Global Regulatory Development – Page 3 – Global Investment Law Watch

Europe: Updated FCA Guidance on Registration for the UK Overseas Funds Regime

Aug 19 2024

By: Emma O’Dwyer, Aoife Maguire, and Hazel Doyle

On 12 August 2024, the UK’s Financial Conduct Authority released updated information on its website page on the Overseas Funds Regime (OFR). It provides details on how UCITS management companies (Operators) can register for FCA Connect – which is the first step for any Operator looking to register funds under the OFR. See our previous OFR-related blogs for more information on the OFR.

CME Group Clarifies and Emphasizes the Duty to Supervise Trading on its Markets

Aug 09 2024

By: Clifford Histed and Cheryl Isaac

If you or your company trades on CME, CBOT, NYMEX or COMEX (CME Group exchanges, collectively referred to herein as “CME”), you will need to take note of CME’s new Market Regulation Advisory Notice (MRAN), which became effective on 16 July. The new MRAN is called “Supervisory Responsibilities for Employees and Agents” and should be reviewed closely to understand CME’s expectations related to diligent supervision, including policies, trainings, monitoring, remediation and sanctions.

Child’s Play: Congress Proposes Allowing Sandboxes for AI Within the Financial Services Industry

Aug 07 2024

By Matthew J. Rogers and Maxwell J. Black

A bipartisan group in the US Congress has introduced legislation that aims to foster artificial intelligence (AI) innovation within the financial services industry by creating regulatory sandboxes. This new bill marks a significant step toward a unified, nationwide framework for regulating AI in the financial services industry.

Europe: ESMA’s Call for Evidence on the UCITS Eligible Assets Directive Closes

Aug 07 2024

By: Áine Ní Riain and Michelle Lloyd

The European Securities and Markets Authority (ESMA) has today closed its Call for Evidence (CfE) on the review of the UCITS Eligible Assets Directive (EAD).

Europe: European Commission Adopts Delegated Regulations for ELTIF 2.0 and Rejects Key Changes Proposed by ESMA

Jul 23 2024

By: Gayle Bowen and Shane Geraghty

The European Commission (EC) has adopted the long awaited ELTIF 2.0 Delegated Regulation (RTS). Its version rejects a number of key proposals previously introduced by ESMA. In particular, the EC has returned to its original versions of Annex I and Annex II, with minor amendments.

Australia: Payroll Tax obligations for Authorised Representatives of ACL and AFSL Holders

Jul 22 2024

By: Jim Bulling and Edwina Frost

Authorised representatives of Australian Financial Service License (AFSL) holders and credit representatives of Australian Credit Licence (ACL) holders may be deemed “contractors” for payroll tax purposes, following a recent ruling by the Supreme Court of NSW.

Where to Next for ASIC? Senate Economics References Committee Releases its Report

Jul 10 2024

By: Daniel Knight and Simon Kiburg

On 3 July the Senate Economics References Committee handed down its report on ASIC. The Senate referred an inquiry into ASIC in October of 2022 to examine the capacity and capability of ASIC to undertake proportionate investigation and enforcement action arising from reports of alleged misconduct. The report is generally critical of ASIC’s performance as a corporate regulator. The report identifies several key issues. Chief among these is the broad remit of ASIC, ASICs approach to investigation and enforcement, and ASICs wider culture.

ISDA Publishes Framework to Facilitate Close-Out of Derivatives Contracts

Jul 08 2024

By: Kenneth Holston, Cheryl L. Isaac, Matthew J. Rogers, Jordan A. Knight, and Bradley D. Bostwick

On 27 June 2024, ISDA published the ISDA Close-out Framework, an interactive decision tree that market participants can use to help prepare for potential terminations of collateralized derivatives contracts that are documented under an ISDA Master Agreement. The ISDA Close-out Framework was launched in response to the March 2023 failures of Signature Bank and Silicon Valley Bank, which shed light on the complexities of terminating swaps and other over-the-counter derivatives in the multifaceted post-financial crisis swap regulatory regimes. ISDA designed this framework in response to feedback from the derivatives industry that factors such as segregated margin and stays on the exercise of termination rights and remedies makes terminating and closing out derivatives contracts increasingly complex.

Deciphering Derivatives Transaction Reporting

Jun 24 2024

By: Jim Bulling and Simon Kiburg

On 21 October 2024 the new ASIC Derivative Transaction Rules (Reporting) 2024 (2024 Rules) will come into effect replacing the current ASIC Derivative Transaction Rules (Reporting) 2022 (2022 Rules). In this post we set out some of the major changes to the 2022 Rules and some of the issues market participants in this space should be aware of.

Next Regulator Up: Treasury Department Explores AI in the Financial Sector

Jun 11 2024

By: Matthew J. Rogers and Maxwell J. Black

On 6 June 2024, the Department of the Treasury (the Treasury) published a request for information on the use of artificial intelligence (AI) in the financial services sector, with the goal of gathering input from a wide range of stakeholders. This request follows soon after the Treasury’s report on AI and cybersecurity.

Like other US regulators, including the Commodity Futures Trading Commission (CFTC), the Treasury is interested in understanding the opportunities and risks posed by AI, including the potential impact on consumers, investors, financial institutions, and businesses. Specifically, the Treasury is seeking feedback on the definition of AI under President Biden’s Executive Order on Safe, Secure, and Trustworthy Development and Use of AI, the types of AI models and tools used by financial institutions, and the general accessibility of AI.

Of particular interest is the Treasury’s query regarding a potential “human capital shortage” in financial organizations. This concerns the scenario where companies utilize AI tools without sufficient employees that fully understand their mechanisms. Additionally, the request solicits perspectives on model risks, operational risks, compliance risks, and third-party risks, among others.

This request for information shows that the Treasury is looking to augment the efforts of the CFTC, Securities and Exchange Commission (SEC), and banking agencies, which have also requested similar AI-related information. It remains to be seen the extent to which federal agencies such as the Treasury coordinate their rulemaking processes and how any such rules will fit together.

Category:Global Regulatory Development