On 25 May 2022, the European Commission (EC) proposed: 

1. Council decision on adding the violation of Union restrictive measures to the areas of crime laid down in Article 83(1) of the Treaty on the Functioning of the European Union; 
2. Directive of the European Parliament and of the Council on asset recovery and confiscation, accompanied with a feedback period.

The Commission is asking the EU Member States to agree to such an addition, as the violation of restrictive measures meets the criteria laid down in Article 83(1) TFEU:

The violation of restrictive measures is considered a crime in a majority of Member States. It is also a particularly serious area of crime, since it may perpetuate threats to international peace and security, undermine the consolidation and support for democracy, the rule of law and human rights and result in significant economic, societal and environmental damage. It has a clear cross-border nature, which requires a uniform cross-border response at EU level and global level.

The Council needs to unanimously adopt, after obtaining the consent of the European Parliament, a decision on adding the evasion or violation of restrictive measures to the areas of crime laid down in Article 83(1) TFEU. Following that, the EC can propose a Directive defining the scope and the criminal penalties for the violation of Union law on restrictive measures. Once adopted, the Directive will complement the proposed EU rules on asset recovery and confiscation.

The Commission is also adopting a Communication, with an annex, setting what a future Directive defining the scope and the criminal sanctions for the violation of Union rules on restrictive measures could contain, notably in terms of the criminal offences to be covered.

The proposed Directive on asset recovery and confiscation will grant competent authorities with the tools to effectively and swiftly trace and identify, freeze, confiscate and manage property derived from criminal activities in all areas where organised crime is active. The proposal aims to provide a new comprehensive legal instrument that addresses asset recovery from beginning to end.  Money laundering, as defined in Directive (EU) 2018/1673 of the European Parliament and of the Council would fall under the scope of the proposed Directive on asset recovery and confiscation. 

The initiative to revise the Confiscation Directive was published on 30 May 2022.  It will start by evaluating the functioning of Directive 2014/42/EU and of Council Decision 2007/845/JHA in EU Member States. 

The Evaluation will assess the following criteria: 

• Relevance: whether the tools of Directive 2014/42/EU and of Council Decision 2007/845/JHA correspond to current needs;
• Effectiveness: whether their original objectives have been achieve;
• Efficiency: the functioning of Directive 2014/42/EU of Council Decision 2007/845/JHA from a simplification and burden reduction perspective;
• Coherence: how Directive 2014/42/EU and Council Decision 2007/845/JHA work together with other legislation in the field of cross border co-operation; and 
• EU added value of Directive 2014/42/EU and of Council Decision 2007/845/JHA.

The feedback period lasts until 25 July 2022.

On 11 May 2022, Council of the EU and European Parliament reached provisional agreement on DORA and NIS2.

DORA summary:

Given the ever-increasing risks of cyber attacks, the EU is strengthening the IT security of financial entities such as banks, insurance companies and investment firms. Yesterday evening the Council presidency and the European Parliament reached a provisional agreement on the Digital Operational Resilience Act (DORA), which will make sure the financial sector in Europe is able to maintain resilient operations through a severe operational disruption.

DORA sets uniform requirements for the security of network and information systems of companies and organisations operating in the financial sector as well as critical third parties which provide ICT (Information Communication Technologies)-related services to them, such as cloud platforms or data analytics services. DORA creates a regulatory framework on digital operational resilience whereby all firms need to make sure they can withstand, respond to and recover from all types of ICT-related disruptions and threats. These requirements are homogenous across all EU member states. The core aim is to prevent and mitigate cyber threats.

Under the provisional agreement, the new rules will constitute a very robust framework that boosts the IT security of the financial sector. The efforts asked from financial entities will be proportional to the potential risks.

Almost all financial entities will be subject to the new rules. Under the provisional agreement, auditors will not be subject to DORA but will be part of a future review of the regulation, where a possible revision of the rules may be explored.

Critical third-country ICT service providers to financial entities in the EU will be required to establish a subsidiary within the EU so that oversight can be properly implemented.

As regards the oversight framework, the co-legislators agreed to opt for an additional joint oversight network which will strengthen the coordination between the European supervisory authorities on this cross-sectoral topic.

Under the provisional agreement, penetration tests shall be carried out in functioning mode, and it will be possible to include several member states’ authorities in the test procedures. The use of internal auditors will be possible only in a number of strictly limited circumstances, subject to safeguard conditions.

As regards the interaction of DORA with the Network and Information Security (NIS) directive, under the provisional agreement financial entities will have full clarity on the different rules on digital operational resilience they need to comply with, in particular for those financial entities holding several authorisations and operating in different markets within the EU. The NIS directive continues to apply. DORA builds on the NIS directive and addresses possible overlaps via a Lex specialis exemption.

The provisional agreement reached yesterday evening is subject to approval by the Council and the European Parliament before going through the formal adoption procedure.

Once the DORA proposal is formally adopted, it will be passed into law by each EU member state. The relevant European Supervisory Authorities (ESAs), such as the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA), will then develop technical standards for all financial services institutions to abide by, from banking to insurance to asset management. The respective national competent authorities will take the role of compliance oversight and enforce the regulation as necessary.

NIS2 summary:

Today, the Council and the European Parliament agreed on measures for a high common level of cybersecurity across the Union, to further improve the resilience and incident response capacities of both the public and private sector and the EU as a whole.

Once adopted, the new directive, called ‘NIS2’, will replace the current directive on security of network and information systems (the NIS directive). 

Stronger risk and incident management and cooperation

NIS2 will set the baseline for cybersecurity risk management measures and reporting obligations across all sectors that are covered by the directive, such as energy, transport, health and digital infrastructure.

The revised directive aims to remove divergences in cybersecurity requirements and in implementation of cybersecurity measures in different member states. To achieve this, it sets out minimum rules for a regulatory framework and lays down mechanisms for effective cooperation among relevant authorities in each member state. It updates the list of sectors and activities subject to cybersecurity obligations, and provides for remedies and sanctions to ensure enforcement.

The directive will formally establish the European Cyber Crises Liaison Organisation Network, EU-CyCLONe, which will support the coordinated management of large-scale cybersecurity incidents.

Widening of the scope of the rules

While under the old NIS directive member states were responsible for determining which entities would meet the criteria to qualify as operators of essential services, the new NIS2 directive introduces a size-cap rule. This means that all medium-sized and large entities operating within the sectors or providing services covered by the directive will fall within its scope.

While the agreement between the European Parliament and the Council maintains this general rule, the provisionally agreed text includes additional provisions to ensure proportionality, a higher level of risk management and clear-cut criticality criteria for determining the entities covered.

The text also clarifies that the directive will not apply to entities carrying out activities in areas such as defense or national security, public security, law enforcement and the judiciary. Parliaments and central banks are also excluded from the scope.

As public administrations are also often targets of cyberattacks, NIS2 will apply to public administration entities at central and regional level. In addition, member states may decide that it applies to such entities at local level too.

Other changes introduced by the co-legislators

The European Parliament and the Council have aligned the text with sector-specific legislation, in particular the regulation on digital operational resilience for the financial sector (DORA) and the directive on the resilience of critical entities (CER), to provide legal clarity and ensure coherence between NIS2 and these acts.

A voluntary peer-learning mechanism will increase mutual trust and learning from good practices and experiences, thereby contributing to achieving a high common level of cybersecurity.

The two co-legislators have also streamlined the reporting obligations in order to avoid causing over-reporting and creating an excessive burden on the entities covered.

Member states will have 21 months from the entry into force of the directive in which to incorporate the provisions into their national law.

On 11 May 2022, European Parliament published a briefing on the review of Directive 2002/65/EC on distance marketing of consumer financial services.

Adopted in 2002, Directive 2002/65/EC on Distance Marketing of Consumer Financial Services introduced a legal framework for governing the distance marketing of financial services, such as banking, loans, insurance and investment. Back then, when relevant legislation was limited at Member State level, the directive aimed to improve consumer protection rules for financial services sold at a distance and to consolidate the internal market by aligning rules in this area. Since its adoption, however, the legal framework and digital landscape for retail financial services has evolved significantly. A 2020 Commission ex-post evaluation of the directive highlighted that it has been effective in strengthening consumer protection and largely remains relevant through its safety-net function. However, the overlap of its provisions with product-specific and horizontal EU legislation, as well as changes to the financial services market have decreased the EU added value and relevance of the directive over time. In addition, digitalisation is found to have amplified some of its practical weaknesses. Subsequently, a review of the directive was included among the REFIT initiatives of the Commission's 2020 Work Programme, and an inception impact assessment was published in May 2021.

On 16 May 2022, the European Securities and Markets Authority (ESMA) issued a public statement on the implications of Russia’s invasion of Ukraine on investment fund portfolios. 

The statement  provides overarching messages to fund managers including high level guidance on:

• the appropriate action in case of exposures to Russian, Belarusian and Ukrainian assets, given valuation and liquidity uncertainties;
• the process fund managers should follow when evaluating these assets; 
• whether it may be considered to use side pockets or similar arrangements to segregate these assets.

ESMA expects fund managers of investment funds with exposures to assets facing liquidity issues to assess whether a fair value of these assets can still be determined and adapt the valuation without undue delay.

On 11 May 2022, European Securities and Markets Authority (ESMA) published an overview of planned consultation papers 2022.

In line with the ESMA Regulation, ESMA consults the Securities and Markets Stakeholder Group (SMSG) on proposed technical standards and guidelines. The purpose of this table is to provide an overview of the currently planned consultations to help the SMSG to plan its activities. The list will be updated by ESMA on a regular basis to inform SMSG about the status and the evolution of the policy products.

On 20 May 2022, the European Securities and Markets Authority (ESMA) updated Questions and Answers (Q&A)  on the application of the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive. 

The following questions were modified or added: 

• Question 3: Performance reference period for the benchmark model
  (Modified) Question 3: Based on paragraph 4026 of the Guidelines on performance fees, how should the performance reference period for the benchmark model be set?
• Question 7: Performance reference period for the hurdle rate model
  (Added) Question 7: Paragraphs 40(32) and 41(33) of the Guidelines on performance fees recommend that the length of the performance reference period (if this is shorter than the whole life of the fund) should be set equal to at least 5 years. Is this requirement applicable to the hurdle rate model?

On 31 May 2022, the European Securities and Markets Authority (ESMA), published a supervisory briefing on sustainability risks and disclosures in the area of investment management.

This briefing will help combat greenwashing by establishing common supervisory criteria for National Competent Authorities (NCAs), to effectively supervise investment funds with sustainability features.

This briefing covers the following areas:

• Guidance for the supervision of fund documentation and marketing material, as well as guiding principles on the use of sustainability-related terms in funds’ names; and
• Guidance for convergent supervision of the integration of sustainability risks by AIFMs and UCITS managers.

The ESMA’s publication is part of the actions to implement ESMA’s Sustainable Finance Roadmap, namely the consistent implementation of new requirements applicable to asset managers by developing new supervisory briefing(s).

As next steps, ESMA will work closely with NCAs to combat greenwashing, by promoting further supervisory convergence in supervising investment funds with sustainability features. This may include updating the supervisory briefing if needed considering experiences after the SFDR RTS starts applying on 1 January 2023.

On 31 May 2022, the European Securities and Markets Authority (ESMA), published a supervisory briefing on the 2021 Common Supervisory Action (CSA) on costs and fees for investment funds.

ESMA highlights, in the Report, the importance of supervision in ensuring investors are not charged with undue costs, considering its high impact on investors’ returns.

