On 24 June 2021, the European Securities and Markets Authority (ESMA), together with the European Commission, the European Central Bank (ECB), the European Banking Authority (EBA), issued a joint statement in which they strongly encourage market participants to use the time remaining until the cessation or loss of representativeness of USD LIBOR, GBP LIBOR, JPY LIBOR, CHF LIBOR and EUR LIBOR to substantially reduce their exposures to these rates.
The statement also encourages market participants to cease using the 35 LIBOR settings, including USD LIBOR, as a reference rate in new contracts as soon as practicable and by 31 December 2021 at the latest.
Participants are also called on to limit the use of any LIBOR setting published under a changed methodology and to include robust fallback clauses nominating alternative rates in all contracts referencing LIBOR. The European Commission, ESMA, ECB Banking Supervision and the EBA will monitor the situation and LIBOR exposures closely.

On 25 June 2021, the European Union published Commission Implementing Regulation (EU) 2021/1042 of 18 June 2021 laying down rules for the application of Directive (EU) 2017/1132 of the European Parliament and of the Council as regards technical specifications and procedures for the system of interconnection of registers and repealing Commission Implementing Regulation (EU) 2020/2244.
The technical specifications and procedures for the system of interconnection of companies registers referred to in Article 22(2) of Directive (EU) 2017/1132 are set out in the Annex of this Commission Implementing Regulation.

On 18 June 2021, the European Data Protection Board (edpb) adopted Recommendations 01/2020 on measures that supplement transfer tools to ensure compliance with the EU level of protection of personal data.
The final version of the Recommendations includes several changes to address comments and feedback received during the public consultation and places a special focus on the practices of a third country’s public authorities. The main modifications are:

• the emphasis on the importance of examining the practices of third country public authorities in the exporters’ legal assessment to determine whether the legislation and/or practices of the third country impinge - in practice - on the effectiveness of the Art. 46 GDPR transfer tool;
• the possibility that the exporter considers in its assessment the practical experience of the importer, among other elements and with certain caveats;
• and the clarification that the legislation of the third country of destination allowing its authorities to access the data transferred, even without the importer’s intervention, may also impinge on the effectiveness of the transfer tool.

On 28 June 2021, the European Commission adopted two adequacy decisions for the United Kingdom - one under the General Data Protection Regulation (GDPR) and the other for the Law Enforcement Directive. Personal data can now flow freely from the European Union to the United Kingdom where it benefits from an essentially equivalent level of protection to that guaranteed under EU law. The adequacy decisions also facilitate the correct implementation of the EU-UK Trade and Cooperation Agreement, which foresees the exchange of personal information, for example for cooperation on judicial matters. Both adequacy decisions include strong safeguards in case of future divergence such as a ‘sunset clause', which limits the duration of adequacy to four years.
Key elements of the adequacy decisions:

• The UK's data protection system continues to be based on the same rules that were applicable when the UK was a Member State of the EU. The UK has fully incorporated the principles, rights and obligations of the GDPR and the Law Enforcement Directive into its post-Brexit legal system.
• With respect to access to personal data by public authorities in the UK, notably for national security reasons, the UK system provides for strong safeguards. In particular, the collection of data by intelligence authorities is, in principle, subject to prior authorisation by an independent judicial body. Any measure needs to be necessary and proportionate to what it intends to achieve. Any person who believes they have been the subject of unlawful surveillance may bring an action before the Investigatory Powers Tribunal. The UK is also subject to the jurisdiction of the European Court of Human Rights and it must adhere to the European Convention of Human Rights as well as to the Council of Europe Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data, which is the only binding international treaty in the area of data protection. These international commitments are an essential elements of the legal framework assessed in the two adequacy decisions.
• For the first time, the adequacy decisions include a so-called ‘sunset clause', which strictly limits their duration. This means that the decisions will automatically expire four years after their entry into force. After that period, the adequacy findings might be renewed, however, only if the UK continues to ensure an adequate level of data protection. During these four years, the Commission will continue to monitor the legal situation in the UK and could intervene at any point, if the UK deviates from the level of protection currently in place. Should the Commission decide to renew the adequacy finding, the adoption process would start again.
• Transfers for the purposes of UK immigration control are excluded from the scope of the adequacy decision adopted under the GDPR in order to reflect a recent judgment of the England and Wales Court of Appeal on the validity and interpretation of certain restrictions of data protection rights in this area. The Commission will reassess the need for this exclusion once the situation has been remedied under UK law.

On 7 June 2021, the Commission Implementing Decision (EU) 2021/915 of 4 June 2021 on standard contractual clauses between controllers and processors under Article 28(7) of Regulation (EU) 2016/679 of the European Parliament and of the Council and Article 29(7) of Regulation (EU) 2018/1725 of the European Parliament and of the Council was published in the Official Journal.
The standard contractual clauses as set out in the Annex fulfil the requirements for contracts between controllers and processors in Article 28(3) and (4) of Regulation (EU) 2016/679 and of Article 29(3) and (4) of Regulation (EU) 2018/1725.
The standard contractual clauses as set out in the Annex may be used in contracts between a controller and a processor who processes personal data on behalf of the controller.
The Commission shall evaluate the practical application of the standard contractual clauses set out in the Annex on the basis of all available information as part of the periodic evaluation provided for in Article 97 of Regulation (EU) 2016/679.

On 7 June 2021, the Commission Implementing Decision (EU) 2021/914 of 4 June 2021 on standard contractual clauses for the transfer of personal data to third countries pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council was published in the Official Journal.
The standard contractual clauses set out in the Annex are considered to provide appropriate safeguards within the meaning of Article 46(1) and (2)(c) of Regulation (EU) 2016/679 for the transfer by a controller or processor of personal data processed subject to that Regulation (data exporter) to a controller or (sub-)processor whose processing of the data is not subject to that Regulation (data importer).
The standard contractual clauses also set out the rights and obligations of controllers and processors with respect to the matters referred to in Article 28(3) and (4) of Regulation (EU) 2016/679, as regards the transfer of personal data from a controller to a processor, or from a processor to a sub-processor.
Where the competent Member State authorities exercise corrective powers pursuant to Article 58 of Regulation (EU) 2016/679 in response to the data importer being or becoming subject to laws or practices in the third country of destination that prevent it from complying with the standard contractual clauses set out in the Annex, leading to the suspension or ban of data transfers to third countries, the Member State.

Here are two Commission Implementing Decisions on the General Data Protection Regulation (GDPR).
1. On 7 June 2021, the Commission Implementing Decision (EU) 2021/915 of 4 June 2021 on standard contractual clauses between controllers and processors under Article 28(7) of Regulation (EU) 2016/679 of the European Parliament and of the Council and Article 29(7) of Regulation (EU) 2018/1725 of the European Parliament and of the Council was published in the Official Journal.
The standard contractual clauses as set out in the Annex fulfil the requirements for contracts between controllers and processors in Article 28(3) and (4) of Regulation (EU) 2016/679 and of Article 29(3) and (4) of Regulation (EU) 2018/1725.
The standard contractual clauses as set out in the Annex may be used in contracts between a controller and a processor who processes personal data on behalf of the controller.
The Commission shall evaluate the practical application of the standard contractual clauses set out in the Annex on the basis of all available information as part of the periodic evaluation provided for in Article 97 of Regulation (EU) 2016/679.
2. On 7 June 2021, the Commission Implementing Decision (EU) 2021/914 of 4 June 2021 on standard contractual clauses for the transfer of personal data to third countries pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council was published in the Official Journal.
The standard contractual clauses set out in the Annex are considered to provide appropriate safeguards within the meaning of Article 46(1) and (2)(c) of Regulation (EU) 2016/679 for the transfer by a controller or processor of personal data processed subject to that Regulation (data exporter) to a controller or (sub-)processor whose processing of the data is not subject to that Regulation (data importer).
The standard contractual clauses also set out the rights and obligations of controllers and processors with respect to the matters referred to in Article 28(3) and (4) of Regulation (EU) 2016/679, as regards the transfer of personal data from a controller to a processor, or from a processor to a sub-processor.
Where the competent Member State authorities exercise corrective powers pursuant to Article 58 of Regulation (EU) 2016/679 in response to the data importer being or becoming subject to laws or practices in the third country of destination that prevent it from complying with the standard contractual clauses set out in the Annex, leading to the suspension or ban of data transfers to third countries, the Member State.

On 3 June 2021, the European Commission published a Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 910/2014 as regards establishing a framework for a European Digital Identity.
Under the new Regulation, Member States will offer citizens and businesses digital wallets that will be able to link their national digital identities with proof of other personal attributes (e.g. driving licence, diplomas, bank account). These wallets may be provided by public authorities or by private entities, provided they are recognised by a Member State.
The new European Digital Identity Wallets will enable all Europeans to access services online without having to use private identification methods or unnecessarily sharing personal data. With this solution they will have full control of the data they share.
The European Digital Identity will be:

• Available to anyone who wants to use it: Any EU citizen, resident, and business in the Union who would like to make use of the European Digital Identity will be able to do so.
  Widely useable: The European Digital Identity wallets will be useable widely as a way either to identify users or to prove certain personal attributes, for the purpose of access to public and private digital services across the Union.
• Users in control of their data: The European Digital Identity wallets will enable people to choose which aspects of their identity, data and certificates they share with third parties, and to keep track of such sharing. User control ensures that only information that needs to be shared will be shared.
• To make it a reality as soon as possible, the proposal is accompanied by a Recommendation. The Commission invites Member States to establish a common toolbox by September 2022 and to start the necessary preparatory work immediately. This toolbox should include the technical architecture, standards and guidelines for best practices.

In parallel to the legislative process, the Commission will work with Member States and the private sector on technical aspects of the European Digital Identity. Through the Digital Europe Programme, the Commission will support the implementation of the European Digital Identity framework, and many Member States have foreseen projects for the implementation of the e-government solutions, including the European Digital Identity in their national plans under the Recovery and Resilience Facility.

On 11 June 2021, the European Securities and Markets Authority (ESMA) published statement on the implementation of the FRANDT commercial terms to provide clearing services.
ESMA encourages market participants to anticipate and get ready to comply with the upcoming regulatory obligations set out in Article 4(3a) of EMIR. At the same time, ESMA acknowledges the challenges that certain clearing members and clients may face to prepare and provide clearing services in accordance with FRANDT commercial terms before the Delegated Regulation has entered into force. In this respect, ESMA expects competent authorities not to prioritise their supervisory actions towards clearing members and clients expected to provide clearing services in accordance with FRANDT commercial terms before the date the Delegated Regulation will apply, and to generally carry out their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner.

On 15 June 2021, the European Union published Commission Implementing Regulation (EU) 2021/955 of 27 May 2021 laying down implementing technical standards for the application of Regulation (EU) 2019/1156 of the European Parliament and of the Council with regard to the forms, templates, procedures and technical arrangements for the publications and notifications of marketing rules, fees and charges, and specifying the information to be communicated for the creation and maintenance of the central database on cross-border marketing of AIFs and UCITS, as well as the forms, templates and procedures for the communication of such information.
The provisions in this Regulation set out standardized forms, templates and procedures for the notification to ESMA of information related to the cross-border distribution of AIFs and UCITS and the publication by competent authorities of such information on their websites.

On 23 June 2021, the European Securities and Markets Authority (ESMA) published the translations of Guidelines on Article 25 of AIFMD - leverage risks in the alternative investment funds sector.
Within two months of the date of publication of the guidelines on ESMA’s website in all EU official languages, which means until 24 August 2021, competent authorities to which these guidelines apply must notify ESMA whether they (i) comply, (ii) do not comply, but intend to comply, or (iii) do not comply and do not intend to comply with the guidelines.
A template for notifications is available on ESMA’s website. Once the template has been filled in, it shall be transmitted to ESMA.

On 25 June 2021, the European Banking Authority (EBA) published its final draft Implementing Technical Standards (ITS) on information on supervisory approaches and aggregate statistical data concerning the new prudential requirements that competent authorities will have to disclose publicly for all types of investment firms authorized under the Markets in Financial Instruments Directive (MiFID). These final draft technical standards, which are part of the Phase 2 mandates of the EBA Roadmap on investment firms, will ensure that the disclosed information is comprehensive and comparable across all Member States.
The disclosed information covers the following areas:

• the text of laws, regulations, administrative rules and general guidance adopted in each Member State;
• options and discretions in the application of the prudential requirements;
• criteria and methodologies of the supervisory review and evaluation process (SREP);
• aggregated statistical data on prudential requirements.

Competent authorities will have to start disclosing this information in June 2022.

On 25 June 2021, the European Central Bank (ECB) announced that it will supervise the largest and most systemic investment firms under new European Union (EU) legislation, which applies as of 26 June 2021. These investment firms must apply for a banking licence and as a consequence will be supervised by the European Central Bank.
The investment firms that will become subject to European banking supervision are those that provide key market and investment banking services and are thus exposed, in a similar way to banks, to credit and market risk. More specifically, the EU legislation defines systemic investment firms as those that trade financial instruments on their own account or place financial instruments on a firm commitment basis and have total consolidated assets above €30 billion. Such investment firms are seen as holding important risks on their balance sheet. The EU legislation on investment firms comprises the Investment Firms Directive, which EU Member States have to transpose into national law, and the Investment Firms Regulation, which is directly applicable in all EU Member States as of 26 June 2021.
The first set of investment firms newly authorised as banks are expected to be added to the list of supervised banks in the second half of 2021, thus becoming subject to European banking supervision.

On 25 June 2021, the European Central Bank (ECB) published FAQ on Sector classification of investment firms authorised as credit institutions (Question ID: 2021/0003).
Question
Q&A 2021/0002 clarifies the obligation of investment firms authorised as credit institutions to report under AnaCredit. Following changes in the regulatory and prudential environment for investment firms, including an amendment to the definition of a credit institution laid down in Regulation (EU) No 575/2013 (CRR), investment firms which are authorised as credit institutions become AnaCredit reporting agents and are required to report information to AnaCredit in accordance with the requirements set out in the AnaCredit Regulation.
In this context, could you clarify whether investment firms which have been authorised as credit institutions should continue to be classified as “Other financial intermediaries” under the S.125 institutional sector or whether they should instead be classified under the S.122 institutional sector?
Answer
The sector classification of investment firms
The modification of the definition of a credit institution in the CRR as a result of Article 62(3)(a) of Regulation (EU) 2019/2033 (IFR) on the prudential requirements of investment firms implies that investment firms which pose significant risks to financial stability will become part of the AnaCredit reporting population once they have been authorised by the competent authority as credit institutions.
However, even if they have been authorised as credit institutions, investment firms which do not carry out business under Article 4(1)(1)(a) of the amended CRR should not be treated as monetary financial institutions (MFIs), because they do not belong to any MFI subsector, i.e. central bank (S.121), deposit-taking corporations except the central bank (S.122) and money market funds (S.123).
Consequently, for the purposes of institutional sector classification under AnaCredit investment, firms which do not carry out business under Article 4(1)(1)(a) of the amended CRR will continue to be classified as “Other financial intermediaries”, even if they have been authorised by the competent authorities as credit institutions.
More specifically, investment firms which meet the definition of other financial intermediaries as defined in paragraph 2.86 of Annex A to Regulation (EU) No 549/2013 and which are authorised to carry out business under point (b) but not point (a) of Article 4(1)(1) of the amended CRR definition of credit institution are classified as “Other financial intermediaries” in the S.125 institutional sector. Such institutions are non-MFI credit institutions.
Meanwhile, credit institutions which meet the conditions referred to in Article 4(1)(1) in point (a) of the amended CRR are classified in the S.122 institutional sector as MFI credit institutions. Similarly, an investment firm authorised as a credit institution is classified as an MFI credit institution in the S.122 institutional sector provided it conducts the business referred to in both point (a) and point (b) of Article 4(1)(1) of the amended CRR.
In the light of the above, the clarifications provided on page 300 of AnaCredit Manual II are complemented as follows:

• for AnaCredit reporting agents which meet the conditions referred to in point (a) of Article 4(1)(1) of the amended CRR, the institutional sector of the reporting agent is “Credit institutions” (S.122)
• for AnaCredit reporting agents that are investment firms which meet any of points (b)(i) to (b)(iii) of Article 4(1)(1) but not point (a), the institutional sector of the reporting agent is “Other financial intermediaries” (S.125)

On 25 June 2021, the European Central Bank (ECB) published  FAQ on the type of instrument in the case of credit extended to investment firms (Question ID: 2021/0004).
Question
The Q&A dealing with the sector classification of investment firms authorised as credit institutions clarifies that investment firms which do not conduct business under Article 4(1)(1)(a) of Regulation (EU) No 575/2013 (CRR) as amended by Article 62(3)(a) of Regulation (EU) 2019/2033 should not be treated as monetary financial institutions and are therefore classified as “Other financial intermediaries” under the S.125 institutional sector. In this regard, could you clarify the type of instrument which should be reported under AnaCredit in the case of instruments extended to investment firms? Under what circumstances would they be classified as “deposits other than reverse repurchase agreements”?
Answer
AnaCredit Manual Part II (Section 3.4.1) clarifies that the type of instrument “deposits other than reverse repurchase agreements” covers any type of deposit or loan (except those that meet the definition of a reverse repurchase agreement) where the debtor is a monetary financial institution (i.e. when its institutional sector is central banks, credit institutions, deposit-taking corporations other than credit institutions or money market funds).
In line with these clarifications relating to sector classification, investment firms – including investment firms authorised as credit institutions – which do not carry out business under point (a) of Article 4(1)(1) of the amended CRR are not classified as “deposit-taking corporations” (the definition of Sector S.122) and therefore do not qualify as MFIs.
Consequently, credit extended to investment firms which are non-MFI credit institutions should not be classified as deposits under AnaCredit.
Meanwhile, credit other than reverse repurchase agreements extended to investment firms which conduct business under both Article 4(1)(1)(a) and Article 4(1)(1)(b) of the amended CRR, and which are therefore classified under the S.122 institutional sector as “MFI credit institutions”, is reported to AnaCredit as “deposits other than reverse repurchase agreements”.

