risk, especially during periods of high market volatility.
    • Significant reduction of associated costs: by limiting firms’ open exposures over the settlement period, there will also be a reduction in margin requirements, allowing market participants to better manage capital and liquidity risk.
    • Maintaining global alignment: given that some major jurisdictions will be adopting T+1, the end users of capital markets may benefit from Europe following the same approach.

    The paper also outlines the various barriers to overcome before such a migration can take place, including:

    • Post trade activities compressed into shorter time frame: there would be significantly fewer hours between trading and the beginning of the settlement cycle for post-trade operational processes to take place. While it might be assumed that moving from two days to one day would reduce the available post-trade processing time by 50%, AFME actually estimates market participants will be moving from having 12 hours to 2 hours of post-trade operations time, an 83% reduction.
    • Possible increase in settlement fails: the migration could also lead to an increase in the number of settlement fails in the market, which will incur cash penalties under Central Securities Depositories Regulation (CSDR) rules, as well as having capital impacts under Basel III requirements.
    • Greater operational complexities for global participants: time zone differences will impact the possibility of same-day matching processes for investors from outside Europe, vastly reducing the time available to communicate and resolve any breaks or exceptions. This impact would be particularly significant on cross-currency transactions which have an FX component.
    • Securities Lending impact: moving to a T+1 settlement cycle compresses the timeline to identify and recall securities, which could lead to breaks in the process, resulting in an increase in settlement fails and cash penalties unless there is a modification to existing processes, technology and overall behavioral changes.
    • Impact for Exchange Traded Funds (ETFs) and Securities-based derivatives more pronounced:  
    • Due to the global composition of many ETFs, which contain underlying securities from several jurisdictions, this can often lead to settlement delays in a T+2 environment, due to time zone differences, market holidays and cross-border settlement complexity. These challenges would be even more pronounced in a T+1 environment.
    • Challenges will also exist for securities-based derivatives with further assessment required to identify impacts to the swap lifecycle, such as margining calculation and collection.

    AFME’s paper strongly recommends that further cross-industry discussion is required to identify and quantify the benefits and challenges of moving to T+1 settlement. AFME cautions that a successful migration will require coordinated industry effort, from an initial impact assessment through to the development of a detailed implementation plan.

    CACEIS is actively engaged in the work of T+1 Settlement discussion.

  • Derivative Financial Instruments (Derivatives)

    ESMA publishes response to the EU Commission regarding recent developments in the energy derivatives markets

    CACEIS

  • On 22 September 2022, European Securities and Markets Authority (ESMA) published response to the EU Commission regarding recent developments in the energy derivatives markets.

    The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has submitted its response to the European Commission (Commission) regarding the current level of margins and of excessive volatility in energy derivatives markets.

    In its letter, ESMA sets out its high-level assessment concerning the areas where the Commission requested input:

    • Measures to limit excessive volatility (circuit breakers)
    • CCP margins and collateral
    • ESMA also makes a number of further suggestions in the following areas:
    • Commodity clearing thresholds
    • Improving regulatory reporting on commodity derivatives
    • Regulating and supervising commodity traders
    • ESMA and NCAs have been focusing and strengthening their respective market monitoring and surveillance activities on the energy derivatives markets. Close cooperation will continue to counter possible threats to market integrity and ensure that any potential signal of market manipulation is followed up and investigated.

    The letter published today comes in response to the formal request from the Commission that ESMA received on 13 September 2022. 

    ESMA stands ready to provide further technical input to EU Institutions to help address the current situation.

  • Digital Services Act

    Council of the EU publishes formally approved draft text of Digital Services Act

    CACEIS

  • On 21 September 2022, Council of the EU published formally approved text of Digital Services Act.

    The rules governing the provision of digital services in the EU have remained largely unchanged since the adoption of the e-Commerce Directive in 2000, while digital technologies and business models continue to evolve rapidly and new societal challenges are emerging, such as the spread of counterfeit goods, hate speech and disinformation online. Against this backdrop, on 15 December 2020, the European Commission tabled a new legislative proposal on a Digital Services Act (DSA) to update the current EU legal framework governing digital services. In parallel, the Commission unveiled a proposal for a Digital Markets Act (see separate fiche).

    The DSA is a horizontal instrument that aims to create a safer and trusted online environment. It puts in place a framework of layered responsibilities targeted at different types of services (i.e, intermediary services, hosting services, online platform services, and very large online platforms services) and proposes a set of harmonised EU-wide asymmetric obligations to ensure transparency, accountability and regulatory oversight of the EU online space (for more information see below the briefing on Digital services act :EU Legislation in Progress).

    Following protracted interinstitutional negotiations, Parliament and Council reached a provisional political agreement on the DSA in April 2022. Parliament sitting in plenary approved the final text during its July 2022 session (with 539 votes in favour, 54 votes against and 30 abstentions). Online platforms (e.g.social media and marketplaces) and online search engines must take measures to protect their users from harmful and illegal content, goods and services. Online platforms must be more transparent and more accountable (e.g. on how their content is recommended to their users) and put in place special measures to ensure their users' safety online. They cannot target advertising based on minors' personal data or on sensitive data (e.g. sexual orientation, religion and ethnicity). They should also not use their online interface to influence users' behaviour, i.e. 'dark patterns'. Online marketplaces are required to make more effort to ensure the information provided by the online traders using their platforms is reliable, including through random checks. Very large online platforms (VLOPs) and very large online search engines (VLOSE) will have to comply with stricter obligations under the DSA, given the significant societal risks they pose when disseminating illegal and harmful content, including disinformation.

    The Council was expected to formally approve the text in September paving the way for its entry into force.

  • EU financial sanctions in response to the crisis in Ukraine

    EU publishes Council Decision on a European Union action to support the development of information technology tools to improve the dissemination of information on Union restrictive measures

    CACEIS

  • On 12 September 2022, Council Decision (CFSP) 2022/1506 of 9 September 2022 on a European Union action to support the development of information technology tools to improve the dissemination of information on Union restrictive measures was published in the Official Journal of the European Union (OJ).

    The wide dissemination of, and easy access to, information on restrictive measures in force in the EU as well as information exchange between the Member States, stakeholders and the Commission are an essential condition of their efficacy.

    Russia’s war of aggression against Ukraine has shown the urgent need to launch an action to better enable Member States and operators to implement the restrictive measures adopted since 24 February 2022. Increased demands on effective implementation of restrictive measures, new requirements set by the unprecedented scope and nature of restrictive measures, and the need for secure communications and close cooperation between Member States, stakeholders and the Commission for their implementation require new or improved and more secure information technology tools.

    This Decision shall enter into force on the date of its adoption.

    It shall apply until 31 December 2024.

  • European Market Infrastructure Regulation (EMIR)

    EU publishes Commission Delegated Regulation 2022/1671 extending the transitional period referred to in Article 89(1), first subparagraph, of Regulation No 648/2012 on OTC derivatives, central counterparties and trade repositories

    CACEIS

  • On 30 September 2022, the European Union (EU) published in its Official Journal (OJ) Commission Delegated Regulation (EU) 2022/1671 of 9 June 2022 extending the transitional period referred to in Article 89(1), first subparagraph, of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories

    The transitional period laid down in Article 89(1), first subparagraph, of Regulation (EU) No 648/2012 is extended until 18 June 2023.

    This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

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

    ESMA publishes final Guidelines on MiFID II suitability requirements

    CACEIS

  • BACKGROUND

    On 23 September 2022, European Securities and Markets Authority (ESMA) published final Guidelines on MiFID II suitability requirements.

    The assessment of suitability is one of the most important requirements for investor protection in the MiFID framework. It applies to the provision of any type of investment advice, whether independent or not, and to portfolio management.

    The main aim of the guidelines is to align with the requirements of the MiFID II Delegated Regulation to integrate sustainability factors, risks and preferences into specific organizational requirements and operating conditions for investment firms, and to complement the current guidelines with good and emerging practices.

    WHAT'S NEW?

    The main amendments introduced to the MIFID II Delegated Regulation and reflected in the guidelines on the topic of sustainability are:

    • Information to clients on the sustainability preferences – Firms will need to help clients understand the concept of sustainability preferences and explain the difference between products with and without sustainability features in a clear manner and avoiding technical language;
    • Collection of information from clients on sustainability preferences – Firms will need to collect information from clients on their preferences in relation to the different types of sustainable investment products and to what extent they want to invest in these products;
    • Assessment of sustainability preferences – Once the firm has identified a range of suitable products for client, in accordance with the criteria of knowledge and experience, financial situation and other investment objectives, the firm shall identify the product(s) that fulfil the client’s sustainability preferences; and
    • Organisational requirements – Firms will need to give staff appropriate training on sustainability topics and keep appropriate records of the sustainability preferences of the client (if any) and of any updates of these preferences.

    This Final Report builds on the text of the 2018 ESMA guidelines, which have been reviewed to consider:

    • the adoption by the European Commission of the changes to the MiFID II Delegated Regulation to integrate sustainability factors, risk and preferences into organisational requirements and operating conditions for investment firms;
    • the good and poor practices identified in ESMA’s 2020 Common Supervisory Action (CSA) on suitability. These good and poor practices will give practical guidance to firms in some areas where lack of convergence was identified; and
    • the amendments introduced through the Capital Markets Recovery Package  to Article 25(2) of MiFID II.

    By pursuing the objective of ensuring a consistent and harmonised application of the requirements in the area of suitability, including on the topic of sustainability, the guidelines will contribute to the achievement of the objectives of MiFID II.

    WHAT'S NEXT?

    The Guidelines will be translated into the official languages of the EU and published on ESMA’s website. The publication of the translations will trigger a two-month period during which national competent authorities must notify ESMA whether they comply or intend to comply with the Guidelines. The Guidelines will apply six months after the date of the publication on ESMA’s website in all EU official languages.

  • Sustainable Finance / Green Finance

    ESAs publish list of additional SFDR queries requiring the interpretation of EU law

    CACEIS

  • On 13 September 2022,  the European Supervisory Authorities  published a  list of additional SFDR queries requiring the  interpretation of EU law. 

    The ESAs have submitted to the European Commission further queries relating to the interpretation of Union law with reference to Regulation (EU) 2019/2088 (the Sustainable Finance Disclosure Regulation “SFDR”).

    Queries related to interpretation of SFDR: 

    • Article 2(17) SFDR
    • Article 9(3) SFDR, carbon emissions reductions and other benchmark questions
    • PAI consideration
    • 500 employee PAI threshold
    • Periodic disclosure frequency for portfolio management services
  • ESMA updates Sustainable Finance implementation timeline (26 September 2022)

    CACEIS

  • On 26 September 2022, European Securities and Markets Authority (ESMA) updated the implementation timeline for SFDR, Taxonomy regulation, CSRD, MiFID, IDD, UCITS  and AIFMD with regards to the sustainable finance.

    The implementation timeline is being updated frequently by ESMA. 

  • ESAs propose disclosures for fossil gas and nuclear energy investments

    CACEIS

  • On 30 September 2022, the European Supervisory Authorities (ESAs) published their draft Regulatory Technical Standards (RTS) regarding the disclosure of financial products’ exposure to investments in fossil gas and nuclear energy activities under the Sustainable Finance Disclosure Regulation (SFDR).

    In  the amending final draft RTS, the ESAs propose to add specific disclosures to provide transparency about investments in taxonomy-aligned gas and nuclear economic activities. These disclosures, which are in line with the definitions in the Complementary Climate Delegated Act, will help investors make informed decisions.

    Specifically, the disclosures:

    • add a yes/no question in the financial product templates of the SFDR Delegated Regulation to identify whether the financial product intends to invest in such activities; if the answer was yes, a graphical representation of the proportion of investments in such activities would be required; and
    • implement minor technical revisions to the Delegated Regulation to correct inconsistencies observed after its publication.

    The ESAs consider the existing disclosures in the SFDR Delegated Regulation sufficient for fossil gas or nuclear energy investments by financial products that are not covered by the EU Taxonomy.

    The EC will scrutinise the draft RTS and endorse them within three months of their publication. Due to the urgency of the matter and the challenging application timeline of the Complementary Climate Delegated Act, the ESAs have left it to the EC to include an expected application date when they endorse the draft RTS.

  • FRANCE

    Accounting

    ANC publishes principles underlying the development by the ANC of French accounting standards / L'ANC publie les principes qui sous-tendent l'élaboration par l'ANC des normes comptables françaises

    CACEIS

  • On 12 September 2022, the Autorité des normes comptables (ANC) published the principles underlying the development by the ANC of French accounting standards (annual accounts and consolidated accounts).

    The purpose of this document is to present the objectives assigned to the annual accounts and the principles that the NCA takes into account in its standardisation work.

    This document is an internal document of the ANC that aims to guide accounting standardization work. It is not intended to constitute a reference framework for the application of accounting rules for preparers and users of accounts.

    Nevertheless, for the sake of transparency and pedagogy, the College of the ANC has decided to make public this internal document in order to make known all the objectives and principles that the ANC, as an accounting standard-setter, takes into account in the development of its accounting regulations.

    This document is likely to evolve, to be completed and/or modified, as standardization work and initial feedback.

    Version française

    L'Autorité des normes comptables (ANC) a publié le 12 septembre 2022 les principes sous-jacents au développement par l'ANC des normes comptables françaises (comptes annuels et comptes consolidés).

    L'objet de ce document est de présenter les objectifs assignés aux comptes annuels et les principes que l'ANC prend en compte dans ses travaux de normalisation.

    Ce document est un document interne à l'ANC qui vise à orienter les travaux de normalisation comptable. Il n'a pas vocation à constituer un cadre de référence pour l'application des règles comptables pour les préparateurs et les utilisateurs des comptes.

    Néanmoins, dans un souci de transparence et de pédagogie, le Collège de l'ANC a décidé de rendre public ce document interne afin de faire connaître l'ensemble des objectifs et principes que l'ANC, en tant que normalisateur comptable, prend en compte dans l'élaboration de sa réglementation comptable.

    Ce document est susceptible d'évoluer, d'être complété et/ou modifié, au fur et à mesure des travaux de normalisation et des premiers retours d'expérience.