The briefing presents the main results of this exercise, namely:

• There is room for improvement on the application of the ESMA supervisory briefing on the supervision of costs in UCITS and AIFs, particularly for smaller management companies;
• Some questions arise concerning compliance with delegation rules where portfolio managers i.e. delegates, exercise significant influence or even decide the level of costs;
• Divergent market practices exist as to what industry reported as “due” or “undue” costs;
• Some NCAs discovered conflicts of interest at UCITS managers, in particular in case of related-party transactions;
• In some instances there is a lack of policies and procedures on efficient portfolio management (EPMs) and lack of clear disclosures as required under the ESMA Guidelines on ETFs and other UCITS issues; and
• Widespread use of fixed fee splits arrangements for securities lending continues, with unfavourable results for retail investors.

ESMA stresses the importance of ensuring that investors are adequately compensated in all cases where they were charged with undue costs or fees, and also in cases where there were calculation errors that resulted in a financial detriment for investors.

As next steps, ESMA invites NCAs to use this opportunity to also consider enforcement actions in the cases where a significant regulatory breach was identified, particularly bearing in mind that the area of costs and fees is a priority due to the high relevance for investor protection.

On 25 May 2022, the European Supervisory Authorities (ESAs) published the European Commission's letter with Q&A and Commission decision on  Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability related disclosures in the financial services sector (SFDR) and Taxonomy Regulation. 

In the letter the Commission informed that its provided answers to questions forwarded by the ESAs in relation to SFDR and Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (Taxonomy Regulation). 

The questions are the following: 

1. Is it possible for financial market participants that are below the threshold set by Article 4(3) and (4) of SFDR and choose not to consider adverse impacts of investment decisions on sustainability factors at entity level (Article 4(1)(b) of SFDR) to indicate that they do consider principal adverse impacts (PAI) at product level only for a certain subset of financial products? In other words, can a financial market participant not consider PAI at entity level but nevertheless consider PAI under Article 7 of SFDR for some of the financial products it manages, and if they do so, can they disclose this under Article 4(1)(b) of SFDR?
2. Do financial advisers, when providing MiFID II investment advice, have to comply with disclosure obligations in Article 6(2) of SFDR in good time before the client is bound by any agreement for the provision of investment advice "as a whole" (i.e. not only limited to financial products as defined by SFDR, but also any financial instrument as defined by MiFID II), or for each single recommendation concerning a "financial product" as defined by Article 2(12) of SFDR?
3. For the purpose of the disclosure of principal adverse impacts under Article 4(5)(a) of SFDR, when a financial adviser recommends financial products or instruments that are not collective or individual portfolios managed by a financial market participant, should it also collect information from non-financial companies for those products and instruments in order to take those into account for the principal adverse impact disclosure?
4. If a financial adviser only considers in its advisory process products which are not in scope of SFDR (i.e. shares of listed companies, corporate bonds, etc.), should the financial adviser still comply with the obligations laid down in Articles 3, 4, 5, 6 and 13 of SFDR?
5. Article 17 of SFDR exempts insurance intermediaries which provide insurance advice with regard to IBIPs and investment firms which provide investment advice that are enterprises irrespective of their legal form, including natural persons and self-employed persons, provided that they employ fewer than three persons. As there is no definition of “employ” or “employee” in SFDR, how are self-employed staff, owner managers or part-time employees counted?
6. Do Articles 6 and 7 of SFDR apply only for new financial products or also for existing financial products on the date of application, 10 March 2021 (even for those financial products that are no longer made available to investors)? Specifically, do Articles 6 and 7 of SFDR apply for existing portfolio management financial products? Do financial products that are no longer made available to new investors have to:
   (a) update and deliver the pre-contractual disclosures under Article 6 and 7 of SFDR to existing investors; and
   (b) provide website and periodic disclosures under Articles 7, 10 and 11 of SFDR to existing investors?
7. If a financial product referred to in Article 8, paragraphs 1, 2 and 2a, or Article 9, paragraphs 1 to 4a, of SFDR does not invest in companies with good governance, is that product able to continue disclosing under Article 8, 9 and 11 of SFDR?
8. Considering that the reference to good governance in Article 8 of SFDR only relates to 'companies', and that Article 9 of SFDR, via the definition of 'sustainable investment' in Article 2(17) of SFDR, specifically relates to 'investee companies', can a financial product investing solely in government bonds while applying an ESG investment strategy be considered to fall under either Article 8 or Article 9 of SFDR?
9. In case a financial product referred to in Article 8 of SFDR which promotes environmental characteristics does not commit in the pre-contractual disclosures to invest in any economic activities that contribute to an environmental objective within the meaning of point (17) of 

Article 2 of SFDR, is the financial market participant obliged to disclose the information required by Article 6 of Taxonomy Regulation? If it is determined later that the same financial product in fact invested in such economic activities, is the financial market participant obliged to make that disclosure?  Similarly, in case a financial product referred to in Article 9 of Regulation (EU) SFDR only committed in the pre-contractual disclosures to invest in economic activities contributing to social objectives and if it is determined later that the financial product in fact invested in economic activities contributing to an environmental objective, would the financial market participant be obliged to disclose the information required by Article 5 of Taxonomy Regulation?

On 3 May 2022, the Decree No. 2022-766 of 2 May 2022 amending the Monetary and Financial Code and supplementing the transposition of Directive (EU) 2019/2162 of the European Parliament and of the Council of 27 November 2019 on the issue of covered bonds and the public supervision of covered bonds was published in the Legifrance (France's Official Journal). 

The decree completes the transposition of Directive (EU) 2019/2162 of the European Parliament and of the Council of 27 November 2019 on the issue of covered bonds and the public supervision of covered bonds, as regards measures falling within the scope of the Regulation, in application of the legislative provisions covered by Ordinance No. 2021-858 of 30 June 2021.

The following amendments were made:

• Article R. 513-1-A of the Monetary and Financial Code is amended as follows:
  1 ° The first paragraph is replaced by the following provisions:
  "Prior to their issuance, the land bonds and other privileged resources mentioned in 2 ° of I of Article L. 513-2 are the subject of a defined program having regard to the legal and contractual characteristics of the securities, subject to authorization by the Prudential Supervision and Resolution Authority, under the conditions defined by that Authority. »
• Article R. 513-7 of the same code is supplemented by a paragraph worded as follows:
  "For land obligations whose maturity date is extendable, the calculation of the estimated principal flows may be made on the basis of the extended maturity date in accordance with the contractual terms of the land obligation."
• Article R. 513-8 of the same code is supplemented by three paragraphs worded as follows:
  "In addition, for the calculation of this ratio, the land credit company takes into account, under conditions and limits defined by order of the Minister responsible for the economy, exposures on companies belonging to the same consolidated entity as this company within the meaning of Article L. 233-16 of the Commercial Code.
  'Unsecured claims found to be in default in accordance with Article 178 of Regulation (EU) No 575/2013 of 26 June 2013 shall not contribute to the calculation of the coverage ratio.
  'Assets which contribute to compliance with the coverage ratio defined in the first subparagraph above the 100 % level shall not be subject to the limits applicable to exposures to credit institutions set out in Article R. 513-6 and shall not be taken into account for the purposes of calculating those limits.'
• Article R. 513-8-1 of the same code is amended as follows:
  1 ° The 1 ° is replaced by the following provisions:
  "1 ° In case of default of payment of the principal on the maturity date initially planned by the land credit company, the credit institution benefiting from the loans granted by the land credit company and guaranteed by the discount, the assignment or pledge of claims pursuant to Articles L. 211-38 to L. 211-40 or Articles L. 313-23 to L. 313-35, whether or not these claims are of a professional nature, or the credit institution issuing promissory notes subscribed by the land credit company in accordance with the terms defined in Articles L. 313-43 to L. 313-48; "
• Article 7 of the decree of 6 July 2021 referred to above is supplemented by a paragraph worded as follows:
  "In addition, for the purpose of calculating the coverage of cash needs provided for in Article R. 513-7, the institution mentioned in III of Law No. 85-695 of 11 July 1985 does not take into account the cash requirements associated with bonds issued before that date."

The text will enter into force on 8 July 2022.

Version française

Le 3 mai 2022, le décret n° 2022-766 du 2 mai 2022 modifiant le code monétaire et financier et complétant la transposition de la directive (UE) 2019/2162 du Parlement européen et du Conseil du 27 novembre 2019 relative à l'émission d'obligations sécurisées et à la supervision publique des obligations sécurisées a été publié dans Legifrance (Journal officiel de la France). 

Le décret achève la transposition de la directive (UE) 2019/2162 du Parlement européen et du Conseil du 27 novembre 2019 relative à l'émission d'obligations sécurisées et à la supervision publique des obligations sécurisées, pour ce qui concerne les mesures relevant du champ d'application du règlement, en application des dispositions législatives relevant de l'ordonnance n° 2021-858 du 30 juin 2021.

Les modifications suivantes ont été apportées :

• L'article R. 513-1-A du code monétaire et financier est modifié comme suit :
  1 ° Le premier alinéa est remplacé par les dispositions suivantes :
  " Préalablement à leur émission, les obligations foncières et autres ressources privilégiées mentionnées au 2 ° du I de l'article L. 513-2 font l'objet d'un programme défini au regard des caractéristiques juridiques et contractuelles des titres, soumis à l'autorisation de l'Autorité de contrôle prudentiel et de résolution, dans les conditions définies par cette autorité. "
• L'article R. 513-7 du même code est complété par un alinéa ainsi rédigé :
  " Pour les obligations foncières dont la date d'échéance est reportable, le calcul des flux prévisionnels en principal peut être effectué sur la base de la date d'échéance reportée conformément aux conditions contractuelles de l'obligation foncière. "
• L'article R. 513-8 du même code est complété par trois alinéas ainsi rédigés :
  " En outre, pour le calcul de ce ratio, la société de crédit foncier prend en compte, dans des conditions et limites définies par arrêté du ministre chargé de l'économie, les expositions sur les sociétés appartenant au même ensemble consolidé que cette société au sens de l'article L. 233-16 du code de commerce.
  'Les créances chirographaires reconnues en défaut conformément à l'article 178 du règlement (UE) n° 575/2013 du 26 juin 2013 ne contribuent pas au calcul du ratio de couverture.
  "Les actifs qui contribuent au respect du ratio de couverture défini au premier alinéa au-delà du niveau de 100 % ne sont pas soumis aux limites applicables aux expositions sur les établissements de crédit prévues à l'article R. 513-6 et ne sont pas pris en compte pour le calcul de ces limites.
• L'article R. 513-8-1 du même code est modifié comme suit :
  1 ° Le 1 ° est remplacé par les dispositions suivantes :
  " 1 ° En cas de défaut de paiement du principal à l'échéance initialement prévue par la société de crédit foncier, l'établissement de crédit bénéficiaire des prêts consentis par la société de crédit foncier et garantis par l'escompte, la cession ou le nantissement de créances en application des articles L. 211-38 à L. 211-40 ou des articles L. 313-23 à L. 313-35, que ces créances aient ou non un caractère professionnel, ou l'établissement de crédit émetteur de billets à ordre souscrits par la société de crédit foncier selon les modalités définies aux articles L. 313-43 à L. 313-48 ; "
• L'article 7 du décret du 6 juillet 2021 susvisé est complété par un alinéa ainsi rédigé :
  " En outre, pour le calcul de la couverture des besoins de trésorerie prévue à l'article R. 513-7, l'établissement mentionné au III de la loi n° 85-695 du 11 juillet 1985 ne prend pas en compte les besoins de trésorerie liés aux obligations émises avant cette date. "

Le texte entrera en vigueur le 8 juillet 2022.