Here are three publications from the ECB on the Prudential Requirements for Investment Firms  Directive & Regulation (IFD / IFR).
1. On 25 June 2021, the European Central Bank (ECB) announced that it will supervise the largest and most systemic investment firms under new European Union (EU) legislation, which applies as of 26 June 2021. These investment firms must apply for a banking licence and as a consequence will be supervised by the European Central Bank.
The investment firms that will become subject to European banking supervision are those that provide key market and investment banking services and are thus exposed, in a similar way to banks, to credit and market risk. More specifically, the EU legislation defines systemic investment firms as those that trade financial instruments on their own account or place financial instruments on a firm commitment basis and have total consolidated assets above €30 billion. Such investment firms are seen as holding important risks on their balance sheet. The EU legislation on investment firms comprises the Investment Firms Directive, which EU Member States have to transpose into national law, and the Investment Firms Regulation, which is directly applicable in all EU Member States as of 26 June 2021.
The first set of investment firms newly authorised as banks are expected to be added to the list of supervised banks in the second half of 2021, thus becoming subject to European banking supervision.
2. On 25 June 2021, the European Central Bank (ECB) published FAQ on Sector classification of investment firms authorised as credit institutions (Question ID: 2021/0003).
Question
Q&A 2021/0002 clarifies the obligation of investment firms authorised as credit institutions to report under AnaCredit. Following changes in the regulatory and prudential environment for investment firms, including an amendment to the definition of a credit institution laid down in Regulation (EU) No 575/2013 (CRR), investment firms which are authorised as credit institutions become AnaCredit reporting agents and are required to report information to AnaCredit in accordance with the requirements set out in the AnaCredit Regulation.
In this context, could you clarify whether investment firms which have been authorised as credit institutions should continue to be classified as “Other financial intermediaries” under the S.125 institutional sector or whether they should instead be classified under the S.122 institutional sector?
Answer
The sector classification of investment firms
The modification of the definition of a credit institution in the CRR as a result of Article 62(3)(a) of Regulation (EU) 2019/2033 (IFR) on the prudential requirements of investment firms implies that investment firms which pose significant risks to financial stability will become part of the AnaCredit reporting population once they have been authorised by the competent authority as credit institutions.
However, even if they have been authorised as credit institutions, investment firms which do not carry out business under Article 4(1)(1)(a) of the amended CRR should not be treated as monetary financial institutions (MFIs), because they do not belong to any MFI subsector, i.e. central bank (S.121), deposit-taking corporations except the central bank (S.122) and money market funds (S.123).
Consequently, for the purposes of institutional sector classification under AnaCredit investment, firms which do not carry out business under Article 4(1)(1)(a) of the amended CRR will continue to be classified as “Other financial intermediaries”, even if they have been authorised by the competent authorities as credit institutions.
More specifically, investment firms which meet the definition of other financial intermediaries as defined in paragraph 2.86 of Annex A to Regulation (EU) No 549/2013 and which are authorised to carry out business under point (b) but not point (a) of Article 4(1)(1) of the amended CRR definition of credit institution are classified as “Other financial intermediaries” in the S.125 institutional sector. Such institutions are non-MFI credit institutions.
Meanwhile, credit institutions which meet the conditions referred to in Article 4(1)(1) in point (a) of the amended CRR are classified in the S.122 institutional sector as MFI credit institutions. Similarly, an investment firm authorised as a credit institution is classified as an MFI credit institution in the S.122 institutional sector provided it conducts the business referred to in both point (a) and point (b) of Article 4(1)(1) of the amended CRR.
In the light of the above, the clarifications provided on page 300 of AnaCredit Manual II are complemented as follows:

• for AnaCredit reporting agents which meet the conditions referred to in point (a) of Article 4(1)(1) of the amended CRR, the institutional sector of the reporting agent is “Credit institutions” (S.122)
• for AnaCredit reporting agents that are investment firms which meet any of points (b)(i) to (b)(iii) of Article 4(1)(1) but not point (a), the institutional sector of the reporting agent is “Other financial intermediaries” (S.125)

3. On 25 June 2021, the European Central Bank (ECB) published  FAQ on the type of instrument in the case of credit extended to investment firms (Question ID: 2021/0004).
Question
The Q&A dealing with the sector classification of investment firms authorised as credit institutions clarifies that investment firms which do not conduct business under Article 4(1)(1)(a) of Regulation (EU) No 575/2013 (CRR) as amended by Article 62(3)(a) of Regulation (EU) 2019/2033 should not be treated as monetary financial institutions and are therefore classified as “Other financial intermediaries” under the S.125 institutional sector. In this regard, could you clarify the type of instrument which should be reported under AnaCredit in the case of instruments extended to investment firms? Under what circumstances would they be classified as “deposits other than reverse repurchase agreements”?
Answer
AnaCredit Manual Part II (Section 3.4.1) clarifies that the type of instrument “deposits other than reverse repurchase agreements” covers any type of deposit or loan (except those that meet the definition of a reverse repurchase agreement) where the debtor is a monetary financial institution (i.e. when its institutional sector is central banks, credit institutions, deposit-taking corporations other than credit institutions or money market funds).
In line with these clarifications relating to sector classification, investment firms – including investment firms authorised as credit institutions – which do not carry out business under point (a) of Article 4(1)(1) of the amended CRR are not classified as “deposit-taking corporations” (the definition of Sector S.122) and therefore do not qualify as MFIs.
Consequently, credit extended to investment firms which are non-MFI credit institutions should not be classified as deposits under AnaCredit.
Meanwhile, credit other than reverse repurchase agreements extended to investment firms which conduct business under both Article 4(1)(1)(a) and Article 4(1)(1)(b) of the amended CRR, and which are therefore classified under the S.122 institutional sector as “MFI credit institutions”, is reported to AnaCredit as “deposits other than reverse repurchase agreements”.

On 4 June 2021, the European Central Bank (ECB) published its opinion on the proposal for a regulation on digital operational resilience for the financial sector (DORA).
In general, the ECB suggests that:

• The Union legislative bodies reflect further on potential inconsistencies between the proposed regulation and the NIS Directive that may hamper the harmonization and reduction of overlapping and conflicting requirements for financial entities.
• There should be greater coordination between the proposed regulation and the proposed NIS2 directive to clarify the exact scope of reporting to which any given financial entity may be subject under these two distinct but connected pieces of Union legislation.
• The Union legislative bodies, in their formulation of the relevant provision on personal data and data retention, also take into account the data minimization principle, as well as further processing for archiving purposes in the public interest, scientific or historical research purposes or statistical purposes.

On 24 June 2021, the European Data Protection Supervisor (EDPS) published its Opinion 9/2021 on the Proposal for a Regulation on Markets in Crypto-assets, and amending Directive (EU) 2019/1937.
In this opinion, the EDPS:

• recalls the need for a broader reflection & discussion: underlying technology of crypto-assets
• recommends to explicitly designate the issuers as controllers
• recommends that the risks to the protection of personal data of the individuals, and replacing minimum data retention  "at least 5 years" by a specified maximum period.

On 4 June 2021, the European Commission (EC) adopted the text EU Taxonomy Climate Delegated Act - Commission Delegated Regulation (EU) supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives.
The EC also adopted the text in all the official languages of the European Union.
The EC also published:

• Adopted text for the 2 annexes
• Impact assessment accompanying the EU Taxonomy Climate Delegated Act
• Summary of the impact assessment accompanying the EU Taxonomy Climate Delegated Act
• Opinion of the Regulatory Scrutiny Board on the impact assessment accompanying the EU Taxonomy Climate Delegated Act

On 16 June 2021, the European Commission (EC) published the EU Taxonomy Compass.
This EU Taxonomy Compass provides a visual representation of the contents of the EU Taxonomy, starting with the Delegated Act on the climate objectives, as adopted on 4 June 2021. Looking forward, it will be updated to include future delegated acts specifying technical screening criteria for additional economic activities substantially contributing to the climate objectives and the other environmental objectives of the Taxonomy Regulation. It will also reflect reviews of the delegated acts in the future.
The EU Taxonomy Compass aims to make the contents of the EU Taxonomy easier to access for a variety of users. It enables users to check which activities are included in the EU Taxonomy (taxonomy-eligible activities), to which objectives they substantially contribute and what criteria they have to meet. It is important to note that minimum safeguards (social standards) have to be met for an economic activity to be considered taxonomy-aligned. The EU Taxonomy Compass also aims to make it easier to integrate the criteria into business databases and other IT systems.

On 7 June 2021, the Autorité des marchés financiers (AMF) introduced a new article in its general regulations on the location of digital asset services and evolves its doctrine (Instruction DOC-2019-23, Instruction DOC-2019-24 and Position DOC-2020-07) on the regulation applicable to DASPs.
The legal regime for digital asset service providers (DASPs), created by the PACTE Act of May 22, 2019, has evolved following the adoption of Ordinance No. 2020-1544 of December 9, 2020, strengthening the framework for combating money laundering and terrorist financing (AML/CFT). This LCB-FT Order, which extended the registration requirement to NSPs providing services of exchanging digital assets for other digital assets and operating digital asset trading platforms is completed by Decree 2021-387 of April 2, 2021.
The AMF reminds that providers who were providing services of exchange of digital assets for other digital assets and operation of trading platform of digital assets before December 10, 2020 have until June 10, 2021 to comply with the registration requirement.

• Creation of a new article in the AMF General Regulation specifying the conditions under which a service is considered as provided in France
• Update of the AMF doctrine : instruction DOC-2019-23 relating to the regime applicable to PSANs is amended in order to adapt and specify the list of items required in a registration and/or approval file (relating to the cybersecurity requirements framework).

Version française

Le 7 juin 2021, l'Autorité des marchés financiers (AMF) a introduit un nouvel article dans son règlement général sur la localisation des services sur actifs numériques et fait évoluer sa doctrine (instruction DOC-2019-23, instruction DOC-2019-24 et position DOC-2020-07) relative à la réglementation applicable aux PSAN.
Le régime juridique des prestataires de services sur actifs numériques (PSAN), créé par la loi PACTE du 22 mai 2019, a évolué à la suite de l’adoption de l’ordonnance n° 2020-1544 du 9 décembre 2020, renforçant le cadre de la lutte contre le blanchiment de capitaux et le financement du terrorisme  (LCB-FT). Cette ordonnance LCB-FT, qui a étendu l’obligation d’enregistrement aux PSAN fournissant les services d’échanges d’actifs numériques contre d’autres actifs numériques et d’exploitation de plateforme de négociation d’actifs numériques (services 3° et 4° de l’article L. 54-10-2 du code monétaire et financier), est complétée par le décret n° 2021-387 du 2 avril 2021.
L’AMF rappelle que les prestataires qui fournissaient des services d’échanges d’actifs numériques contre d’autres actifs numériques et d’exploitation de plateforme de négociation d’actifs numériques avant  le 10 décembre 2020 ont jusqu’au 10 juin 2021 pour se mettre en conformité avec l’obligation d’enregistrement.

• Création d’un nouvel article dans le règlement général de l’AMF précisant les conditions dans lesquelles un service est considéré comme fourni en France
• Mise à jour de la doctrine de l’AMF.

On 10 June 2021, the Commission nationale de l'informatique et des libertés (CNIL) approved the first European code of conduct dedicated to cloud infrastructure service providers (IaaS).
This code, carried by Cloud Infrastructure Service Providers Europe (CISPE), is intended for providers of cloud infrastructure services located in the territory of the European Union. It brings an operational dimension to European and national data protection principles.
The code of conduct is divided into five parts on:

• the geographical and material scope of the code of conduct;
• data protection requirements  ;
• the requirements in terms of transparency of security measures  ;
• the procedures for adhering to the code of conduct;
• the governance project of the code of conduct.

Version française

Le 10 juin 2021, la Commission nationale de l'informatique et des libertés (CNIL) a approuvé le premier code de conduite européen dédié aux fournisseurs de services d’infrastructure cloud (IaaS).
Ce code, porté par Cloud Infrastructure Service Providers Europe (CISPE), s’adresse aux fournisseurs de services d’infrastructure cloud situés sur le territoire de l’Union européenne. Il apporte une dimension opérationnelle aux principes européens et nationaux de la protection des données.
Le code de conduite se divise en cinq parties :

• le champ d’application géographique et matériel du code de conduite (c’est-à-dire dans quels pays il s’applique et ce qu’il concerne) ;
• les exigences en matière de protection des données ;
• les exigences en matière de transparence des mesures de sécurité ;
• les modalités d’adhésion au code de conduite ;
• le projet de gouvernance du code de conduite.

On 10 June 2021, the Order No. 2021-738 of 9 June 2021 transposing Directive (EU) 2020/1504 of the European Parliament and of the Council of 7 October 2020 amending Directive 2014/65/EU on markets in financial instruments was published in the Official Journal.
The Regulation will enter into force on 10 November 2021. From that date, existing platforms wishing to continue to provide crowdfunding services will have 12 months, until 10 November 2022, to obtain authorisation as a European crowdfunding provider.
In France, this regime will largely replace the existing regimes for crowdfunding investment advisors and crowdfunding intermediaries. A reform revising the national framework applicable to these providers will therefore have to be adopted soon to draw all the consequences of the Regulation and ensure the compliance of national law with the new European regime.
Directive (EU) 2020/1504 has complemented Regulation (EU) 2020/1504 by excluding crowdfunding providers from the scope of Directive (EU) 2014/65 on markets in financial instruments, in order to avoid a situation in which they would be subject to obtaining multiple authorisations within the European Union.
The sole purpose of this Order is to transpose that Directive. It comprises two articles.
Article 1 adds, in Article L. 531-2, European crowdfunding providers to the list of operators authorised to provide investment services while being exempted from the authorisation procedure, which is provided for in Article L. 532-1 ensuring the application in national law of Directive (EU) 2014/65 on markets in financial instruments.
Article 2 sets out the conditions for the entry into force of this Order on 10 November 2021.

Version française

Le 10 juin 2021, l'Ordonnance no 2021-738 du 9 juin 2021 portant transposition de la directive (UE) 2020/1504 du Parlement européen et du Conseil du 7 octobre 2020 modifiant la directive 2014/65/UE concernant les marchés d’instruments financiers a été publiée au Journal Officiel.
L'entrée en application du règlement est fixée au 10 novembre 2021. A compter de cette date, les plateformes existantes qui souhaiteront continuer à fournir des services de financement participatif auront douze mois, soit jusqu'au 10 novembre 2022, pour obtenir l'agrément de prestataire européen de services de financement participatif. En France, ce régime remplacera en grande partie les régimes existants des conseillers en investissements participatifs (CIP) et des intermédiaires en financement participatif (IFP). Une réforme révisant le cadre national applicable à ces prestataires devra donc être adoptée prochainement pour tirer toutes les conséquences du règlement et assurer la conformité du droit national au nouveau régime européen.
La directive (UE) 2020/1504 est venue compléter le règlement (UE) 2020/1504 en excluant les prestataires de services de financement participatif du champ d'application de la directive (UE) 2014/65 concernant les marchés d'instruments financiers, afin d'éviter une situation dans laquelle ils seraient subordonnés à l'obtention de multiples agréments au sein de l'Union européenne.
La présente ordonnance a pour objet unique la transposition de cette directive. Elle comprend deux articles.
L'article 1er ajoute, à l'article L. 531-2, les prestataires européens de services de financement participatif à la liste des opérateurs autorisés à fournir des services d'investissement tout en étant exemptés de la procédure d'agrément, laquelle est prévue à l'article L. 532-1 assurant l'application en droit national de la directive (UE) 2014/65 concernant les marchés d'instruments financiers.
L'article 2 prévoit les conditions d'entrée en vigueur de la présente ordonnance au 10 novembre 2021.

On 4 June 2021, the Association Française des Titres (AFTI) published its 2020 annual report.
This fiscal year was marked by the COVID-19 health crisis, an unprecedented event. In this difficult framework for all, AFTI, thanks to its 24 administrators and its 25 group leaders, continued its activities and maintained the dynamics of the Association notwithstanding the singular conditions. This economic and health crisis affected the entire economy and all industries, but to varying degrees. AFTI members and their professional associations have successfully overcome these upheavals.

Version française

Le 4 juin 2021, l'Association Française des Titres (AFTI) a publié son rapport annuel 2020.
Cet exercice aura été marqué par la crise sanitaire du COVID-19, événement sans précédent. Dans ce cadre difficile pour tous, l’AFTI grâce à ses 24
administrateurs et ses 25 animateurs de groupes, a poursuivi ses activités et a maintenu la dynamique de l’Association nonobstant les conditions singulières. Cette crise économique et sanitaire a touché toute l’économie et toutes les industries, mais à des degrés divers. Les membres de l’AFTI et leur Association professionnelle ont réussi à surmonter ces bouleversements avec succès.

On 27 June 2021, France published  Decree No. 2021-814 of 25 June 2021 on the list of savings products covered by Act No. 2021-219 of 26 February 2021 on the escheatment of supplementary retirement savings contracts.
The decree sets the list of supplementary retirement savings products subject to the obligation of declaration by the managers of the contracts to GIP Union-retraite, which ensures the publication of this information on its online service to prevent escheatment on these products. This list integrates on the one hand the individual and collective products existing before the law n°2019-486 of May 22, 2019 relating to the growth and transformation of companies as well as the new retirement savings products created by this law.