  • Financial supervision

    France publishes the new usury rates applicable from 1 October / La France publie les nouveaux taux d'usure applicables à partir du 1er octobre

    CACEIS

  • On 28 September 2022, notices and communications on the new usury rates applicable from 1 October was published in Legifrance (France's Official Journal)

    The Banque de France collected data on mortgage rates charged in the third quarter from banks. It retains the following provisions:

    • As the Governor indicated to the Finance Committee of the National Assembly on September 27, an exceptional increase in usury rates – the role of which is to protect borrowers – is neither desirable nor necessary.

    The application of the formula provided for by law, i.e. 4/3 of the average rates applied, indeed leads to a well-proportioned and more marked increase than last June: the increase will be 0.48% for mortgages over 20 years old, and 0.43% for those under 20 years old, bringing the new ceilings to 3.05 and 3.03% respectively. This will make it possible to settle certain more difficult situations of access to credit noted in recent weeks. The usury rates for the other categories of loans (mainly for consumer credit and local authorities) will also be raised. The next usury rate adjustment will take place on January 1st.  

    These provisions will be published in detail in the Official Journal on September 30. 

    Version française

    Le 28 septembre 2022, les avis et communications sur les nouveaux taux d'usure applicables à partir du 1er octobre ont été publiés dans Legifrance (Journal officiel de la France).

    La Banque de France a collecté auprès des banques les données relatives aux taux de crédit immobilier pratiqués au troisième trimestre. Elle retient les dispositions suivantes :

     

    • Comme le gouverneur l'a indiqué devant la Commission des finances de l'Assemblée nationale le 27 septembre dernier, une hausse exceptionnelle des taux d'usure - dont le rôle est de protéger les emprunteurs - n'est ni souhaitable ni nécessaire.

    L'application de la formule prévue par la loi, soit 4/3 des taux moyens appliqués, conduit en effet à une augmentation bien proportionnée et plus marquée qu'en juin dernier : la hausse sera de 0,48% pour les prêts hypothécaires de plus de 20 ans, et de 0,43% pour ceux de moins de 20 ans, portant les nouveaux plafonds à respectivement 3,05 et 3,03%. Ceci permettra de régler certaines situations plus difficiles d'accès au crédit constatées ces dernières semaines. Les taux d'usure des autres catégories de prêts (principalement pour le crédit à la consommation et les collectivités locales) seront également relevés. Le prochain ajustement des taux d'usure aura lieu le 1er janvier.  

    Ces dispositions seront publiées en détail au Journal officiel le 30 septembre. 

  • FinTech / RegTech / BigTech / SupTech / Digital Economy

    Ministry of Economy publishes article on new devices to support the development of the Cloud / Le ministère de l'économie publie un article sur les nouveaux dispositifs d'aide au développement du cloud

    CACEIS

  • Le 12 septembre 2022, le ministère de l'économie publie un article sur le Cloud.

    Les nouvelles mesures sont les suivantes :

    • Accompagnement vers l'obtention du visa SecNumCloud pour les PME,
    • Mieux accompagner la transformation numérique des administrations,
    • Un cadre réglementaire ambitieux à l'échelle européenne,
    • La nécessité pour la Commission européenne de valider au plus vite l'important projet d'intérêt européen commun (IPCEI) cloud,
    • Améliorer le dialogue entre l'État et l'écosystème à travers un Comité stratégique de la filière " numérique de confiance.

    Version française

    Le 12 septembre 2022, le ministère de l'économie publie un article sur le Cloud.

    Les nouvelles mesures sont les suivantes :

    • Accompagnement vers l'obtention du visa SecNumCloud pour les PME,
    • Mieux accompagner la transformation numérique des administrations,
    • Un cadre réglementaire ambitieux à l'échelle européenne,
    • La nécessité pour la Commission européenne de valider au plus vite l'important projet d'intérêt européen commun (IPCEI) cloud,
    • Améliorer le dialogue entre l'État et l'écosystème à travers un Comité stratégique de la filière " numérique de confiance.
  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    AFM publishes summary of studies on the readability of information documents intended for retail investors / L'AFM publie une synthèse des études sur la lisibilité des documents d'information destinés aux investisseurs particuliers

    CACEIS

  • On 30 September 2022, the Autorité des marchés financiers (AMF) published  a summary of studies on the readability of information documents intended for retail investors. 

    Since 2018, the AFM  has been monitoring savers' perception of the clarity of regulatory documentation. This synthesis summarizes the findings from studies conducted on different types of investment, which reveal comprehension difficulties and a need for less technical language.

    European regulations require professionals to provide savers with understandable information on the characteristics of the investment products offered.

    Understanding key information documents (KIDs) or prospectuses is essential for retail investors to make informed investments. The AMF ensures the quality and clarity of the information made available to them.

    The main findings of the studies conducted with panels of savers highlight the difficulties of understanding encountered by savers due to the excessive density of information, the use of technical jargon and long sentences, as well as the absence illustrations, highlighting important information and reading aids. The language used is seen as addressing more sophisticated investors than novice savers.

    Among the practices likely to provide better readability to regulatory documents according to the panels of savers questioned, a clearer presentation, the highlighting of important elements (risks, costs) and the use of a glossary could facilitate their understanding.

    These studies feed the daily supervision practices of the teams. By publishing this summary, the AMF aims to make those who design and market financial products intended for retail investors aware of the difficulties of understanding that may be encountered by the latter.

    It reminds professionals that they must adopt a language and a form that promotes the readability of information. Indeed, if the models of regulatory documents are standardized at European level (the format of DIC, prospectuses), the regulations leave professionals latitude in the form and content of the headings.

    Version française

    L'Autorité des marchés financiers (AMF) a publié le 30 septembre 2022 une synthèse des études sur la lisibilité des documents d'information destinés aux investisseurs particuliers. 

    Depuis 2018, l'AFM réalise un suivi de la perception par les épargnants de la clarté de la documentation réglementaire. Cette synthèse reprend les résultats des études menées sur différents types d'investissement, qui révèlent des difficultés de compréhension et un besoin d'un langage moins technique.

    La réglementation européenne impose aux professionnels de fournir aux épargnants des informations compréhensibles sur les caractéristiques des produits d'investissement proposés.

    La compréhension des documents d'informations clés (DIC) ou prospectus est essentielle pour que les épargnants puissent investir en connaissance de cause. L'AMF veille à la qualité et à la clarté de l'information mise à leur disposition.

    Les principaux résultats des études menées auprès de panels d'épargnants mettent en évidence les difficultés de compréhension rencontrées par les épargnants en raison de la densité excessive des informations, de l'utilisation d'un jargon technique et de phrases longues, ainsi que de l'absence d'illustrations, de mise en évidence des informations importantes et d'aides à la lecture. Le langage utilisé est considéré comme s'adressant à des investisseurs plus avertis qu'à des épargnants novices.

    Parmi les pratiques susceptibles d'apporter une meilleure lisibilité aux documents réglementaires selon les panels d'épargnants interrogés, une présentation plus claire, la mise en évidence des éléments importants (risques, coûts) et l'utilisation d'un glossaire pourraient faciliter leur compréhension.

    Ces études alimentent les pratiques quotidiennes de supervision des équipes. En publiant cette synthèse, l'AMF souhaite sensibiliser les personnes qui conçoivent et commercialisent des produits financiers destinés aux particuliers aux difficultés de compréhension que peuvent rencontrer ces derniers.

    Elle rappelle aux professionnels qu'ils doivent adopter un langage et une forme qui favorisent la lisibilité de l'information. En effet, si les modèles de documents réglementaires sont standardisés au niveau européen (le format des DIC, les prospectus), la réglementation laisse aux professionnels une latitude dans la forme et le contenu des rubriques.

  • BELGIUM

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

    BnB updates section of its website on the prevention of money laundering and terrorist financing (AML/CFT)

    CACEIS

  • On 27 September 2022, Banque nationale de Belgique (BnB) updated the section of its website on the prevention of money laundering and terrorist financing (AML/CFT).

    By its Communication NBB 2018_04 of 8 February 2018, the BnB informed financial institutions of the creation on its website of a section dedicated to the prevention of money laundering and terrorist financing (section called "AML/CFT website"). The purpose of this AML/CFT website is to bring together all the legal and regulatory texts on the prevention of money laundering and terrorist financing and to clarify the comments and recommendations of the BnB in this area.

    The BnB informs you that a new update of the AML/CFT website has just been carried out. On this occasion, a new page is dedicated to the recommended actions in case of credible publications of cases of massive fraud or ML/TF in the press. For more information, BnB refers to its AML/CFT website, which contains an overview of the changes made to its successive versions.

  • Financial supervision

    Belgium publishes Law on the Status and control of stock exchange companies and on various provisions

    CACEIS

  • On 26 September 2022, Belgium published Law of 20 July 2022 on the Status and Control of Stock Exchange Companies and on Various Provisions.

    The following articles were modified:

    • Art. 284;
    • Art. 285;
    • Art. 286;
    • Art. 287;
    • Art. 289;
    • Art. 297;
    • Art. 299;
    • Art. 334;
    • Art. 379;
    • Art. 420;
    • Art. 424.
  • Prudential Requirements for Investment Firms Directive & Regulation (IFD / IFR)

    Belgium publishes Law transposing Directive 2019/2034 on the prudential supervision of investment firms

    CACEIS

  • On 5 September 2022, Belgium published in its Official Journal the Law of 20 July amending the Law of 25 October 2016 on access to the activity of providing investment services and on the statute and supervision of investment management and advisory firms and laying down other miscellaneous provisions to transpose Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms.

    As such, the partial transposition provides for:

    • Amendments to the law of 25 October 2016 on access to the activity of providing investment services and the status and control of portfolio management and investment.
    • Amendments to the Act of 2 August 2002 on the supervision of the financial sector and financial.
    • Amendments to the Law of 3 August 2012 on collective investment undertakings which meet the conditions of Directive 2009/65/EC and undertakings for investment in debt-claims.
    • Amendments to the law of 19 April 2014 on alternative collective investment undertakings and their managers.
  • GERMANY

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

    Bundesrat adopts draft law to amend the asset investment law

    CACEIS

  • On 6 September 2022, Bundesrat adopted draft law to amend the asset investment law.

    The Investment Act regulates the sale of financial products on the so-called gray capital market. In this financial market sector issuers are essentially required to disclose their balance sheets and to prepare prospectuses for certain investments. In July 2021, financial investments in so-called blind pools where no information about the investment purpose was available at the time of the investment were banned. The capital market segment regulated in the Asset Investment Act is not subject to state supervision. For years, the Federal Financial Supervisory Authority and the consumer advice centers have recorded a large number of complaints about bad investments and substantial property losses. As a result of the insolvencies of providers such as Prokon Regenerative Energies GmbH, the S+K Group, the P&R Group and numerous other companies have lost billions to investors. Protecting consumers from such financial investments is insufficient. Therefore, the Investment Act should include a general cap on the investment sums per investment are supplemented according to the individual financial situation of the consumer. That's what they'll do today for so-called "swarm financing" relevant investment limits for all financial investments specified in the Asset Investments Act. In this way, consumers can benefit according to their financial situation high-risk individual investments and the total loss of their entire assets. You can continue to invest your invested amounts in such financial investments in the future, but you have to rely on several dreadful financial products distribute capital markets. This creates a consumer-friendly for these products continue to participate in this capital market segment to an unlimited extent.

    The solution is the introduction of investment limits in the Asset Investment Act for small investors, which define the investment limits for internet service platforms for bulk financing for all regulated investments there.

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

    BaFin publishes General Administrative Act - Product intervention regarding Futures

    CACEIS

  • On 30 September 2022, BaFin published General Administrative Act - Product intervention regarding Futures.

    Retail investors based in Germany will be protected from suffering unlimited losses when trading futures from 1 January 2023. To this end, the Federal Financial Supervisory Authority (BaFin) restricts the marketing, distribution and sale of these products to retail investors. In contrast to the draft version, which BaFin had consulted in February 2022, the published General Decree allows exceptions: Trading in futures for hedging purposes remains possible for retail investors under certain conditions.

    In the future, retail investors will be allowed to continue trading futures if they use them to hedge real economic price risks. They must then confirm the purpose of the hedging to their investment service provider in advance. Hedging opportunities are particularly important for agricultural enterprises, but also for other companies in the real economy.

    In addition, futures trading remains possible for retail investors if an investment service provider contractually excludes the obligation to make additional contributions and investors can therefore not lose more than the amount invested. In addition, a transitional regulation applies: Futures contracts with which positions are settled or closed that were opened before the general ruling came into force are not covered by the BaFin measure.

    BaFin prohibits the obligation to make additional contributions in non-hedging futures trading by retail investors because unlimited financial risks may be associated with this. It is also reacting to the mini and micro future products, which are increasingly coming onto the market and which are specifically aimed at this customer group due to their smaller contract size and thus lower entry threshold. With its product intervention measure, the supervisory authority ensures that the loss of retail investors in futures trading is limited to the amount they have invested.

    BaFin may restrict or prohibit the marketing, distribution and sale of financial instruments if there are significant concerns about investor protection (Art. 42 Markets in Financial Instruments Regulation, MiFIR).

  • Sustainable Finance / Green Finance

    BaFin publishes questions and answers on SFDR

    CACEIS

  • On 5 September 2022, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) published questions and answers on SFDR.

    The EU Disclosure Regulation contains vague legal terms, the interpretation of which creates practical difficulties for financial market participants and financial advisors. Also the questions and answers provided by the European Commission, which they asked in the July 2021 and in the May 2022 on the Disclosure Regulation, raise questions of application. With their Message of 29 June 2022, BaFin had therefore announced that it would analyse the remaining issues and examine its own room for manoeuvre in this area.

    With the new questions and answers 2-4 now presented, BaFin publishes the first results. She also plans to expand the list of questions and answers on an ongoing basis. For the time being, BaFin bases its administrative practice on the legal opinion contained in the replies. However, changes may occur if the European Commission or the Joint Committee of the European Supervisory Authorities publish different assessments.

  • HONG KONG

    FinTech / RegTech / BigTech / SupTech / Digital Economy

    HKMA publishes guidance on Cloud computing

    CACEIS

  • On 1 September 2022, the Hong Kong Monetary Authority (HKMA) published a guidance on Cloud computing.