On 16 May 2022, the Autorité des marchés financiers (AMF) and the ESMA underlined certain points of vigilance due to the Ukrainian crisis in view of the half-year closings.

Aware of the profound repercussions of the war in Ukraine, both European and international for certain listed companies, ESMA and the AMF underline several points of vigilance to be taken into account in their financial communication, as the 2022 half-year closing approaches.

Although this is a half-year closing, ESMA and the AMF stress the importance of identifying the main risks and uncertainties to which issuers are exposed, directly or indirectly, of providing specific information and detailed and to adapt the information provided to the context, both in the financial statements and the management report.

In particular, ESMA and the AMF invite listed companies to:

• keep the market informed of the evolution of the situation and its consequences on their financial performance and their prospects;
• communicate transparently about effects, both direct and indirect;
• ensure consistency between the information provided in the financial statements and other elements of financial communications such as the management report.

Reminders are given on certain subjects that may require specific and detailed analyzes and information, in particular, the main judgments and estimates, impairment tests, analyzes of control and of assets held for sale as well as financial risks (credit , liquidity, foreign exchange). 

The AMF reiterates that it is available to companies and their statutory auditors for discussions prior to the closing of the accounts on structuring financial issues.

Version française

Le 16 mai 2022, l'Autorité des marchés financiers (AMF) et l'ESMA soulignent certains points de vigilance en raison de la crise ukrainienne en vue des clôtures semestrielles.

Conscients des profondes répercussions de la guerre en Ukraine, tant européennes qu'internationales pour certaines sociétés cotées, l'ESMA et l'AMF soulignent plusieurs points de vigilance à prendre en compte dans leur communication financière, à l'approche de la clôture semestrielle 2022.

Bien qu'il s'agisse d'une clôture semestrielle, l'ESMA et l'AMF soulignent l'importance d'identifier les principaux risques et incertitudes auxquels les émetteurs sont exposés, directement ou indirectement, de fournir des informations spécifiques et détaillées et d'adapter l'information fournie au contexte, tant dans les états financiers que dans le rapport de gestion.

En particulier, l'ESMA et l'AMF invitent les sociétés cotées à :

• tenir le marché informé de l'évolution de la situation et de ses conséquences sur leurs performances financières et leurs perspectives ;
• communiquer de manière transparente sur les effets, tant directs qu'indirects ;
• assurer la cohérence entre les informations fournies dans les états financiers et les autres éléments de communication financière tels que le rapport de gestion.

Des rappels sont faits sur certains sujets qui peuvent nécessiter des analyses et informations spécifiques et détaillées, notamment les principaux jugements et estimations, les tests de dépréciation, les analyses de contrôle et des actifs détenus en vue de la vente ainsi que les risques financiers (crédit, liquidité, change). 

L'AMF rappelle qu'elle se tient à la disposition des sociétés et de leurs commissaires aux comptes pour des entretiens préalables à la clôture des comptes sur les questions financières structurantes.

On 19 May 2022, the Order of 16 May 2022 approving amendments to the general regulation of the Autorité des marchés financiers was published in Legifrance (France's Official Journal).

The following amendments were made:

I. - Article 223-15-1 is amended as follows:

The words: "nineteen twentieths" are replaced by the words: "nine tenths".

I. - After the c of 2 ° of article 319-14, it is inserted four paragraphs worded as follows:

"From 1 January 2026, portfolio management companies as well as the persons referred to in a and, for their AIF management activity, the companies referred to in c can no longer benefit from movement commissions.

By way of derogation from the preceding paragraph, such persons may continue, after 31 December 2025, to benefit from movement commissions in connection with transactions relating to:

(a) Immovable property and furnishings, capital goods or movable property assigned to such immovable property and necessary for the operation, use or exploitation of the latter, rights in rem relating to such property and rights held as a financial lessee relating to such immovable property leasing contracts for such property; and

(b) Units or shares of entities which are not admitted to trading on a market referred to in Articles L. 421-1, L. 422-1 and L. 423-1 of the Monetary and Financial Code and whose assets consist mainly of the assets mentioned in a or of direct or indirect participations in entities themselves meeting the conditions of this paragraph or of current account advances granted to such entities. "

III. - After the c of 2 ° of article 321-119, it is inserted a paragraph worded as follows:

"From 1 January 2026, portfolio management companies and the persons referred to in a and, for their UCITS management activity, the companies referred to in c can no longer benefit from movement commissions. "

IV. - After article 321-164, an article 321-164-1 is inserted, worded as follows:

"By way of derogation from the tenth paragraph of article 321-119, the asset management companies covered by this title as well as the persons referred to in a and, for their activity of management of collective investment schemes, the companies referred to in c of 2 ° of the said article may continue, after 31 December 2025, to benefit from movement fees in connection with transactions relating to:

(a) Immovable property and furnishings, capital goods or movable property assigned to such immovable property and necessary for the operation, use or exploitation of such immovable property, rights in rem in respect of such property and rights held as financial lessee relating to leasing contracts relating to such property; and

(b) Units or shares of entities which are not admitted to trading on a market referred to in Articles L. 421-1, L. 422-1 and L. 423-1 of the Monetary and Financial Code and whose assets consist mainly of the assets mentioned in a or of direct or indirect participations in entities themselves meeting the conditions of this paragraph or of current account advances granted to such entities. »

Version française

Le 19 mai 2022, l'arrêté du 16 mai 2022 portant homologation de modifications du règlement général de l'Autorité des marchés financiers a été publié dans Legifrance (Journal officiel de la France).

Les modifications suivantes ont été apportées :

I. - L'article 223-15-1 est modifié comme suit :

Les mots : " dix-neuf vingtièmes " sont remplacés par les mots : " neuf dixièmes ".

I. - Après le c du 2 ° de l'article 319-14, il est inséré quatre alinéas ainsi rédigés :

" A compter du 1er janvier 2026, les sociétés de gestion de portefeuille ainsi que les personnes mentionnées au a et, pour leur activité de gestion de FIA, les sociétés mentionnées au c ne peuvent plus bénéficier de commissions de mouvement.

Par dérogation à l'alinéa précédent, ces personnes peuvent continuer, après le 31 décembre 2025, à bénéficier des commissions de mouvement dans le cadre des opérations relatives à :

(a) Des biens immobiliers et leur ameublement, des biens d'équipement ou des biens meubles affectés à ces biens immobiliers et nécessaires au fonctionnement, à l'utilisation ou à l'exploitation de ces derniers, des droits réels portant sur ces biens et des droits détenus en tant que preneur de crédit-bail portant sur ces biens immobiliers des contrats de location de ces biens ; et

(b) Des parts ou actions d'entités qui ne sont pas admises à la négociation sur un marché mentionné aux articles L. 421-1, L. 422-1 et L. 423-1 du code monétaire et financier et dont l'actif est principalement constitué des actifs mentionnés au a ou de participations directes ou indirectes dans des entités répondant elles-mêmes aux conditions du présent paragraphe ou d'avances en compte courant consenties à ces entités. "

III. - Après le c du 2 ° de l'article 321-119, il est inséré un alinéa ainsi rédigé :

" A compter du 1er janvier 2026, les sociétés de gestion de portefeuille et les personnes mentionnées au a et, pour leur activité de gestion d'OPCVM, les sociétés mentionnées au c ne peuvent plus bénéficier de commissions de mouvement. "

IV. - Après l'article 321-164, il est inséré un article 321-164-1 ainsi rédigé :

" Par dérogation au dixième alinéa de l'article 321-119, les sociétés de gestion de portefeuille relevant du présent titre ainsi que les personnes visées au a et, pour leur activité de gestion d'organismes de placement collectif, les sociétés visées au c du 2 ° dudit article peuvent continuer, après le 31 décembre 2025, à bénéficier des commissions de mouvement dans le cadre des opérations portant sur :

(a) Des biens immobiliers et des meubles meublants, des biens d'équipement ou des biens meubles affectés à ces biens immobiliers et nécessaires au fonctionnement, à l'utilisation ou à l'exploitation de ces biens immobiliers, des droits réels sur ces biens et des droits détenus en tant que preneur de crédit-bail relatifs à ces biens ; et

(b) Des parts ou actions d'entités qui ne sont pas admises à la négociation sur un marché mentionné aux articles L. 421-1, L. 422-1 et L. 423-1 du code monétaire et financier et dont l'actif est principalement constitué des actifs mentionnés au a ou de participations directes ou indirectes dans des entités répondant elles-mêmes aux conditions du présent paragraphe ou d'avances en compte courant consenties à ces entités. "

On 20 May 2022, the Autorité des normes comptables (ANC) published the Recommendation n°2022-02 relating to the procedures for the first application of ANC Regulation No. 2020-01 relating to consolidated financial statements prepared according to French accounting standards.

This recommendation applies to any group establishing consolidated or combined accounts according to the provisions of ANC Regulation No. 2020-01 (hereinafter the Regulation).

It aims to (i) recall the main principles governing the provisions of the Regulation and (ii) the structure of the texts for groups drawing up their consolidated or combined accounts in accordance with French accounting standards.

It also aims to specify certain transitional measures for which the application of the articles of the Regulation may pose practical or interpretation difficulties that were not anticipated when the texts were adopted.

Version française

Le 20 mai 2022, l'Autorité des normes comptables (ANC) a publié la recommandation n°2022-02 relative aux modalités de première application du règlement ANC n° 2020-01 relatif aux comptes consolidés établis selon les normes comptables françaises.

Cette recommandation s'applique à tout groupe établissant des comptes consolidés ou combinés selon les dispositions du Règlement ANC n° 2020-01 (ci-après le Règlement).

Elle vise à (i) rappeler les grands principes régissant les dispositions du règlement et (ii) la structure des textes pour les groupes établissant leurs comptes consolidés ou combinés selon les normes comptables françaises.

Il vise également à préciser certaines mesures transitoires pour lesquelles l'application des articles du règlement peut poser des difficultés pratiques ou interprétatives qui n'avaient pas été anticipées lors de l'adoption des textes.

On 23 May 2022, the Autorité des marchés financiers (AMF) published the summary of SPOT inspections regarding the implementation in France of the ESMA-coordinated supervisory exercise on the costs and fees of UCITS marketed to retail clients.

As announced by the Autorité des Marchés Financiers (AMF) when it presented its supervisory priorities for 2021, the AMF took part in the joint supervisory exercise coordinated by ESMA on the costs and fees of UCITS marketed to retail clients (referred to in this document as retail UCITS). Specifically, based on a methodology defined by ESMA, the AMF (i) carried out a review, on a representative sample of asset management companies (AMCs) and UCITS, of practices for defining, managing and controlling the costs and fees of retail UCITS; (ii) assessed the extent to which these practices comply with the regulatory requirements set out in the UCITS IV Directive and its implementing regulations, which were the basis for ESMA’s supervisory briefing published on 4 June 2020; and (iii) identified good and poor practices in this area.

As part of its investigations, the AMF sent a questionnaire to 49 asset managers representing nearly 2,050 French and foreign UCITS for a total amount of €766 billion assets under management. It completed its observations with a series of short thematic inspections (SPOT inspections) upon five of these companies and conducted in-depth interviews with six others.

Concretely, the AMF examined the following:

• the breakdown of costs and fees for the UCITS marketed by the asset managers of the panel;
• “undue” costs and risky practices;
• price setting and review processes;
• costs paid to third parties and potential associated conflicts of interests;
• fees disclosure via regulatory and marketing documentation available for the UCITS in the sample;
• costs and fees monitoring associated with the implementation of efficient portfolio management (“EPM”) techniques;
• the internal control system in place regarding costs and fees.

