By: Shane Geraghty, Michelle Lloyd, and Ruth Hennessy
The Central Bank of Ireland has introduced a macroprudential policy framework for Irish-authorised GBP-denominated liability driven investment funds (LDI Funds), to make them more resilient to shocks to UK interest rates.
Read MoreBy: Daniel Knight and Kithmin Ranamukhaarachchi
The Australian Attorney-General’s Department (Department) has released five consultation papers outlining proposals for extensive reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime.
Read MoreBy: Clifford C. Histed, Cheryl L. Issac, Matthew J. Rogers, and Wiley F. Cole
On 20 May 2024, the National Futures Association (NFA) announced that its recently finalized Compliance Rule 2-52, related Interpretive Notice 9082 and amended Bylaw 301 will go into effect on 15 October 2024. NFA members will be required to submit their Member Questionnaire (formerly, the Annual Questionnaire) at least annually, and sometimes more frequently, as required by the NFA. If an NFA member’s business operations materially change rendering previously provided information inaccurate or incomplete, the NFA member will be required promptly to update its Member Questionnaire. While NFA members may use their discretion to determine what constitutes a material change, Interpretive Notice 9082 provides illustrative guidance on this point.
Read MoreBy: Rich Kerr, Sasha Burstein, and Brian Doyle-Wenger
On 16 May 2024, the US Securities and Exchange Commission (SEC) adopted amendments to Regulation S-P’s safeguards and disposal rules. The amendments are designed to address the expanded use of technology and corresponding risks that have emerged since the original adoption of Regulation S-P in 2000. The amendments expand the scope of information and broaden the number of customers protected under both rules. The safeguards and disposal rule will apply to “customer information”, which includes records that contain “nonpublic personal information” as defined in the existing rule. Additionally, the amended rule expands the applicability of the safeguards rule to include transfer agents, and the disposal rules to include all transfer agents including those registered with appropriate regulatory authorities other than the SEC.
Read MoreBy: Philip Morgan, Andrew Massey, and Omega Modi
An anti-greenwashing rule comes into force in the UK on 31 May 2024. This is the first part of the FCA’s Sustainability Disclosure Requirements.
Read MoreBy: Richard F. Kerr, Jennifer L. Klass, C. Todd Gibson, and Kenneth Holston
On 13 May 2024, the Securities and Exchange Commission (SEC) and the Department of the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) jointly proposed rulemaking to implement section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (CIP Rulemaking), which would require SEC-registered investment advisers (RIAs) and exempt reporting advisers (ERAs) to establish written customer identification programs (CIP).
Read MoreBy: Áine Ní Riain, Dr Philipp Riedl, and Ruth Hennessy.
The European Securities and Markets Authority (ESMA) has published its much anticipated Final Report: Guidelines on funds’ names using ESG or sustainability-related terms (Guidelines).
This follows a consultation on the subject between November 2022 and February 2023 and an update provided by ESMA last December.
Acknowledging the significant impact of fund names on investor decision-making, ESMA has determined that a fund with ESG- or sustainability-related terms in its name must apply at least 80% of its investments to meet environmental or social characteristics or sustainable investment objectives.
The Guidelines also apply exclusion criteria for certain terms in fund names:
Use of “sustainability”-related terms in fund names will require a commitment to “invest meaningfully” in sustainable investments. Similar use of “transition” or “impact” – related terms will require that the relevant fund’s investments used to meet the 80% threshold are on a clear and measurable path to transition or are made with the objective to generate a positive, measurable impact alongside a financial return.
The Guidelines will apply to all EU UCITS and EU AIFs, and it currently seems likely that they will also apply to non-EU funds marketed into the EU (this is a point on which we will be watching developments closely).
The Guidelines are expected to come into force in Q3 or Q4 2024, subject to completion of administrative formalities including a decision by national competent authorities on whether to apply them locally (which is generally expected). Existing funds will have an additional 3-month transition period before compliance becomes mandatory.
By: Matthew J. Rogers and Maxwell J. Black
On 2 May 2024, the Commodity Futures Trading Commission’s (CFTC) Technology Advisory Committee (Committee) released a report entitled Responsible AI in Financial Markets: Opportunities, Risks & Recommendations. The report discusses the impact and future implications of artificial intelligence (AI) on financial markets and further illustrates the CFTC’s desire to oversee the AI space.
Read MoreBy: Tsuguhito Omagari, Yuki Sako, Jason Nelms and Charmaine Mok
Financial Services Agency of Japan (FSA) proposed amendments to its supervisory guidelines applicable to managers of investment trust (toshin) funds and real estate funds, and is currently accepting comments until May 13. Of those, amendments relating to real estate funds would require managers to take additional measures to manage transactional conflicts of interest, specifically:
Read MoreBy: Áine Ní Riain, Aoife Maguire, Gayle Bowen, and Philip Morgan
The Financial Conduct Authority (FCA) has released updated information and, together with HM Treasury, a “roadmap,” on the UK’s Overseas Funds Regime (OFR). It intends to accept applications from new funds (i.e. those not in the Temporary Marketing Permissions Regime (TMPR)) from September 2024. This is a welcome development for managers of new EEA UCITS that are not currently able to access the UK retail market.
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