Version française

Le 27 juin 2021, la France a publié le Décret no 2021-814 du 25 juin 2021 portant la liste des produits d’épargne couverts par la loi no 2021-219 du 26 février 2021 relative à la déshérence des contrats d’épargne retraite supplémentaire.
Le décret fixe la liste des produits d’épargne retraite supplémentaire soumis à l’obligation de déclaration par les gestionnaires des contrats au GIP Union-retraite, qui assure la publication de ces informations sur son service en ligne pour prévenir la déshérence sur ces produits. Cette liste intègre d’une part les produits individuels et collectifs existants avant la loi no 2019-486 du 22 mai 2019 relative à la croissance et la transformation des entreprises ainsi que les nouveaux produits d’épargne retraite créés par cette loi.

On 23 June 2021, the Autorité des marchés financiers (AMF) updated its Doctrine due to the new quarterly reporting on investment rule violations and compensation by asset management companies and collective investment schemes.
Following the Order of 29 March 2021 approving the AMF General Regulation, the Authority is updating its doctrine to clarify expectations regarding new reporting.
The AMF's policy sets out the procedures and format for the quarterly submissions to be made. The first quarterly data transmission by asset management companies will be due no later than 31 October 2021 for the period from the 1st of July 2021 to the 30th of September 2021.

Version française

Le 23 juin 2021, l'Autorité des marchés financiers (AMF) a mis à jour sa doctrine en raison du nouveau compte-rendu trimestriel des non-respects des règles d'investissement et des indemnisations par les sociétés de gestion de portefeuille et placements collectifs.
La doctrine de l'AMF précise les modalités et le format des transmissions trimestrielles à effectuer. La première transmission trimestrielle des données par les sociétés de gestion de portefeuille devra être effectuée au plus tard le 31 octobre 2021 pour la période du 1er juillet 2021 au 30 septembre 2021.

On 23 June 2021, the Autorité des marchés financiers (AMF) updated the accepted market practice on liquidity contracts.
As of July 1, 2021, the accepted market practice (AMP) on liquidity contracts, which had been in effect since January 2019 on the French market, is updated to take into account in-depth analyses of the effects of the AMP and of the series of short thematic controls performed in 2020.

Version française

Le 23 juin 2021, l'Autorité des marchés financiers (AMF) a actualisé la pratique de marché admise sur les contrats de liquidité.
A compter du 1er juillet 2021, la pratique de marché admise sur les contrats de liquidité, qui avait cours depuis janvier 2019 sur le marché français, est actualisée pour tenir compte des analyses en profondeur des effets de cette dernière et de la série des contrôles thématiques courts effectués en 2020.

On 3 June 2021, the Autorité des marchés financiers (AMF) published a position (DOC-2021-04) to incorporate the ESMA guidance on certain aspects of the MiFID II suitability requirements. This position is intended to replace, as of 6 June, AMF position DOC-2012-17 integrating the ESMA guidance taken under MiFID I.

1) A position that incorporates ESMA's guidelines
The AMF has incorporated, in a new position DOC-2021-04, the guidance published by ESMA guidance on certain aspects of the MiFID II suitability requirements (ESMA35-36-1952). This guidance was issued on the basis of Directive 2014/65/EU of the European Parliament and of the Council of May 15, 2014, known as MiFID II, transposed into domestic law in the Monetary and Financial Code, and its Commission Delegated Regulation (EU) 2017/565 of April 25, 2016. They are intended to replace those published in 2012 under the MiFID I texts (ESMA/2012/388).

2) Clarification of the new requirements for the compliance function
The new ESMA guidelines provide details on the evolution of the compliance function's tasks under MiFID II (responsibilities in terms of product governance, possibility of assuming the complaints management function, advice to the management body on the firm's remuneration policy), by detailing, for example, the compliance function's reporting obligations to the management bodies.

3) Future developments on the doctrine applicable to collective investment management
ESMA's guidelines apply to the provision of investment or related services and therefore concern investment firms, credit institutions and portfolio management companies in the context of the provision of such services.
In order to standardize practices, the AMF will update its policy on UCITS and AIF management in the coming months to take into account the relevant elements of the revised guidelines. This update will be made in connection with the clarifications that the AMF must make in its doctrine following the publication of the summary of SPOT controls on the outsourcing of internal control.

Version française

Le 3 juin 2021, l'Autorité des marchés financiers (AMF) a publié une position (DOC-2021-04) pour intégrer les orientations de l'Autorité européenne des marchés financiers (ESMA) sur « certains aspects de MiFID II relatifs aux exigences de la fonction de vérification de la conformité ». Cette position a vocation à remplacer, à compter du 6 juin prochain, la position AMF DOC-2012-17 intégrant les orientations de l’ESMA prises sous MIF 1.

1) Une position qui reprend les orientations de l’ESMA
L’AMF a intégré, dans une nouvelle position DOC-2021-04, les orientations publiées par l’ESMA concernant « certains aspects relatifs aux exigences de MiFID II relatifs aux exigences de la fonction de vérification de la conformité » (ESMA35-36-1952). Ces orientations ont été édictées sur le fondement de la directive 2014/65/UE du Parlement européen et du Conseil du 15 mai 2014, dite MIF 2, transposée en droit interne dans le code monétaire et financier, et de son règlement délégué (UE) 2017/565 de la Commission du 25 avril 2016. Elles ont vocation à remplacer celles publiées en 2012 sous l’empire des textes MIF 1 (ESMA/2012/388).

2) Des précisions sur les nouvelles exigences de la fonction de conformité
Les nouvelles orientations de l’ESMA apportent des précisions sur l’évolution des missions de la fonction de conformité sous MIF 2 (responsabilités en matière de gouvernance des produits, possibilité d’assurer la fonction de gestion des plaintes, conseil de l’organe de direction sur la politique de rémunération de l’entreprise), en détaillant par exemple les obligations de reporting de la fonction de conformité au instances dirigeantes.

3) Des évolutions à venir sur la doctrine applicable à la gestion collective
Les orientations de l’ESMA s’appliquent dans le cadre de la fourniture de services d’investissement ou de services connexes et concernent donc les entreprises d’investissement, les établissements de crédit et les sociétés de gestion de portefeuille dans le cadre de la fourniture de tels services.
Afin d’homogénéiser les pratiques, l’AMF fera évoluer dans les prochains mois sa doctrine relative à la gestion d’OPCVM et de FIA pour tenir compte des éléments pertinents des orientations révisées. Cette mise à jour se fera en lien avec les précisions que l’AMF doit apporter dans sa doctrine à la suite de la publication de la synthèse des contrôles SPOT sur l'externalisation du contrôle interne.

On 3 June 2021, the Association Française des Marchés Financiers (AMAFI) published proposals for MiFID II Review.
The purpose of this document is to recall and present, as far as investor protection is concerned, the priorities identified (and not addressed by the MiFID 2 Quick Fix) by AMAFI in view of the general review of MiFID 2 / MiFIR, in the light of Directive (EU) 2021/338 of the European Parliament and of the Council published in the OJEU on 26 February 2021 ("last version" or "final version" of the "Quick Fix").
On the investor protection side of MiFID 2, AMAFI's priorities identified in the document are related to the following issues:
(1) Product governance;
(2) Inducements regime;
(3) Costs and fees;
(4) Opt-in procedure4 ;
(5) Best execution;
(6) Response Measures;
(7) 10% Loss Alert;
(8) Adequacy check (ESMA suitability guidelines).

Version française

Le 3 juin 2021, l'Association Française des Marchés Financiers (AMAFI) a publié des propositions pour la revue de MiFID II.
L’objectif de ce document est de rappeler et présenter, pour ce qui concerne le volet Protection des investisseurs, les priorités identifiées (et non adressées par le Quick Fix MiFID 2) par l’AMAFI en vue de la révision générale de MiFID 2 / MiFIR, à l’aune de la Directive (UE) 2021/338 du Parlement européen et du Conseil publiée au JOUE du 26 février 2021 (« dernière version » ou « version définitive » du « Quick Fix »).
Sur le volet Protection des investisseurs de MiFID 2, les priorités de l’AMAFI identifiées dans le document visent les problématiques associées aux thématiques suivantes :
(1) Gouvernance Produits ;
(2) Régime des inducements ;
(3) Coûts et frais ;
(4) Procédure d’opt-in4 ;
(5) Meilleure exécution ;
(6) Mesures d’intervention ;
(7) Alerte 10% sur les pertes ;
(8) Vérification du caractère adéquat (Orientations ESMA suitability).

On 24 June 2021, the Association Française des Marchés Financiers (AMAFI) published Q&As on the implementation of IFD-IFR. This Q&A document answers some key questions following the implementation of IFD-IFR in France.
France chose to transpose IFD by introducing into the banking law an additional status of specialised credit institution: the credit and investment institution. This status meets the European objective while minimising the constraints for the IEs concerned. Since 2016, AMAFI has been active on this issue, which is vital to many of its members. It set up and gradually expanded the IFR/IFD Group, which now includes the main institutions concerned, the French Banking Federation (FBF) and law and advisory firms.
While the European and French texts have not yet been published and many uncertainties remain within the investment institutions as to what they must concretely achieve in the weeks and months to come, the Group wishes to bring to the attention of the Association's members this document which, around questions and answers, provides various elements of appreciation, the result of numerous discussions with the authorities, DGT, ACPR and AMF. It will be updated as necessary.
These FAQs deal with the following main issues:

• authorisation procedure for investment institutions
• management of exemptions for investment institutions
• management of liquidity exemptions for class 2 investment institutions
• reporting by investment institutions
• remuneration policy
• own funds pillar 2
• interpretation of certain technical standards issued by the EBA.

Version française

Le 24 juin 2021, l’Association Française des Marchés Financiers (AMAFI) a publié des questions-réponses concernant sa mise en œuvre de la réglementation IFD/IFR.
 
La France a choisi de transposer IFD en introduisant dans la loi bancaire un statut supplémentaire d’établissement de crédit spécialisé : l’établissement de crédit et d’investissement (ECI). Ce statut répond ainsi à l’objectif européen tout en minimisant les contraintes pour les EI concernées. Dès 2016, l’AMAFI a été mobilisée sur ce dossier essentiel pour nombre de ses adhérents. Elle a ainsi constitué en l’élargissant peu-à-peu un Groupe IFR/IFD qui associe aujourd’hui les principaux établissements concernés, la Fédération bancaire française (FBF) ainsi que des cabinets d’avocats et de conseils.
Alors que les texte européens et français ne sont pas encore publiés et que de nombreuses incertitudes demeurent au sein des EI sur ce qu’elles doivent concrètement réaliser dans les semaines et mois qui viennent, le Groupe souhaite porter à la connaissance des adhérents de l’Association ce document qui autour de questions-réponses fourni différents éléments d’appréciation, fruit de nombreuses discussions avec les autorités, DGT, ACPR et AMF. Il sera mis à jour en tant que de besoin.
Ces FAQ traitent des principales questions suivantes :

• procédure d’agrément des ECI
• gestion des exemptions pour les ECI
• gestion des exemptions de liquidité pour les EI de classe 2
• reporting des EI
• politique de rémunération
• fonds propres – pilier 2
• interprétation de certaines normes techniques publiées par l’EBA.

On 30 June 2021, the Système unifié de rapport financier (e-surfi) and the ACPR implemented in its information system the changes related to version 3.0 of the DPM. This taxonomy version makes the following changes:
 
COREP OF (Own Funds):
New states:
CR IRB: C_08.03 (CR IRB 3), C_08.04 (CR IRB 4), C_08.05 (CR IRB 5), C_08.05.1 (CR IRB 5.1), C_08.06 (CR IRB 6), C_08. 07 (CR IRB 7)
CCR: C_34.01 (CCR 1), C_34.02 (CCR 2), C_34.03 (CCR 3), C_34.04 (CCR 4), C_34.05 (CCR 5), C_34.06 (CCR 6), C_34.07 (CCR 7), C_34.08 (CCR 8), C_34.09 (CCR 9), C_34.10 (CCR 10), C_34.11 (CCR 11)
NPE: C_35.01 (NPE LC1), C_35.02 (NPE LC2), C_35.03 (NPE LC3)
Other Modification: The report C_15.00 (CR IP LOSSES) which was expected semi-annually becomes annual.
 
COREP LR (Leverage Ratio):
New states: C_48.01 (LR6.1); C_48.02 (LR6.2).
The states C_41.00 (LR2) and C_42.00 (LR3) are deleted.
 
COREP LE  (Large Exposures):
The states C_30.00 (LE 4) and C_31.00 (LE 5) are deleted.
 
COREP NSFR:
New states: C 80.00, C 81.00, C 82.00 (simplified NSFR), C 83.00 (simplified NSFR), C 84.00
The states C_60.00 (NSFR - RSF) and C_61.00 (NSFR - ASF) are deleted.
 
GSII:
This is a new module comprising a single report G_01.00 (GSII indicators and elements falling under the European banking union)
The new version of the functional business cards that will be made available on the OneGate portal in early July will incorporate these changes.
The subjugations to the COREP FRTB statements, to be submitted from the decree of September 2021, are being adjusted and will be communicated to you in a future version of the functional business card.
On the following link below: updated list of optional states: " List of optional expected states_Communication July 2021.xlsx "
 
Investment institutions and IFR / IFD regulations:
For class 2 and 3 investment institutions, ACPR asks not to take into account the expected states in the functional business cards for the decree of June 2021.
Indeed, a communication has been sent to the institutions concerned specifying the CRR statements expected for the order of June 2021. Exceptionally, these statements must be sent by email and in Excel format to the usual banking supervision correspondents.
 
Reminder on the changes to the terms of submission of optional statements:
Since the deadline of 12/2020, each state expected in the functional business card, whether mandatory or optional, must be declared with a discount indicator completed with the @find: filed attribute valued.

Version française

Le 30 juin 2021, le Système unifié de rapport financier (e-surfi) et l'ACPR ont implémenté dans leur système d’information les évolutions liées à la version 3.0 du DPM. Cette version de taxonomie apporte les modifications ci-dessous :
 
COREP OF (Own Funds) :
Nouveaux états :
CR IRB : C_08.03 (CR IRB 3), C_08.04 (CR IRB 4), C_08.05 (CR IRB 5), C_08.05.1 (CR IRB 5.1), C_08.06 (CR IRB 6), C_08.07 (CR IRB 7)
CCR : C_34.01 (CCR 1), C_34.02 (CCR 2), C_34.03 (CCR 3), C_34.04 (CCR 4), C_34.05 (CCR 5), C_34.06 (CCR 6), C_34.07 (CCR 7), C_34.08 (CCR 8), C_34.09 (CCR 9), C_34.10 (CCR 10), C_34.11 (CCR 11)
NPE : C_35.01 (NPE LC1), C_35.02 (NPE LC2), C_35.03 (NPE LC3)
Autre Modification : L’état C_15.00 (CR IP LOSSES) qui était attendu semestriellement devient annuel.
 
COREP LR (Leverage Ratio) :
Nouveaux états : C_48.01 (LR6.1) ; C_48.02 (LR6.2).
Les états C_41.00 (LR2) et C_42.00 (LR3) sont supprimés.
 
COREP LE (Large Exposures) :
Les états C_30.00 (LE 4) et C_31.00 (LE 5) sont supprimés.
 
COREP NSFR  :
Nouveaux états : C 80.00, C 81.00, C 82.00 (NSFR simplifié), C 83.00 (NSFR simplifié), C 84.00
Les états C_60.00 (NSFR – RSF) et C_61.00 (NSFR – ASF) sont supprimés.
 
GSII : Il s’agit d’un nouveau module comprenant un état unique G_01.00 (Indicateurs GSII et éléments relevant de l’union bancaire européenne)
La nouvelle version des cartes de visite fonctionnelles qui sera mise à votre disposition sur le portail OneGate début juillet intègrera ces changements.
Les assujettissements aux états COREP FRTB, à remettre à partir de l’arrêté de Septembre 2021, sont en cours d’ajustements et vous seront communiqués dans une prochaine version de la carte de visite fonctionnelle.
Sur le lien, la liste mise à jour des états optionnels : « Liste des états attendus optionnels_Communication juillet 2021.xlsx »
 
Établissements d’investissement et règlementation IFR/IFD :
Pour les établissements d’investissement de classe 2 et 3, ACPR demande de ne pas tenir compte des états attendus dans les cartes de visite fonctionnelles pour l’arrêté de Juin 2021.
En effet, une communication a été adressée aux établissements concernés précisant les états CRR attendus pour l’arrêté de Juin 2021. À titre exceptionnel, ces états sont à transmettre par mail et sous format Excel auprès des correspondants habituels du contrôle bancaire.
 
Rappel sur les changements des modalités de remises des états optionnels :
Depuis l’échéance de 12/2020, chaque état attendu dans la carte de visite fonctionnelle, qu’il soit obligatoire ou optionnel, doit être déclaré avec un indicateur de remise complété de l’attribut @find :filed valorisé.

On 11 June 2021, the Autorité des marchés financiers (AMF) published an initial assessment of the securities financing market and specified the various use cases already identified for this data, which must be made more reliable.

1) Reporting covering four types of transaction
Article 4 of the European Regulation provides that investment firms, credit institutions, asset management companies and eligible non-financial entities shall report the following transactions to the trade repositories accredited by ESMA:

• Repo transactions;
• Securities and commodities lending and borrowing transactions;
• Buy-sell back and sell-buy back transactions;
• Margin lending transactions.

2) Initial analysis by the regulator
SFTR reporting is fairly granular, and makes it possible to establish classifications by type of reporting entity or by product type. Most of the amounts reported for repos and securities lending and borrowing can be attributed to banks and credit institutions. Investment funds account for a small proportion (2% to 3%) of the reported amounts.
It should be mentioned that Brexit caused a sharp drop in the volume of SFTR data from January 2021; however, at first sight the related loss of information remains limited, since these transactions are often carried out with a European counterparty that remains subject to the reporting obligation. 