The AMF has presented the good and poor practices observed in the sample in a summary document. For example, the exercise highlighted two relatively uncommon but questionable practices. The AMF identified that 14 of the 2,050 or so UCITS analysed had a portfolio composition very close to that of their index, which may suggest a rather passive management style, even though the level of fees was high. For seven funds, it also identified a very high level of turnover fees (“commissions de mouvement”), in excess of 2.5% of net assets. In both cases, the level of fees severely hinders the ability to achieve the management goal and the possibility to outperform the benchmark.

An evolution of the current rules has therefore been decided. The first change concerns the prohibition of turnover fees. It aims to abolish the possibility for UCITS and AIF managers to benefit from turnover fees, with the exception of turnover fees on real estate assets. To enable asset management companies to adapt their set-up, these changes will apply as of January 1, 2026. An amendment to the AMF General Regulation was approved by order of the Minister of the Economy, Finance and Recovery published on May 19, 2022. In this perspective, the AMF will modify its policy to specify the implementation of this change.

The second change concerns the marketing of active funds featuring high fees despite a performance that closely tracks their benchmark, as well as passive funds with high fees.  For active funds, investment services providers (ISPs) must have procedures in place to identify funds with high fees relative to their tracking error vis-à-vis their benchmark. With respect to passive funds, the AMF also states that ISPs must have policies and procedures in place to compare the level of fees of funds that have a passive management objective with those of comparable funds in order to determine whether lower-cost equivalent collective investments are likely to be suitable for their client's profile.

Regarding the SPOT controls, the processes for setting up and reviewing costs and fees structures are generally regulated by an ad hoc committee. However, for the five management companies controlled, the SPOT inspections revealed the absence of an internal umbrella procedure explaining the process for setting up fees schemes (when funds are created) as well as the criteria taken into account for changing these fees. 

When they are paid to third parties, costs are usually governed by special agreements and by a conflict of interest management system consisting of a dedicated procedure, a mapping and a register. Risks of conflicts of interests related to the costs of the services provided by the management company's parent group (acting as a depositary or distributor), external distributors or delegated managers, are adequately addressed.

The AMF considers that the procedures governing the disclosure of costs and fees in UCITS' regulatory and marketing documentation are operational. It did note one shortcoming however, consisting into the lack of information on the existence, nature, main types of beneficiaries and the general formula for calculating fees retrocession.

Version française

L'Autorité des marchés financiers (AMF) a publié le 23 mai 2022 la synthèse des contrôles SPOT relatifs à la mise en œuvre en France de l'exercice de supervision coordonné par l'ESMA sur les coûts et frais des OPCVM commercialisés auprès de la clientèle de détail.

Comme annoncé par l'Autorité des Marchés Financiers (AMF) lors de la présentation de ses priorités de surveillance pour 2021, l'AMF a participé à l'exercice de surveillance conjoint coordonné par l'ESMA sur les coûts et frais des OPCVM commercialisés auprès de la clientèle de détail (appelés OPCVM de détail dans ce document). Concrètement, sur la base d'une méthodologie définie par l'ESMA, l'AMF (i) a procédé à une revue, sur un échantillon représentatif de sociétés de gestion de portefeuille (SGP) et d'OPCVM, des pratiques de définition, de gestion et de contrôle des coûts et frais des OPCVM de détail ; (ii) a évalué le degré de conformité de ces pratiques aux exigences réglementaires fixées par la directive OPCVM IV et ses règlements d'application, qui ont servi de base au briefing prudentiel de l'ESMA publié le 4 juin 2020 ; et (iii) a identifié les bonnes et mauvaises pratiques en la matière.

Dans le cadre de ses investigations, l'AMF a adressé un questionnaire à 49 gestionnaires d'actifs représentant près de 2 050 OPCVM français et étrangers pour un montant total de 766 milliards d'euros d'actifs sous gestion. Elle a complété ses observations par une série de contrôles thématiques courts (contrôles SPOT) auprès de cinq de ces sociétés et a mené des entretiens approfondis auprès de six autres.

Concrètement, l'AMF a examiné les éléments suivants :

• la répartition des coûts et frais des OPCVM commercialisés par les gestionnaires du panel ;
• les coûts " indus " et les pratiques à risque ;
• les processus de fixation et de révision des prix
• les coûts payés à des tiers et les conflits d'intérêts potentiels associés ;
• la divulgation des frais via la documentation réglementaire et marketing disponible pour les OPCVM de l'échantillon ;
• le suivi des coûts et des frais associés à la mise en œuvre des techniques de gestion efficace de portefeuille ("EPM") ;
• le système de contrôle interne en place concernant les coûts et frais.

L'AMF a présenté les bonnes et mauvaises pratiques observées dans l'échantillon dans un document de synthèse. Par exemple, l'exercice a mis en évidence deux pratiques relativement peu courantes mais discutables. L'AMF a identifié que 14 des quelques 2050 OPCVM analysés avaient une composition de portefeuille très proche de celle de leur indice, ce qui peut suggérer un style de gestion plutôt passif, même si le niveau des frais est élevé. Pour sept fonds, elle a également identifié un niveau très élevé de commissions de mouvement, supérieur à 2,5% des actifs nets. Dans les deux cas, le niveau des commissions entrave gravement la capacité à atteindre l'objectif de gestion et la possibilité de surperformer l'indice de référence.

Une évolution des règles actuelles a donc été décidée. La première modification concerne l'interdiction des commissions de mouvement. Elle vise à supprimer la possibilité pour les gestionnaires d'OPCVM et de FIA de bénéficier de commissions de mouvement, à l'exception des commissions de mouvement sur les actifs immobiliers. Afin de permettre aux sociétés de gestion d'adapter leur dispositif, ces modifications s'appliqueront à compter du 1er janvier 2026. Une modification du règlement général de l'AMF a été homologuée par arrêté du ministre de l'économie, des finances et du recouvrement publié le 19 mai 2022. Dans cette perspective, l'AMF modifiera sa doctrine pour préciser la mise en œuvre de cette modification.

Le second changement concerne la commercialisation des fonds actifs à frais élevés malgré une performance proche de leur indice de référence, ainsi que des fonds passifs à frais élevés.  Pour les fonds actifs, les prestataires de services d'investissement (PSI) doivent mettre en place des procédures permettant d'identifier les fonds à frais élevés par rapport à leur tracking error vis-à-vis de leur benchmark. En ce qui concerne les fonds passifs, l'AMF précise également que les PSI doivent disposer de politiques et de procédures permettant de comparer le niveau des frais des fonds ayant un objectif de gestion passive à celui de fonds comparables afin de déterminer si des placements collectifs équivalents moins coûteux sont susceptibles de convenir au profil de leur client.

En ce qui concerne les contrôles SPOT, les processus de mise en place et de révision des structures de coûts et de frais sont généralement réglés par un comité ad hoc. Cependant, pour les cinq sociétés de gestion contrôlées, les contrôles SPOT ont révélé l'absence d'une procédure interne parapluie expliquant le processus de mise en place des schémas d'honoraires (lors de la création de fonds) ainsi que les critères pris en compte pour modifier ces honoraires. 

Lorsqu'ils sont versés à des tiers, les frais sont généralement encadrés par des conventions particulières et par un système de gestion des conflits d'intérêts composé d'une procédure dédiée, d'une cartographie et d'un registre. Les risques de conflits d'intérêts liés aux coûts des services fournis par le groupe mère de la société de gestion (agissant en tant que dépositaire ou distributeur), les distributeurs externes ou les gestionnaires délégués, sont adéquatement traités.

L'AMF considère que les procédures régissant la divulgation des coûts et frais dans la documentation réglementaire et commerciale des OPCVM sont opérationnelles. Elle a cependant relevé une lacune, consistant en l'absence d'information sur l'existence, la nature, les principaux types de bénéficiaires et la formule générale de calcul de la rétrocession de frais.

On 23 May 2022, the Autorité des marchés financiers (AMF) updated their policy on funds with high fees.

Following the Common Supervisory Action (CSA) on the practices of portfolio asset management companies with regard to management costs and fees, the AMF has reviewed the marketing of active funds that are close to their benchmark and passive funds with high fees, and has decided to upgrade its policy in order to specify the requirements applicable to investment services providers (ISP) in such cases.

To clarify what is expected of distributors in this case, Position-recommendation DOC-2007-25 now states that ISPs must have policies and procedures in place to compare the level of fees of funds with a passive management objective with those of comparable funds in order to determine whether equivalent, lower-cost collective investment schemes are likely to be suitable for their clients.

The AMF’s new positions shall apply to ISPs as from 1 January 2023.

Version française

Le 23 mai 2022, l'Autorité des marchés financiers (AMF) a mis à jour sa politique sur les fonds à frais élevés.

A la suite de l'action commune de surveillance (ACS) sur les pratiques des sociétés de gestion de portefeuille en matière de frais de gestion et de commissions, l'AMF a examiné la commercialisation des fonds actifs proches de leur indice de référence et des fonds passifs à frais élevés et a décidé de faire évoluer sa doctrine afin de préciser les exigences applicables aux prestataires de services d'investissement (PSI) dans ce cas.

Afin de clarifier ce qui est attendu des distributeurs dans ce cas, la position-recommandation DOC-2007-25 précise désormais que les PSI doivent disposer de politiques et de procédures permettant de comparer le niveau des frais des fonds à objectif de gestion passive à celui de fonds comparables afin de déterminer si des OPCVM équivalents, moins coûteux, sont susceptibles de convenir à leurs clients.

Les nouvelles positions de l'AMF s'appliquent aux PSI à compter du 1er janvier 2023.

On 5 May 2022, the Association Française de Gestion (AFG) responded to ESMA's consultation on its draft Guidelines on certain aspects of the MiFID II suitability requirements.

In its response, the AFG puts forward a possible approach to meet the obligations of the regulations and in particular the possibility:

• To integrate an additional question between the questioning of the existence of the customer's sustainability preferences and the questioning of the three categories of sustainability (a, b, c). - This additional question "do you have any specific sustainability preferences" would allow the customer not to have to answer all of the questions on categories a, b and c in the event that the customer does not have specific preferences.
• To propose a matrix , at the end of the customer questioning on sustainability preferences, highlighting the products in accordance with one or more of the sustainability preferences expressed by the customer (a, b, c or a combination of the three categories) . This option would respond to the desire of the authorities to present products combining several categories of durability without questioning the customer on the subject.

In its response, AFG also supports ESMA's proposals

• The ability to collect customer information as ranges (low, mid, high) instead of specific percentages.
• The principle of viewing the customer as having “neutral” sustainability preferences when responding that they have no sustainability preferences and the ability to present them with products with or without sustainable features.

Furthermore, throughout its response, the AFG recalls:

• The need for strong education with clients on aspects related to sustainability but also on the state of the sustainable finance market, which is not mature at this stage.
• The importance of being able to benefit from the procedure of modifying the client's sustainability preferences on a regular basis. Indeed, it is very likely that financial institutions will have to resort to this procedure on a regular basis in the current state of the market.
• The possibility for financial institutions to be able to modify the customer profile when they use this procedure for updating customer sustainability preferences.

Version française

Le 5 mai 2022, l'Association Française de Gestion (AFG) a répondu à la consultation de l'ESMA sur son projet de lignes directrices sur certains aspects des exigences de convenance de MiFID II.