    The HKMA notes that cloud computing, if managed properly, provides a range of benefits, including cost efficiency, operational resilience, and business scalability. The HKMA's supervisory policy permits authorised institutions to utilise the technology as long as the associated risks are effectively managed, in compliance with the existing supervisory requirements, including those related to technology risk management and outsourcing. The HKMA's supervisory expectations on cloud computing are developed with reference to the results of the HKMA's thematic examinations undertaken between 2021 and 2022. In particular, authorised institutions are expected to pay attention to the following key principles before adopting cloud computing: 

    • governance framework; 
    • on-going risk management and controls; 
    • protection of access and other legal rights; and 
    • risk management capabilities. 

    The HKMA notes that the above principles serve to complement, and should be read in conjunction with, relevant existing HKMA guidance, including its supervisory policy manual modules on outsourcing, operational resilience and general principles for technology risk management.

  • Investor protection / Consumer protection

    SFC publishes Circular on investor education on the HKIDR and OTCR

    CACEIS

  • On 16 September 2022, the Securities and Futures Commission (SFC) published Circular on investor education on the Hong Kong Investor Identification Regime (HKIDR) and Over-the-counter Securities Transactions Reporting Regime (OTCR).

    To facilitate the Relevant Regulated Intermediaries (RRIs) preparing for the implementation and promoting public investors’ awareness of the HKIDR and OTCR, the SFC has prepared various investor education items for the use of RRIs. Details are as follows:

    • Videos introducing the HKIDR and OTCR;
    • Posters, mask holders and pamphlet for the HKIDR and OTCR. 

    The SFC invites RRIs to distribute these promotional items to their clients.

    In addition, electronic versions of the pamphlet in Chinese and English are made available on SFC's HKIDR and OTCR dedicated webpage. RRIs are also welcome to download and make use of the electronic pamphlet so as to facilitate their handling of enquiries from clients.

  • IRELAND

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

    CBI fines Danske Bank A/S for transaction monitoring failures in respect of anti-money laundering and terrorist financing systems

    CACEIS

  • On 15 September 2022, the Central Bank of Ireland fined Danske Bank A/S for transaction monitoring failures in respect of anti-money laundering and terrorist financing systems. 

    The three breaches comprised of failures by Danske under the CJA relating to:

    • Transaction Monitoring: Danske failed to ensure that its automated transaction monitoring system monitored the transactions of certain categories of customer for money laundering and terrorist financing risk at its Irish branch for a period of almost nine years.
    • Enhanced Customer Due Diligence: In failing to conduct automated transaction monitoring in respect of certain categories of customers, Danske’s Irish branch did not take into consideration an important part of due diligence i.e. transaction monitoring data, which is necessary to identify and assess money laundering/terrorist financing risks specific to those customers and identify where any consequential additional measures might be required.
    • Anti-money laundering / Countering the Financing of Terrorism policies, procedures and controls: The policies, procedures and controls put in place by Danske did not operate to identify the erroneous exclusion of certain categories of customers from automated transaction monitoring.
  • Financial supervision

    Ireland publishes S.I. No. 426/2022 - Central Bank Act 1942 (Section 32D) Regulations 2022 regarding levy contribution

    CACEIS

  • On 2 September 2022, the S.I. No. 426/2022 - Central Bank Act 1942 (Section 32D) Regulations 2022 was published in the Irish Statute Book. 

    The purpose of these Regulations is to prescribe levies pursuant to section 32D of the Central Bank Act 1942, for entities, including Investment Funds, Alternative Investment Fund Managers and other Investment Fund Service Providers, Credit Institutions.

  • Regulation on a pilot regime for market infrastructures based on distributed ledger technology (DLT Regulation)

    Ireland publishes S.I. No. 443/2022 - European Union (Markets in Financial Instruments) (Amendment) (No. 4) Regulations 2022

    CACEIS

  • On 9 September 2022, the S.I. No. 443/2022 - European Union (Markets in Financial Instruments) (Amendment) (No. 4) Regulations 2022 was published in the Irish Statute Book. 

    These Regulations amend the European Union (Markets in Financial Instruments) Regulations 2017 (S.I. No.375 of 2017) to extend the definition of financial instrument to include those instruments issued by way of distributed ledger technology (DLT), as required by Regulation (EU) 2022/858 on a pilot regime for market infrastructures based on distributed ledger technology.

  • Sustainable Finance / Green Finance

    Ireland publishes S.I. No. 442/2022 - European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) (No.2) Regulations 2022

    CACEIS

  • On 9 September 2022, the S.I. No. 442/2022 - European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) (No.2) Regulations 2022 was published in the Irish Statute Book. 

    These Regulations implement Commission Delegated Directive (EU) 2021/1270 of 21 April 2021 amending Directive 2010/43/EU as regards the sustainability risks and sustainability factors to be taken into account for Undertakings for Collective Investment in Transferable Securities (UCITS).

  • ITALY

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

    Italy publishes amendments to the Issuers' Regulation to adapt the rules on the marketing of UCITS to the provisions of Regulation No. 2019/1156 and Directive 2019/1160

    CACEIS

  • On 14 September 2022, Italy published in the Gazzetta Ufficiale amendments to the Issuers' Regulation to adapt the rules on the marketing of UCITS to the provisions of Regulation (EU) No. 2019/1156 and Directive (EU) 2019/1160 as well as, limited to certain aspects, to the provisions of Regulation (EU) No. 2019/2088 and Regulation (EU) No. 2020/852.

    The European legislation on the cross-border distribution of UCIs, provided for in the so-called CBDF Package (Regulation (EU) 2019/1156 and Directive (EU) 2019/1160) and the new pre-contractual disclosure obligations envisaged for UCI managers by the SFDR and Taxonomy Regulations, made it necessary to amend - subject to the publication, on 11 February 2022, of a consultation document - the Regulation implementing the Legislative Decree no. 58 of 24 February 1998, (Consolidated Law on Finance - TUF), concerning the regulation of issuers, adopted with Resolution no. 11971 (Issuers Regulation), in order to:

    i) adapt the regulatory legislation pertaining to Consob to the CBDF Directive and the CBDF Regulation, within the framework of the regulatory powers attributed to the Institute by the TUF, as also amended by Legislative Decree no. 191/2021;

    ii) adapt the pre-contractual information provided in the offer documentation relating to UCIs to the SFDR Regulation and the Taxonomy Regulation.

    The consultation with the market ended on 11 March 2022.

    As a result of the consultation procedure, the Commission adopted the Resolution no. 22437 of 6 September 2022 (currently being published in the Official Gazette) with which changes have been made to the Issuers Regulation.

    With reference to the adjustment to the CBDF Package, the primary areas of intervention concerned:

    a) the regulations relating to the structures for retail investors that must be made available in Italy in the event of the marketing in our country of units or shares of EU UCITS, EU AIFs (Alternative Investment Funds) by Italian managers, or of Gefia (AIFM - managers of alternative investment funds) EU, as well as of Italian AIFs by AIFMs EU.

    The discipline relating to local facilities identifies the tasks to be performed by the structures available to investors, governs the case in which the tasks have been conducted by a third party or by the manager jointly with a third party and identifies the language in which such structures must be provided;

    b) the discipline on the ending of marketing, in an EU state other than Italy, of FIA units or shares by Italian managers and, in Italy:

    • of EU UCITS units or shares;
    • of Fia reserved by AIFMs Ue;
    • of Italian and EU AIFs with retail investors by EU AIFMs.

    c) the discipline on the pre-marketing of reserved AIFs, which identifies the deadline and methods of transmission of the communication that the Italian manager must send to Consob, establishes that the AIF subscriptions made within eighteen months from the beginning of the pre- marketing concerning this AIF are considered the result of the marketing, with the consequent obligation to complete the notification procedure and identify the subjects who can carry out the pre-marketing activity on behalf of a manager;

    d) the rules on marketing communications applicable in the context of an offer to the public relating to UCIs, which has been modified to take into account the fact that Consob no longer has the regulatory power to govern the criteria on the basis of which the advertising is made with reference to an offer to the public of open-ended UCITS units or shares (UCITS and AIFs), the discipline provided for by the CBDF Regulation being applicable in this regard as well as the Guidelines on marketing communications under the Regulation on cross-border distribution of funds (ESMA34- 45-1244).

    With reference to the adaptation to the provisions concerning pre-contractual information on sustainability envisaged by the SFDR Regulation and the Taxonomy Regulation with regard to UCITS and AIF managers and their products, it is envisaged in the Issuers Regulation that this information is provided in the prospectus/document of offer (in the case of AIFs which are not subject to the prospectus obligation) or in a specific attachment, based on the provisions of article no. 6 of the SFDR Regulation and the regulatory technical standards adopted by the European Commission in accordance with the provisions of the aforementioned European regulation.

    The resolution also provides that the aforementioned pre-contractual disclosure obligations, which have not yet become applicable pursuant to the SFDR Regulation and the Taxonomy Regulation, shall apply from the dates of application provided for by the European regulations. Finally, a transitional provision is also dictated to allow the updating of the offer documentation in relation to the UCITS offers in progress.

  • Listing / Trading rules

    Borsa Italiana publishes amendments to the Market Rules and to the related Instructions

    CACEIS

  • On 22 September 2022, Borsa Italiana published amendments to the Market Rules and to the related Instructions.

    The changes related to Borsa Italiana's listing process are aimed at simplifying the listing process and requirements, revising the system of responsibilities placed on the various players involved in the admission process, and reducing the preparation time and inquiry burdens associated with listing.

    Specifically, the areas of intervention cover the following areas:

    • Documentary simplification for issuers; 
    • Competences of Borsa Italiana in admission matters;
    • Role and responsibilities of the Sponsor;
    • Discipline of the specialist operator.

    The overall structure is thus more aligned with the regulation of other EU markets. The simplification of the listing process is part of the broader effort made by Euronext to facilitate access to capital markets, attract local and international issuers to its markets, and encourage access to financial resources through access to public capital markets.

    On 21 September 2022, CONSOB published resolution No. 22455 on approval of amendments to the Regulations of markets organized and managed by Borsa Italiana spa.

  • LUXEMBOURG

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

    CSSF signs a public-private partnership with the ABBL and the CRF regarding AML/CFT / La CSSF signe un partenariat public-privé avec l'ABBL et le CRF en matière de LAB/CFT

    CACEIS

  • On 16 September 2022, Commission de Surveillance du secteur financier (CSSF) announced the signature of a public-private partnership with the ABBL and the CRF regarding AML/CFT.

    In order to further strengthen their collaboration in the fight against money laundering and the financing of terrorism, the Luxembourg Bankers’ Association (ABBL), the Cellule de Renseignement Financier (CRF) and the Commission de Surveillance du Secteur Financier (CSSF) have signed a Public Private Partnership on 13 September 2022.

    The fight against ML/TF requires an integrated approach in which public authorities and industry representatives pool their knowledge and skills to prevent, detect and combat these crimes together. Such a public-private dialogue helps providing clarity on risks related to specific activities, typologies of crimes, regulatory expectations, and also aims at identifying specific areas or issues where more regulatory guidance is needed.

    Taking these challenges into consideration, ABBL’s CEO Jerry Grbic (pictured right), CRF’s Director Max Braun (left) and CSSF’s Director General Claude Marx (center) have signed on 13 September 2022 the new terms of reference applicable to a revamped public-private exchange platform of the banking sector in Luxembourg.

    This signature is the culmination of a procedure launched three years ago. In the course of the year 2019, the ABBL’s Private Banking Cluster became associated to the process initiated by the CSSF and four working meetings between the CSSF and the ABBL were organised.

    Version française

    Le 16 septembre 2022, la Commission de Surveillance du secteur financier (CSSF) a annoncé la signature d'un partenariat public-privé avec l'ABBL et la CRF en matière de lutte contre le blanchiment et le financement du terrorisme.

    Afin de renforcer encore leur collaboration dans la lutte contre le blanchiment d'argent et le financement du terrorisme, l'Association Luxembourgeoise des Banques (ABBL), la Cellule de Renseignement Financier (CRF) et la Commission de Surveillance du Secteur Financier (CSSF) ont signé le 13 septembre 2022 un partenariat public-privé.

    La lutte contre le blanchiment d'argent et le financement du terrorisme requiert une approche intégrée dans laquelle les autorités publiques et les représentants du secteur mettent en commun leurs connaissances et leurs compétences pour prévenir, détecter et combattre ensemble ces crimes. Un tel dialogue public-privé permet de clarifier les risques liés à des activités spécifiques, les typologies de crimes, les attentes réglementaires, et vise également à identifier les domaines ou questions spécifiques pour lesquels davantage d'orientations réglementaires sont nécessaires.

    Prenant en considération ces défis, Jerry Grbic, CEO de l'ABBL (photo de droite), Max Braun, directeur de la CRF (photo de gauche) et Claude Marx, directeur général de la CSSF (photo du centre) ont signé le 13 septembre 2022 les nouveaux termes de référence applicables à une plateforme d'échange public-privé du secteur bancaire au Luxembourg.

    Cette signature est l'aboutissement d'une procédure lancée il y a trois ans. Au cours de l'année 2019, le Private Banking Cluster de l'ABBL s'est associé à la démarche initiée par la CSSF et quatre réunions de travail entre la CSSF et l'ABBL ont été organisées.

  • Audit matter

    CSSF publishes report on the CEAOB survey / La CSSF publie un rapport sur l'enquête du CEAOB

    CACEIS

  • On 21 September 2022, Commission de Surveillance du secteur financier (CSSF) published report on the CEAOB survey.

    The CEAOB, which is the framework for co-operation between national audit oversight bodies at an EU level, has recently issued its report on “Materiality in the context of an audit” which aggregates the results of the thematic review carried out by its members in 2020 and 2021.

    The report provides an overview of how Big 4 Firms determine materiality levels and how Audit Committee Chairs perceive this assessment and interact with auditors on materiality matters.

    This report serves also the CEAOB as a support to address certain recommendations to auditors, audit committees and standard setters with the objective to enhance the appropriateness of the assessed materiality levels applied by auditors and to prevent judgmental biases.