3) Various use cases
SFTR data can allow the regulator to:

• enhance its risk analysis;
• improve its monitoring of stress on a given underlying asset in the securities lending and borrowing market by using, for example, the lending fee rate entered in the securities lending and borrowing report;
• enhance the monitoring of net short position reports by cross-checking them against SFTR reporting data;
• study the techniques for using securities financing transactions that asset management companies employ;
• analyse significant movements in securities around key dates such as shareholders’ meetings or ex-dividend dates.

SFTR reporting will be the subject of work and analyses over the coming months in order to improve the quality of data and make the best use of it.

Version française

Le 11 juin 2021, l'Autorité des marchés financiers (AMF) a publié un premier état des lieux du marché des opérations de financement sur titres et précise les différents cas d’usage d’ores et déjà identifiés pour ces données, qui devront être fiabilisées.

1) Un reporting portant sur quatre types d’opérations
L’article 4 du règlement européen prévoit que les entreprises d’investissement, les établissements de crédit, les sociétés de gestion mais également les entités non financières éligibles procèdent, auprès des référentiels centraux (trade repositories) agréés par l’ESMA, à un reporting des opérations suivantes :

• les opérations de pension (ou repo) ;
• le prêt ou l’emprunt de titres ou de matières premières (securities lending) ;
• les opérations d’achat-revente ou de vente-rachat (buy-sell back transaction et sell-buy back transaction) ;
• les opérations de prêt avec appel de marge (margin lending).

2) Une première exploitation par le régulateur
Assez granulaire, le reporting SFTR permet d’établir des typologies par type de déclarant ou par type de produit. Les banques et les établissements de crédit contribuent à la majorité des montants déclarés sur le repo et sur le prêt-emprunt de titres. Les fonds d’investissement représentent une faible part (de 2 à 3 %) des montants déclarés.
Il convient de mentionner que le Brexit a eu pour impact une baisse sensible de la volumétrie des données SFTR à partir de janvier 2021 ; néanmoins, la perte d’information associée reste limitée en première analyse car ces opérations sont souvent réalisées face à une contrepartie européenne restant soumise à l’obligation de déclaration. 

3) Différents cas d’usage
Les données SFTR permettent au régulateur :

• d’enrichir ses analyses des risques ;
• d’améliorer son suivi de l’état de tension du marché du prêt-emprunt sur un sous-jacent donné en utilisant par exemple le taux de la commission d’emprunt renseigné dans la déclaration de prêt-emprunt ;
• d’approfondir le suivi des déclarations de positions courtes nettes en les croisant avec les données issues du reporting SFTR ;
• d’étudier les techniques d’utilisation des opérations de financement sur titre par les sociétés de gestion ;
• d’analyser les mouvements significatifs de titres autour de dates clés telles que les dates d’assemblées générales ou de détachement de coupon.

Le reporting SFTR fera l’objet au cours des prochains mois de travaux et d’analyses visant à améliorer la qualité des données, afin de permettre la meilleure exploitation possible.

On 7 June 2021, the Autorité des normes comptables (ANC) published a Regulation No. 2021-03 of June 4, 2021 amending ANC Regulation No. 2016-03 relating to the annual accounts of securitization undertakings.
The College of the ANC has reintroduced into ANC Regulation No. 2016-03, provisions relating to the accounting treatment of securities lending and borrowing. These provisions, to which the regulation referred, appeared in the Insurance Code from which they were repealed as of December 31, 2020.

Version française

Le 7  juin 2021, l’Autorité des normes comptables (ANC) a publié le Règlement N° 2021-03 du 4 juin 2021 modifiant le règlement ANC N°2016-03 relatif aux comptes annuels des organismes de titrisation.
Le Collège de l’ANC a réintroduit dans le règlement ANC n°2016-03, les dispositions relatives au traitement comptable des prêts et emprunts de titres. Ces dispositions, auquel le règlement renvoyait, figuraient dans le code des assurances d’où elles ont été abrogées à compter du 31 décembre 2020.

On 4 June 2021, the Chambre des représentants de Belgique published a Draft law on various tax provisions and amending the law of 18 September 2017 on the prevention of money laundering and terrorist financing and on limiting the use of cash.

This bill includes various amending provisions relating to income taxes, the Code of Miscellaneous Duties and Taxes, the Act of 22 May 2003 on the Organisation of the Budget and Accounting of the Federal State and Tax Procedure, as well as a provision amending the Act of 18 September 2017 on the Prevention of Money Laundering and the Financing of Terrorism and the Restriction of the Use of Cash.

On 14 June 2021, the Banque nationale de Belgique (BnB) published Circular NBB_2021_12 / Due diligence regarding the transfer of funds from abroad and the consideration of tax regularization procedures for the application of the anti-money laundering law.

In order to promote equal treatment of Belgian financial institutions that, because of their asset management activities or the issuance of single premium life insurance contracts, are confronted with the risk of money laundering arising from serious tax fraud, but also taking into account the tax regularization procedures followed by their clients, and to ensure that these institutions manage these risks properly, this circular explains the Bank's expectations for proper compliance with the anti-money laundering and anti-terrorist financing (AML/CFT) vigilance obligations imposed by the law of 18 September 2017.

This circular clarifies the Bank's expectations as regards proper compliance with the obligations of vigilance imposed by the Law of 18 September 2017 on the prevention of money laundering and terrorist financing and on limiting cash withdrawals, in respect of the funds held by these institutions for their clients following transfer of funds from abroad.

On 10 June 2021, the Financial Services and Markets Authority (FSMA) published study on Non-financial reporting.

Belgian listed companies have improved their reporting of non-financial information than two years ago. There are still some points requiring attention, however, and room for improvement. That is clear from an wide-ranging study conducted by the Financial Services and Markets Authority (FSMA), which makes recommendations for further progress.

On 8 June 2021, the Banque nationale de Belgique (BnB) published a Communication NBB_2021_13 on new reportings to the EBA.

The purpose of this Communication is to inform securities firms on the impact of the new IFR/IFD prudential framework on the new reporting scheme, in particular with regard to the NBB's expectations for the reporting of the reference date of June 2021 and the technical protocol to be followed for this purpose. In addition, the Communication informs securities firms about the new EU reports as from the reference date of September 2021 and about the adaptation of the national periodic IF statements.

The communication applies to stock exchange companies incorporated under Belgian law.

On 2 June 2021, the Chambre des représentants de Belgique published a Draft law transposing directives and implementing European regulations in the financial sector.

This bill aims to ensure the transposition into Belgian law of the following European texts:

• The partial transposition of Directive (EU) 2019/1160 with regard to cross-border distribution of collective investment undertakings.
  The transposition of Directive 2019/1160 and the compliance of Belgian law with Regulation 2019/1156 require the amendment of the law of 3 August 2012 on undertakings for collective investment which comply with the conditions of Directive 2009/65/EC and on undertakings for collective investment in debt securities as well as the law of 19 April 2014 on alternative investment undertakings and their managers. The entire legislation on collective management is therefore affected. For one provision, Article 1(5)(a) of Directive 2019/1160, amendments are required to the Royal Decree of 12 November 2012 on undertakings for collective investment which meet the conditions of Directive 2009/65/EC. The draft aims at transposing Directive 2019/1160 in a faithful manner. It therefore does not introduce any new obligations that go beyond the requirements set out in that directive.
• Regulation (EU) 2019/2088 on sustainability?related disclosures in the financial services sector and Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment.
  Being the competent authority to ensure compliance with these different sectoral European legislations, FSMA is hereby designated as the competent authority to ensure compliance with the provisions of Regulation (EU) 2019/2088 by insurance undertakings, managers of collective investment schemes, management companies of collective investment schemes, institutions for occupational retirement provision, managers of eligible venture capital funds, managers of eligible social entrepreneurship funds, investment firms, credit institutions and insurance intermediaries.
• The partial transposition of Directive (EU) 2019/2177 on Solvency II.

On 21 June 2021, the Financial Services and Markets Authority (FSMA) published  its 2020 annual report.

This annual report not only comes out at a particular time, it also covers a singular year to say the least. An unprecedented year because 2020 was, of course, the year of the COVID-19 pandemic. This pandemic has had an impact on the markets and sectors FSMA oversees, but also on its approach and the way the supervisor works.

On 17 June 2021, the Chambre des représentants de Belgique adopted draft Law transposing a series of directives and implementing European regulations on financial matters in Belgium.

This law transposes:

• partially Directive (EU) 2019/1160 of the European Parliament and of the Council of 20 June 2019 amending Directives 2009/65/EC and 2011/61/EU as regards the cross-border distribution of collective investment undertakings;
• partially Directive (EU) 2019/2177 (Solvency II), Directive 2014/65/EU on markets in financial instruments and Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing.

On 18 June 2021, Belgium published the Law of 2 June 2021 transposing a series of directives and implementing European regulations on financial matters  in Belgium.

This law transposes:

• partially Directive (EU) 2019/1160 of the European Parliament and of the Council of 20 June 2019 amending Directives 2009/65/EC and 2011/61/EU as regards the cross-border distribution of collective investment undertakings;
• partially Directive (EU) 2019/2177 (Solvency II), Directive 2014/65/EU on markets in financial instruments and Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing.

On 2 June 2021, the Fédération belge du secteur financier (FebelFin) published an article on the Belgian "Towards Sustainability" quality standard.

• The Belgian quality standard Towards Sustainability defines the minimum requirements for sustainable financial products, has been revised and strengthened.
• This revision refines the criteria of the label and aligns it with the European regulations.
• Febelfin supports this revision, which confirms that the Belgian financial sector is a forerunner in Europe in terms of sustainability.
• The Belgian label has become a market standard with more than 580 investment products having obtained the label. This represents 390 billion euros managed in compliance with the quality standard.
• On the Towards Sustainability website, investors can find all the information on the labelled products.

On 16 June 2021, the Financial Services and Markets Authority (FSMA) published study on Belgian investment funds evolution toward more sustainability.

A little more than half of all Belgian public funds consist of sustainable assets or invest sustainably. These are the findings of a study conducted by the FSMA on the occasion of the introduction of the Sustainable Finance Disclosure Regulation (SFDR).

On 9 June 2021, Germany published the Electronic Securities Act in the Deutsches Bundesgesetzblatt (BGBL). The introduction of electronic securities is intended to make the German financial market more viable in the future and, at the same time, to protect the integrity, transparency and functioning of the markets.

On 3 June 2021, the Bundesfinanzministerium published a draft regulation amending the Regulation on the statutes of BaFin (Verordnung über die Satzung der Bundesanstalt für Finanzdienstleistungsaufsicht), which will enter into force on 1 July 2021. The draft regulation is intended to address the need, highlighted by cases such as that involving Wirecard, for more effective financial supervision in Germany and a more powerful role for BaFin in enforcing the interests of investors and consumers in particular.
The German Federal Government commissioned a comprehensive external study of BaFin’s organisational structures, workflows and resources to identify instruments to strengthen supervision also in these areas. Based on the results of the study, the BMF has presented a 7-point reform plan to make BaFin’s supervisory structure more effective and efficient.
The basis of the intended modernisation is a further development of BaFin’s management structure that more clearly reflects the responsibilities of the members of BaFin’s Executive Board and strengthens the central management function of its President. Provisions of the Financial Services Supervision Act (Finanzdienstleistungsaufsichtsgesetz) that are fundamental to this further development are to be amended as part of the recently adopted Act to Strengthen Financial Market Integrity (Gesetz zur Stärkung der Finanzmarktintegrität) which will also enter into force on 1 July 2021. Consequential amendments to BaFin’s statutes are therefore necessary.
The reform plan of the BMF also aims to strengthen investor and consumer protection through BaFin’s supervisory activities. BaFin’s mandate of collective consumer protection is to be strengthened. Existing and new instruments for exercising this mandate are to be used more proactively. Investor and consumer protection is also to be given greater weight at the Executive Board level.

On 10 June 2021, Germany published the Act to strengthen Financial Market Integrity in the Deutsches Bundesgesetzblatt (BGBL).
The law has been created in reaction to the recent events in connection with the former German DAX-listed financial service provider Wirecard. In order to improve the system of financial statements control for capital market and capital market-oriented companies, the law provides that BaFin shall be equipped with more extensive competencies in the financial statements control process. In future, BaFin will, amongst other things, be able to take actions directly against companies active in the capital market in case of any suspicion of a manipulation of financial statements and to conduct examinations with regard to all capital market-oriented companies. Furthermore, the law will introduce an obligation for capital market companies to change their external auditors at least every ten years, a civil law liability of auditors for any breach of their duties in the audit process, more severe punishments for criminal offences in connection with financial statements as well as a prohibition of dealing with certain financial instruments for BaFin employees.

On 28 June 2021, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) announced the application of EIOPA Guidelines on information and communication technology security and governance in Germany.
The objective of these Guidelines is to:

• provide clarification and transparency to market participants on the minimum expected information and cyber security capabilities, i.e. security baseline;
• avoid potential regulatory arbitrage;
• foster supervisory convergence regarding the expectations and processes applicable in relation to ICT security and governance as a key to proper ICT and security risk management.

On 29 June 2021, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) announced the application of ESMA Guidelines on outsourcing to cloud providers in Germany.
The guidelines cover:

• the outsourcing risk analysis and due diligence,
• the procedures and internal policies to ensure governance, control and documentation requirements (for example, outsourcing decision, cloud provider selection, monitoring of outsourced activities),
• the essential elements of the contractual outsourcing agreement to cloud providers, including exit strategies,
• the notification obligations to the competent authorities.

On 10 June 2021, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) published special guidelines on ad hoc disclosure for credit and financial institutions.
BaFin has added guidelines specifically for credit and financial institutions to Module C of its Issuer Guidelines. These guidelines address the question of which ad hoc disclosure requirements arise for credit and financial institutions whose financial instruments are admitted to trading on an organised market or are included with their consent for trading on a multilateral trading facility (MTF) or an organised trading facility (OTF) when they are the addressee of supervisory action.
Module C of the Issuer Guidelines explains BaFin’s administrative practice in relation to the concept of inside information under Article 7 of the Market Abuse Regulation (MAR) and the ad hoc disclosure obligation under Article 17 MAR with respect to all issuers. Sections I.2 and I.3 of this Module are therefore authoritative in principle for the determination of potential inside information. However, for institutions that are subject to ongoing supervision by BaFin, further specific questions arise with respect to inside information in the areas of supervisory action (including supervisory classifications, recovery planning and banking supervision measures) and resolution which are examined in more detail in the newly published guidelines.

On 8 June 2021, the BVI Bundesverband Investment und Asset Management e.V.  commented on the draft regulations envisaged under the Securities Institutions Act (WpIG) before the new legal requirements for securities institutions come into force on 26 June 2021.
The restructuring of the remuneration system for securities institutions is closely related to the EU requirements of the IFD and its Level 2 and 3 measures. These include, in particular, the additional RTS on the identification of employee categories, which have not yet been adopted, as well as on the payment of variable remuneration in certain instruments and the EBA remuneration guidelines, which are also still outstanding. These documents set out numerous requirements that are also to be regulated or supplemented by the new WpI-VergV. It is therefore imperative to first wait for these EU requirements in order to ensure appropriate implementation at national level. This applies, for example, to the identification of employees, payment in instruments and the handling of severance payments.
The EBA remuneration guidelines are not scheduled for final publication until the end of June 2021. Afterwards, the official translation into the respective national languages is still required. Irrespective of this, the EBA has proposed an implementation deadline in the draft, according to which the securities institutions concerned must implement and document their remuneration policy by 31 December 2021. In addition, the new remuneration policy is to be applied for the performance year starting after 31 December 2021. This would still give sufficient time to adapt the WpI-VergV in the light of the EU requirements in the course of the summer.
Moreover, many of the requirements in the regulation will only be specified in more detail in the EBA guidelines. This raises the general question of whether the requirements of non-binding guidelines of an EU authority should be transferred to a national regulation. Should these change, the practices set out in them could not be adapted flexibly, but would first have to go through a formal regulation amendment procedure, which takes a lot of time. BVI therefore sees no reason to deviate from the current principle that BaFin announces on its website whether it complies or does not comply with EBA guidelines in its administrative practice. However, this would require a fundamental revision of the draft regulation, which would then have to be reduced to the (EU) legal requirements of Art. 30 and 32 IFD.

On 1 June 2021, the BVI Bundesverband Investment und Asset Management e.V.  published a paper "How Taxonomy-aligned are ESG-strategy funds?".
Funds applying standard market ESG investment strategies and minimum exclusions achieve better sustainability scores than non-sustainable comparison portfolios even if the share of taxonomy-aligned activities in the fund portfolio is low. Therefore, the share of portfolio alignment with the taxonomy cannot be seen as the sole yardstick for the sustainability of a fund portfolio.
This is the result of an analysis by the German Investment Funds Association BVI based on a portfolio simulation. According to the analysis, even in sustainable funds as defined by the EU Disclosure Regulation (SFRD), the portfolio’s share of taxonomy-aligned activities will not exceed the single-digit percentage range for the time being, assuming that the portfolio is sufficiently diversified. The reason for this is that the taxonomy is still in its infancy.
So far, the relevant sustainable activities and technical criteria have only been defined for two of the taxonomy's six environmental objectives. Furthermore, the planned social sustainability objectives are still pending. Thus, achieving a higher share of taxonomy-aligned activities in sustainable fund portfolios is dependent on further development of the technical taxonomy criteria.