Dans sa réponse, l'AFG met en avant une approche possible pour répondre aux obligations de la réglementation et notamment la possibilité :

• D'intégrer une question supplémentaire entre l'interrogation sur l'existence des préférences du client en matière de durabilité et l'interrogation sur les trois catégories de durabilité (a, b, c). - Cette question supplémentaire "avez-vous des préférences spécifiques en matière de durabilité" permettrait au client de ne pas avoir à répondre à toutes les questions sur les catégories a, b et c dans le cas où le client n'a pas de préférences spécifiques.
• Proposer une matrice, à la fin de l'interrogation du client sur les préférences en matière de durabilité, mettant en évidence les produits en fonction d'une ou plusieurs des préférences en matière de durabilité exprimées par le client (a, b, c ou une combinaison des trois catégories). Cette option répondrait au souhait des autorités de présenter des produits combinant plusieurs catégories de durabilité sans interroger le client sur le sujet.

Dans sa réponse, l'AFG soutient également les propositions de l'ESMA

• La possibilité de recueillir des informations sur le client sous forme de fourchettes (faible, moyen, élevé) plutôt que de pourcentages spécifiques.
• Le principe de considérer le client comme ayant des préférences " neutres " en matière de durabilité lorsqu'il répond qu'il n'en a pas et la possibilité de lui présenter des produits avec ou sans caractéristiques durables.

Par ailleurs, tout au long de sa réponse, l'AFG rappelle :

• La nécessité d'une éducation forte auprès des clients sur les aspects liés à la durabilité mais aussi sur l'état du marché de la finance durable, qui n'est pas mature à ce stade.
• L'importance de pouvoir bénéficier de la procédure de modification des préférences du client en matière de durabilité sur une base régulière. En effet, il est très probable que les institutions financières devront recourir à cette procédure sur une base régulière dans l'état actuel du marché.
• La possibilité pour les institutions financières de pouvoir modifier le profil du client lorsqu'elles utilisent cette procédure de mise à jour des préférences du client en matière de durabilité.

On 23 May 2022, the Association Française de Gestion (AFG) published the table of spreads under MiFID II and PRIIPs for April 2022.

As a reminder, AFG publishes for its members a table of half-spreads used to calculate and display the implicit transaction costs under MIF II and PRIIPS. The table is optional and indicative. It is accompanied by an explanatory note.

Version française

Le 23 mai 2022, l'Association Française de Gestion (AFG) a publié le tableau des spreads sous MIF II et PRIIPs pour le mois d'avril 2022.

Pour rappel, l'AFG publie pour ses membres un tableau des demi-fourchettes utilisé pour le calcul et l'affichage des coûts implicites de transaction sous MIF II et PRIIPS. Ce tableau est facultatif et indicatif. Il est accompagné d'une note explicative.

On 31 May 2022, the Association Française de Gestion (AFG) informed on methods of transmission of reports due under article 29 of the Energy and Climate law for the 2021 financial year (article 29 LEC).

Management companies must publish article 29 LEC reports (entity and products) on their website each year. These reports must also be sent electronically to the French Environment and Energy Management Agency (ADEME), as well as to the AMF in the required format before June 30 (or within 6 months that follow the closing).

Version française

Le 31 mai 2022, l'Association Française de Gestion (AFG) a informé sur les modalités de transmission des rapports dus au titre de l'article 29 de la loi Énergie et Climat pour l'exercice 2021 (article 29 LEC).

Les sociétés de gestion doivent publier chaque année sur leur site internet les rapports article 29 LEC (entité et produits). Ces rapports doivent également être transmis par voie électronique à l'Agence de l'environnement et de la maîtrise de l'énergie (ADEME), ainsi qu'à l'AMF dans le format requis avant le 30 juin (ou dans les 6 mois qui suivent la clôture).

On 18 May 2022, the Chambre des représentants de Belgique adopted some articles on the draft law on urgent miscellaneous provisions relating to the fight against money-laundering.

The adopted articles relate to:

• Amendments to the Law of 7 December 2016 on the organization of the profession and public supervision of auditors;
• Amendments to the Act of 18 September 2017 on the prevention of money laundering and terrorist financing and on limiting the use of cash;
• Amendments to the Act of 17 March 2019 on the professions of certified public accountant and tax consultant.

On 2 May 2022, Belgium published a Ministerial Order delegating the power to impose administrative fines for infringements of the Royal Decree of 30 July 2018 on the operating procedures of the UBO register.

The powers provided for in Article 132, § 6, of the Act of 18 September 2017 on the prevention of money laundering and terrorist financing and the limitation of the use of cash and in Article 18 of the Royal Decree of 30 July 2018 on the operating procedures of the UBO register are delegated to the holders of the following functions:

1. the General Administrator of the General Administration of the Treasury of the Federal Public Service Finance;
2. if the above-mentioned person is unable to act, the head of the department that manages the UBO register within that administration, as well as any persons with at least one title of adviser, who are part of that department.

On 2 May 2022, the Financial Services and Markets Authority (FSMA) published Circular 2022_15 regarding the periodic questionnaire on the prevention of money laundering and terrorist financing.

This circular informs obliged entities on the contents of the information, and the modalities for their transmission, intended to be used to assess the compliance and the efficiency of the system they have implemented for combating money laundering and the financing of terrorism. This information is collected by means of an annual questionnaire, which is an important tool in the exercise of the FSMA permanent legal supervisory powers in combating ML/TF.

On 10 May 2022,  the Banque nationale de Belgique (BnB) published communication 2016_37 on recovery plans: Guidelines for Central Securities Depositories (CSDs) and CSD support organisations authorised in Belgium.

This communication specifies the expectations of the BnB with regard to the reorganization plan. It is intended to be a user-friendly tool for credit institutions as well as for parent companies that also have the regulatory status of CSDs or support organizations of CSDs approved in Belgium and Belgian CSDs that do not have the regulatory status of credit institutions.

On 16 May 2022, the Chambre des représentants de Belgique published a proposal for a law to strengthen and simplify the right of consultation with regard to the central contact point for financial accounts and contracts.

The Law of 8 July 2018 on the organisation of a central contact point for financial accounts and contracts and on the extension of access to the central file of notices of seizure, delegation, assignment, collective debt settlement and protest (the PCC Law), the programme Law of 20 December 20202 and the Law of 2 December 2021 amending the PCC Law have thoroughly modernised the central contact point for financial accounts and contracts (PCC) created within the National Bank of Belgium (BnB).

The present bill aims to make four changes in the PCC Law.

First, the five-year retention period for requests for information, set forth in Article 8 of the PCC Law, is extended to ten years. This extension brings the retention period in line with the retention period for data submitted to the PCC by information providers in Article 5 of the PCC Act. 

Secondly, the time limit for consultation is extended from six calendar months to ten years. It is thus aligned with the retention period for data recorded in the PCC. Thirdly, any person registered in the PCC will be able to consult the consultation history of their data on a digital platform. The possibility of exercising the right of consultation on the basis of a written request is maintained.

Thirdly, any person registered in the PCC will be able to consult the consultation history of his/her data on a digital platform. The possibility of exercising the right of consultation on the basis of a written request is maintained.

Finally, in accordance with Article 15 of the General Data Protection Regulation (GDPR), it is also explicitly provided that the reasons for the consultations must be communicated when a person registered in the PCC exercises his or her right of consultation. 

The present proposal does not set out the modalities for the establishment of the above-mentioned digital platform. It will be up to the BnB to organize this platform in the most efficient and accessible way possible.

On 18 May 2022, the Financial Services and Markets Authority (FSMA) updated its information about supplementary pensions.

The FSMA website and the FAQs  about supplementary pensions state a number of amounts that are set by the social legislation on supplementary pensions. These amounts have been updated.

On 3 May 2022, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) repealed general decree pursuant to Section 4 Paragraph 1 Sentence 4 (now: Sentence 5) of the Pfandbrief Act ( PfandBG ) for the approval of domestic credit institutions with credit rating 2 for cover pursuant to the Pfandbrief Act of December 22, 2014.

As a result of the general decree of December 22, 2014, balances and monetary claims against domestic credit institutions with rating category 2 according to Table 3 became Article 120 paragraph 1 of the EU Capital Ordinance eligible for Pfandbrief cover if they exceed an original term of 100 days. § 4 paragraph 1 sentence 3 number 3 letter b PfandBG in the version applicable from 08.07.2022 allows these claims to be covered by Pfandbriefe, regardless of their original term. As of July 8, 2022, the legal basis for the general decree of December 22, 2014 will no longer apply. The general decree of December 22, 2014 must therefore be rescinded as of July 8, 2022, see Section 4 (1) sentence 7 of the PfandBG .

Objections to this notification can be lodged with the Federal Financial Supervisory Authority in Bonn or Frankfurt am Main within one month of notification.

On 20 May 2022, the Bundesrat adopted a draft law for a more effective enforcement of sanctions (Sanctions Enforcement Act I).

This draft law proposes the following measures:

• Regulations that can be implemented in the short term as an anticipation of a later more fundamental solution for the operational implementation of the sanctions packages adopted by the EU after Russia’s illegal attack on Ukraine, in particular restrictive measures aimed at individuals and institutions, restrictions on economic cooperation and import and export restrictions;
• Creation of powers for data access and data exchange of participating authorities as well as determination of funds and economic resources and their protection in the event of an impending transfer of assets;
• Amendment and insertion of various Sections of the Foreign Trade and Payments Act, amendment of Sections 26a, 28, 30, 32 and 40 of the Money Laundering Act, amendment of Section 24c of the Banking Act and insertion of Section 14a of the Securities Trading Act and Section 17a of the Financial Services Supervision Act

On 27 May 2022, the law on the more effective enforcement of sanctions (Sanctions Enforcement Act I) was published in the Bundesgesetzblatt.

Under threat of fines and up to one year imprisonment, sanctioned persons must then disclose their assets. To this end, the Foreign Trade Act, the Money Laundering Act, the Banking Act and the Securities Trading Act will be amended.

The new features include:

• Authority of the authorities to summon and hear witnesses, to secure evidence, to search homes and business premises, to inspect land registers and other public registers. Improved and expanded ways to identify and query accounts, identify lockers and securities accounts of sanctioned individuals.
• Penalty obligation to report frozen funds and other economic resources. The sanctioned persons are obliged to notify their property immediately to the Deutsche Bundesbank or the Federal Office of Economics and Export Control. The penalty is up to one year imprisonment or fine.
• Funds and other economic resources can be secured until ownership is clarified.
• Extension of the data transfer powers of the authorities involved, e.B. Bundesbank to the FUI (Central Office for Financial Transaction Investigations).

On 19 May 2022, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) published documentation for creating MMDL messages in XML format in relation to outsourcing.

On 6 May 2022, the Securities and Futures Commission (SFC) published Frequently Asked Questions (FAQs) on (i) the Code of Conduct on Bookbuilding and Placing Activities in Equity Capital Market and Debt Capital Market Transactions and (ii) “Sponsor Coupling”.

SFC’s FAQs aim to provide further guidance and clarifications to facilitate an effective implementation of policies, procedures and controls for market participants to comply with the relevant requirements.

On 27 May 2022, the Securities and Futures Commission (SFC) published its Joint Announcement with the China Securities Regulatory Commission regarding  implementation of plans to include eligible exchange-traded funds (ETFs) in Stock Connect.

The principal arrangements for ETF Connect will make reference to those under Stock Connect and follow existing fund operations as well as the laws, regulations and operational models governing trading and clearing in the two markets.