    The « Commission de Surveillance du Secteur Financier », as authority responsible for the public oversight of the audit profession in Luxembourg, has played an active role in this survey by leading the Task Force in charge of the project at EU level.

    Version française

    Le 21 septembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié le rapport sur l'enquête du CEAOB.

    Le CEAOB, qui est le cadre de coopération entre les organismes nationaux de surveillance de l'audit au niveau de l'UE, a récemment publié son rapport sur "La matérialité dans le contexte d'un audit" qui regroupe les résultats de l'examen thématique réalisé par ses membres en 2020 et 2021.

    Le rapport donne un aperçu de la façon dont les Big 4 Firms déterminent les niveaux de matérialité et comment les présidents des comités d'audit perçoivent cette évaluation et interagissent avec les auditeurs sur les questions de matérialité.

    Ce rapport sert également au CEAOB de support pour adresser certaines recommandations aux auditeurs, aux comités d'audit et aux normalisateurs dans le but d'améliorer la pertinence des niveaux de matérialité évalués appliqués par les auditeurs et de prévenir les biais de jugement.

    La Commission de Surveillance du Secteur Financier, en tant qu'autorité responsable de la supervision publique de la profession d'audit au Luxembourg, a joué un rôle actif dans cette étude en dirigeant la Task Force en charge du projet au niveau européen.

  • Financial supervision

    CSSF publishes its 2021 annual report / La CSSF publie son rapport annuel 2021

    CACEIS

  • On 8 September 2022, the Commission de Surveillance du secteur financier (CSSF) published its 2021 annual report. 

    With this report, the CSSF is revisiting the main actions with respect to prudential supervision and financial consumer protection, as well as the regulatory developments that marked 2021.

    Moreover, on the occasion of the publication of the annual report, CSSF directors and some of its experts speak, on its mini website Panorama (https://panorama-cssf.lu/en/), of the main topics that caught their attention in recent months. The following topics are addressed in videos:

    • The vision of the CSSF.
    • Various dimensions of sustainable finance.
    • Climate-related and environmental risks.
    • Regulation of mortgage loans in Luxembourg.
    • Liquidity risk management in the UCI sector.
    • Fight against money laundering and terrorist financing.
    • Issues concerning financial and non-financial data.
    • Financial innovation and challenges with respect to IT security.
    • The CSSF’s transformation strategy (CSSF 4.0).
    • Upskilling at the CSSF.

    Version française

    Le 8 septembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié son rapport annuel 2021. 

    Avec ce rapport, la CSSF revient sur les principales actions en matière de surveillance prudentielle et de protection des consommateurs financiers, ainsi que sur les évolutions réglementaires qui ont marqué l'année 2021.

    Par ailleurs, à l'occasion de la publication du rapport annuel, les administrateurs de la CSSF et certains de ses experts s'expriment, sur son mini-site Panorama (https://panorama-cssf.lu/en/), sur les principaux sujets qui ont retenu leur attention ces derniers mois. Les thèmes suivants sont abordés dans les vidéos :

    • La vision de la CSSF.
    • Les différentes dimensions de la finance durable.
    • Les risques liés au climat et à l'environnement.
    • La réglementation des crédits hypothécaires au Luxembourg.
    • La gestion du risque de liquidité dans le secteur des OPC.
    • La lutte contre le blanchiment d'argent et le financement du terrorisme.
    • Questions relatives aux données financières et non financières.
    • L'innovation financière et les défis en matière de sécurité informatique.
    • La stratégie de transformation de la CSSF (CSSF 4.0).
    • La formation continue à la CSSF.
  • Investment Funds / Collective Investment Schemes (CIS) / Asset Management

    CSSF publishes communication regarding the pre-marketing notifications / La CSSF publie une communication concernant les notifications préalables à la mise sur le marché

    CACEIS

  • On 8 September 2022, Commission de Surveillance du secteur financier (CSSF) published communication regarding the pre-marketing notifications.

    Following the publication of Circular CSSF 22/810 on 12 May 2022 and the introduction of the new eDesk module – ePassporting on 1 July 2022 regarding the marketing notification and de-notification procedures, the following supervised entities must send pre-marketing notifications exclusively via the eDesk Portal as of 15 September 2022:

    • Luxembourg AIFMs engaging in pre-marketing in Luxembourg or another Member State in accordance with Article 28-1 of the AIFM Law;
    • Managers of Luxembourg EuVECAs and EuSEFs engaging in pre-marketing in Luxembourg or another Member State in accordance with Article 4a of Regulation (EU) No 345/2013 or Article 4a of Regulation (EU) No 346/2013 respectively.

    Version française

    Le 8 septembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié une communication concernant les notifications préalables à la mise sur le marché.

    Suite à la publication de la circulaire CSSF 22/810 le 12 mai 2022 et à l'introduction du nouveau module eDesk - ePassporting le 1er juillet 2022 concernant les procédures de notification et de dé-notification de commercialisation, les entités surveillées suivantes doivent envoyer les notifications de pré-marketing exclusivement via le portail eDesk à partir du 15 septembre 2022 :

    • Les gestionnaires de fonds alternatifs luxembourgeois effectuant du pré-marketing au Luxembourg ou dans un autre État membre conformément à l'article 28-1 de la loi AIFM ;
    • Les gestionnaires d'EuVECA et d'EuSEF luxembourgeois engageant une pré-commercialisation au Luxembourg ou dans un autre État membre conformément à l'article 4a du règlement (UE) n° 345/2013 ou à l'article 4a du règlement (UE) n° 346/2013 respectivement.
  • Luxembourg publishes consolidated law transposing UCITS Directive, and implementing various EU regulations / Le Luxembourg publie une loi consolidée transposant la directive OPCVM et mettant en œuvre divers règlements de l'UE

    CACEIS

  • On 9 September 2022,  Consolidated version applicable on 08/03/2022: Law of 16 July 2019 on: 

    1. implementation of Regulation (EU) No. 345/2013 of the European Parliament and of the Council of April 17, 2013 on European venture capital funds;
    2. implementation of Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European social entrepreneurship funds;
    3. implementation of Regulation (EU) 2015/760 of the European Parliament and of the Council of April 29, 2015 on European long-term investment funds;
    4. implementation of Regulation (EU) 2017/1131 of the European Parliament and of the Council of June 14, 2017 on money market funds;
    5. implementation of Regulation (EU) 2017/2402 of the European Parliament and of the Council of December 12, 2017 creating a general framework for securitization as well as a specific framework for simple, transparent and standardized securitizations, and amending Directives 2009/65 /EC, 2009/138/EC and 2011/61/EU and regulations (EC) No. 1060/2009 and (EU) No. 648/2012;
    6. modification of the amended law of 5 April 1993 relating to the financial sector;
    7. modification of the law of 23 July 2016 relating to reserved alternative investment funds was published in Legilux (Journal Officiel du Grand-Duché de Luxembourg).

    The version was applicable since 8 March 2022.

    Version française

    Le 9 septembre 2022, Version consolidée applicable le 08/03/2022 : Loi du 16 juillet 2019 relative à : 

    1. la mise en œuvre du règlement (UE) n° 345/2013 du Parlement européen et du Conseil du 17 avril 2013 relatif aux fonds européens de capital-risque ;
    2. la mise en œuvre du règlement (UE) n° 346/2013 du Parlement européen et du Conseil du 17 avril 2013 relatif aux fonds européens d'entrepreneuriat social ;
    3. mise en œuvre du règlement (UE) 2015/760 du Parlement européen et du Conseil du 29 avril 2015 relatif aux fonds européens d'investissement à long terme ;
    4. mise en œuvre du règlement (UE) 2017/1131 du Parlement européen et du Conseil du 14 juin 2017 relatif aux fonds du marché monétaire ;
    5. mise en œuvre du règlement (UE) 2017/2402 du Parlement européen et du Conseil du 12 décembre 2017 créant un cadre général pour la titrisation ainsi qu'un cadre spécifique pour les titrisations simples, transparentes et standardisées, et modifiant les directives 2009/65 /CE, 2009/138/CE et 2011/61/UE et les règlements (CE) n° 1060/2009 et (UE) n° 648/2012 ;
    6. modification de la loi modifiée du 5 avril 1993 relative au secteur financier ;
    7. modification de la loi du 23 juillet 2016 relative aux fonds d'investissement alternatifs réservés.

    a été publiée dans le Legilux (Journal Officiel du Grand-Duché de Luxembourg).

    Cette version était applicable depuis le 8 mars 2022. 

  • CSSF publishes FAQ on cross border distribution of funds as guidance on marketing communications / La CSSF publie une FAQ sur la distribution transfrontalière de fonds ainsi que des orientations sur les communications marketing

    CACEIS

  • On 20 September 2022, Commission de Surveillance du secteur financier (CSSF) published FAQ on cross border distribution of funds as guidance on marketing communications.

    The present document refers to a list of questions & answers (FAQs) in relation to a number of key aspects of the application of article 4 of the CBDF Regulation and ESMA Guidelines with the objective to bring further clarity on the supervisory expectations of the competent authority. This document will be updated from time to time and the CSSF reserves the right to alter its approach to any matter covered by the FAQs at any time. The entities concerned should regularly check the website of the CSSF in relation to any matter of importance to them to see if questions have been added and/or positions have been altered. The present FAQs are to be read in conjunction with ESMA Guidelines as well as questions and answers to be published by ESMA with respect to marketing communications (“MCs”), if any. In this context, the CSSF refers to the information made available by ESMA on the following website: www.esma.europa.eu

    Version française

    Le 20 septembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié une FAQ sur la distribution transfrontalière de fonds en tant qu'orientation sur les communications commerciales.

    Le présent document renvoie à une liste de questions et réponses (FAQ) concernant un certain nombre d'aspects clés de l'application de l'article 4 du règlement CBDF et des lignes directrices de l'AEMF, dans le but de clarifier davantage les attentes de l'autorité compétente en matière de surveillance. Ce document sera mis à jour de temps en temps et la CSSF se réserve le droit de modifier à tout moment son approche sur toute question couverte par les FAQs. Les entités concernées sont invitées à consulter régulièrement le site Internet de la CSSF pour toute question importante pour elles afin de vérifier si des questions ont été ajoutées et/ou si des positions ont été modifiées. Les présentes FAQ doivent être lues conjointement avec les lignes directrices de l'AEMF ainsi qu'avec les questions et réponses qui seront publiées par l'AEMF concernant les communications marketing ("CM"), le cas échéant. Dans ce contexte, la CSSF renvoie aux informations mises à disposition par l'ESMA sur le site Internet suivant : www.esma.europa.eu.

  • CSSF updates notification letter for marketing of shares of EU AIFs in Member States / La CSSF met à jour la lettre de notification pour la commercialisation des parts de fonds alternatifs de l'UE dans les États membres

    CACEIS

  • On 21 September 2022, Commission de Surveillance du secteur financier (CSSF) updated notification letter for the marketing of units or shares of EU AIFs in Member States and/or home Member State of the AIFM established in Luxembourg (Article 31/32 of the AIFMD).

    Version française

    Le 21 septembre 2022, la Commission de Surveillance du secteur financier (CSSF) a mis à jour la lettre de notification pour la commercialisation d'unités ou de parts de fonds alternatifs de l'UE dans les États membres et/ou l'État membre d'origine du gestionnaire établi au Luxembourg (article 31/32 de l'AIFMD).

  • BCL updates the FAQ for statistical reporting of investment funds / BCL met à jour la FAQ pour les déclarations statistiques des fonds d'investissement

    CACEIS

  • On 21 September 2022, the Central Bank of Luxembourg (BCL) updated the frequently asked questions (FAQ) for statistical reporting of investment funds. 

    The BCL updated reporting instructions raised by the investment funds and/or provided additional clarifications on instructions that were not sufficiently clear. 

    The updated FAQ contains the following topics: 

    • The RIAD database (Register of data relating to institutions and subsidiaries)
    • Declaration of alternative investment funds that are not regulated
    • Dates relevant to reporting
    • Reporting obligations: the beginning and the end
    • Specific cases
    • Consistency checks
    • Financial market instruments
    • Sanctions

    Version française

    Le 21 septembre 2022, la Banque centrale du Luxembourg (BCL) a mis à jour les questions fréquemment posées (FAQ) pour les déclarations statistiques des fonds d'investissement.

    La BCL a mis à jour les instructions de déclaration soulevées par les fonds d'investissement et/ou a apporté des clarifications supplémentaires sur des instructions qui n'étaient pas suffisamment claires. 

    La FAQ mise à jour contient les sujets suivants : 

    • La base de données RIAD (Registre des données relatives aux institutions et filiales)
    • Déclaration des fonds d'investissement alternatifs qui ne sont pas réglementés
    • Dates pertinentes pour la déclaration
    • Obligations de déclaration : le début et la fin
    • Cas particuliers
    • Contrôles de cohérence
    • Instruments du marché financier
    • Sanctions
  • Sustainable Finance / Green Finance

    CSSF publishes communication to the investment fund industry on SFDR RTS confirmation letter / La CSSF publie une communication à l'industrie des fonds d'investissement sur la lettre de confirmation du SFDR RTS

    CACEIS

  • On 6 September 2022, the Commission de Surveillance du secteur financier (CSSF) published a communication to the investment fund industry on Sustainable Finance Disclosure Regulation Regulatory Technical Standards (SFDR RTS) confirmation letter.

    The CSSF informed that the announced RTS confirmation letter, that should accompany the filing of a prospectus/issuing document to support the update on sustainability-related disclosures with regard to SFDR RTS, is now available and can be downloaded from the website of the CSSF for Undertakings for Collective Investment in Transferable Securities (UCITS) and for Alternative investment funds (AIFs).

    While the RTS confirmation letter is presented in two versions that are similar in essence, a specific version for UCITS respectively for AIFs must however be used depending on the fund type concerned.