On 8 June 2021, the Bundesfinanzministerium published draft Ordinance Amending the Ordinance on Reporting Violations to the Federal Financial Supervisory Authority.
Whistleblowers (reporting persons) make an important contribution to the detection and punishment of wrongdoing, particularly within the framework of financial supervision. The targeted and appropriate use of information from tips received by the Federal Financial Supervisory Authority (BaFin) is important in order to strengthen the potential gain in knowledge from the input of whistleblowers. With this in mind, it is appropriate to review existing processes on a regular basis. This review has revealed potential for optimization with regard to the existing processes, which should now be exploited. It is appropriate to inform whistleblowers regularly about the status of the processing of their submission, insofar as this is possible taking into account the special confidentiality obligations of BaFin. This will encourage whistleblowers and properly acknowledge their valuable contribution to uncovering wrongdoing. Whistleblowers are thus motivated to make further submissions or provide more detailed information.
In addition, in order to make the best possible use of the information resulting from whistleblowing, it is necessary to strengthen the targeted cooperation between BaFin and other authorities. To this end, appropriate regulations must be created with regard to data sharing and cooperation with other authorities.

On 29 June 2021, the Securities and Futures Commission (SFC) published its Circular to intermediaries – Notification to the SFC of suspected ramp and dump scams involving market manipulation in the shares of companies listed on the Stock Exchange of Hong Kong.
This circular serves to:

• encourage intermediaries to provide information or documents which may facilitate the SFC’s immediate assessment of the impact of potential market misconduct, in particular where a ramp and dump scam is suspected;
• remind intermediaries of their existing obligations under paragraph 12.5(f) of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct) to report market misconduct suspected to have been committed by their clients to the SFC in a timely manner; and
• provide intermediaries with guidance on red flags which may arouse the reasonable suspicion of intermediaries or their staff about suspected ramp and dump scams and warrant an assessment of whether the associated trading activities should be reported to the SFC under paragraph 12.5(f) of the Code of Conduct.

The SFC reiterates that it does not tolerate any form of market misconduct.  To protect investors and maintain the integrity of markets, combating ramp and dump scams and other types of market misconduct is a high priority for the SFC. All material issues and deficiencies identified on the part of intermediaries as well as their senior management in this regard will be investigated.

On 1 June 2021, the Securities and Futures Commission (SFC) issued a circular urging licensed corporations to review their business continuity plan and consider COVID-19 vaccination as a critical part of operational risk management.
In this connection, they should identify functions that are critical to their business operations and client interests and to encourage staff performing such critical functions to get vaccinated.
The SFC urges licensed corporations to:
(a) review their business continuity plan (BCP) and identify functions which are critical to their business operations and client interests and encourage staff performing such critical functions, for example client-facing and critical support staff, to get vaccinated.  Licensed corporations are also reminded to maintain proper documentation of any changes to their BCPs; and
(b) consider suitable arrangements for critical staff who have not yet been vaccinated or are unfit for vaccination due to medical conditions to undergo periodic COVID-19 testing.
As more people get vaccinated, this will help drive down infection rates and allow COVID-related restrictions to be lifted gradually, and eventually interrupt community transmission to the point that can return to a high degree of normalcy.

On 11 June 2021, the updated Securities and Futures Ordinance (Cap. 571) was published in the Official Gazette of Hong Kong.
The updates concern following aspects:

• Part III Exchange Companies, Clearing Houses, Exchange Controllers, Investor Compensation Companies and Automated Trading Services
• Part VIII Supervision and Investigations
• Part XIII Market Misconduct Tribunal
• Part XIV Offences Relating to Dealings in Securities and Futures Contracts, etc.
• Part XIVA Disclosure of Inside Information
• Part XV Disclosure of Interests
• Part XVII Repeals and Related Provisions
• Schedule 1 Interpretation and General Provisions
• Schedule 5 Regulated Activities
• Schedule 10 Savings, Transitional, Consequential and Related Provisions, etc.

On 11 June 2021, the updated Securities and Futures (Price Stabilizing) Rules (Cap. 571W) was published in the Official Gazette of Hong Kong.
The updates concern Part 1 Preliminary including :

• Interpretation,
• Designation as a financial services provider,
• Transactions that are specified OTC derivative transactions for purposes of clearing obligation,
• Transactions that are specified OTC derivative transactions for purposes of record keeping obligation.

On 11 June 2021, the updated Securities and Futures (OTC Derivative Transactions—Clearing and Record Keeping Obligations and Designation of Central Counterparties) Rules (Cap. 571AN) was published in the Official Gazette of Hong Kong.
The update concerns Part 2 Clearing Obligation:

• When clearing obligation arises
• Clearing obligation applies even if counterparty is, or transaction was entered into, outside Hong Kong
• Clearing obligation does not apply to transactions with exempt affiliate
• Clearing obligation does not apply to transactions recorded in exempt jurisdiction books
• Clearing obligation does not apply to transactions resulting from multilateral portfolio compression exercise
• Clearing obligation taken to have been complied with if transaction cleared under laws of designated jurisdiction.

On 11 June 2021, the Securities and Futures and Companies Legislation (Amendment) Ordinance 2021 was published in the Government Gazette of Hong Kong.
An Ordinance aims to amend the Securities and Futures Ordinance, the Companies Ordinance and other enactments:

• to facilitate the establishment and implementation of an uncertificated securities market regime in Hong Kong;
• to provide for a regulatory regime for persons providing securities registrar services;
• to refine the scope of certain regulated activities relating to over-the-counter derivative transactions.

Here are four publications published in the Official Gazette of Hong Kong on the Financial Market Infrastructure (FMI).

1. On 11 June 2021, the updated Securities and Futures Ordinance (Cap. 571) was published in the Official Gazette of Hong Kong.

The updates concern following aspects:

• Part III Exchange Companies, Clearing Houses, Exchange Controllers, Investor Compensation Companies and Automated Trading Services
• Part VIII Supervision and Investigations
• Part XIII Market Misconduct Tribunal
• Part XIV Offences Relating to Dealings in Securities and Futures Contracts, etc.
• Part XIVA Disclosure of Inside Information
• Part XV Disclosure of Interests
• Part XVII Repeals and Related Provisions
• Schedule 1 Interpretation and General Provisions
• Schedule 5 Regulated Activities
• Schedule 10 Savings, Transitional, Consequential and Related Provisions, etc.

2. On 11 June 2021, the updated Securities and Futures (Price Stabilizing) Rules (Cap. 571W) was published in the Official Gazette of Hong Kong.
The updates concern Part 1 Preliminary including :

• Interpretation,
• Designation as a financial services provider,
• Transactions that are specified OTC derivative transactions for purposes of clearing obligation,
• Transactions that are specified OTC derivative transactions for purposes of record keeping obligation.

3. On 11 June 2021, the updated Securities and Futures (OTC Derivative Transactions—Clearing and Record Keeping Obligations and Designation of Central Counterparties) Rules (Cap. 571AN) was published in the Official Gazette of Hong Kong.
The update concerns Part 2 Clearing Obligation:

• When clearing obligation arises
• Clearing obligation applies even if counterparty is, or transaction was entered into, outside Hong Kong
• Clearing obligation does not apply to transactions with exempt affiliate
• Clearing obligation does not apply to transactions recorded in exempt jurisdiction books
• Clearing obligation does not apply to transactions resulting from multilateral portfolio compression exercise
• Clearing obligation taken to have been complied with if transaction cleared under laws of designated jurisdiction.

4. On 11 June 2021, the Securities and Futures and Companies Legislation (Amendment) Ordinance 2021 was published in the Government Gazette of Hong Kong.
An Ordinance aims to amend the Securities and Futures Ordinance, the Companies Ordinance and other enactments:

• to facilitate the establishment and implementation of an uncertificated securities market regime in Hong Kong;
• to provide for a regulatory regime for persons providing securities registrar services;
• to refine the scope of certain regulated activities relating to over-the-counter derivative transactions.

On 18 June 2021, the Companies (Residential Addresses and Identification Numbers) Regulation was published in the Government Gazette of Hong Kong.
The main purposes of this Regulation are—
(a) to provide for the information to be contained in an application made for the purposes of section 49 (1) of the Companies Ordinance (Cap. 622) (Ordinance) to withhold a residential address or identification number from public inspection;
(b) to provide for the form of, and the documents to accompany, an application mentioned in subparagraph (a);
(c) to provide for the information to be contained in an application made for the purposes of section 51 (3) of the Ordinance for disclosure of a residential address or identification number withheld from public inspection under section 49 (1) of the Ordinance;
(d) to specify the persons to whom an address or identification number mentioned in subparagraph (c) may be disclosed, and to provide for the conditions in accordance with which the address or number may be disclosed to those persons;
(e) to provide for the information to be contained in an application made for the purposes of section 58 (3) of the Ordinance for disclosure of certain protected information;
(f) to provide for the form of, and the documents and fees to accompany, the applications mentioned in subparagraphs (c) and (e);
(g) to provide for the powers of the Registrar of Companies appointed under section 21 (1) of the Ordinance to require additional documents and information for the purposes of determining the applications mentioned in subparagraphs (a), (c) and (e);
(h) to specify the persons to whom the protected information mentioned in subparagraph (e) may be disclosed, and to provide for the conditions in in accordance with which the information may be disclosed to those persons; and
(i) to provide for an exemption from the fees mentioned in subparagraph (f) for certain persons.

On 30 June 2021, the Securities and Futures Commission (SFC) published its Annual Report 2020-21 setting out its priorities for maintaining Hong Kong’s status as a leading international financial centre and preserving the overall integrity and stability of the financial system.
Amidst the unprecedented challenges arising from COVID, the SFC has doubled down on its front-loaded regulatory approach to tackle corporate fraud and intermediary misconduct. It is also working with the Hong Kong Police to combat online scams such as “ramp and dump” schemes and raise public awareness about them.
The SFC also stepped up its monitoring of conduct and operational risks and carried out more frequent stress tests to assess licensed corporations’ financial resilience. In view of market conditions, the SFC waived its annual licensing fees for the 2021-22 financial year.

On 18 June 2021, the Companies Ordinance (Amendment of Schedule 11) Notice 2021 was published in the Government Gazette of Hong Kong.
This Notice amends Schedule 11 to the Companies Ordinance (Cap. 622) (Ordinance) to provide for the transitional arrangements on—
(a) the treatment of the correspondence address of the directors and reserve directors of certain companies and non-Hong Kong companies in the Companies Register on the commencement of Subdivision 2 of Division 7 of Part 2 (except section 54 (1) (a) (ii)) of the Ordinance; and
(b) the requirement for a company's register of directors to contain a correspondence address with respect to its directors and reserve directors, for delivering a notice under section 645 (4) of the Ordinance in respect of the correspondence address, and for containing the correspondence address in the company's annual return.

On 18 June 2021, the Companies (Non-Hong Kong Companies) (Amendment) Regulation 2021 was published in the Government Gazette of Hong Kong.
This Regulation amends sections 3 and 9 of the Companies (Non-Hong Kong Companies) Regulation (Cap. 622 sub. Leg. J) so that—
(a) an application for registration as a registered non-Hong Kong company must contain a correspondence address of each of the company's directors who is a natural person; and
(b) an annual return of a registered non-Hong Kong company—
(i) is not required to contain the usual residential address of a director who is a natural person; and
(ii) is not required to contain the full identity card or passport number of a director, company secretary or authorized representative who is a natural person.

On 25 June 2021, the revised Guidelines on Competence, Guidelines on Continuous Professional Training and Fit and Proper Guidelines was published in the Government Gazette of Hong Kong.
With these revised guidelines, the Securities and Futures Commission (SFC) updates the entry requirements for license applicants and the ongoing competency standards for corporations and individual practitioners.
The industry generally welcomed the proposals which included raising the minimum academic qualification requirements for individuals, broadening the scope of recognized academic qualifications, clarifying the management experience requirements for responsible officers (ROs) and enhancing the competence requirements for individuals advising on matters in relation to the Codes on Takeovers.
After considering the responses to the consultation, the SFC agreed to recognize post-graduate diplomas and certificates in designated fields and also clarified the management experience required of an RO applicant and the corporate finance experience of those who intend to advise on matters in relation to the Codes on Takeovers. The SFC will also include environmental, social and governance (ESG) as a relevant topic for continuous professional training purposes.

On 17 June 2021, the Securities and Futures Commission (SFC) and the Securities and Exchange Commission of Thailand (SEC) announced that the implementation of the Mutual Recognition of Funds scheme (MRF) has come into effect.
The SFC also published a Frequently Asked Questions on Thailand-Hong Kong Mutual Recognition of Funds and Hong Kong Feeder Fund Investing in Thai Master Fund.

On 29 June 2021, the Securities and Futures Commission (SFC) issued a circular to provide guidance to management companies of SFC-authorized unit trusts and mutual funds on enhanced disclosures for funds which incorporate environmental, social and governance (ESG) factors as a key investment focus (ESG funds).
The circular, which supersedes a previous version issued in 2019, includes a new requirement for ESG funds to conduct and disclose periodic assessments of how they incorporate ESG factors and also provides additional guidance for ESG funds with a climate-related focus.
A database of SFC-authorized ESG funds is available on the SFC website. To enhance transparency for these funds, their key features will also be listed in the database after the new circular takes effect.
The SFC will keep in view market developments and may provide further guidance or impose additional requirements for ESG funds where appropriate.

On 8 June 2021, the Securities and Futures Commission (SFC) inform reporting entities on the proposed updates to the Administration and Interface Development Guide (AIDG), which includes mandating new/ modified data fields, under the OTC derivatives reporting requirements.
The key proposed updates to the technical specifications for OTC derivatives reporting include:
(i)  mandating the supporting field value of “Proprietary rates” (which is currently reported on a voluntary basis) under the data fields “Floating Rate Index” and “Floating Rate Option”;
(ii) making available the data field “Global Unique Transaction Identifier” (Global UTI) and related data fields in anticipation of the global implementation of UTI;
(iii) mandating the reporting of product types under the data field “Special Terms”[1] for products specified in the Supplementary Reporting Instructions (SRI); and
(iv) enhancing the Equity templates to address market feedback and to cater to regulatory needs.  The proposed changes have made reference to international standards.

On 9 June 2021, the Securities and Futures and  Companies Legislation (Amendment) Ordinance 2021 was published in the Official Gazette of Hong Kong.
This Ordinance aims to facilitate the establishment and implementation of an uncertificated securities market regime in Hong Kong; to provide for a regulatory regime for persons providing securities registrar services; to refine the scope of certain regulated activities relating to over-the-counter derivative transactions; to make minor miscellaneous amendments; and to provide for related matters.

On 11 June 2021, the S.I. No. 281 of 2021 - European Union (Controls of Cash Entering or Leaving the Union) Regulations 2021 was published in the Irish Statute Book.
The Regulations provide that persons entering or leaving the European Union through the State and carrying cash with a value of €10,000 or more must make a declaration to the Revenue Commissioners and make the cash available for control. Failure to do so is an offence.
The Regulations further provide that in the case of unaccompanied cash with a value of €10,000 or more which is entering or leaving the European Union through the State, the sender, recipient or a representative thereof may be required to make a declaration to the Revenue Commissioners and make the cash available for control. Failure to do so is an offence.

On 1 June 2021, the Houses of the Oireachtas (Ireland's national parliament) initiated Employment Equality (Amendment) (Non-Disclosure Agreements) Bill 2021.
The Employment Equality Act 1998 is the primary law in Ireland regulating how employees are treated in the workplace and the rights that employers must guarantee for those that work for them. The provisions relevant to this proposal are the Part II prohibitions on workplace discrimination and sexual harassment. The Employment Equality (Non-Disclosure Agreements) (Amendment) Bill 2021 would insert a new section 14B into the original 1998 Act to restrict the use of non-disclosure agreements following such incidents of workplace sexual harassment or discrimination.
When a crime has been committed, a non-disclosure agreement must never be used to prevent accountability for that crime, or to cover up a public or private institution’s continued record of inaction following bullying or harassment in the workplace.
This bill would essentially prohibit non-disclosure agreements following incidents of workplace sexual harassment or discrimination in almost all circumstances. The only exception to this rule would be when the person who experienced the harassment or discrimination requests a non-disclosure agreement to protect their own confidentiality or a so-called ‘victim’s exception’ to a general prohibition rule.

On 10 June 2021, the Central Bank of Ireland published a Fitness & Probity Interview Guide (‘the Guide’). The purpose of the Guide is to assist Pre-Approval Controlled Function (PCF) applicants who have been called to attend an F&P interview as part of the assessment process. It will also assist regulated firms who are seeking to appoint PCF applicants where those applicants have been requested to attend an interview. It is a one stop shop for all the practical information which a firm and applicant may need on the PCF interview process.

On 24 June 2021, the Central Bank of Ireland (CBI)  issued the 31st Edition of the Central Bank UCITS Q&A document, which includes a new Q&A, ID 1099.
The new Q&A, ID 1099, confirms the Central Bank’s position in relation to a UCITS having a share class that makes distributions to charity. The Q&A confirms that this is permissible, subject to a number of requirements being met by the UCITS.

On 24 June, the Central Bank issued the 39th edition of the Central Bank AIFMD Q&A, which updates QAs ID 1021 and ID 1136 and includes two new Q&As, ID1143 and ID1144.QA ID 1021 has been updated generally and to clarify the extent to which an Irish entity can perform duties for non-EU AIFs pursuant to Article 36(1)(a) of the AIFMD. QA ID 1136 updates the types of AIF for which a Depositary of Assets other than Financial Instruments (DAoFI) can act.
New QA, ID 1143, outlines the circumstances in which a DAoFI can accept an appointment from a non-EU AIFs pursuant to Article 36(1)(a) of the AIFMD to perform the duties set out in Article 21(7)-(9) of the AIFMD.
QA ID 1144 confirms the Central Bank’s position in relation to AIFs having a share class that makes distributions to charity. The Q&A confirms that this is permissible, subject to a number of conditions being met by the AIF.