The launch of the ETF link is subject to regulatory approvals and the completion of market readiness preparations and other operational arrangements. A separate announcement will be made about the official launch date.

On 27 May 2022, the Central Bank of Ireland (CBI) published its respond on crypto assets. 

Being alert to and mitigating the identified risks from, developments in the crypto sector is a key priority for the CBI and the CBI takes a strategic approach in this regard with several streams of focus. 

In the letter, is referred to the following: 

• The CBI is supporting the Department of Finance in negotiations on the MiCA proposal and welcomes the harmonised approach towards developing an appropriate regulatory framework for the markets in crypto-assets. MiCA is a high priority for the CBI as it seeks to address many of the risks and enhance the benefits associated with crypto assets including risks to consumer protection and market integrity, and specific risks to financial stability and monetary policy from stable coins. 
• The CBI has issued frequent warnings to consumers about the risks associated with crypto assets, published consumer explainers, and taken a strong consistent position in the CBI statements in the media on crypto assets. The CBI's warnings have reflected similar warnings issued by the European Supervisory Authorities. 

On 16 May 2022,  the Central Bank of Ireland (CBI) published the approval process for UCITS side-pocketing arrangement in relation to Russian, Belarusian and Ukrainian assets that are impacted by the Russian invasion into Ukraine and/or impacted by sanctions that have been imposed as a result of Russia’s invasion of Ukraine. 

The Central Bank will permit, subject to conditions set out below, a UCITS to implement a side-pocket arrangement only for Russian, Belarusian and Ukrainian assets that are directly and/or indirectly impacted by the Russian invasion into Ukraine and/or impacted by sanctions that have been imposed as a result of Russia’s invasion of Ukraine (“Affected Securities”). The Affected Securities have become illiquid or untradeable as a result of the Russian invasion of Ukraine and at this time, are difficult to value accurately. This arrangement may be implemented by way of establishment of a clone fund into which liquid assets may be transferred. The side pocketing of UCITS assets is only available in the context of Affected Securities and should not be interpreted as creating a precedent by the Central Bank for any other current or future situations.

A side-pocket by way of a new UCITS is established when liquid assets of an (original) UCITS are transferred into a newly authorised/approved clone UCITS. The Affected Securities which have become illiquid or difficult to value remain in the original UCITS. Shareholders in the newly established clone UCITS hold shares in that fund pro-rata to their holdings in the original UCITS. Investors in the original UCITS continue to have a pro-rata holding in the original UCITS. The original UCITS would be wound down over time with any realised value being paid out to shareholders.

On 3 May 2022, the Central Bank of Ireland (CBI) updated its communication on regulatory flexibility for securities markets, investment management, investment firms and fund Service providers. 

The update entails the removal of the reference to a decision by the Department of Finance to exercise discretion to delay the application of the European Single Electronic Format (ESEF) Regulation for one year. Relevant issuers are reminded that they must apply ESEF reporting for financial years from 1 January 2021.

On 19 May 2022, the Central Bank of Ireland (CBI) published updates to the funds authorisation and funds service providers sections of the website. 

CBI recognises the benefit in having clarity and transparency related to authorisation processes and procedures.  In particular, clear website disclosure assists applicants when engaging with the authorisation processes.  In light of the evolving authorisation process in respect of investment funds and to keep industry participants up to date on various processes applicable to the area, the website has been updated as follows:

• A dedicated section setting out information on the process in respect of requests for derogation for UCITS, Retail Investor AIFs, and Qualifying Investor AIFs;
• Guidance on how investment managers, investment advisers, and non-EU AIFMs are reviewed by the CBI  which involve some changes to existing processes for investment managers; and
• A dedicated “Contact Us” section setting out relevant email addresses for different types of queries.

These website updates are being carried out in the context of a wider review of fund authorisation processes which CBI has underway.  This will involve a review of (i) authorisation processes related to UCITS and Retail Investor AIFs and (ii) authorisation processes for Qualified Investor AIFs.  Both reviews will be completed during the course of 2022.

On 25 May 2022, Italy published the Ministerial Decree on the communication of the beneficial owner of the company register.

The Decree governs:

• the communication of data and information to the Register of Companies relating to the beneficial ownership of companies, legal persons, private trusts and related institutes; 
• access to data and information by the various parties interested.

In particular, the following are required to communicate on beneficial ownership:

• the founder or persons to whom the representation and administration of companies and private legal persons is attributed;
• the trustee of trusts or similar institutions. 

Publication is expected within 60 days of the decree coming into force of the provision of the Ministry of Economic Development which certifies the operation of the data communication system and information on the beneficial owner. 

In this regard, it should be noted that the communications on the ownership effective must be carried out within 60 days following the publication of the provision of the MISE. 

The Decree will come into force on 9 June 2022.

On 17 May 2022, Chambre des députés publishes draft law 8007 amending: 

1. the amended law of 10 August 1915 concerning commercial companies; 
2. the amended law of 19 December 2002 concerning the trade and company register and accounting and annual accounts of companies; 
3. the amended law of 24 May 2011 concerning the exercise of certain rights of shareholders at general meetings of listed companies and transposing Directive 2007/36/EC of the European Parliament and of the Council of July 11, 2007 on the exercise of certain rights of shareholders of listed companies; 
4. the Civil Code.

The amended law of August 10, 1915 concerning commercial companies was subject to an important reform in 2016, but there were several material errors and omissions. Also, in its practical implementation, this law has  revealed some inconsistencies and uncertainties that it seemed useful to address through the present project without making substantial changes. In addition, since 2016, a number of European directives and laws have been amended or even repealed, whose references in the articles of the 1915 Law should be updated.

Thus, as the 1915 law is cited in other legislative acts and some references have not been updated, this is  remedied by the amendment of the 1915 law.

On this occasion, the present project proposes to seize the opportunity to correct other material errors found in the laws of 2002 and  May 2011, as well as to transpose Directive 2007/36/EC.

On 12 May 2022, the Commission des normes comptables (CNC) published Q&A 22/027 - Accounting treatment of transactions and balances denominated in foreign currencies under LUX GAAP and LUX GAAP-JV regimes.

The integration of foreign currency transactions and, if necessary, to (re)valuation - at the end of the financial year should be incorporated in the annual report.  However, neither the Accounting Directive 2013/34/EU1, nor Luxembourg corporate accounting law provide guidelines on the matter.  The international accounting standards IFRS  include IAS 21 "The Effects of Changes in Foreign Exchange Rates" which addresses these issues and provides guidance.

Due to the lack of the existing guidelines on  EU and national level, the various accounting practices has been developed on the matter in Luxembourg.   Among these practices, CNC identifies  the "classical approach", the "monetary vs. non-monetary approach" and the "short term vs. long term approach".

Consequently, the Q&A seeks to formalize the main approaches taken by Luxembourg companies with respect to the treatment of transactions and balances denominated in foreign currencies in foreign currencies under LUX GAAP and LUX GAAP - JV.

On 30 May 2022, the Commission de Surveillance du Secteur Financier (CSSF) updated.

The updated forms related to the:

• AML/CFT market entry form,
• Annual AML/CFT questionnaire,
• External AML/CFT report as defined in section 1.3 of Circular CSSF 21/788, and
• Submission of information related to AML supervisory measures.

On 6 May 2022, Commission de Surveillance du secteur financier (CSSF) updated the survey on covered claims in connection with investment business.

On 22 April 2022, the Commission de Surveillance du secteur financier (CSSF) published Circular 22/807 on updated of Circular 12/552 on the central administration, internal governance and the management of risks.

This Circular applies to all credit institutions and professionals performing lending operations.
The purpose of this circular is to inform that the CSSF, in its capacity as competent authority, applies:

• Guidelines on internal governance (EBA/GL/2021/05);
• Guidelines on the assessment of the suitability of members of the management body and key function holders (EBA/GL/2021/06);
• Guidelines on certain aspects of MiFID II compliance function requirements (ESMA35-36-1952).

The Circular 22/807 update Circular CSSF 12/552, such as modified by the circulars CSSF 13/563, CSSF14/597, CSSF 16/642, CSSF 16/647, CSSF 17/655, CSSF 20/750, CSSF 20/759 and 21/785 relating to the central administration, internal governance and the management of risks.

The Circular 22/807 shall applicable from June 30, 2022.

On 12 May 2022, the Commission de Surveillance du Secteur Financier (CSSF) published Circular 22/810 regarding notification and de-notification procedures for cross-border fund distribution.

The Circular 22/810 informs UCITS and managers of investment funds incorporated under Luxembourg law that notification and withdrawal procedures for pre-marketing and cross-border marketing will be progressively made available on the eDesk.

Consequently, the Circular 11/5091 will eventually be repealed. The CSSF will continue to inform the relevant entities on the on the evolution of the procedures available in the eDesk portal. 

The available link for eDesk portal:  edesk.apps.cssf.lu/edesk-dashboard/dashboard/getstarted

This Circular will be applicable as of May 12, 2022.

On 16 May 2022, Commission de Surveillance du Secteur Financier (CSSF) published Circular 22/811 on authorisation and organisation of entities acting as Undertaking for collective investment (UCI) administrator.

In view of evolutions in the field of UCI administration, the CSSF specifies its requirements concerning governance and internal organisation by publishing Circular CSSF 22/811. 

The UCI administration activity covers three main functions: the registrar function, the NAV calculation and accounting function, and the client communication function as defined in section 2.2.2 of the circular.

In particular, the circular implements a new reporting for UCI administrators (pt 7 of the circular & annex B). The reporting must be filed, for the first time, at the latest five months after the UCIA financial year-end, starting from 30/06/2023 (pt 104 of the circular). Another important change is that prior authorisation is replaced by a prior notification in case of delegation of a critical or important operational task (pt 100-101 of the circular).

The circular immediately enters into effect and applies to all entities acting as UCI administrators for regulated and non-regulated UCIs established, or not, in Luxembourg. The requirement for authorisation set out in section 2.2.1 of the circular does not apply to entities already acting as UCIA at the date of entry in force of this circular. A grandfathering period, in order to comply with the remaining provisions of the present circular, is granted to such entities already acting as UCIA at the date of entry in force of Circular 22/811 until 30/06/2023.

On 31 May 2022, the Commission de Surveillance du secteur financier (CSSF)  updated the  money laundering/ financing of terrorism (ML/FT) sub-sector risk assessment (SSRA) on the collective investment sector.

The conclusions drawn in this assessment were based on quantitative data collected through different initiatives, in particular the annual AML/CFT survey, and qualitative assessments by the CSSF as part of its onsite and offsite AML/CFT supervision. 

In line with its AML/CFT supervisory strategy, the CSSF hereby updates its 2020 risk assessment using quantitative and qualitative data related to the years 2020 and 2021. 

In the Luxembourg National Risk Assessment published in September 2020, the sub-sector of Collective Investments has been assessed as inherently high risk in relation to money laundering and terrorist financing. 

The scope of this assessment encompasses all Luxembourg regulated undertakings for collective investments. It focuses on Investment Fund Managers (IFM), considering their specific AML/CFT roles and responsibilities.

This update of the risk assessment, is aimed:

• To serve as a source for the investment fund industry when performing their own ML/TF risk assessments; 
• To promote the understanding of ML/TF risks and AML/CFT obligations in the fund industry; 
• To support public-private interaction; 
• To reflect CSSF’s own understanding of particular ML/TF risks in the sub sector; 
• To further improve CSSF’s supervisory activities and sub-sector specific supervision strategy, where relevant; and 
• To serve as an input for CSSF’s risk assessments.