    The CSSF reminded that practitioners intending to update pre-contractual documents may benefit of an accelerated examination and visa stamping of the prospectus provided that the following conditions are fulfilled:

    • changes made to the pre-contractual documents are limited to the insertion of the templates according to the annexes of Commission Delegated Regulation (EU) 2022/1288 and that for all of the sub-funds subject to Article 8 or 9 SFDR of the fund;
    • the updated prospectus filed is accompanied by the RTS confirmation letter and related table requested, duly filled in and signed by authorised persons;
    • any other changes made apart from changes made in reference to the insertion of the standardised annexes pursuant to Commission Delegated Regulation (EU) 2022/1288 must be minor, of editorial nature only and not entail a material change for investors;
    • for the purpose of the accelerated examination and visa stamp procedure, the following sequential process must be followed: 1. the submission for examination of a draft prospectus/issuing document including the templates (in track changes compared to last visa-stamped prospectus/issuing document), the RTS confirmation letter and the related table requested; 2.  where relevant, CSSF will return comments to the applicant with request for prompt clarification or confirmation, if needed, reiteration until completion and consent on disclosures to be inserted; 3. after completion and consent, transmission to the applicant of an information that examination phase ended and invitation to upload of the consented prospectus version in clean version for visa stamp, in PDF – text format and in accordance with Circular CSSF 19/708 relating to the electronic transmission of documents to the CSSF (DOCREP-ENNNNNNNN-CCCCCCCC-PPPP-YYYY-MM-DD-PC-LL-0000.pdf).

    This accelerated examination and processing is available until 31 October 2022, any transmission following the process above after that date can only be considered on a best effort basis.

    Prospectuses/issuing documents updated with regard to SFDR RTS along with other material changes to the prospectus/issuing document must be filed through ordinary amendments procedure and will be examined on a best effort basis.

    On 14 September 2022, the form of Confirmation letter for the purpose of CSSF visa stamping of the Fund prospectus updated in relation to the pre-contractual disclosure requirements specified in the Commission Delegated Regulation 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/2088 (“CDR”) was updated by CSSF.

    Version française

    Le 6 septembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié une communication à l'intention de l'industrie des fonds d'investissement sur la lettre de confirmation des normes techniques réglementaires de divulgation en matière de finance durable (SFDR RTS).

    La CSSF a informé que la lettre de confirmation RTS annoncée, qui doit accompagner le dépôt d'un prospectus/document d'émission pour soutenir la mise à jour des divulgations liées à la durabilité en ce qui concerne les SFDR RTS, est maintenant disponible et peut être téléchargée sur le site web de la CSSF pour les organismes de placement collectif en valeurs mobilières (OPCVM) et pour les fonds d'investissement alternatifs (FIA).

    Si la lettre de confirmation du RTS est présentée en deux versions similaires dans leur essence, une version spécifique pour les OPCVM respectivement pour les FIA doit toutefois être utilisée en fonction du type de fonds concerné.

    La CSSF a rappelé que les praticiens ayant l'intention de mettre à jour des documents précontractuels peuvent bénéficier d'un examen et d'un visa accélérés du prospectus pour autant que les conditions suivantes soient remplies :

    • les modifications apportées aux documents précontractuels se limitent à l'insertion des modèles selon les annexes du Règlement Délégué (UE) 2022/1288 de la Commission et ce pour tous les sous-fonds soumis à l'article 8 ou 9 du RFDR du fonds ;
    • le prospectus actualisé déposé est accompagné de la lettre de confirmation RTS et du tableau associé demandé, dûment remplis et signés par les personnes autorisées ;
    • toute autre modification apportée, à l'exception des modifications apportées en référence à l'insertion des annexes standardisées conformément au règlement délégué (UE) 2022/1288 de la Commission, doit être mineure, de nature uniquement rédactionnelle et ne pas entraîner de changement important pour les investisseurs ;
    • aux fins de la procédure accélérée d'examen et de délivrance de cachets de visa, le processus séquentiel suivant doit être suivi : 1. la soumission pour examen d'un projet de prospectus/document d'émission comprenant les modèles (en suivant les modifications apportées par rapport au dernier prospectus/document d'émission visé par un visa), la lettre de confirmation RTS et le tableau connexe demandé ; 2. le cas échéant, la CSSF renverra des commentaires au demandeur en lui demandant de fournir rapidement des éclaircissements ou une confirmation, si nécessaire, une réitération jusqu'à l'achèvement et le consentement sur les divulgations à insérer ; 3. après l'achèvement et le consentement, transmission au demandeur d'une information indiquant que la phase d'examen est terminée et invitation à télécharger la version du prospectus ayant fait l'objet du consentement en version propre pour le visa, en format PDF - texte et conformément à la circulaire CSSF 19/708 relative à la transmission électronique de documents à la CSSF (DOCREP-ENNNNNNN-CCCCCCCC-PPPP-YYYYY-MM-DD-PC-LL-0000.pdf).

    Cet examen et ce traitement accélérés sont disponibles jusqu'au 31 octobre 2022, toute transmission suivant le processus ci-dessus après cette date ne pourra être prise en compte que dans la mesure du possible.

    Les prospectus/documents d'émission mis à jour au regard des SFDR RTS ainsi que les autres modifications importantes apportées au prospectus/document d'émission doivent être déposés selon la procédure de modification ordinaire et seront examinés dans la mesure du possible.

    Le 14 septembre 2022, le formulaire de la lettre de confirmation aux fins de l'apposition du visa de la CSSF sur le prospectus du Fonds mis à jour en ce qui concerne les obligations d'information précontractuelles spécifiées dans le règlement délégué 2022/1288 de la Commission du 6 avril 2022 complétant le règlement (UE) 2019/2088 (" RDC ") a été mis à jour par la CSSF.

  • CSSF publishes results of general public survey on sustainable finance / La CSSF publie les résultats de l'enquête grand public sur la finance durable

    CACEIS

  • On 21 September 2022, Commission de Surveillance du secteur financier (CSSF) published results of general public survey on sustainable finance.

    Given the challenges surrounding the development of sustainable finance, the Commission de Surveillance du Secteur Financier (CSSF), the Fondation ABBL pour l’éducation financière (ABBL Foundation) and the Luxembourg Sustainable Finance Initiative (LSFI) mandated ILRES to conduct a survey in order to better assess the perception and knowledge of Luxembourg households in this area. The main conclusions are: a favourable opinion with respect to the possible impact of the financial world but a lack of knowledge about this subject and hence the importance of educational action and the key role of the banker.

    Version française

    Le 21 septembre 2022, la Commission de Surveillance du secteur financier (CSSF) a publié les résultats de l'enquête grand public sur la finance durable.

    Compte tenu des enjeux liés au développement de la finance durable, la Commission de Surveillance du Secteur Financier (CSSF), la Fondation ABBL pour l'éducation financière et la Luxembourg Sustainable Finance Initiative (LSFI) ont mandaté l'ILRES pour réaliser une enquête afin de mieux évaluer la perception et les connaissances des ménages luxembourgeois dans ce domaine. Les principales conclusions sont : une opinion favorable quant à l'impact possible du monde financier mais un manque de connaissances sur ce sujet et donc l'importance d'une action éducative et le rôle clé du banquier.

  • SWITZERLAND

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

    SBA publishes statement on the revision of the Intelligence Service Act / L'ASB publie une déclaration sur la révision de la loi sur le service de renseignement

    CACEIS

  • On 9 September 2022, the Swiss Bankers Association (SBA) publishes statement on the revision of the Intelligence Service Act (ISA).

    The main arguments are the following:

    • Addition to the ISA that the processing of personal data is based on the Data Protection Act (FADP), provided the provisions of the ISA do not provide for any other regulation.
    • Clarification of the formulation of the legislature in Art. 26 Para. 1 condition. f E-ISA regarding the way in which requests for transactions come
    • Inclusion of an express obligation for financial intermediaries to provide information in the ISA, so that the banks are not exposed to a possible breach of banking secrecy.
    • Insertion of the requirement of an objectively substantiated suspicion in order to objectively narrow down inquiries.

    (FADP= lex generalis, ISA = lex specialis)

    Version française

    Le 9 septembre 2022, l'Association suisse des banquiers (ASB) publie une déclaration sur la révision de la loi sur le service de renseignement (LSR).

    Les principaux arguments sont les suivants :

    • Ajout à la LSR que le traitement des données personnelles se fonde sur la loi sur la protection des données (LPD), pour autant que les dispositions de la LSR ne prévoient pas d'autre réglementation.
    • Clarification de la formulation de la législature à l'art. 26 Para. 1 condition. f E-ISA concernant la manière dont les demandes de transactions arrivent.
    • Insertion d'une obligation expresse d'information des intermédiaires financiers dans la LSR, afin que les banques ne soient pas exposées à une éventuelle violation du secret bancaire.
    • Insertion de l'obligation d'un soupçon objectivement fondé afin de restreindre objectivement les demandes de renseignements.

    (LPD= lex generalis, LSR = lex specialis)

  • Federal Council publishes communication regarding the new data protection law / Le Conseil fédéral publie une communication concernant la nouvelle loi sur la protection des données

    CACEIS

  • On 31 August 2022, The Federal Council published a communication regarding the new data protection law from 1 September 2023.

    The completely revised Data Protection Act and the implementing provisions in the new Data Protection Ordinances (OPDo) and Data Protection Certifications (OCPD) will enter into force on September 1, 2023, in accordance with the decision of the Federal Council of August 31, 2022. This period will leave sufficient time for the economic community to take the necessary steps to implement the new law.

    The total revision of the Data Protection Act (LPD) and the provisions of the ordinances will ensure better protection of personal data. The legislation is adapted to technological advances and the rights of individuals vis-à-vis their data, as well as transparency on how it is collected, are improved.

    The Federal Council has adapted the draft OPDo in various points in order to take account of the opinions expressed during the consultation on the implementing provisions. Thus, the chapter relating to the obligations of the data controller has been thoroughly revised: private data controllers are released from certain obligations related to the duty to inform when communicating personal data. The modalities of the right of access are simplified thanks to the removal of the obligation to document the reasons for which the communication is refused, restricted or deferred. Due to critical feedback on data security, the Federal Council has also adapted its original plan in this area.

    By fixing the entry into force of the new data protection legislation on 1 September 2023, the Federal Council is responding to the concerns of the economic world. This one-year deadline will allow enough time for data protection officers to do what is necessary for the implementation of the new law.

    Parliament passed the total revision of the data protection law on September 25, 2020. The new law ensures compatibility with European law and allows Switzerland to ratify the revised version of the Council of Europe's Convention 108 on data protection. This modernization is important so that the EU continues to recognize Switzerland as a third country with an adequate level of data protection and that cross-border data exchange remains possible without additional requirements. These are crucial points for Switzerland's economic position and competitiveness. The EU has recognized Switzerland's level of data protection since 2000. This recognition is currently being reviewed.

    Version française

    Le 31 août 2022, le Conseil fédéral a publié une communication concernant la nouvelle loi sur la protection des données à partir du 1er septembre 2023.

    La loi sur la protection des données entièrement révisée et les dispositions d'exécution dans les nouvelles ordonnances sur la protection des données (OPDo) et les certificats de protection des données (OCPD) entreront en vigueur le 1er septembre 2023, conformément à la décision du Conseil fédéral du 31 août 2022. Ce délai laissera suffisamment de temps à la communuaté économique pour prendre les mesures nécessaires à la mise en œuvre de la nouvelle loi.

    La révision totale de la loi sur la protection des données (LPD) et les dispositions des ordonnances assureront une meilleure protection des données personnelles. La législation est adaptée aux progrès technologiques et les droits des personnes vis-à-vis de leurs données, ainsi que la transparence sur la manière dont elles sont collectées, sont améliorés.

    Le Conseil fédéral a adapté le projet d'OPDo en différents points afin de tenir compte des avis exprimés lors de la consultation sur les dispositions d'exécution. Ainsi, le chapitre relatif aux obligations du contrôleurs de données a été profondément remanié : les contrôleurs de données privées sont libérés de certaines obligations liées au devoir d'information lors de la communication de données personnelles. Les modalités du droit d'accès sont simplifiées grâce à la suppression de l'obligation de documenter les raisons pour lesquelles la communication est refusée, restreinte ou différée. En raison des réactions critiques concernant la sécurité des données, le Conseil fédéral a également adapté son projet initial dans ce domaine.

    En fixant l'entrée en vigueur de la nouvelle législation sur la protection des données au 1er septembre 2023, le Conseil fédéral répond aux préoccupations du monde économique. Ce délai d'un an laissera suffisamment de temps aux délégués à la protection des données pour faire le nécessaire à la mise en œuvre de la nouvelle loi.

    Le Parlement a adopté la révision totale de la loi sur la protection des données le 25 septembre 2020. La nouvelle loi assure la compatibilité avec le droit européen et permet à la Suisse de ratifier la version révisée de la Convention 108 du Conseil de l'Europe sur la protection des données. Cette modernisation est importante pour que l'UE continue de reconnaître la Suisse comme un pays tiers disposant d'un niveau adéquat de protection des données et que l'échange transfrontalier de données reste possible sans exigences supplémentaires. Ce sont des points cruciaux pour la position économique et la compétitivité de la Suisse. L'UE reconnaît le niveau de protection des données de la Suisse depuis 2000. Cette reconnaissance est actuellement en cours de révision.

  • FinTech / RegTech / BigTech / SupTech / Digital Economy

    Federal Council publishes discussion on draft update of digital Switzerland strategy / Le Conseil fédéral publie une communication sur les discussions concernant le projet de mise à jour de la stratégie pour la Suisse numérique

    CACEIS

  • On 22 September 2022, the Federal Council published a communication on advisory board discussion on draft update of digital Switzerland strategy.

    The Digital Switzerland Strategy sets the guidelines for our country's digital transformation. It is binding on the federal administration and provides a framework on which all other digitisation actors can rely. The Federal Chancellery is currently working on its revision and took advantage of the advisory committee meeting on 21 September to present and discuss its draft.

    The purpose of the update is to simplify the strategy and to foresee the themes on which priority should be given each year. The strategy will always provide an overview of the activities carried out in the field of digital transformation. The activities are divided into five areas. Indicators are used to measure progress in each of the areas. The direction to be followed in the long term is indicated in a vision.

    Version française

    Le 22 septembre 2022, le Conseil fédéral a publié une communication sur la discussion du conseil consultatif concernant le projet de mise à jour de la stratégie pour la Suisse numérique.

