Global Investment Law Watch

Exploring the legal and regulatory issues affecting the worldwide asset management community.

 

1
New Year, New CPO/CTA Exemption Affirmations and CPO FinCEN Requirements
2
Europe: ESMA Provides Update on Fund ESG Naming Rules
3
Europe: ESMA Publishes Long-Awaited Final Report on ELTIF 2.0 Regulatory Technical Standards
4
ICMA’s Code of Conduct for ESG Ratings and Data Products Providers – A Step Towards Consistent Global Standards
5
Australia: Proposed Licensing Exemptions for Foreign Financial Services Providers (FFSPs) Before Parliament
6
CFTC Proposes Highly Anticipated Guidance on Voluntary Carbon Credit Derivatives
7
Australia: ASIC to Focus on Net Zero Statements and Targets
8
Europe: Final SDR rules published by FCA – Time to label your funds (maybe)
9
Australia: ASIC is Remaking Exchange Traded Funds Class Order Relief
10
EUROPE: New Screening Criteria for the EU Taxonomy’s Environmental Objectives

New Year, New CPO/CTA Exemption Affirmations and CPO FinCEN Requirements

By: Clifford C. Histed, Kenneth Holston, Cheryl L. Isaac, and Matthew J. Rogers

Happy New Year! As we kick off 2024, we note that the National Futures Association (NFA) published its annual Notice to Members with guidance on the annual affirmation requirement for certain exempt commodity pool operators (CPOs) and commodity trading advisors (CTAs). If you rely on an exemption or exclusion from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5) or 4.5, or an exemption from CTA registration under 4.14(a)(8), you must file an annual affirmation in the NFA’s Exemptions System by 29 February 2024, and a multi-factor authentication is now required for access. Failure to make this affirmation will result in your registration exemption being withdrawn on 1 March 2024.

In addition, the NFA also issued a Notice to Members regarding the Financial Crimes Enforcement Network (FinCEN) final rule implementing the Corporate Transparency Act beneficial ownership information (BOI) reporting requirements. Although CFTC-registered entities (including CPOs and CTAs) are exempt from these requirements (see 31 U.S.C. §5336(a)(11)(B)(xiv)), certain pooled investment vehicles will be required to comply. Commodity pools that are operated or advised by an SEC-registered broker-dealer or investment adviser are generally exempt, but a limited number of other commodity pools will be subject to the new rule.

Accordingly, CPOs with non-exempt commodity pools will need to file BOI reports with FinCEN, including identifying information about individuals who directly or indirectly own or control the commodity pool. FinCEN recently extended the BOI reporting deadline for certain reporting companies, with the relevant compliance dates as follows:

  • Commodity pools created or registered before 1 January 2024: file BOI reports by 1 January 2025.
  • Commodity pools created or registered in 2024: file BOI reports within 90 calendar days after registration is effective.
  • Commodity pools created or registered on or after 1 January 2025: file BOI reports within 30 calendar days after registration is effective.

For commodity pools created or registered after 1 January 2024, a CPO will also need to report information about the “company applicants,” meaning the individual or individuals who directly file the document that creates or registers the commodity pool.

Please feel free to contact the authors of this blog post with any questions.

Europe: ESMA Provides Update on Fund ESG Naming Rules

By: Áine Ní Riain and Lucy Deane

On 14 December, the European Securities and Markets Authority (ESMA) issued a Public Statement updating its proposals for guidelines on funds’ names using ESG or sustainability-related terms, following its consultation on the same guidelines (ESMA34-472-373, the Guidelines) that ran from November 2022 to February 2023.

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Europe: ESMA Publishes Long-Awaited Final Report on ELTIF 2.0 Regulatory Technical Standards

By: Gayle Bowen and Shane Geraghty

On 19 December, the European Securities and Markets Authority (ESMA) published its final report setting out draft Regulatory Technical Standards under the amended European Long-Term Investment Funds Regulation.

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ICMA’s Code of Conduct for ESG Ratings and Data Products Providers – A Step Towards Consistent Global Standards

By: Carolyn Sng and Sook Young Yeu

The International Capital Market Association (ICMA) has released a voluntary code of conduct for ESG ratings and data products providers (the Code), reflecting recommendations by the International Organization of Securities Commissions (IOSCO). The Code is intended to be internationally interoperable and may be used by jurisdictions where no local code or regulation is in place.

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CFTC Proposes Highly Anticipated Guidance on Voluntary Carbon Credit Derivatives

By: Cheryl Isaac and Wiley Cole

On 4 December 2023, the Commodity Futures Trading Commission (CFTC) proposed guidance on the listing of voluntary carbon credit (VCC) derivative contracts. The proposal outlines how designated contract markets (DCMs), which are CFTC-registered derivatives exchanges, may list VCC derivative contracts while complying with statutory “Core Principles” set forth in the Commodity Exchange Act (CEA) and applicable CFTC rules and regulations.

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Australia: ASIC to Focus on Net Zero Statements and Targets

By: Lisa Lautier and Dhivya Kalyanakumar

On 21-22 November 2023, the Australian Securities & Investments Commission (ASIC) hosted the ASIC Annual Forum with a focus on ‘navigating disruption’. With heightened geopolitical uncertainty and market volatility, ASIC outlined its key focus areas for 2024:

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Europe: Final SDR rules published by FCA – Time to label your funds (maybe)

The FCA has published its final rules on the UK’s Sustainability Disclosure Requirements (SDR) regime. The key features include:

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Australia: ASIC is Remaking Exchange Traded Funds Class Order Relief

By: Matthew Watts and Lisa Lautier

The Australia Securities and Investment Commission (ASIC) have released Consultation Paper 374 proposing to remake Class Order [CO 13/721] Relief to facilitate quotation of exchange traded funds on the AQUA Market (Class Order) which is due to expire on 1 April 2024.

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EUROPE: New Screening Criteria for the EU Taxonomy’s Environmental Objectives

By: Áine Ní Riain and Gayle Bowen

Following their adoption and publication in draft form by the European Commission last June, two new EU Taxonomy delegated acts were published in the Official Journal on 21 November, and will apply from January 2024. They confirm new and amended technical screening criteria (TSCs) in relation to the environmental objectives in the Taxonomy Regulation.  This is a significant build-out in the application of the Taxonomy Regulation given that for an economic activity to be taxonomy-aligned, it must:

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