On 5 May 2022, the Luxembourg Sustainable Finance Initiative (LSFI) published a report on how financial advisors consider clients’ sustainability motivations before the upcoming MiFID II Delegated Act.

300 mystery shopping visits across seven EU countries map the current extent to which sustainability feeds into financial advice. The research, summarized in this report, represents the most comprehensive attempt to date to map the preparedness of the European market to changes to EU regulation under the upcoming MiFID II Delegated Act.

On 10 May 2022, the Swiss Bankers Association (SBA) published a statement on the partial revision of the FINMA Money Laundering Ordinance (AMLO-FINMA)

The most important concerns from the point of view of the SBA are as follows: 

• all legal bases (revised AMLA, AMLO and MLO-FINMA) should enter into force at the same time. 
• with regard to the envisaged documentation obligation in the sense of a No AML Report (Art. 22 para. 2 AMLO-FINMA), the primary concern of the SBA is to adhere to the original wording and thus the restriction to dubious business relationships with significant assets. Subsidiarily, the SBA proposes a restriction of the documentation requirement.

Version française

Le 10 mai 2022, l'Association suisse des banquiers (ASB) a publié une déclaration sur la révision partielle de l'Ordonnance de la FINMA sur le blanchiment d'argent (AMLO-FINMA)

Les préoccupations les plus importantes du point de vue du SBA sont les suivantes :

• toutes les bases légales (LBA révisée, AMLO et MLO-FINMA) devraient entrer en vigueur en même temps.
• en ce qui concerne l'obligation de documentation envisagée dans le sens d'une déclaration de non-blanchiment (art. 22 al. 2 LBA-FINMA), la principale préoccupation de l'ASB est de respecter la formulation originale et donc la restriction aux relations d'affaires douteuses avec actifs importants. Subsidiairement, le SBA propose une limitation de l'exigence de documentation.

On 10 May 2022, the Swiss Bankers Association (SBA) published a statement on the total revision of the FINMA Data Ordinance (2022). 

The most important concerns from SBA'a point of view are as follows: 

• Clarification is needed in Art. 1 of the FINMA E-Data Ordinance, according to which the Federal Data Protection Act applies unless the FINMA Data Ordinance contains provisions to the contrary. 
• The purposes of data processing should be specified and clearly stated in Art. 3 FINMA E-Data Ordinance. 
• The granting of access rights must be restricted or extended to individual employees in accordance with their function, in compliance with the need-to-know principle and on the basis of objectively comprehensible criteria (Art. 5 para. 3 FINMA E-Data Ordinance). The relevant criteria should be regulated in the processing regulations pursuant to Art. 2 para. 2 FINMA E-Data Ordinance. 
• The acquisition of personal data without the knowledge of the data subject requires a legal basis and is otherwise inadmissible. Since there is no legal basis in the present case, Art. 7 (3) of the FINMA E-Data Ordinance should be deleted. 

Version française

Le 10 mai 2022, l'Association suisse des banquiers (ASB) a publié une prise de position sur la révision totale de l'ordonnance sur les données de la FINMA (2022). 

Les préoccupations les plus importantes du point de vue de l'ASB sont les suivantes : 

• Des clarifications sont nécessaires dans l'art. 1 de l'ordonnance sur les données électroniques de la FINMA, selon lequel la loi fédérale sur la protection des données s'applique sauf si l'ordonnance sur les données de la FINMA contient des dispositions contraires. 
• Les finalités du traitement des données doivent être précisées et clairement indiquées à l'art. 3 de l'ordonnance sur les données électroniques de la FINMA. 
• L'octroi des droits d'accès doit être limité ou étendu à certains collaborateurs en fonction de leur fonction, dans le respect du principe du besoin de savoir et sur la base de critères objectivement compréhensibles (art. 5, al. 3, ordonnance sur les données électroniques de la FINMA). Les critères pertinents doivent être réglés dans le règlement de traitement selon l'art. 2 al. 2 de l'ordonnance de la FINMA sur les données électroniques. 
• L'acquisition de données personnelles à l'insu de la personne concernée nécessite une base légale et est par ailleurs inadmissible. Comme il n'existe pas de base légale en l'espèce, l'art. 7, alinéa 3, de l'ordonnance de la FINMA sur les données électroniques doit être supprimé. 

On 4 May 2022, the Eidgenössische Finanzmarktaufsicht (FINMA) published Guidance 1/2022 on the licensing process for asset managers and trustees.

With this Guidance, FINMA shows portfolio managers and trustees the necessary steps in the licensing process, set out the corresponding timetable and provide recommendations for fulfilling the duties in accordance with the FinIA.

FINMA strongly recommends that all institutions submit their complete license application to a supervisory organisation (SO) by 30 June 2022. This is to allow an adequate amount of time for the affiliation process. The confirmation of affiliation to an SO is an important milestone before a license application can be submitted to FINMA.

Since 1 January 2020 portfolio managers and trustees must be licensed by FINMA and supervised by an SO. For existing portfolio managers and trustees, a transitional period applies until 31 December 2022, by which date FINMA must have received a license application. It is the responsibility of the institutions concerned to meet the applicable deadlines. The transitional period can only be extended in exceptional circumstances.

Version française

Le 4 mai 2022, l'autorité fédérale de surveillance des marchés financiers (FINMA) a publié la directive 1/2022 sur le processus d'autorisation des gestionnaires de fortune et des fiduciaires.

Avec cette guidance, la FINMA indique aux gestionnaires de portefeuille et aux trustees les étapes nécessaires du processus d'autorisation, fixe le calendrier correspondant et fournit des recommandations pour remplir les devoirs conformément à la LFINMA.

La FINMA recommande vivement à tous les établissements de soumettre leur demande d'autorisation complète à un organisme de surveillance (OS) d'ici au 30 juin 2022. Ceci afin de laisser un délai suffisant pour le processus d'affiliation. La confirmation de l'affiliation à un OS est une étape importante avant qu'une demande de licence puisse être soumise à la FINMA.

Depuis le 1er janvier 2020, les gestionnaires de portefeuille et les trustees doivent être autorisés par la FINMA et supervisés par un OS. Pour les gestionnaires de portefeuille et les fiduciaires existants, une période transitoire s'applique jusqu'au 31 décembre 2022, date à laquelle la FINMA doit avoir reçu une demande d'autorisation. Il incombe aux institutions concernées de respecter les délais applicables. La période transitoire ne peut être prolongée que dans des circonstances exceptionnelles.

On 2 May 2022, the Decree of 8 April 2022, containing rules regarding the registration of beneficial owners of trusts and similar legal arrangements implementing Article 31 of the amended Fourth Anti-Money Laundering Directive (Implementation Decree on registration of beneficial owners of trusts and similar legal arrangements) was published in the Official Gazette of the Kingdom of the Netherlands. 

This Decree, together with the Implementation Act on registration of ultimate beneficial owners of trusts and similar legal structures (hereinafter referred to as: the Implementation Act), is intended to implement the obligation to maintain and centrally register information about the ultimate beneficial owners of trusts and similar legal structures. This obligation arises from Article 31 of the European fourth anti-money laundering directive, as amended by European Directive (EU) 2018/843 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. 

In this Decree, a number of matters regulated in the Implementation Act have been further elaborated, including:

• the concept of "ultimate beneficial owner";
• the classes in which the size of the economic interest can be expressed;
• the retention periods;
• the grounds for foreclosure; and
• the competent authorities.

On 27 May 2022, the Act of 11 May 2022, amending the Financial Supervision Act, the Financial Supervision Funding Act 2019 and any other laws in the field of financial markets (Financial Markets Amendment Act 2022) was published in the Official Gazette of the Kingdom of the Netherlands. 

The 2022 Act contains changes to key legislation relevant to the Dutch financial markets, including, but not limited to, the Act on the Financial Supervision (Wet op het financieel toezicht, the AFS), the Financial Supervision Funding Act 2019 (Wet bekostiging financieel toezicht) and the Act on the prevention of money laundering and terrorist financing (Wet ter voorkoming van witwassen en financieren van terrorisme). This legislative proposal is part of an annual cycle of changes to legislation relevant to the Dutch financial markets.

Among others, the 2022 Act provides for the introduction of a “segregated assets account” (rekening met afgescheiden vermogen) for payment institutions, payment processing service providers, electronic money institutions and investment firms. In particular, there are certain requirements for the segregated assets account including that it must be held with a bank with its seat in the Netherlands that is licensed by the European Central Bank or the Dutch Central Bank (De Nederlandsche Bank), the account must be in the name of the financial institution concerned, and it should follow from the name of the account that it is held by the account holder in its own name and noting the account holder’s capacity, but for the benefit of one or more third parties (the customers). The funds in the segregated assets account are separate assets and are only to be used for settling claims from interested parties, i.e. from: (1) third parties for whom the funds have been deposited in the account and (2) the bank where the segregated assets account is held (provided it concerns claims related to the management of the account). In both cases the claims must be related to the entrustment of the funds to the account holder. This exclusivity of recourse means that in the event of the bankruptcy of the financial institution, the funds in the segregated assets account do not form part of the financial institution’s bankruptcy estate.

This Act shall enter into force at a time to be determined by Royal Decree, which may be determined differently for the various articles or parts thereof.

On 12 May 2022, the De Nederlandsche Bank (DNB) announced second inquiry about the management of the new pension scheme.

This request is a follow-up to the DNB request of October 4, 2021 . With this inquiry they gain insight into the progress of your preparation for the transition to an NPR and especially into the risks that are relevant at the moment. This serves two purposes. The answers enable DNB in the first place to deploy their supervisory capacity where the greatest risks exist, which contributes to efficient and effective supervision. Secondly, they gain insight into which fund expects to switch and when. This allows them to estimate in which years they can expect the most requests for and applications from funds and they can prepare their selves for this internally.

DNB periodically repeats this request during the transition period. As the transition progresses, new risks will arise. DNB will adjust the questions accordingly, in order to always obtain an up-to-date insight into the risks that match the stage of preparation you are in and the legal requirements.

DNB understands that this request requires an extra effort from the sector. That is why the request contains questions from both DNB and the AFM. Naturally, this questionnaire has been compared with other questions so that no duplicate information is requested.

In the second half of 2022 you will receive sector-wide feedback on the results of the request.

This request will be made available on Wednesday 18 May 2022 via Digital Reporting Desk (DLR). You can upload the excel file with your answers up to and including Monday 20 June 2022 in DLR.

On 31 May 2022, the De Nederlandsche Bank (DNB) published a position paper on the Future Pensions Act.

In DNB's opinion, this bill takes important steps towards a more future-proof pension system:

• In the bill, pension funds no longer promise pension benefits. This removes the need for a discount rate for valuing pension entitlements and thus a major source of tension between generations.
• The new pension system has a risk attitude per age cohort. This ensures that This ensures that the risks to which young and old participants are exposed are better aligned with the risks they are willing and able to take. risks that they are willing and able to bear.
• The abolition of the average system will make the pension system more compatible with the modern The abolition of the average system ensures that the pension system is better suited to the modern labor market. Participants will receive a pension accrual that matches The abolition of the average system ensures that the pension system is better suited to the modern labor market.
• At the same time, the strong points of the current pension system will be retained, including the obligation to pay contributions, the collective administration and the collective investment policy.

On 2 May 2022, the De Nederlandsche Bank (DNB) announced new policy rule titled "DNB Enforcement Policy for the timely submission of supervisory reports" coming into effect.