    La stratégie Suisse numérique fixe les lignes directrices de la transformation numérique de notre pays. Elle est contraignante pour l'administration fédérale et constitue un cadre sur lequel tous les autres acteurs de la numérisation peuvent s'appuyer. La Chancellerie fédérale travaille actuellement à sa révision et a profité de la réunion du comité consultatif du 21 septembre pour présenter et discuter son projet.

    L'objectif de cette mise à jour est de simplifier la stratégie et de prévoir les thèmes sur lesquels la priorité doit être donnée chaque année. La stratégie donnera toujours un aperçu des activités menées dans le domaine de la transformation numérique. Les activités sont divisées en cinq domaines. Des indicateurs sont utilisés pour mesurer les progrès réalisés dans chacun des domaines. La direction à suivre à long terme est indiquée dans une vision.

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

    Federal Council launches consultation on amendment to the ordinance on collective investments / Le Conseil Fédéral lance une consultation sur la modification de l'ordonnance sur les placements collectifs

    CACEIS

  • On 23 September 2022, Federal Department of Finance launches consultation on amendment to the Collective Investment Schemes Ordinance (OPCC). The proposed new enforcement provisions will apply to the Limited Qualified Investor Fund (L-QIF).

    In December 2021, the Federal Chambers decided to modify the law on collective investments in order to introduce into Swiss law a new type of fund, namely the L-QIF. This will be exempt from the authorization or approval of the Swiss Financial Market Supervisory Authority (FINMA), provided that it is exclusively reserved for qualified investors and administered by institutions subject to the supervision of the FINMA. The aim of the L-QIF is to contribute to increasing the capacity for innovation and to strengthening the attractiveness of the Swiss investment fund market.

    The draft submitted for consultation introduces the implementing provisions relating to the L-QIF into the OPCC. It is also an opportunity to make other amendments to the OPCC and to various ordinances, including the Financial Institutions Ordinance.

    The consultation procedure lasts until December 23, 2022.

    Version française

    Le 23 septembre 2022, le Département fédéral des finances lance une consultation sur la modification de l'ordonnance sur les placements collectifs de capitaux (OPCC). Les nouvelles dispositions d'exécution proposées s'appliqueront au fonds d'investissement qualifié limité (FICQ).

    En décembre 2021, les Chambres fédérales ont décidé de modifier la loi sur les placements collectifs afin d'introduire en droit suisse un nouveau type de fonds, à savoir le L-QIF. Celui-ci sera dispensé de l'autorisation ou de l'approbation de l'Autorité fédérale de surveillance des marchés financiers (FINMA), à condition qu'il soit exclusivement réservé à des investisseurs qualifiés et administré par des institutions soumises à la surveillance de la FINMA. L'objectif du L-QIF est de contribuer à augmenter la capacité d'innovation et à renforcer l'attractivité du marché suisse des fonds de placement.

    Le projet soumis à consultation introduit les dispositions d'exécution relatives au L-QIF dans l'OPCC. Il est également l'occasion d'apporter d'autres modifications à l'OPCC et à diverses ordonnances, dont l'ordonnance sur les établissements financiers.

    La procédure de consultation dure jusqu'au 23 décembre 2022.

  • Sustainable Finance / Green Finance

    AMAS publishes Circular 07/2022 on transparency and disclosure for collective assets referring to sustainability / L'AMAS publie la circulaire 07/2022 sur la transparence et la divulgation pour les actifs collectifs faisant référence à la durabilité

    CACEIS

  • On 26 September 2022, the Asset Management Association Switzerland (AMAS) introduced a self-regulation for asset managers and designers of collective investment products.

    For the first time, financial institutions that design and manage collective sustainable investment products will be subject to binding and self-regulated standards, along with disclosure obligations. Non-AMAS members may join this framework.

    The key points of the self-regulation framework:

    • Asset management firms must be sufficiently familiar with sustainable issues at the level of their management and supervisory bodies and at the operating level, and ensure that infrastructure and resources are in place for meeting the investment strategy’s sustainability requirements.
    • It lays down an all-encompassing obligation to document sustainability policies and approaches, as well as the metrics, datapoints and analysis tools used in the investment strategy and process. The principles of actively practiced stewardship must also be explained.
    • Exclusions or incorporation of ESG criteria are no longer sufficient to deem a financial product “sustainable”.
    • Firms are required to report to investors in a way that makes sustainability goals transparent, using comparable indicators.

    The voluntary self-regulation framework was developed under a broad-based approach. It will come into force on 30 September 2023. With its explicit references to both institutional and product levels, it dovetails with the self-regulation process of client advisory that the Swiss Bankers Association has introduced.

    Version française

    Le 26 septembre 2022, l'Asset Management Association Switzerland (AMAS) a introduit une autorégulation pour les gestionnaires d'actifs et les concepteurs de produits de placement collectifs.

    Pour la première fois, les établissements financiers qui conçoivent et gèrent des produits de placement collectifs durables seront soumis à des normes contraignantes et autorégulées, ainsi qu'à des obligations de divulgation. Les non-membres de l'AMAS peuvent adhérer à ce cadre.

    Les points clés du cadre d'autorégulation :

    • Les sociétés de gestion d'actifs doivent être suffisamment familiarisées avec les questions de durabilité au niveau de leurs organes de gestion et de surveillance et au niveau opérationnel, et s'assurer que l'infrastructure et les ressources sont en place pour répondre aux exigences de durabilité de la stratégie d'investissement.
    • Elle prévoit l'obligation générale de documenter les politiques et les approches en matière de durabilité, ainsi que les paramètres, les points de données et les outils d'analyse utilisés dans la stratégie et le processus d'investissement. Les principes de la gestion active doivent également être expliqués.
    • Les exclusions ou l'incorporation de critères ESG ne sont plus suffisantes pour considérer un produit financier comme "durable".
    • Les entreprises sont tenues de rendre compte aux investisseurs d'une manière qui rende les objectifs de durabilité transparents, en utilisant des indicateurs comparables.

    Le cadre d'autorégulation volontaire a été élaboré selon une approche large. Il entrera en vigueur le 30 septembre 2023. Avec ses références explicites aux niveaux des institutions et des produits, il s'inscrit dans le processus d'autorégulation du conseil à la clientèle mis en place par l'Association suisse des banquiers.

  • NETHERLANDS

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

    The Netherlands publish Decree amending the Financial Sector Administrative Fines Decree in connection with an emergency measure to ban trust services to clients in the Russian Federation or the Republic of Belarus

    CACEIS

  • On 7 September 2022, Decree of 25 August 2022 amending the Financial Sector Administrative Fines Decree in connection with an emergency measure to ban trust services to clients in the Russian Federation or the Republic of Belarus in the Official Gazette of the Kingdom of the Netherlands. 

    This Decree aligns the Financial Sector Administrative Fines Decree with amendments to the Trust Office Supervision Act 2018 (Wtt 2018) resulting from the Act of 13 July 2022 amending the Trust Office Supervision Act 2018 in connection with an urgent measure to grant trust services to clients in the Russian Federation or the Republic of Belarus ( Stb. 2022, 303). This amendment includes a prohibition on the provision of trust services to persons and companies residing or established or having a beneficial owner (UBO) in the Russian Federation or the Republic of Belarus.

    In order to give the Dutch Central Bank (DNB) the opportunity to impose a fine and to enforce this prohibition, an amendment to the Decree on administrative fines in the financial sector is being implemented by means of this order in council. Because of the great importance of compliance with the ban in view of the current European situation and in addition to the European sanctions, a category 3 is used.

    The Decree enters into force on the day after publication in the Official Gazette.

  • European Crowdfunding Service Providers (ECSP) Regulation

    AFM issues first European crowdfunding license

    CACEIS

  • On 8 September 2022,  the Autoriteit Financiële Markten (AFM)  announced about the issuance of first European crowdfunding license. 

    This is the first license that the AFM has granted to a Dutch crowdfunding platform under the new regulations of the European Crowdfunding Regulation. Important aspects of this Regulation are: a high level of investor protection, a level playing field and promotion of cross-border services.

    The European Crowdfunding Service Providers Regulation (ECSPR) has been in force in the EU Member States since November 2021. The ECSPR is part of the European Capital Markets Union, which aims to harmonize the EU capital markets. The ECSPR aims at as much uniformity as possible in the rules for crowdfunding service providers in the EU countries.

    Parties in the Netherlands that focus on crowdfunding for business activities must have the so-called Crowdfunding Service Provider license in order to provide crowdfunding services. The AFM assesses whether these parties meet the requirements and objectives of the ECSPR.

    One of the main objectives of the regulation is to provide potential investors with a better understanding of what the project in question entails, better understand its prospects and better assess the risks associated with the specific project. Crowdfunding service providers must ensure that.

    In addition, the ECSPR requires crowdfunding service providers to operate efficiently and prudently. Other requirements include reliable and appropriate governance, avoiding conflicts of interest and conducting due diligence on clients.

    The European Commission intends to extend the transition period for existing crowdfunding service providers by 1 year, until November 10, 2023. The AFM calls on parties not to wait with their license application. The AFM has now received a license application from a large number of crowdfunding service providers.

  • Sustainable Finance / Green Finance

    The Netherlands publish Decree on implementation guidelines for investment firms and UCITS on sustainability risks and sustainability factors

    CACEIS

  • On 7 September 2022, Decree of 30 August 2022 amending the Decree on the Supervision of the Conduct of Financial Undertakings Wft, the Decree on Prudential Rules Wft and the Decree on Administrative Fines in the Financial Sector for the implementation of delegated directives (EU) 2021/1269 and (EU) 2021/1270 (implementation guidelines for investment firms and UCITS on sustainability risks and sustainability factors) was published in the Official Gazette of the Kingdom of the Netherlands. 

    The Decree on the Supervision of the Conduct of Financial Undertakings Wft is amended as follows:

    A

    In Article 1, a definition is inserted in alphabetical order as follows:

    sustainability risk: sustainability risk within the meaning of Article 2(22) of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability disclosures in the financial services sector (OJEU 2019, L 317);

    B

    A paragraph is added to Article 30, which reads:

    "7. A manager of a UCITS takes sustainability risks into account when complying with the provisions of the first paragraph."

    C

    An article is inserted after Article 30, reading:

    "Article 30a

    A UCITS manager integrates sustainability risks into the management of each UCITS it manages, taking into account the nature, scale and complexity of its operations."

    D

    Article 31d, first paragraph, is replaced by «; and » at the end of part e by a semicolon and the period at the end of part f by «; and » added a part that reads:

    "g. be responsible for the integration of sustainability risks into the general investment policy, investment strategies, internal procedures for making investment decisions and the risk management policy of each UCITS managed by the manager as referred to in subparagraphs a to f."

    E

    A sentence is added to Article 32(6), which reads: In the analysis and description of the intended objective of the target group, referred to in the second paragraph, under a, the investment firm shall also take into account any sustainability objective of the target group.

    F

    In article 32a, first paragraph, after «objectives of the target group» is inserted «, including sustainability objectives».

    G

    Article 32b is amended as follows:

    1. In the first, third, fifth and eighth paragraphs, «objectives of the target group» is replaced by «objectives, including sustainability objectives, of the target group».

    2. The second paragraph shall read:

    "2. The investment firm shall determine the target group for which a particular financial instrument is not appropriate, except in the case of a financial instrument that takes into account sustainability factors as referred to in Article 2(24) of Regulation (EU) 2019/2088 of the European Parliament and the Council of 27 November 2019 on sustainability disclosures in the financial services sector (OJEU 2019, L 317)."

    H

    Article 38a, second paragraph, is amended as follows:

    1. At the end of subsection e, «and;» replaced by a semicolon.

    2. With subsection f to subsection g, a subsection is inserted that reads:

    f. it retains sufficient resources and expertise for the effective integration of sustainability risks; and.

    I

    Article 126a, second paragraph, is replaced by «; and » at the end of part a by a semicolon and the period at the end of part b by «; and » added a part that reads:

    c. the conflicts of interest that may arise as a result of integrating sustainability risks into its processes, systems and internal control.

    J

    Two paragraphs are added to Article 126i, reading:

    3. A fund manager of a UCITS takes sustainability risks into account when complying with paragraphs 1 and 2, Article 23(1) of the Decree on Prudential Rules under the Wft and Articles 34(1), 38a(2), parts e and f, and paragraph 3. of this decision.

    4. If Article 4, first paragraph, part a, third or fourth paragraph, of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on disclosures about sustainability in the financial services sector (OJEU 2019, L 317) applies the manager of a UCITS, when complying with the articles referred to in the third paragraph, he also takes into account the most important adverse effects of investment decisions on sustainability factors.

    In the Decree on Prudential Rules under the Wft , an article is inserted after Article 23a, reading:

    Article 23.0a

    In addition to Article 23(1), the risk management policy of a UCITS manager includes procedures for managing sustainability risks as referred to in Article 2(22) of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability disclosures in the financial services sector (OJEU 2019, L 317).

    Article 10 of the Decree on administrative fines in the financial sector is amended as follows:

    1. In the enumeration of articles from the Decree on the Supervision of the Conduct of Financial Undertakings Wft, the following article number with the corresponding fine category is inserted in numerical order:

    30a

    2

    2. In the enumeration of articles from the Decree on the Supervision of the Conduct of Financial Undertakings Wft, "30, first to sixth paragraphs" is replaced by "30, first to seventh paragraphs inclusive" and "126i, first and second paragraphs" is replaced by " 126i, first to fourth paragraphs».

    3. In the list of articles from the Decree on Prudential Rules under the Wft, the following article number with the corresponding fine category is inserted in numerical order:

    23.0a

    3

    The Decree shall enter into force on the day after the date of issue of the Official Gazette in which it is published, with the exception of Article I, parts E, F and G, which shall enter into force on 22 November 2022.

  • AFM announces investigation into compliance with SFDR and Taxonomy by fund managers

    CACEIS

  • On 8 September 2022, the Autoriteit Financiële Markten (AFM) announced vestigation into compliance with Sustainable Finance Disclosure Regulation (SFDR) and Taxonomy by fund managers. 