On 24 June 2021, the Central Bank of Ireland (CBI) published a feedback statement following the consultation on competent authority discretions in the Investment Firms Directive (IFD) and the Investment Firms Regulation (IFR) (CP135) which signals the Central Bank’s proposed approach to provisions in the IFD/IFR where the Central Bank can or must exercise it discretion.
This statement also confirms the Central Bank’s intention to revise the reporting requirements for investment firms set out in Section 8 of S.I. No. 604 of 2017 Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Investment Firms) Regulations 2017.
Additionally, this statement confirms that Alternative Investment Fund Managers and UCITS Management Companies with MiFID top-up permissions should continue to comply with the current prudential regime specified in their condition of authorization.

On 24 June 2021, the Central Bank of Ireland (CBI) updated the Introduction to MiFID Investment Firms and the Requirements and Guidance for MiFID firms.
IFR/IFD will see the introduction of new prudential requirements for certain MiFID investment firms that is more tailored to the risks associated with the range of activities undertaken by such firms.
It does this through the linking of business models of investment firms, and the specific risks they pose, with the prudential and governance requirements applicable. This introduction of more appropriate risk-sensitive prudential requirements will focus, not only on the risks the firm faces, but also the potential harm that a firm can pose to its clients and to the market.

On 16 June 2021, the FIU (UIF in italian) published the Anti-Money Laundering Notebook entitled "Cases of money laundering and terrorist financing" which collects the most relevant cases found in recent operational experience of the UIF.
The selected cases include both phenomena identified by the obliged subjects, as well as complex and articulated operations reconstructed by the FIU. Operational cases emerged through information exchanges with the Units of foreign intelligence are also included.
For each case, the links between the reports provided are shown, as well as the analyzes carried out by the UIF. Moreover, where possible, the hypothesis of illicit activity underlying the financial movements analyzed by the Unit are presented, in addition to the investigative and judicial outcomes.
Each case is also accompanied by the list of anomaly indicators and a graphic representation of the overall operations and of the correlations between the subjects involved.

On 24 June 2021, the provisions on the assessment procedure applicable to representatives of banks, financial intermediaries, electronic money institutions, payment institutions and depositor guarantee systems” were published on the Gazzetta Ufficiale n. 149.
These Provisions govern procedural and functional aspects of the assessment in terms of suitability on the basis of the provisions of the Italian Ministerial Decree n. 169/2021.
The Provisions will enter into effect on 1 July 2021 and will apply to appointments made after 1 July 2021, and to appointments realized after the date of entry into force of the Ministerial Decree (30 December 2020), but limited to events after 1 July 2021 and limited to the cases provided for by paragraphs 3, 4, 5 and 6 of Section II (i.e. procedure for the assessment of the suitability of the alternate members of the control body, procedures applicable to the coverage of an additional non-executive position, as well as applicable to occurring events and renewals, and suspension of offices).
It should be noted that the rules cancelled following the entry into force of this disposition, are still applicable to appointments made before 1 July 2021.
Regarding procedures for which the report of the competent body is sent to Banca d'Italia as of the day following the publication date of these provisions, the deadline within which Banca d'Italia establishes the forfeiture of the office due to lack of requirements by corporate officers is extended by 60 to 120 days.

On 3 June 2021, with Notice no. 19364, Borsa Italiana published changes to the EuroTLX Market Regulations relating to the cancellation procedures applicable to the trading of financial instruments once they reach maturity.
With reference to securitized derivative financial instruments, for which the recognition of the settlement amount at maturity is carried out in advance with respect to the natural cancellation from the negotiations, different cancellation procedures are introduced depending on the instrument in question.

On 3 June 2021, Borsa Italiana, with Notice no. 19366, published amendments to the Market Regulations, concerning the following aspects.

• in rel to the ETFplus market:
  (i) the introduction of a minimum tick for the agreed transactions; and
  (ii) the introduction of the possibility for the applicant to select the subjects authorized to reply on the basis of objective criteria defined by Borsa Italiana in case of automatic RFQ, launched for orders of relevant size
• in relation the rules on the participation of operators in the markets, with specific with regard to the conditions for entrusting the management of technological systems and the admission procedure to negotiations, changes were introduced to remove references to the London Stock Group Exchange.

With this change, the connection with the market will be offered by y Borsa Italiana and by a company accredited by Borsa Italiana.

On 4 June 2021, the Commission de Surveillance du secteur financier (CSSF) updated FAQ regarding the fight against money laundering and terrorist financing (AML/CFT) for individuals/investors.
The question concern the  latest developments in relation to international financial sanctions. The CSSF clarified the requirement under latest Law of 19 December 2020 on the implementation of restrictive measures in financial matters, which entered into force on 27 December 2020, provides new insights on this topic.
The natural and legal persons that are required to implement the restrictive measures provided for in this law shall inform the Minister responsible for Finance of the enforcement of each restrictive measure taken in respect of a State, natural or legal person, entity or group designated in accordance with the above law and the regulatory implementing texts, including attempted transactions.
The CSSF is, in particular, responsible for the supervision of the professionals falling within its competence for the purposes of the implementation of this law.

On 30 June 2021, the Law of 23 September 2020 on measures concerning the holding of meetings in companies and other legal persons was published in the Official Journal.
The Law extends exceptional measures concerning the holding of meetings in companies and other legal persons until 31 December 2021.

On 2 June 2021, the Commission de Surveillance du secteur financier (CSSF) updated the form for the communication by a non-financial counterparty below the clearing threshold.
This notification has to be submitted by a non-financial counterparty that participates to one of the following transactions:                            
a) OTC credit derivative contracts;
b) OTC equity derivative contracts;
c) OTC foreign exchange derivative contracts;
d) OTC interest rate derivative contracts; or
e) OTC commodity derivative contracts and other OTC derivative contracts not defined under points (a) to (d).            

On 11 June 2021, the Commission de Surveillance du secteur financier (CSSF) published press release 21/14 on the implementation of the FRANDT commercial terms to provide clearing services.
This press release relates to the Public Statement on the “Implementation of the FRANDT commercial terms to provide clearing services”, published by ESMA on 11 June 2021, where ESMA indicates that there is a time gap between 18 June 2021 (when the FRANDT framework under level 1 regulation starts to apply) and the date of entry into force of the Delegated Regulation specifying the criteria to comply with FRANDT requirements.
Based on the considerations described in the ESMA statement, and taking into account the fact that the entities concerned face challenges in finalising the implementation of the FRANDT, the CSSF decided that it will not prioritise its supervisory actions towards clearing members and clients expected to provide clearing services in accordance with FRANDT commercial terms before the date the Delegated Regulation will apply.

On 4 June 2021, the Commission de Surveillance du secteur financier (CSSF) updated its IFM EMIR questionnaire.
In case of changes in either the EMIR classification or use of derivative contracts or organizational model, this IFM Questionnaire - EMIR shall be updated and resubmitted to the CSSF within undue delay.       

On 4 June 2021, the Commission de Surveillance du secteur financier (CSSF) updated the registration form for an alternative investment fund manager (AIFM).
This AIFM registration form aims at providing the CSSF with information about compliance with article 3 of the AIFM Law as well as any applicable laws, rules and regulations relating to the Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010.

On 8 June 2021, the Commission de Surveillance du secteur financier (CSSF) published a communication on the data collection on commercial real estate for investment fund managers.
The CSSF will implement a recurrent data collection exercise focusing on the financing of the commercial real estate (CRE) sector by investment funds. This data collection takes place on a bi-annual basis.
For the purpose of this first iteration, answers are expected by 30 September on the basis of CRE stock data ending on 31 December 2020 and of CRE investment data over the second half of 2020. As of 2022, the data collection will be due twice a year, on 31 March and 30 September of each calendar year.
The request for data collection is addressed to Investment Fund Managers (IFM) who manage funds with an exposure to the real estate market. The CSSF will consider the need to enlarge the scope in the future.
The CSSF will contact the concerned IFMs directly by requesting them to provide the relevant data by 30 September 2021. These IFMs will be invited to complete the questionnaire over eDesk.

BACKGROUND
In 2010 and 2013, the Commission de Surveillance du secteur financier (CSSF) published Frequently Asked Questions (“FAQs”) aiming at highlighting some of the key aspects of the laws and regulations governing UCITS and the AIFMD regulation from a Luxembourg perspective.
The FAQs are therefore primarily addressed to management companies managing undertakings of collective investment and undertakings for collective investment in transferable securities (“UCITS”) as well as managers of alternative investment funds (AIFMs) and alternative investment funds (AIFs) that are established in Luxembourg.
These documents are 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.

WHAT'S NEW?
On 10 June 2021, the Commission de Surveillance du secteur financier (CSSF) published its clarifications on the application of MiFID to Luxembourg Investment Fund Managers (IFMs).
The clarifications were added into:

• CSSF FAQ concerning the Luxembourg Law of 17 December 2010 relating to undertakings for collective investment: section 10;
• CSSF FAQ concerning the Luxembourg Law of 12 July 2013 on alternative investment fund managers: section 26.

This CSSF FAQ aims at clarifying under what circumstances and to what extent MiFID applies to IFMs, their third-party delegates and their investment advisers.
In both Q&As, the following questions have been answered concerning the application of MiFID to Luxembourg IFMs:

1. Do IFMs and UCIs qualify as clients under MiFID?
2. How should the exemption from MiFID for UCIs and their IFM foreseen under article 2(1) (i) MiFID be understood?
3. When does the service rendered by third parties to IFMs fall within the scope of MiFID?
4. Do MiFID rules apply to the performance of functions included in the collective portfolio management by another delegate IFM?
5. Do MiFID rules apply to the marketing of funds?
6. Do MiFID rules apply when an IFM delegates the marketing to another IFM?
7. Which MiFID investment services may be considered as marketing of funds?
8. Is investment advice included in the activity of collective portfolio management?
9. Do MiFID rules apply to investment advisors when they provide investment advice to an IFM?
10. Are IFMs authorised to provide investment advice to another IFM?
11. Which MiFID exemptions may apply to third parties providing investment services to IFM?

WHAT'S NEXT?
IFMs are expected to comply with the CSSF FAQ as soon as possible and by 31 December 2021 at the latest, considering the best interests of investors. Consequently, IFMs should as soon as possible analyze their organization model in order to assess:

• the need for an authorization to provide services under UCI Law and AIF Law;
• appropriate compliance, by any third country entity acting as their delegate or undertaking services on their behalf, with the third country regime as foreseen under CSSF Circular 20/743.

On 16 June 2021, the Commission de Surveillance du secteur financier (CSSF) updated the Guidelines on the UCITS risk reporting (URR).
The updated version concerns the reporting obligation that applies to all Luxembourg domiciled UCITS authorized by the CSSF as at 30 June 2021. UCITS liquidated during the reference period are out of scope.
While management companies and investment companies know the UCITS they manage and that are covered by the reporting scope, the CSSF asks them nevertheless to critically verify, prior to the submission of the report, that they cover all UCITS authorized as at 30 June 2021 by consulting the CSSF’s list. This list will only be available as from 15 July 2021.
The frequency of the UCITS risk reporting is semi-annual, this reporting exercise covering the half-year starting 1 January 2021 and ending 30 June 2021. For completeness purposes, the next report is scheduled for the reference date 31 December 2021 covering the semester from 1 July 2021 to 31 December 2021.
UCITS shall submit the UCITS risk reporting as at 30 June 2021 to the CSSF by 16 August 2021 at the latest.

On 21 June 2021, the Commission de Surveillance du secteur financier (CSSF) published FAQ regarding the AML/CFT Market Entry Form (Funds and IFMs) which concerns following questions:
1. When should a Market Entry Form be completed?
2. When should an Initial Market Entry be submitted?
3. Who can initiate, contribute and/or submit a Market Entry Form?
4. How does the delegation work?
5. For existing Funds/IFMs, should the managers/directors submit a new declaration of honour, CV, criminal record and copy of their ID?
6. Should a new compliance officer (i.e. “RC”) be appointed, and should this person not be part of the board of managers/directors, which documents must be provided to the CSSF?
7. For existing Funds/IFMs, should the RR and RC submit new identification forms RR and RC?
8. For the documents which must be signed, which type of signature is accepted by the CSSF?
9. The eDesk Market Entry form indicates that there are missing documents in the application. What does that mean and what should be done?
10. The indirect shareholding structure of the IFM includes a private equity fund. What does this implicate?
11. If there are multiple requests for the approval of more than one new sub-fund, can an AML/CFT Market Entry Form be submitted for each new sub-fund request?
12. For portfolio manager(s) and investment advisor(s) not regulated by the CSSF, what does “known to the CSSF” mean?
13. The indirect shareholding of the IFM includes a multitude of indirect shareholders (each below 10%) representing less than 25% of this indirect shareholding. What should be done?

On 22 June 2021, the Commission de Surveillance du secteur financier (CSSF) informed market participants about the publication of the CSSF Feedback Report – ESMA Common Supervisory Action on UCITS Liquidity Risk Management which presents the main observations made by the CSSF in the context of the CSA together with the related recommendations for improvements in view of the applicable regulatory requirements.
The CSSF is currently engaging on a bilateral basis with IFM in relation to the observations made in the context of the CSA exercise, thereby asking these IFM to implement the necessary corrective measures for the shortcomings observed.
In addition, the CSSF asks all UCITS managers to conduct, by the end of 2021, a comprehensive assessment with regard to the compliance of their liquidity risk management set-ups in relation to the observations of ESMA and of the CSSF and to take, if applicable, the necessary corrective measures.

On 29 June 2021, the Commission de Surveillance du secteur financier (CSSF) published FAQ on the submission of closing documents and financial information by managers. It contains the technical requirements for the submission of documents to the CSSF, the list of documents to submit, the procedures for the submission, the format and the deadlines to respect.

On 30 June 2021, the Commission de Surveillance du secteur financier (CSSF) published update of the description of the feedback files and controls on the reporting requirements according to Annex IV to Commission Delegated Regulation (EU) No 231/2013 supplementing Directive 2011/61/EU.
The CSSF informs that following the implementation of new validation rules on GFIA and FIA reporting files, the document which describes the different return files that senders of GFIA reports receive and which also describes the checks that the CSSF performs on the reporting files, has been updated on its website (version 5.07, 30 June 2021).

On 15 June 2021, the Commission de Surveillance du secteur financier (CSSF) published communication on the adaptation of the FAQ on the statuses of PFS with respect to the PFS status relating to the granting of loans to the public (Article 28-4 of the Law of 5 April 1993 on the financial sector (LFS)).
Article 28-4 of the LFS is aimed at professionals whose activity consists in granting, for their own account, loans to the public. Given the increasing number of requests to take a stance regarding the interpretation of the notion of “public” and the question of when the CSSF considers that a lending activity is directed towards the public, the CSSF updated the FAQ (Part II, Question 52) in order to provide clarification and legal certainty.
In the absence of a legal definition of the term “public” in the LFS, the CSSF considers that a lending activity is not directed towards the public where:

• loans are granted to a limited circle of previously determined persons; or
• the nominal value of a loan amounts to EUR 3,000,000 at least (or the equivalent amount in another currency) and the loans are granted exclusively to professionals such as defined in Article L. 010-1. 2) of the Consumer Code.

In all other cases, the CSSF will carry out an assessment on a case-by-case basis.

On 18 June 2021, the Federal Council brought the Federal Act on the Adaptation of Federal Law to Developments in Distributed Electronic Register Technology fully into force as of 1 August 2021. The associated blanket ordinance will also enter into force on the same day. This will allow for innovative DLT trading facilities and increase legal certainty in the event of bankruptcy.

Version française

Le 18 juin 2021, le Conseil fédéral a mis en vigueur le reste de la loi fédérale sur l'adaptation du droit fédéral aux développements de la technologie des registres électroniques distribués (TRD). Cette loi sera applicable dans son intégralité à partir du 1er août 2021. L'ordonnance qui s'y rapporte prendra également effet à cette date. Ces deux actes permettent l'utilisation de systèmes de négociation innovants fondés sur la TRD et augmentent la sécurité juridique en cas de faillite.

On 18 June 2021, the Federal Data Protection Officer issued guidance governing the transfer of data abroad. A flowchart clarifies different situations of transfer of data and its compliance with Art 6 of the Federal Act on Data Protection. It outlines cases where sufficient guarantee for transfer is available and those where additional assessments are necessary. It annexes a questionnaire that can be submitted to data processors with potential US-nexus.

Version française

Le 18 juin 2021, le Préposé fédéral à la protection des données a publié un guide sur le transfert de données à l'étranger. Un organigramme clarifie les différentes situations de transfert de données et leur conformité avec l'art 6 de la loi fédérale sur la protection des données. Il décrit les cas dans lesquels une garantie suffisante pour le transfert est disponible et ceux dans lesquels des évaluations supplémentaires sont nécessaires. Un questionnaire annexé peut être soumis aux responsables du traitement des données ayant un potentiel US-nexus.

On 18 June 2021, the Federal Council published report on the remuneration of the highest level of management in companies and institutions of the Confederation in 2020.
In this report, the Federal Council presents the remuneration and other contractual conditions agreed with the top executives and members of the management bodies of companies and institutions close to the Confederation.

Version française

Le 18 juin 2021, le Conseil fédéral a publié le rapport sur les rémunérations des cadres des entreprises et des institutions de la Confédération en 2020.
Dans ce rapport, le Conseil fédéral présente les rémunérations et autres conditions contractuelles convenues avec les cadres et les membres des organes de direction des entreprises et des institutions proches de la Confédération.

On 9 June 2021, the Council of States adopted the draft law on the limited qualified investor fund (L-QIF) by 41 votes to zero (with one abstention). This is an outstanding result for the draft, a huge success for the Asset Management Association Switzerland, and an important signal for both our industry and the Swiss financial sector as a whole.
The L-QIF is intended to enhance Switzerland’s competitiveness as a location for funds and asset management by sparking a renewed increase in the number of collective investment schemes launched in Switzerland.

