Europe – Page 5 – Global Investment Law Watch

Europe: UK Government Proposes To Regulate ESG Ratings Providers

Apr 11 2023

Responding to encouragement from both the FCA and IOSCO, HM Treasury has proposed regulating ESG ratings providers in a consultation paper dated 30 March 2023. It primarily aims to improve the transparency of the methodologies and governance objectives adopted by ESG ratings providers, as well as to mitigate risks arising from conflicts of interest where the rating provider also provides other services to the rated entity.

Europe: Significant Changes Proposed to Market Abuse Regulation in the UK

Apr 11 2023

By Michael Ruck and Aurelija Grubytė

HM Treasury and the FCA have completed their joint review of the criminal market abuse regime, and published a joint statement on 24 March 2023. Their observations are relevant to both the criminal and civil market abuse regimes in the UK. Most notably:

Europe: Here’s Your Chance to Improve the UK’s Senior Managers and Certification Regime

Apr 04 2023

By Samuel Gordon

The FCA, PRA and UK Government are looking for feedback by 1 June 2023 to guide potential changes to the Senior Managers and Certification Regime (SMCR), the UK’s regime designed to improve individual accountability and conduct standards of (mostly) senior personnel in financial services firms. To this end, the FCA and PRA jointly published a discussion paper on 30 March and HM Treasury published a call for evidence.

Europe: UK’s FCA Issues Stern Warning to ESG Benchmark Administrators for Lack of Rigour

Mar 31 2023

By Zainab Kuku

The FCA did not hold back in its most recent comments to ESG benchmark administrators, in an indication of its increasingly adversarial approach to ‘greenwashing’. It described the quality of disclosures of ESG factors considered in benchmark methodologies as ‘poor’, and aimed clear warning shots at administrators who fail to comply with the FCA’s feedback.

Europe: ELTIF 2.0 Has Been Published

Mar 21 2023

By Philipp Riedl

On 15 March 2023, amendments to the EU Regulation on the European Long-Term Investment Fund (ELTIF) were published in the Official Journal of the European Union. They will apply from 10 January 2024.

Europe: Gains From Crypto Trading Are Taxable, German Court Decides

Mar 06 2023

By Hilger von Livonius

In a recent decision of 14 February 2023, the Federal Fiscal Court (Bundesfinanzhof, BFH), the highest German tax court, has ruled that privately held cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) and Monero (XMR) are – notwithstanding the fact that there are no physical goods in which a traditional form of legal ownership can be established – taxable assets for German income tax purposes. As a consequence, any gains from their acquisition (against fiat currency or otherwise) and sale (or exchange) within a one-year period will be taxable (at the owner’s personal tax rate); if, however, the relevant cryptocurrency has been held for more than one year, any gains will be tax exempt. For these purposes, the holder of the “private key” will be considered as legal owner of the cryptocurrency. The tax treatment of a realization of an increase in value of cryptocurrencies is therefore, in Germany, substantially the same as for fiat currency.

Europe: Is ELTIF 2.0 a More Viable Structure for Long-Term Investment in the EU?

Mar 03 2023

By Philipp Riedl

Version 1 of the European Long-Term Investment Fund (ELTIF) has not been a huge success story with only a few relatively small funds launched to date. However the development of a well-supported fund structure for retail investors to invest in illiquid long-term assets remains a key priority for EU legislators.

Europe: Important Issues Still Open for Debate in EU’s AIFMD and UCITS Reviews

Feb 28 2023

By Giovanni Campi

On 24 January 2023, the ECON Committee of the EU Parliament adopted its report on proposed amendments to the EU’s main fund rules, AIFMD and the UCITS Directive, ahead of trilogue negotiations with the EU Council and Commission set to begin in March. When agreed, the revised Directives are expected to come into force in 2025 in light of the 24 months transposition period. Notable proposals include:

Europe: Central Bank of Ireland Confirms Fast Track approval in Relation to New SFDR RTS

Feb 24 2023

By Áine Ní Riain and Gayle Bowen

On the 17th February 2023, a new Delegated Regulation was published which amends and corrects the existing Sustainable Finance Disclosure Regulation (SFDR) regulatory technical standards with the main changes introducing disclosure requirements for Article 8 and Article 9 funds in respect of fossil gas and nuclear energy related activities to ensure alignment with the EU Taxonomy. The Delegated Regulation does not provide for a transition period and entered into force on 20 February.

The Central Bank of Ireland in order to accommodate the Delegated Regulation published their Process Clarification which confirms that the Central Bank will facilitate a fast-track filing process for the update of pre-contractual disclosure documents pursuant to the Delegated Regulation. Compliance with the Delegated Regulation is now a matter of priority for financial market participants and funds sponsors.

For more information on this regulatory update we suggest a read of our full Article or contact one of our authors.

Europe: FCA Sets Ambitious Goal to Improve Asset Management Regulation in the UK

Feb 24 2023

By Robert Lloyd, Maya Ffrench-Adam and Philip Morgan

On 20 February 2023, the FCA published a discussion paper (DP23/2) on improving the UK asset management regime. Key themes include:

Alignment with Relevant International Standards

The FCA does not want to create unnecessary complexity for firms operating in multiple jurisdictions. It aims to develop the regime to interact effectively with international requirements, while promoting the international competitiveness of the UK economy.

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