    Next autumn, the AFM will investigate the status of compliance with a number of SFDR requirements by investment fund managers. The AFM will, among other things, examine whether managers  have tightened up the SFDR classification of (sustainable) funds as a result of an earlier AFM investigation.  A number of SFDR requirements and compliance with the SFDR-affiliated Taxonomy Regulation are also being investigated.

    The AFM is investigating whether managers have tightened up the SFDR classification of funds. The earlier SFDR survey in 2021 showed that questions could be raised about the correctness of the SFDR classification of funds as Article 8 or 9 product. In a number of cases, funds appeared to be incorrectly classified as having sustainable characteristics or with a sustainable objective. As a result of this finding, managers were asked to re-evaluate the classification of their funds and to adjust it where necessary.

    The AFM also examines the extent to which managers have made information available on their website about the sustainability policies and the integration of sustainability in their remuneration policy.

    Finally, the AFM investigates the extent to which managers comply with the transparency requirements, which have been in force since 1 January 2022 on the basis of the Taxonomy Regulation. Providers of 'sustainable' financial products that have an environmental objective or that have environmental characteristics must report the extent to which they invest in activities that fall under the two environmental objectives from the taxonomy that relate to climate change. The reporting obligation on the other four environmental objectives of the Taxonomy Regulation will come into effect on 1 January 2023.

    The AFM conducts the investigation on the basis of the information available on the website of the administrators, and will request additional information where necessary. The findings will then be fed back to the market generically, and where necessary individually.

    Following the findings of the earlier SFDR investigation in 2021, the AFM announced that it would conduct a follow-up investigation this year, focusing on compliance with technical standards. Now that the implementation of these technical standards has been postponed to January 1, 2023, this research has also been postponed to 2023.

  • SPAIN

    Company Law

    Spain publishes Law 18/2022 on the creation and growth of companies

    CACEIS

  • On 28 September 2022, Spain published Law 18/2022 of 28 September on the creation and growth of companies.

    The objective of this law is not to increase the business size per se, since this depends on the interaction between the entrepreneur and the market response, but rather, on the one hand, to facilitate the creation of new companies and, on the other, to reduce the obstacles that they face in their growth, whether of regulatory or financial origin, in order to achieve an increase in competition for the benefit of consumers, the productivity of our productive fabric, the resilience of our companies and the capacity to create quality jobs.

    The measures contained in this law aimed at speeding up the creation of companies, improving regulation for the development of economic activities, reducing commercial delinquencies and facilitating access to financing, will also contribute, together with other laws such as those for the promotion of emerging companies or the insolvency reform, to the improvement of the business climate in our country, with the foreseeable positive indirect effects associated in terms of foreign investment and job creation.

    In particular, alternative measures to bank financing are incorporated into the "Create and Grow" Law. Making alternative financing mechanisms such as crowdfunding, collective investment and venture capital more flexible.

    The Law adapts national regulation to European regulations, introducing more flexibility for these platforms to provide their services in Europe. In addition, investor protection is strengthened and the creation of vehicles is allowed to group investors and thus reduce management costs.

    Likewise, the venture capital industry is promoted. To this end, it expands the type of companies in which these entities can invest, including financial companies with a high technological component.

    Finally, the recognized figures for closed-end funds are expanded, including structures with extensive experience in other countries of our environment.

  • EU financial system

    Banco de España adopts Guidelines on the equivalence of confidentiality and professional secrecy regimes of third-country authorities

    CACEIS

  • On 13 September 2022, the Banco de España adopted the European Banking Authority (EBA) Guidelines on the equivalence of confidentiality and professional secrecy regimes of third-country authorities (EBA/GL/2022/04). 

    The EBA/GL/2022/04 refers to the evaluations carried out by the EBA on the confidentiality and professional secrecy regimes to which third country competent authorities are subject in order to determine whether they are equivalent to the requirements established under the European regulations on the exchange of information, professional secrecy and confidentiality. 

    In these Guidelines the EBA publishes the list of third-country authorities whose regimes are recognized as equivalent for the conclusion of cooperation agreements and the participation in the prudential supervisory colleges, resolution colleges and in the colleges for the prevention of money laundering and financing of terrorism. 

    The adoption by the EU competent authorities of the Guidelines implies the recognition of a list of third countries regimes as equivalent within the framework of Directive 2013/36/EU (Capital requirement Directive, CRD) Directive 2015/2366 (Payment Services Directive, PSD2), Directive 2014/59/EU (on the Bank Recovery and Resolution Directive, BRRD) and the Directive 2015/849 (the AntiMoney Laundering Directive, AMLD). 

    Specifically, these new Guidelines replace, since 16 August 2022, EBA Guidelines/Recommendations EBA/REC/2015/01 y the following amendments: EBA/REC/2017/01, EBA/REC/2018/01, EBA/REC/2018/03 y EBA/GL/2020/03. 

    It concludes with the recognition, as equivalent in terms of confidentiality, of 45 competent authorities based on CRD, 5 based on PSD2, 5 based on BRRD and 5 based on AMLD. 

    These Guidelines have been developed by the EBA in accordance with article 16 of Regulation (EU) No 1093/2010. The EBA published the English version of these Guidelines on 3 May 2022 (the Spanish version was released on 15 June 2022). 

    With the exception of the "Central Bank" of the territory of Kosovo, the Banco de España, in its double role of competent authority and preventive resolution authority of the less significant credit institutions, as well as in its role of the competent authority for the direct supervision of payment institutions and electronic money institutions, adopted these Guidelines as its own on 13 September 2022.

  • UNITED KINGDOM

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

    UK Parliament publishes draft of the Economic Crime Corporate and Transparency Bill

    CACEIS

  • On 22 September 2022, UK Parliament published draft of the Economic Crime Corporate and Transparency Bill.

    The Economic Crime and Corporate Transparency Bill is effectively the second part of a legislative  package to prevent the abuse of United Kingdom (UK) corporate structures and tackle economic crime.  It follows on from the Economic Crime (Transparency and Enforcement) Act 2022, which received Royal Assent on 15 March 2022. 

    The Bill has three key objectives:

    a) Prevent organised criminals, fraudsters, kleptocrats and terrorists from using companies and  other corporate entities to abuse the UK’s open economy. This Bill will reform the powers of the Registrar of Companies and the legal framework for limited partnerships in order to safeguard businesses, consumers and the UK’s national security.

    b) Strengthen the UK’s broader response to economic crime, in particular by giving law enforcement new powers to seize cryptoassets and enabling businesses in the financial sector  to share information more effectively to prevent and detect economic crime. 

    c) Support enterprise by enabling Companies House to deliver a better service for over four million UK companies, and improving the reliability of its data to inform business transactions and lending decisions across the economy.

    The main elements of the Bill are:

    a) Broadening the Registrar’s powers so that the Registrar becomes a more active gatekeeper over company creation and custodian of more reliable data concerning companies and other UK registered entities such as LLPs and LPs – including new powers to check, remove or decline information submitted to, or already on, the register. 

    b) Introducing identity verification requirements for all new and existing registered company directors, People with Significant Control, and those delivering documents to the Registrar. This will improve the reliability of the Registrar’s data, to support business decisions and law enforcement investigations. 

    c) Providing the Registrar with more effective investigation and enforcement powers and introducing better cross-checking of data with other public and private sector bodies. 

    d) Tackling the abuse of limited partnerships (including Scottish limited partnerships), by strengthening transparency requirements and enabling them to be deregistered. 

    e) Amending the Register of Overseas Entities to maintain consistency with change to the Companies Act 2006.

    f) Creating powers to quickly and more easily seize and recover cryptoassets, which are theprincipal medium used for ransomware. The creation of a civil forfeiture power will mitigate the risk posed by those who cannot be criminally prosecuted but use their funds to further their criminality, or for use for terrorist purposes. 

    g) Creating new exemptions from the principal money laundering offences to reduce unnecessary reporting by businesses carrying out transactions on behalf of their customers and giving new powers for law enforcement to obtain information to tackle money laundering and terrorist financing.

    h) Removing the need for a Statutory Instrument to be laid in order to update the UK’s high risk third country list.

    i) Enabling businesses in certain sectors to share information more effectively to prevent and detect economic crime.

  • Benchmarks

    FCA publishes decision on cessation of 1- and 6- month synthetic sterling LIBOR at end-March 2023

    CACEIS

  • On 29 September 2022,  the Financial Conduct Authority (FCA) published decision on cessation of 1- and 6- month synthetic sterling LIBOR at end-March 2023.

    The FCA previously required ICE Benchmark Administration (IBA), the administrator of LIBOR, to continue publication of the 1-, 3- and 6-month sterling and yen LIBOR settings for an additional year after end-2021, using a synthetic methodology. This was to help mitigate the risk of widespread disruption to legacy LIBOR contracts which had not transitioned by end-2021, when the sterling and yen LIBOR panels ended.

    The FCA consulted in June 2022 on winding down 1- and 6-month synthetic sterling LIBOR at end-March 2023. The FCA recognised that market participants would value having a period of notice before the cessation of synthetic sterling LIBOR and that it would take a certain amount of time to announce the outcome of the consultation. In line with the consultation, the FCA has decided to require continued publication of the 1- and 6-month synthetic sterling LIBOR settings for a further 3 months after the end of 2022, until 31 March 2023. The majority of respondents to the FCA consultation agreed that the 1- and 6-month synthetic sterling LIBOR settings could cease in an orderly fashion at end-March 2023, or were neutral. Some responses noted that remaining exposure to these settings is low, and some said that having a confirmed cessation date could help support remaining transition efforts.

    The FCA has no intention to use our powers to compel IBA to continue to publish the 1- and 6-month synthetic sterling LIBOR settings beyond this, and therefore these settings will permanently cease immediately after final publication on 31 March 2023.

    Market participants need to ensure they are prepared for the permanent cessation of 1- and 6-month synthetic sterling LIBOR on 31 March 2023. In line with the FCA statement published in August 2022, issuers and holders of outstanding bonds referencing sterling LIBOR need to agree to convert these bonds to fair alternative rates, if they don’t have robust fallbacks in place. Lenders and borrowers will also need to agree appropriate arrangements for any outstanding loans referencing sterling LIBOR. 

    Feedback to our consultation suggested that some private finance initiative (PFI) loans remain linked to 6-month sterling LIBOR, and the FCA encourages all relevant parties to ensure these contracts are amended as a matter of priority.

    For synthetic yen LIBOR, market participants should be prepared for publication to cease permanently at end-2022, as we have set out previously.

    The FCA consultation also asked for views on when the 3-month synthetic sterling LIBOR setting could cease in an orderly fashion. The FCA is currently considering responses on this question. There was support for continuing the 3-month synthetic sterling LIBOR setting for a limited period beyond end-March 2023. While there was some variation in views, a significant number of respondents argued for giving advance notice that the 3-month setting would end after that limited period of continued publication. Those market participants who still have contracts referencing 3-month synthetic sterling LIBOR should be preparing for its cessation in due course. The FCA is considering the appropriate date for such cessation in light of the feedback received, and will provide further information when we publish our summary of feedback on that question.

    The consultation also sought information on exposures to US dollar LIBOR that might persist beyond end-June 2023, and information to help us assess the case for, and consequences for market participants if we were to decide to compel IBA to produce US dollar LIBOR using a synthetic methodology for a limited period. We are assessing that feedback and will respond later in the autumn.

  • Depositor protection rules

    PRA publishes consultation paper CP9/22 on depositor protection

    CACEIS

  • On 23 September 2022,  Prudential Regulation Authority (PRA) published consultation paper CP9/22 on depositor protection. 

    This Consultation Paper (CP) sets out the Prudential Regulation Authority’s (PRA) proposals to amend the Depositor Protection Part of the PRA Rulebook (DP), delete the Dormant Account Scheme Part of the PRA Rulebook, and make minor amendments to the PRA’s Supervisory Statement 18/15 on ‘Depositor and dormant account protection’ (SS18/15), the PRA’s Statement of Policy on ‘Deposit Guarantee Schemes’ (SoP – DGS), and the PRA’s SoP on ‘Calculating Risk-Based Levies for the Financial Services Compensation Scheme deposits class’ (‘SoP – RBL’).

    The proposals in this CP would result in changes to the Dormant Account Scheme Part of the PRA Rulebook (DAS), DP rules, SS18/15, SoP – DGS, and SoP – RBL. 

    The consultation period for the Continuity of Access Rules and Dormant Account Scheme proposals closes 21 October 2022. 

    The consultation period for the remaining proposals closes 16 December 2022. 

    References related to the UK’s membership of the EU in SS18/15, SOP – DGS, and SoP – RBL covered by this CP have been updated as part of these proposals to reflect the UK’s withdrawal from the EU. Unless otherwise stated, any remaining references to EU or EU-derived legislation refer to the version of that legislation which forms part of retained EU law

  • Financial supervision

    FCA publishes CP22/17: Quarterly Consultation Paper No. 37

    CACEIS

  • On 2 September 2022, the Financial Conduct Authority (FCA) published CP22/17: Quarterly Consultation Paper No. 37. 

    Once a quarter, the FCA consults on proposed miscellaneous amendments to our Handbook. These tend to be minor changes but the FCA still wants to get stakeholders feedback on its proposals.

    The FCA is proposing:

    • changes to the Glossary of definitions, DEPP, COLL and EG to reflect amendments made to the individually recognised overseas collective investment
    • schemes regime under section 272 of FSMA, together with other minor changes to COLL to reflect the UK’s withdrawal from the EU
    • changes to reporting requirements in the Supervision manual
    • changes to PERG, CONC and MCOB to align with recent changes to the regulatory perimeter in - respect of credit agreements entered into with high net worth borrowers
    • changes to clarify the definition of a ‘significant SYSC firm’

    The deadline to submit comments are as follows: 

    • by 26 September 2022 for Chapter 4 and 5; 
    • by 3 October 2022 for Chapter 3; 
    • 10 October 2022 for Chapter 2.
  • PRA publishes discussion paper setting out its proposed approach to policy-making

    CACEIS

  • On 8 September 2022, Prudential Regulation Authority (PRA) published a  discussion paper setting out its proposed approach to policy-making. 