Version française

Le 9 juin 2021, le  Conseil des Etats a adopté le projet de loi sur le fonds d'investissement qualifié limité (L-QIF) par 41 voix contre zéro (avec une abstention). Il s'agit d'un résultat exceptionnel pour le projet, d'un grand succès pour l'Association suisse de gestion d'actifs et d'un signal important pour notre industrie et le secteur financier suisse dans son ensemble.
Le L-QIF a pour but de renforcer la compétitivité de la Suisse en tant que lieu d'implantation des fonds et de la gestion d'actifs en suscitant une nouvelle augmentation du nombre de placements collectifs de capitaux lancés en Suisse.

On 23 June 2021, the Federal Council adopted the 2030 Sustainable Development Strategy and an Action Plan for the period 2021–2023. The strategy sets priorities for the implementation of the 2030 Agenda for Sustainable Development.

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Le 23 juin 2021, le Conseil fédéral a adopté la Stratégie 2030 pour le développement durable et un plan d'action pour la période 2021-2023. La stratégie fixe des priorités pour la mise en œuvre de l'Agenda 2030 pour le développement durable.

On 17 June 2021, the Asset Management Association Switzerland (AMAS) published revised guidelines following the implementation of FinSA/FinIA. The revised guidelines have not yet been recognized by FINMA as minimum standard (FINMA’s recognition is awaited for next autumn).
The industry has entered the final phase of implementing the FinSA and FinIA. The transition periods specified in the FinIA for existing licensees expired at the end of 2020. The FinSA, meanwhile, gives financial service providers until the end of 2021 to implement its new rules. The transitional provisions additionally specify deadlines for phasing out certain provisions of the old CISA. These also expire on 31 December 2021.
As part of AMAS ongoing effort to finalize the implementation of the FinSA and FinIA, the following AMAS (former “SFAMA”) guidelines have been revised: the Code of Conduct, the Guidelines for real estate funds, and the technical guidelines (Guidelines for money market funds, Guidelines on the valuation of assets and the handling of valuation errors, Guidelines on the calculation and publication of performance data, Guidelines on the calculation and disclosure of the TER). The provisions of the old Transparency Guidelines were also revised and integrated into the revised Code of Conduct. The Distribution Guidelines of 22 May 2014 and the KIID Guidelines of 20 January 2012 will cease to apply as of 31 December 2021.

Version française

Le 17 juin 2021, l'Asset Management Association Switzerland (AMAS) a publié des directives révisées suite à la mise en œuvre de FinSA/FinIA. Les directives révisées n'ont pas encore été reconnues par la FINMA comme norme minimale (la reconnaissance de la FINMA est attendue pour l'automne prochain).
L'industrie est entrée dans la phase finale de mise en œuvre de la FinSA et de la FinIA. Les périodes de transition spécifiées dans la FinIA pour les titulaires de licence existants ont expiré à la fin de 2020. La FinSA, quant à elle, donne aux prestataires de services financiers jusqu'à la fin de 2021 pour mettre en œuvre ses nouvelles règles. Les dispositions transitoires précisent en outre des délais pour l'élimination progressive de certaines dispositions de l'ancienne LPCC. Celles-ci expirent également le 31 décembre 2021.
Dans le cadre des efforts continus de l'AMAS pour finaliser la mise en œuvre de la FinSA et de la FinIA, les directives suivantes de l'AMAS (anciennement " SFAMA ") ont été révisées : le Code de conduite, les Directives pour les fonds immobiliers, et les directives techniques (Directives pour les fonds du marché monétaire, Directives sur l'évaluation des actifs et le traitement des erreurs d'évaluation, Directives sur le calcul et la publication des données de performance, Directives sur le calcul et la publication du TER). Les dispositions des anciennes lignes directrices sur la transparence ont également été révisées et intégrées dans le code de conduite révisé. Les Directives de distribution du 22 mai 2014 et les Directives KIID du 20 janvier 2012 cesseront de s'appliquer à compter du 31 décembre 2021

On 11 June 2021, the Netherlands published Decree of June 11, 2021 to amend the BES Money Laundering and Terrorist Financing (Prevention) Decree in connection with the further elaboration of the concept of beneficial owner, the merging of categories for simple client screening and further rules with regard to cash transports.

On 28 June 2021, De Nederlandsche Bank (DNB) published comparative study on governance in systems based on distributed ledger technology (DLT).
The (experimental) use of DLT is growing, also in the financial sector. DLT systems themselves advocate the fact that they use (consensus) algorithms and cryptography to create a leaderless system (horizontal). How is it possible to ensure that decisions in these DLT systems are in the interest of all stakeholders and the public interest, including supervisory authorities? Given the popularity of the Bitcoin and Ethereum blockchains, for example, it is not inconceivable that a part of the FMI will be based on a public DLT system in the future. It is therefore important to gain a better understanding of the governance of such DLT systems, and what the risks are for FIs when using DLT. This paper compares the governance of financial institutions (FIs) and financial market infrastructures (FMIs) on the one hand with the governance of systems based on distributed ledger technology (DLT systems), on the other, to discover how they differ, and where potential risks and benefits lie for their future use, also in the financial markets. We answer two questions: i) What are the differences in governance between traditional FIs, FMIs and DLT systems? and ii) What are the consequences of decentralized governance of DLT systems for supervisory authorities?

On 24 June 2021, the De Nederlandsche Bank (DNB) announced that the rise of BigTechs requires adjustments in financial supervision.
The growing role of BigTechs such as Google, Amazon, Apple and Facebook in the financial sector requires special attention from regulators such as De Nederlandsche Bank (DNB). For example, the regulations must be adapted to new risks, there must be more European supervision with more cooperation between various supervisors, and financial institutions must be seriously challenged with regard to the sustainability of their revenue models.  

On 29 June 2021, the Ministry of Economic Affairs and Digital Transformation (MINECO) informed that the Council of Ministers has approved a Royal Decree that transposes Directive 2018/958 on the proportionality test that must be applied before adopting new regulated professions or modifying existing ones.
The Royal Decree details the list of issues that must be taken into account when evaluating the requirements to regulate a profession in order to ensure that the measures adopted are proportionate, necessary and non-discriminatory for the exercise of said profession.
Although current Spanish regulations already include the obligation to carry out a prior analysis of the need, proportionality and non-discrimination for regulated professions, the Royal Decree includes as a novelty that this analysis must be done following the approved framework established by the European Union, which guarantees that the same criteria are taken into account in all countries.

On 25 June 2021, the Ministry of Economic Affairs and Digital Transformation (MINECO) launched the public hearing on the Draft Law XX / 2021 on covered bonds, which transposes Directive (EU) 2019/2162 of the European Parliament and of the Council of 27 November 2019 on the issue of covered bonds and covered bond public supervision and amending Directives 2009/65/EC and 2014/59/EU.
The Directive establishes a series of requirements to guarantee the transparency and quality of the assets that are part of the coverage set. Among these requirements, it is required that these assets continue to be of high quality and a control body is appointed for the entire coverage, which will carry out permanent monitoring. Likewise, for the mortgage loans that are part of the coverage set, entities must update their appraisal every six months.
Additionally, other obligations are included to provide these products with greater resistance against possible solvency or liquidity crises, increasing the guarantees for investors. To this end, entities must permanently maintain a liquidity cushion to meet interest payments and amortizations of the covered bond issues.
The immunization of the loans of the coverage pool is also reinforced against situations of resolution or liquidation of the entity, through the segregation of the coverage pool and its assignment to a specific issuance program, the maintenance of the bankruptcy privilege and the individualization of a controlled registration of the loans that are part of the coverage set, which will allow them to be managed as separate assets in the event of bankruptcy or resolution. The Bank of Spain is appointed as supervisor of the obligations established by the Directive.
The modification of the regulatory framework of covered bonds will improve the credit quality of these products, which will result in an improvement in the financing conditions of the entities that may be transferred to the loan conditions. In addition, it will favor the liquidity of the European safe asset market, which will boost the capital market as a source of financing for the economy.

On 25 June 2021, the Ministry of Economic Affairs and Digital Transformation (MINECO) launched a public hearing on the Draft Law XX / 2021 and Draft Royal Decree XX / 2021 in relation to the transposition of Directive (EU) 2019/1160 of the European Parliament and of the Council of June 20, 2019, amending Directives 2009/65 / EC (UCITS) and 2011/61 / EU (AIFMD) with regard to the cross-border distribution of undertakings for collective investment.
The Directive deepens the Capital Market Union, eliminating national barriers to the concurrence of funds, with the aim of achieving a more efficient European market, with the same protection standards for all clients in the European Union.
To this end, the regulations coordinate the conditions of fund managers operating in the European Union; facilitates the marketing of harmonized investment funds (UCITS) to investors from other states; allows managers to carry out marketing activities prior to the constitution of the fund; and it clarifies the conditions for the termination of the marketing of these funds in the destination State, with special attention to the protection of the investors of the fund that is discontinued.
The incorporation of the Directive into Spanish legal system will make it easier for Spanish funds to attract clients in other EU countries without the need to have a permanent establishment in the destination country, and it will be easier for Spanish investors to participate in funds from other EU countries.

On 7 June 2021, the Comicion Nacional del Mercado del valores (CNMV) announced the adoption of guidelines on certain aspects of the requirements of the MiFID II compliance function.
Each competent authority has a period of two months from the publication of the translated ESMA Guidelines to confirm its intention to comply or not. Its objectives are to establish consistent, efficient and effective supervisory practices within the European Union, ensuring the common, uniform and consistent application of certain aspects of the MiFID II compliance function relating to the requirements referred to in paragraph 2.
In this regard, the CNMV has notified ESMA of its intention to comply with the guidelines. Therefore, the CNMV is going to take these Guidelines into account in its authorization and supervisory tasks.

BACKGROUND

The recent Securities Market and Investment Services Act, repeals the revised text of the Securities Market Act, approved by Royal Legislative Decree 4/2015 of 23 October and aims to technically improve, modernise and adapt the legal regime of the Spanish securities markets. 

The draft law systematises and reorganises the current regulations in order to ensure clarity and simplicity in the regulation of the capital markets. By synthesising the content of the law, the appropriate distribution between law and royal decree is ensured and the development of the basic framework is entrusted to the regulations, which makes it necessary to restructure the current regulatory framework.

The legislation is updated to take into account the latest developments and progress that have taken place in the Spanish capital markets from both the regulatory and technological points of view, notably taking into account the elimination of the obligation for central securities depositories to have an information system for the supervision of trading, clearing, settlement and registration of negotiable securities.

The aim is also to reduce the regulatory burden on the market infrastructures and to foster their competitiveness by bringing the applicable regulations into line with those of the other Member States.

WHAT'S NEW?

The purpose of this Royal Decree is to implement the Securities Market and Investment Services Law with regard to financial instruments, the representation of negotiable securities by means of book entries, the admission of securities to trading on regulated markets, public offers for sale or subscription and the prospectus required for this purpose, trading centres, the clearing, settlement and registration of negotiable securities, the legal regime for central counterparties and central securities depositories, and the regime for providers of data supply services.

The new feature lays in the introduction of the following financial instruments in the Law: 

• instruments issued using distributed ledger technology
• crypto-assets
• European venture capital funds,
• European social entrepreneurship funds, and
• European long-term investment funds.

The preliminary draft incorporates the obligations and operation of regulated markets, multilateral trading systems and organized contracting systems that were regulated separately in Royal Decree 1464/2018 of 21 December on the Securities Market Law.

The draft eliminates the information system for the supervision of the negotiation, clearing, settlement and registration of securities (known as post trade interface ). Moreover, the royal decree details the regime applicable to the accounting record of negotiable securities admitted to trading in trading centers and those not admitted in the centers.

Finally, the CNMV is assigned the functions to provide the service of coding financial instruments with the ISIN code , or to designate the entity in charge of providing said service, in its role as the National Codification Agency as the only competent entity in Spain for these purposes.

The consultation on the Draft Law of the Securities Market and Investment Services ended on 25 May 2021.

On 2 June 2021, the S.I. 2021 No. 637 - The Proceeds of Crime Act 2002 (Investigations in different parts of the United Kingdom) (Amendment) Order 2021 was published in the UK legislation.
The 2002 Act was amended by the Criminal Finances Act 2017 (c. 22) (the “2017 Act”) in three relevant respects:
(1) The power to make production orders and issue search and seizure warrants in Part 8 of the 2002 Act was extended to two new types of investigation. These are ‘detained property investigations’ and ‘frozen funds investigations’. These investigations relate to new powers to forfeit, respectively, various listed types of tangible property and funds in bank accounts.
(2) The power to make disclosure orders under Part 8 of the 2002 Act was extended to money laundering investigations.
(3) A power to extend moratorium periods in relation to money laundering investigations was inserted.
This Order amends the Proceeds of Crime Act 2002 (Investigations in different parts of the United Kingdom) Order 2003 in connection with the commencement of these provisions for Northern Ireland.

On 29 June 2021, the Financial Conduct Authority (FCA) published a letter on action needed in response to common control failings identified in anti-money laundering frameworks (dated 21 May 2021).
Although the FCA observed examples of effective control frameworks and good practice, the FCA identified, across some firms, several common weaknesses in key areas of firms’ financial crime systems and control frameworks. These areas include:

• Governance and Oversight
• Risk Assessments
• Due Diligence
• Transaction Monitoring
• Suspicious Activity Reporting

Firms do not need to contact FCA to respond to this letter. However, firms and their senior management should carefully consider its contents and take the necessary steps to gain assurance that the firm’s financial crime systems and controls are commensurate with the risk profile of the firm and meet the requirements of the MLRs.
The FCA expects firm to complete a gap analysis against each of the common weaknesses that the FCA outlined. Firms should take prompt and reasonable steps to close any gaps identified. The FCA expects the senior manager holding the financial crime function to have sufficient seniority to be able to carry it out effectively and to ensure that the gap analysis is promptly completed and its findings shared internally and acted upon as appropriate.
In future engagement with firms, the FCA asked firms to demonstrate the steps that they have taken. Where the FCA assesses firms’ actions in response to this letter to be inadequate, the FCA will consider appropriate regulatory intervention to manage the financial crime risk posed.

On 3 June 2021, the Financial Conduct Authority (FCA) informed that Temporary Registration Regime (TPR) was extended for crypto-asset businesses from 9 July 2021 to 31 March 2022.
The extended date allows crypto-asset firms to continue to carry on business while the FCA continues with its robust assessment.

On 7 June 2021, the Bank of England (BoE) published a Discussion Paper which aims to broaden the debate around new forms of digital money and seek views on the Bank’s emerging thoughts on the subject.
The Discussion Paper considers the following issues:

• The role of money in the economy
• Fundamental questions across a range of public policy objectives
• An illustrative scenario for the demand for new forms of digital money modelled by Bank staff
• The implications for macroeconomic stability
• The regulatory environment

The Bank therefore has identified five core principles from the responses which will guide its future exploration of CBDC. These include:

1. Financial inclusion should be a prominent consideration in the design of any CBDC.
2. A competitive CBDC ecosystem with a diverse set of participants will support innovation and offer the best chance to deliver the benefits of CBDC.
3. In assessing the case for CBDC, the Bank should assess whether non-CBDC payment innovations could deliver the same benefits.
4. A CBDC should seek to protect users’ privacy.
5. While CBDC should “do no harm” to the Bank’s ability to meet monetary and financial stability, opportunities to meet our policy objectives more effectively should also be considered in CBDC exploration.

On 17 June 2021, the Financial Conduct Authority (FCA) published the fourth consumer research publication on cryptoassets ownership.
The consumer research shows that as holding cryptoassets has become more common attitudes to them have changed. 38% of crypto users regard them as a gamble (down from 47% last year), while increasing numbers see them as either a complement or alternative to mainstream investments.  
By contrast, the level of overall understanding of cryptocurrencies is declining, suggesting that some people who have heard of crypto may not fully understand, with only 71% correctly identified the definition of cryptocurrency from a list of statements.
The research is the FCA’s fourth consumer research publication on cryptoassets ownership. It is part of the FCA’s strategy to develop its thinking on the potential harms and benefits to consumers from cryptoassets and help better understand consumers’ attitudes and patterns of use.
During that period the FCA issued further consumer warnings, stating that investing in cryptoassets is high risk and that investors should be prepared to lose all their money.
The FCA will continue working closely with HM Treasury and other regulators, including through the UK Cryptoasset Taskforce. 

On 30 June 2021, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) published Policy Statement 14/21 which provides feedback to responses to Consultation Paper (CP) 6/21 ‘Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251’. It also contains the PRA’s and FCA’s final policy, in the form of amendments to BTS 2016/2251.
This PS is relevant to PRA-authorised firms that are financial counterparties for the purposes of Article 2 of the European Market Infrastructure Regulation (EMIR). In addition, this PS is relevant to all FCA solo-regulated entities and non-financial counterparties in scope of the margin requirements under EMIR.
Where the final rules differ from the draft in the CP in a way which is, in the opinion of the PRA, significant, the Financial Services and Markets Act 2000 (FSMA) requires the PRA to publish:
(a) details of the difference together with a cost benefit analysis; and
(b) a statement setting out in the PRA’s opinion whether or not the impact on mutuals of the final rule is significantly different to the impact that the draft rule would have had on mutuals, or the impact that the final rule will have on other PRA-authorised firms.
In response to two comments, the PRA and FCA have made a change to the transitional provision to extend the eligibility of European Economic Area (EEA) Undertakings for the Collective Investment in Transferable Securities (UCITS) as eligible collateral.
PRA and FCA anticipates that the changes will improve legal certainty of participants in the UK derivatives markets. The extension of the transitional provision will provide certainty to market participants in the medium term, while enabling the PRA and FCA to consider the issue more fully, and consult as necessary, on any longer-term proposals. The impact is not anticipated to be different for mutuals.