    This Discussion Paper (DP) describes how the PRA intends to approach policy-making as the PRA takes on wider rulemaking responsibilities under the Financial Services and Markets Bill (FSM Bill’). It is relevant for all PRA-regulated firms.

    The FSM Bill will implement the outcomes of the Future Regulatory Framework (FRF) Review, which was established by the Government to consider how the UK’s financial services regulatory framework should adapt for the future, and in particular to reflect the UK’s position outside of the European Union. 

    The PRA's ambition is to be a strong, accountable, responsive, and accessible policymaker. To deliver on this, its approach will remain similar in some areas, and change in others. the PRA will continue to be driven by the pursuit of strong prudential standards, which are a cornerstone of UK financial stability and the international reputation of the UK as a safe and attractive place to do financial services business. However, the move to a more British style of regulation, with most of the technical rules made by independent regulators, will enable PRA to be more agile and deliver policies which are better suited to the UK’s financial sector.

    The PRA welcomes views on the ideas set out in this DP from all interested parties. The period for comment runs until 8 December 2022. 

  • UK Government publishes "Growth Plan 2022"

    CACEIS

  • On 23 September 2022,  UK Government published "Growth Plan 2022". 

    Among other announcements, The Growth plan entails a number of important regulatory announcements relevant to financial services firms. In particular: 

    • The PRA will remove the current bankers’ bonus cap. 
    • The Government will bring forward changes to remove well-designed performance fees from the occupational defined contribution pension charge cap. The growth document states that this will ensure “that savers benefit from higher potential investment returns while providing clarity for institutional investors to help unlock investment into of the UK’s most innovative businesses and productive assets.”
    • Further financial services regulatory reforms that will include the government plan for repealing EU law for financial services and replacing it with rules tailor made for the UK, and scrapping EU rules from Solvency II to free up billions of pounds for investment.
  • FCA publishes detailed timeline of Consumer Duty

    CACEIS

  • On 27 September 2022, the Financial Conduct Authority (FCA) published detailed timeline of Consumer Duty. 

    The main milestones are as follows: 

    • 27 July 2022: Final rules and guidance published.
    • 31 October 2022: Firms’ boards (or equivalent management body) should have agreed their plans and be able to evidence they have scrutinised and challenged the plans to ensure they are deliverable and robust to meet the new standards.
    • 30 April 2023: Manufacturers should have completed all  the reviews necessary to meet the outcome  rules for their existing open products and services so they can share with distributors  to meet their obligations under the Duty, and identify where changes need to be made. 
    • 31 July 2023: Implementation deadline for new and existing products or services that are open to sale or renewal.
    • 31 July 2024: Implementation deadline for closed products or services.
  • FCA publishes Handbook Notice No 102

    CACEIS

  • On 30 September 2022, the Financial Conduct Authority (FCA) published Handbook Notice No 102.

    This Handbook Notice describes the changes to the FCA Handbook and other material made by the Financial Conduct Authority (FCA) Board under its legislative and other statutory powers on 15 July 2022 and 29 September 2022.

  • UNITED STATES

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

    SEC publishes research study on fund performance benchmarks

    CACEIS

  • On 19 September 2022,  the U.S. Securities and Exchange Commission (SEC) published research study on fund performance benchmarks. 

    The research study examining the impact of mutual fund performance benchmarks on investor decision-making, and potential strategic behavior by firms in displaying benchmarks. This study examines market data and the results of a large behavioral experiment to understand how funds employ benchmarks and how investors respond to benchmark presentation.

    Analysis in the research study may be informative for evaluating comments on the proposed requirements for funds’ performance disclosure. The authors are making this analysis available to allow the public to consider this supplemental information.  

  • Securities Exchange Act

    SEC adopts the updated EDGAR Filer Manual

    CACEIS

  • On 19 September 2022,  the U.S. Securities and Exchange Commission (SEC) adopted the updated EDGAR Filer Manual. 

    The SEC  is adopting amendments to Volume II of the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) Filer Manual (“Filer Manual”) and related rules and forms. The EDGAR system was upgraded on September 19, 2022.

  • BRAZIL

    Financial supervision

    ANBIMA informs that institutions that manage portfolios must register them in ANBIMA database from 1 September 2022

    CACEIS

  • On 2 September 2022, the Brazilian Financial and Capital Markets Association (ANBIMA) informed that institutions that manage portfolios must register them in ANBIMA database from 1 September 2022.

    The requirements are part of the Third Party Asset Management Code.

    Among the information that must be reported are:

    • target audience of the portfolio,
    • investor segment, 
    • date of first contribution, 
    • status (active, inactive or closed portfolio), 
    • model (standardized or customized strategy), 
    • portfolio and investor risk profiles , 
    • value of management fee, 
    • performance fee, 
    • profitability.
  • BACEN informs on new authorisation rules for financial institutions

    CACEIS

  • On 6 September 2022, Banco Central do Brasil (BACEN) informed on new authorisation rules for financial institutions enter into force.

    As of 1 September 2022,  the authorization process for the operation of financial institutions (IFs) will be simplified. The new rules are disciplined by CMN Resolution No. 4970, adopted in November last year by the National Monetary Council (CMN). 

    Among the subjects disciplined by the resolution, in addition to the authorization for operation, are: cancellation, transfer of corporate control (change of the institution's owner), division, merger, incorporation, expansion of the operational scope due to change of corporate object, election of directors, change of name among others.

    In addition, the standard will allow the proportional application of the requirements to be met in the authorization processes due to factors such as the type and size of the institution, business complexity and risks involved. With the new rules, there will be a reduction in the cost of compliance and the authorisation process will become faster.

    Here are some procedures that, from now on, will make the authorization processes faster:

    • Authorisation for single-stage operation;
    • Replacement of documents with information structured in declarations;
    • Review of impediments and restrictions to the exercise of positions, shareholding control and qualified participation;
    • Review of the requirements of the controllers (owners) of the institution, excluding the requirement 'knowledge about the business branch', which has now been required of all the administrators;
    • Elimination of the authorisation for the expansion of qualified participation. 

    The standard is in line with the Economic Freedom Act and aligned with international parameters, such as Basel Principle 5.

  • CVM publishes Circular Letter regarding guidance on the launch of the Securities Consultant Registration System (REGCON)

    CACEIS

  • On 9 September 2022, the Comissão de Valores Mobiliários (CVM) published Circular Letter CVM/SIN 07/22 - guidance on the launch of the Securities Consultant Registration System (REGCON).

    One of the benefits of the new system is the automatic granting right after filling in the data and sending the documents. The Institutional Investor Monitoring Management (GAIN) of SIN will analyze the information and the payment of the Inspection Fee. In case of non-compliance, the technical area may cancel the official accreditation.

  • CVM publishes resolution 168 amending specific provisions of CVM Resolutions 59 and 80 with the objective of regulating legal provisions introduced in Law 6,404 by Law 14,195

    CACEIS

  • On 20 September 2022, the Comissão de Valores Mobiliários (CVM) published CVM Resolution 168 amending specific provisions of CVM Resolutions 59 and 80 with the objective of regulating legal provisions introduced in Law 6,404 by Law 14,195.

    CVM Resolution 168 deals with aspects related to the composition of management bodies of publicly-held companies and plural voting. The new standard is associated with measures to improve the business environment in the country, inspired by the methodology used by the World Bank, then adopted when the report called Doing Business was published.

    Main changes promoted by CVM Resolution 168:

    • exemption from the prohibition of the accumulation of positions between the chief executive officer and the chairman of the board of directors for publicly-held companies considered to be small, pursuant to art. 294-B of Law 6,404.
    • indication only of the percentage of independent members that must be observed in the composition of the board of directors of publicly-held companies that fit the criteria established in the new standard.
    • indication that plural voting does not apply at general meetings of shareholders that resolve on transactions with related parties that must be disclosed pursuant to Annex F of CVM Resolution 80.

    It is important to highlight that the new resolution took into account the existing concepts and commands on these topics in the rules of differentiated listing segments or even in the CVM regulation itself.

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

    CVM publishes Resolution No 167 including the ANBIMA Managers Certification for Structured Funds (CGE) in the list of certification exams accepted by the CVM

    CACEIS

  • On 13 September 2022, the Comissão de Valores Mobiliários (CVM) published CVM Resolution 167 including the ANBIMA Managers Certification for Structured Funds (CGE) in the list of certification exams accepted by the CVM for the purpose of applying the art. . 3, III, of CVM Resolution 21.

    Adjustments were also made to the reference forms sent by the individual and corporate portfolio managers to the CVM so that professionals can inform the type of examination provided when authorization is obtained, as well as the sector in which they operate.

  • CVM publishes Circular Letter regarding guidelines to the market on inspection fee

    CACEIS

  • On 20 September 2022, the Comissão de Valores Mobiliários (CVM) published CVM/SIN/SSE 2/2022 - guidelines to the market on Inspection Fee.

    The Circular Letter reinforces that the rates currently provided are:

    (i) arising from the registration activity of the CVM (Registration Fee);

    (ii) periodic - now annual (Annual Rate); and

    (iii) for carrying out public offerings (Offer Rate).

    The situations, periodicities and conditions for collecting each of them are also detailed.

    It is worth emphasizing that the fees must be paid by all natural and legal persons mentioned in art. 3 of Law 7,940 (amended by Law 14,317/22), such as: members of the securities distribution system, national publicly-held companies, foreign companies subject to registration with the CVM, securitization companies, among others.

  • Payment and Settlement Systems

    BACEN publishes Resolution on procedure for consulting the Central Bank of Brazil on the total aggregate value of receivables from centrally settled payment arrangements

    CACEIS

  • On 6 September 2022, Banco Central do Brasil (BACEN) published Resolution BCB No. 242 of 9/6/2022 on procedure for consulting the Central Bank of Brazil by financial institutions of data on the total aggregate value of receivables from centrally settled payment arrangements.

    It repeals Resolution BCB No. 63 of January 21, 2021, which establishes the procedure for consulting the Central Bank of Brazil by financial institutions of data on the total aggregate value of receivables from centrally settled payment arrangements.

    The Collegiate Board of Directors of the Central Bank of Brazil resolved that Bcb Resolution No. 63 of January 21, 2021 is repealed.

    This Resolution enters into force on 1 December 2022.

  • Sustainable Finance / Green Finance

    BACEN publishes BCB Normative Instruction No. 304 on ESG risks

    CACEIS

  • BACEN published BCB Normative Instruction No. 304 of 9/14/2022 on ESG risks.

    It amends the Instructions for completion and layout of the code document 2030 - Document of Social, Environmental and Climatic Risk (DRSAC), which deals with BCB Normative Instruction No. 222, of December 28, 2021.

    The Head of the Financial System Monitoring Department (Desig) resolved the new versions of the Instructions for completion and layout of the code document 2030 - Document of Social, Environmental and Climate Risk (DRSAC) are available on the website of the Central Bank of Brazil, at the www.bcb.gov.br/estabilidadefinanceira/leiautedocumentoscrd e-mail address, with the following modifications:

    The Normative Instruction enters into force on 1 October 2022.

  • European Market Infrastructure Regulation (EMIR)

    EU publishes Commission Implementing Decision 2022/1683 on the equivalence of the regulatory framework for CCP in Colombia to the requirements of Regulation No 648/2012

    CACEIS

  • On 30 September 2022, the European Union (EU) published in its Official Journal (OJ) Commission Implementing Decision (EU) 2022/1683 of 28 September 2022 on the equivalence of the regulatory framework for central counterparties in Colombia to the requirements of Regulation (EU) No 648/2012 of the European Parliament and of the Council.

    For the purposes of Article 25(6) of Regulation (EU) No 648/2012, the legal and supervisory arrangements of the Republic of Colombia applicable to central counterparties, consisting of the Law no. 964 of 2005 as complemented by the general rules and circulars issued by the Superintendencia Financiera, shall be considered equivalent to the requirements laid down in Regulation (EU) No 648/2012.

    This Decision shall enter into force on the day following that of its publication in the Official Journal of the European Union.

  • COLOMBIA

    European Market Infrastructure Regulation (EMIR)

    EU publishes Commission Implementing Decision 2022/1683 on the equivalence of the regulatory framework for CCP in Colombia to the requirements of Regulation No 648/2012

    CACEIS

  • On 30 September 2022, the European Union (EU) pubished in its Official Journal (OJ) Commission Implementing Decision (EU) 2022/1683 of 28 September 2022 on the equivalence of the regulatory framework for central counterparties in Colombia to the requirements of Regulation (EU) No 648/2012 of the European Parliament and of the Council.

    For the purposes of Article 25(6) of Regulation (EU) No 648/2012, the legal and supervisory arrangements of the Republic of Colombia applicable to central counterparties, consisting of the Law no. 964 of 2005 as complemented by the general rules and circulars issued by the Superintendencia Financiera, shall be considered equivalent to the requirements laid down in Regulation (EU) No 648/2012.

    This Decision shall enter into force on the day following that of its publication in the Official Journal of the European Union

  • INTERNATIONAL

    Securities Financing Transactions Regulation (SFTR)

    ICMA publishes updated version of its SFTR reporting recommendations

    CACEIS

  • On 23 September 2022, the International Capital Market Association (ICMA) published  updated version of its SFTR reporting recommendations. 

    This is the eighth update to the public version of the SFTR Guide since its initial release in February 2020. Compared to the previous public version, the updated Guide includes 6 new questions and numerous further updates, reflecting new insights as well as additional ESMA guidance, eg regarding the reporting of central bank SFTs in the UK, guidance on the reporting of settlement fails, other Q&As issued by ESMA, as well as statements on the reporting of third-country issuer LEIs from both ESMA and the FCA. A blackline version has been published alongside the Guide itself to provide a complete overview of the recent changes. The SFTR Recommendations will continue to evolve to reflect ongoing discussions within the ERCC’s SFTR Task Force as well as any further requirements published by regulators. New public versions of the Guide will be released periodically. In addition, ICMA members also have access to a range of further best practice documents which complement the Recommendations.

  • CONTACTS

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

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

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

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

    Design
    CACEIS Group Communications

    Photos credit
    CACEIS, Adobe Stock

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