On 25 June 2021, the Bank of England (BoE) announced its supervisory action over Euroclear UK and Ireland September 2020 operational settlement outage.
The outage was caused by an issue with messaging software which resulted in a discrepancy within the settlement system. Settlement was immediately and automatically halted whilst investigations were undertaken.
The Bank of England has fully reviewed the incident. In light of the incident’s serious and disruptive nature, and in recognising the importance of ensuring implementation of these remedial actions, the Bank has issued a direction under section 191 of the Banking Act 2009 requiring EUI to implement the recommendations of the independent reviewer. The Bank is also using its powers under section 166 of the Financial Services and Markets Act 2000 to require EUI to appoint a skilled person to assess the implementation of the recommendations.
The skilled person will provide a final report to the Bank in the first half 2022 to provide assurance that the outcomes required by the recommendations have been met.

On 22 June 2021, the UK Government published outcome of its consultation on Regulatory Framework for Approval of Financial Promotions.
The government agrees with the majority view that a gateway should be introduced for the approval of financial promotions of unauthorized persons. Under this gateway the ability of an authorized firm to assess a financial promotion will be specifically assessed against the FCA’s objectives. The government considers this approach will achieve the desired objective of strengthening the FCA’s supervision of firms approving the promotions of unauthorized persons whilst maintaining the existing distinction between regulated activities and financial promotions as set out in FSMA.
Process for firms:

1. Requirement imposed on new and existing authorized firms not to approve financial promotions.
2. New and existing authorized firms that wish to approve financial promotions apply to vary or cancel requirement.
3. FCA determines, accepts or refuses applications.

On 25 June 2021, the Financial Conduct Authority (FCA) published Handbook Notice no. 89.
This Handbook Notice describes the changes to the FCA Handbook and other material made by the FCA Board under its legislative and other statutory powers on 24 June 2021.
On this date the FCA Board approved the following instruments:

• Training and Competence Sourcebook (Amendment No 9) Instrument 2021.
• Financial Services Compensation Scheme (Miscellaneous Amendments) Instrument 2021.
• Handbook Administration (No 56) Instrument 2021.

On 1 June 2021, the UK Government announced that the current exemption for Undertakings for the Collective Investment in Transferable Securities (UCITS) funds from the requirements of the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation will be extended by five years to 31 December 2026.
This announcement is being made now to provide certainty for industry and investors regarding the disclosures UCITS funds providers will have to make to retail investors beyond the end of 2021.
While the current exemption will be extended by five years, depending on from the result of HM Treasury’s review of the UK retail disclosure regime, changes to the PRIIPs Regulation may be made – or a successor regulation may be introduced – sooner than 2026. In this scenario, considerations would be made to ensure a smooth transition to the new regime for all retail investment product providers, including those marketing UCITS funds.

On 1 June 2021, the Financial Conduct Authority (FCA) published Remuneration Policy Statement (RPS) Table for AIFMs.
AIFMs should use this table to keep a record of AIFM Remuneration Code Staff identified for the current performance year, as required ESMA guidelines on remuneration policies under the AIFMD.

On 30 June 2021, the Financial Conduct Authority (FCA) published its Review of host Authorised Fund Management firms.
FCA's key observations include 4 main areas:

• Due diligence over delegated third-party investment managers and funds
• Oversight of delegated third-party investment managers and funds  
• Governance and oversight
• Financial resources.

The FCA expects all AFMs, regardless of their business model, to consider these findings and whether there are weaknesses in their own systems. Where necessary, they should make changes to address FCA’s concerns.
The findings of this review are significant, and the FCA intends to conduct further work to identify whether it is appropriate to make changes to FCA’s regulatory framework. Part of that work may involve potential rule changes which would go through the standard consultation processes, separate from this review.
Where firms have deficiencies in either financial or non-financial resources, the FCA will ensure they take the necessary steps to resolve this. This might involve the FCA assessing their financial resources, including capital and liquidity positions. Where firms are found to be in breach, the FCA will ask firms to rectify this.

On 30 June 2021, the S.I. 2021 No. 774 - The Markets in Financial Instruments (Capital Markets) (Amendment) Regulations 2021 was published in the UK legislation.
These Regulations—
(1) remove an obligation on trading and execution venues to publish reports relating to the quality of execution of orders obtained on them;
(2) remove a requirement for investment firms providing portfolio management services to inform their professional client whenever the overall value of the portfolio depreciates by 10% and thereafter at multiples of 10%;
(3) remove an obligation for firms to provide detailed contract notes for trades executed on behalf of wholesale clients, and quarterly reports on portfolio management services;
(4) exempt investment firms providing portfolio management services to professional clients from the requirement to provide cost benefit analyses to those professional clients when they switch the instruments in which they invest;
(5) revoke the obligation for an investment firm to provide specified information relating to its services to clients before a service is carried out, where the services are provided to eligible counterparties;
(6) allow investment firms, where agreements to buy or sell financial securities are concluded via distance communication and where the client consents, to provide costs and charges information to their clients after the transaction has been carried out;
(7) make electronic communication the default mode of communication with wholesale clients.

On 24 June 2021, the Financial Conduct Authority (FCA) published Primary Market Bulletin 34.
In this edition, the FCA provided its intention to:

• Create a new Technical Note, Primary Market/TN/619.1, to adapt, as FCA Guidance, the European Securities and Markets Authority’s (ESMA) Guidelines on disclosure requirements under the Prospectus Regulation. The FCA will augment this with the measures on specialist issuers in the ESMA update of the CESR recommendations (CESR Recommendations) on FCA’s Handbook.
• Incorporate certain explanations in the PD Q&As, on FCA’s Handbook, into Technical Notes.
• No longer refer to the CESR Recommendations and the PD Q&As on FCA’s Handbook. The relevant substantive content will be consolidated into the FCA’s Technical Notes. This is a more appropriate place for such content in the context of the UK’s regulatory regime.
• Consult in the September 2021 Quarterly Consultation Paper (QCP) on removing them from FCA Handbook site and on consequential amendments to the Prospectus Regulation Rules (PRR). In particular, PRR 1.1.5 G and PRR 1.1.7 G. and PRR App 1.1 Relevant definitions, which refer to them.

On 28 June 2021, the UK Government published the Draft statutory instrument, which will make amendments to the Financial Services and Markets Act 2000 (PRA-regulated Activities) (Amendment) Order.
This SI makes changes to the PRA RAO which will allow the PRA to continue to designate systemic investment firms after the IFPR is introduced. Particularly, the SI

• makes changes which allow for all investment firms that deal in investments as principal to be eligible for designation by the PRA. This does not mean the PRA will necessarily designate all of these investment firms. When designating investment firms, the PRA will continue to have regard to its statutory objectives, the assets of the person or group, and its Statement of Policy on designation.
• removes the requirement for the PRA to consult the Bank of England (BoE) before issuing a new designation statement of policy. The PRA and BoE consider this requirement can be deleted as it does not reflect their current structures, because the PRA is a part of the BoE.
• clarifies that, where the FCA has given its approval in relation to a particular function, such an approval should be deemed to be given by the PRA. This means authorised persons don’t need to re-apply for approval when a firm they work for becomes designated by the PRA.

On 29 June 2021, the Financial Conduct Authority (FCA) published Policy statement PS21/6: Implementation of Investment Firms Prudential Regime.
The rules apply to:

• any MIFID investment firm currently subject to any part of the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR)
• any regulated and unregulated holding companies of groups that contain an investment firm that are currently authorised under MiFID and or a Collective Portfolio Management Investment (CPMI).

The current prudential regime for FCA investment firms is based on requirements designed for globally active systemically important banks. The main aim of this regime is to protect depositors by ensuring that it is difficult for a bank to fail. Investment firms do not have depositors that need to be protected. This means that the current requirements are not designed to address the potential harm posed by these firms to their clients and the markets in which they operate.
This is the first of the Policy Statements we will issue to introduce the IFPR. The FCA expects the IFPR to take effect in January 2022, subject to progress and amendments to the Financial Services (FS) Bill.

On 9 June 2021, the UK Government announced on the new independent group to help tackle ‘greenwashing’.
The Green Technical Advisory Group (GTAG) will oversee the Government’s delivery of a “Green Taxonomy” – a common framework setting the bar for investments that can be defined as environmentally sustainable.
The Green Taxonomy will help clamp down on greenwashing – unsubstantiated or exaggerated claims that an investment is environmentally friendly – and make it easier for investors and consumers to understand how a firm is impacting the environment.

On 17 June 2021, the Bank of England (BoE) published its climate-related financial disclosure in June 2021, which sets out the Bank’s approach to managing the risks from climate change across its entire operations.
This year’s report builds on the first by:

• deepening the analysis of our own balance sheet using the latest climate data and modelling techniques;
• highlighting progress made on the Bank’s climate-related work plan;
• reflecting changes in the remits and recommendations to the Bank’s policy committees; and
• clarifying the outcomes the Bank seeks to achieve through its refreshed climate strategy.

The report also sets out how the Bank has further embedded climate change into its internal governance and risk management frameworks, as part of its organization wide approach.

On 22 June 2021, the Financial Conduct Authority (FCA) published Consultation paper CP21/17: Enhancing climate-related disclosures by asset managers, life insurers and FCA-regulated pension providers.
The key elements of our proposals are:

• Entity-level disclosures. Firms would be required to publish, annually, an entity-level TCFD report on how they take climate-related risks and opportunities into account in managing or administering investments on behalf of clients and consumers.
• Product or portfolio-level disclosures. Firms would be required to produce, annually, a baseline set of consistent, comparable disclosures in respect of their products and portfolios, including a core set of metrics.

The proposals will directly affect:

• asset managers
• life insurers (including pure insurers)
• non-insurer FCA-regulated pension providers, including platform firms and Self-invested Personal Pension (SIPP) operators
• FCA-regulated pension providers.

The FCA is inviting feedback by 10 September 2021 and intends to confirm its final policy on climate-related disclosures before the end of 2021.

On 22 June 2021, the Financial Conduct Authority (FCA) published Consultation paper CP21/18: Enhancing climate-related disclosures by standard listed companies.
Effective capital markets rely on good corporate disclosures. High-quality information on companies’ exposure to climate-related risks and opportunities is increasingly seen as crucial to informed asset pricing and allocation of capital to support the transition to a net zero economy.
Improving climate-related disclosures along the investment chain is therefore central to FCA’s sustainable finance strategy.
FCA’s proposals will directly affect issuers of standard listed equity shares (excluding standard listed investment entities and shell companies) and may also impact issuers of other listed securities. FCA’s CP and discussion chapter will also interest a wide range of stakeholders, including:

• •law firms, corporate finance and other advisors
• investors and asset owners
• accountants, auditors and second party opinion providers
• ESG data and rating providers
• industry groups, trade associations, civil society groups, industry experts and academics
• regulated firms
• policymakers and regulatory bodies.

The FCA is inviting feedback by 10 September 2021 and intends to confirm its final policy on climate-related disclosures before the end of 2021.

On 7 June 2021, the Brazilian Financial and Capital Markets Association (ANBIMA) released the  first edition of the National Risk Assessment on Money Laundering and Terrorist Financing.
According to the report, the securities sector has low vulnerability to these risks. In the sectorial assessment, the segment represented by intermediaries and investment funds showed average vulnerability, especially due to the difficulty in identifying the final beneficiaries of non-resident investors.

On 7 June 2021, the Comissão de Valores Mobiliários (CVM) published Joint Circular Letter CVM/SIN/SSE/SPREV 5/2021 for the clarifications on the interpretation of article 15 of CMN Resolution No. 3922, of November 25, 2010, concerning the replacement of investment fund manager.
The motivation for the circular letter was the receipt of inquiries about what would justify the replacement of an ineligible manager by another ineligible one. This situation is in fact seen as exceptional by SIN, SSE and SPREV, since these funds, by virtue of the regulation of their shareholders, must seek their permanent reclassification, which would occur with the replacement of service providers only by others who were eligible, or when this is not possible, promoting its liquidation.
The Circular Letter highlights that the new service provider must call a general meeting in order to present and deliberate on the fund's liquidation plan, in order to evidence, thus, its entry into the fund as a necessary measure to enable the reclassification process of the investment fund.

On 8 June 2021, the Brazilian Financial and Capital Markets Association (ANBIMA) informed that due to an operational error, the document Liquidity Risk Rules and Procedures for 555 Funds , which was on ANBIMA's portal between May 31 and June 8, was not in the final version.
The correct draft, which is now published, brings punctual adjustments to give greater clarity to the rules and less prescription regarding the previous content of articles 10 and 11.

On 21 June 2021, the Comissão de Valores Mobiliários (CVM) informed that, in the Public Hearing at Comissão de Finanças e Tributação (CFT), addresses following issues regarding the performance and regulation of Autonomous Investment Agents (AA):

• Exclusivity: In the understanding of the CVM's Economic Analysis and Risk Management Advisory (ASA), reflected in the aforementioned study, the main grounds for the inclusion of the regulatory device that requires the exclusive link between the AAI and the intermediary seem to have been mitigated by technological evolution, the maturation of the market, and by virtue of other rules that expanded the list of controls exercised by intermediaries over these participants, notably CVM Instruction 505/2011.
• Remuneration and transparency: Despite not having been the focus of the work, other regulators were concerned about aspects involving remuneration throughout the distribution chain and its transparency to investors.  
• Inspection Fees: the reduction of the Surveillance Rates of the Securities Markets (TFCVM) for AAIs is significant, both for individuals and companies. 

On 22 June 2021, the Comissão de Valores Mobiliários (CVM) published Circular Letter CVM/SIN 06/21 on new Investment Fund Management System.
The new platform has a more up-to-date architecture and facilitates data storage, minimizing the need for integration between different database, which will allow to monitor and change information about each fund at all stages of its existence:

• Fund registration (which will be granted automatically after sending the mandatory documents).
• Update of registration information.
• Quota payment records.
• Changes to the closing date of the fiscal year.
• Replacement of the managing institution or other participants.
• Closing of funds.

The submission of periodic information (Daily Report, Monthly Profile, CDA, balance sheets, sheets and audited Financial Statements) already in force through the CVMWEB Document Submission System does not change.

On 22 June 2021, the Brazilian Financial and Capital Markets Association (ANBIMA) informed that as of 1 July 2021, the analysis period for qualifying portfolio managers will undergo changes. They seek to adapt the processes to CVM Resolution 21/2021, also changing the accreditation flow.
The analysis of authorization requests from portfolio managers of individuals or companies by ANBIMA and by the regulator must take place within 60 calendar days. The changes will streamline the qualification process, which previously could reach 105 working days.

On 30 June 2021, the Banco de la República published the 2021 financial stability reports.
This Special Reports analyze the performance of the real estate market and housing credit, and identifies potential sources of risk in the expected economic recovery scenario. To do this, it studies the dynamics of the supply, demand and price indicators. The results suggest that the slowdown in prices still reflects lagging dynamics, but as housing demand continues to grow and supply remains stable, prices in the national aggregate could register an upward correction. This has been accompanied by a notable increase in housing loan disbursements, despite a reduction in consumers' willingness to buy.
An important part of the liquidity management of financial entities in Colombia is carried out through operations in the money market, both collateralized and uncollateralized. The first includes repo, simultaneous and temporary transfer of securities (TTV) operations and others that are carried out through trading systems or in the over the counter market.(OTC). For its part, the uncollateralized market includes only the operations carried out in the interbank market. Given the importance of the relationships established in these markets, both for the transmission of monetary policy and for the efficiency in the distribution of liquidity, this Report studies the structure of this market and the characteristics of its interconnections to the light of network analysis, in order to monitor their recent dynamics and analyze the characteristics of the interconnections between agents.

On 22 June 2021, the Unidad de Proyección Normativa y Estudios de Regulación Financiera (URF) published the Decree 2555 and the methodology of the minimum profitability of the portfolio of short-term retirement.
The current file is the technical document for the application of the Law 100 of 1993 on the incorporation of the minimum yield mechanism as an instrument to promote the efficient management of the resources managed by the pension and retirement fund management entities.

On 25 June 2021, the Financial Action Task Force (FATF) published an updated list of Jurisdictions under Increased Monitoring.
In October 2020, the FATF decided to pursue work, paused due to the COVID-19 pandemic, and to identify new countries with strategic AML/CFT deficiencies and prioritise the review of listed countries with expired or expiring deadlines of action plan items. The following countries had their progress reviewed by the FATF since February 2021: Albania, Barbados, Botswana, Cambodia, Cayman Islands, Ghana, Jamaica, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Uganda, and Zimbabwe. For these countries, updated statements are provided. Burkina Faso and Senegal were given the opportunity and chose to defer reporting due to the pandemic; thus, the statements issued in February 2021 for these jurisdictions are included, but they may not necessarily reflect the most recent status of the jurisdiction’s AML/CFT regime. Following review, the FATF now also identifies Haiti, Malta, Philippines, and South Sudan.

On 21 June 2021, the U.S. Securities and Exchange Commission (SEC) informs on its adoption of Updated Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) Filer Manual.
The amendments will require filers to upload specified supporting documentation to demonstrate the relationships between the entity requesting access and the existing EDGAR account, and the entity requesting access and the individual acting for that entity. Filers seeking access to an existing EDGAR account for which they have neither the access codes nor the current contact email address would be required to submit documents with the request for access, and additional documents as requested by SEC staff. The amendments will also provide that filers seeking access under this process must allow at least five (5) business days for processing of the request, and must respond to requests from SEC staff for additional information and document.