DNB revised its Enforcement Policy in the event of late provision of financial reports by supervised institutions dated 16 May 2013. This has been replaced by the DNB Enforcement Policy Rule for the timely submission of supervisory reports of 30 March 2022 (hereinafter: Enforcement Policy Supervisory Reports). The Enforcement Policy on Supervision Reports was published in the Government Gazette on 2 May 2022 (Government Gazette 2022, 11493) and will come into effect on 3 May 2022.

In the Enforcement Policy on Supervision Reports, DNB explains the method of submission. An institution submits a supervisory report digitally via an electronic reporting system developed for this purpose by DNB (currently the Digital Reporting Desk (DLR)). A supervisory report is considered to be submitted on time if it has been submitted to the electronic reporting system at the latest on the submission date determined by or pursuant to a statutory provision and in accordance with the method established by DNB. In principle, this is the case when the supervision report in the electronic reporting system has been given the status fulfilled. If a supervisory report is not submitted to DNB in time, DNB will consider whether it is appropriate to impose an order subject to a penalty and/or an administrative fine.

Under the Enforcement Policy on Supervisory Reports, DNB explains that, in principle, DNB imposes an order subject to periodic penalty payments if an institution fails to submit a supervisory report on time. In addition, DNB gives a favorable period of ten working days within which the report must still be submitted in full. After expiry of the favorable period, a penalty of EUR 1,250 will in principle be forfeited for each full working day that the order has not been met in full, with a maximum of EUR 12,500.

If an institution repeatedly fails to submit a supervisory report on time within a consecutive period of thirteen months, DNB will in principle impose an administrative fine. DNB defines repeatedly as the failure to submit a supervisory report on time for the second time within a consecutive period of thirteen months. DNB determines the amount of the administrative fine on the basis of the step-by-step plan as referred to in Article 8 of the Enforcement Policy on Supervisory Reports.

On 2 May 2022, the policy rule of the Nederlandsche Bank NV of 30 March 2022 containing rules with regard to the timely submission of supervisory reports was published in the Official Gazette of the Kingdom of the Netherlands.

De Nederlandsche Bank NV (DNB) has adopted the following policy with regard to the enforcement of violations of reporting obligations to which DNB is subject pursuant to Sections 1:79 and 1:80 of the Financial Supervision Act, Section 48 of the Trust Office Supervision Act 2018, Articles 175 and 176 of the Pensions Act and Articles 170 and 171 of the Obligatory Occupational Pension Scheme Act, has an enforcement power (DNB Enforcement Policy for the timely submission of supervisory reports).

On 24 May 2022, the Comicion Nacional del Mercado del valores (CNMV) updated the Questions and answers (Q&As) on regulations on collective investment schemes (CISs), venture venture capital firms and other collective investment vehicles.

Question 69 undecies is added to reflect the latest interpretative criteria on securities settlement discipline. The question is the following: 

• In relation to the penalty regime on settlement discipline in financial markets according to the European Regulation 909/2014 on the improvement of settlement in the EU and central securities depositories, can penalties for settlement failures be passed on to CIS? Is it mandatory to hand over to CIS the compensation received for settlement failures? 

Moreover, a minor adjustment is included in question 156 for clarification purposes:

• In the case of a management company or financial intermediary authorized to market a CII, when is the subscription considered to be at the initiative of the client?

On 11 May 2022, the Comicion Nacional del Mercado del valores (CNMV) adopted the European Banking Authority (EBA) guidelines on sound remuneration policies for Investmeent firms (IFs) under Directive (EU) 2019/2034.

The CNMV has informed EBA of its intention to comply with the guidelines on sound remuneration policies for IFs under Directive (EU) 2019/20341. Therefore, the CNMV will take such criteria into account and focus its attention, within the scope of its supervisory powers, on compliance with them by the firms to which they apply.

The aim of these Guidelines is to improve the clarity and convergence in the  application of certain aspects of the requirements on remuneration policies, following the amendments to Directive (EU) 2019/2034 on this matter.

The Guidelines supplement the details contained in Directive (EU) 2019/2034 on the governance and processes relating to the implementation of remuneration policies for all staff and identified staff. The most relevant aspects of these guidelines are indicated below:

• They detail the requirements to ensure gender neutral remuneration policies, i.e., that staff, irrespective of their gender, receive equal pay for equal work or work of equal value. In this regard, the guidelines detail how to monitor the gender pay gap according to the size of the firm.
  They also contain the requirements that the remuneration policy must comply with in terms of approval and payment of variable remuneration for identified staff, in particular on aspects relating to the deferral of variable remuneration and payment in instruments.
• They detail the requirements on remuneration ratios that firms’ remuneration policies must comply with in the variable part of remuneration for identified staff under previous legislation. They contain the supervisory approach to be applied by competent authorities in the supervision of remuneration policies and practices.

On 19 May 2022, the Comicion Nacional del Mercado del valores (CNMV) adopted the European Banking Authority (EBA) Guidelines on internal governance under Directive (EU) 2019/2034, applicable to investment firms.

The CNMV has notified the EBA of its intention to comply with the aforementioned Guidelines.

The Guidelines detail the obligations of investment firms regarding internal governance arrangements required by the Directive. These refer to their organisational structure and the corresponding internal lines of responsibilities, as well as the processes to identity, manage, monitor, and report all risks to which they are or may be exposed. They also affect the internal control framework. 

These obligations do not apply to investment firms that meet the conditions to be considered as small and non-interconnected investment firms. 

On 24 May 2022, the Financial Reporting Council (FRC) updated ISAs (UK), amended to include conforming amendments arising from the revision of ISA (UK) 315 (Revised July 2020) Identifying and Assessing the Risks of Material Misstatement.

The revised ISAs (UK) are: 200, 210, 220, 230, 240, 250A, 260, 265, 300, 320, 330, 402, 450, 500, 501, 505, 520, 530, 540, 550, 570, 580, 600, 610, 620, 700, 701, 720.

ISQC (UK) 1 has also been updated.

On 11 May 2022, the Financial Conduct Authority (FCA) issued a statement to customers on the risks of investing in cryptoassets. 

The FCA emphasises that the FCA has not been given regulatory oversight over direct investments in cryptoassets and non-fungible tokens (NFTs). There are no consumer protections for those who buy any cryptoassets and NFTs, and they are not FSCS protected. As a result, if a consumer buys cryptoassets, a consumer should be prepared to lose all the money she/he invest.

Those marketing cryptoassets must stick to the guidelines set out by the Advertising Standards Authority (ASA) and state that cryptoassets are not regulated by the FCA. Marketing must also make clear that cryptoassets are not protected by financial compensation schemes. 

On 31 May 2022, the UK Government launched consultation on managing the failure of systemic digital settlement asset (including stablecoin) firms.

The government has made a firm commitment to place the UK’s financial services sector at the forefront of cryptoasset technology and innovation. It is taking a staged and proportionate approach to cryptoasset regulation, which is sensitive to risks posed and responsive to new developments in the market. This approach will focus on stablecoins in the first instance given their potential to develop into a widespread means of payment.

Among other things, it is intended that this will create the conditions for issuers and service providers of stablecoins used as a means of payment to operate and grow safely in the UK, driving consumer choice and efficiencies. However, the government also considers it necessary to ensure appropriate, and proportionate, tools are in place to mitigate the financial stability issues that may materialise should a firm that has reached systemic scale fail. This consultation sets out the government’s intention to deliver such tools in a timely fashion.

Since the initial commitment to regulate certain types of stablecoins, events in cryptoasset markets have further highlighted the need for appropriate regulation to help mitigate consumer, market integrity and financial stability risks.

This consultation seeks the views of stakeholders on both the intention to appoint the FMI SAR as the primary legal framework through which to address the failure of a systemic DSA firm, as well as the necessary amendments that will be required to ensure the FMI SAR can operate effectively with regard to such a firm. Separately, HM Treasury will be consulting in the coming months on the regulatory perimeter for systemic payments firms at large.

The deadline submit a respond is 2nd of August 2022. 

On  13 May 2022, the Financial Conduct Authority (FCA) published consultation paper CP22/9 on the Expansion of the Dormant Assets scheme. 

The Dormant Asset Scheme (DAS) allows banks and building societies to pay dormant monies to an authorised reclaim fund which then puts this money towards funding good causes. In 2016, HM Government established the Independent Commission on Dormant Assets to examine what new assets could be brought into an expanded Dormant Asset Scheme. The Commission identified dormant assets in a range of financial services sectors that could be included in an expanded DAS.

In February 2022, the Dormant Assets Act 2022 received Royal Assent. The Act amends the Dormant Bank and Building Society Accounts Act 2008 to expand the scope of dormant assets that can be contributed to the DAS. 

The new assets in scope of the expanded scheme fall under five asset classes: 

• insurance 
• pensions 
• securities 
• investment assets  
• client money 

On 24 May 2022, the he Dormant Assets act 2022 (Commencement) Regulations 2022 were published in the UK legislation.

These Regulations bring into force on 6th June 2022 those provisions of the Dormant Assets Act 2022 (c. 5) that are not already in force. Section 34 (which relates to extent, commencement, construction as one with 2008 Act and citation) came into force on Royal Assent (24th February 2022).

On 10 May 2022, the UK Government issues briefings and the Queen speech on the upcoming legislations. 

For the financial services it was highlighted that  the government will bring forward the Financial Services and Markets Bill. The main elements of the Bill should be as follows: 

• revoking retained EU law on financial services and replacing it with an approach to regulation that is designed for the UK;
• updating the objectives of the financial services regulators to ensure a greater focus on growth and international competitiveness;
• reforming the rules that regulate the UK’s capital markets to promote investment;
• ensuring that people across the UK continue to be able to access their own cash with ease;
• introducing additional protections for those investing or using financial products, to make it safer and support the victims of scams. 

The Bill is not yet introduced.

On 19 May 2022, the Financial Conduct Authority (FCA) published policy statement PS22/5 concerning the changes to Handbook and Enforcement Guide. 

The Handbook and Enforcement Guide to give guidance on the supervisor's  power to cancel or vary the statutory permissions of many FCA-authorised firms to carry on FCA-regulated activities.

This Policy Statement explains the modifications and sets out the FCA's responses to relevant feedback the FCA received to Consultation Paper No CP21/28. 

As for changes to the Handbook and Guidance, the following is highlighted: 

• Description of the new Schedule 6A power to cancel or vary as well as the process that Schedule 6A requires FCA to follow when FCA uses it; 
• Provision of guidance on the FCA's approach, in particular the circumstances in which the FCA considers that firm is not carrying on any FCA-regulated activities; 
• Provision on guidance on the potential use of the FCA's power in an enforcement context; 
• Description of factors that the FCA will or max take into account when considering an application for annulment, as well as conditions the FCA can impose on annulment and the FCA's additional power under Schedule 6A;
• Provision of guidance  on the potential effect of an annulment on the ability of the financial services compensation scheme to consider paying compensation and the ability of the financial Ombudsman service to consider complains; 
• Introduction of a new rule in dispute resolution: complains sourcebook to delay, in certain circumstances and in the interests of firms whose applications to annul are successful, the deadline for submitting the complains returns following annulment. 

A new guidance will be effective immediately. 

On 25 May 2022, the Financial Conduct Authority (FCA) published the regulatory initiatives grid as of May 2022. 

The grid sets out the regulatory pipeline. This is so the financial services industry can understand and plan for the timing of the initiatives that may have a significant operational impact on them.

The grid overviews initiatives that affect multiple sectors, such initiatives covers Environment, Social and Governance (ESG), Cross-cutting/omnibus, Financial resilience, Operational resilience, Conduct, Competition, innovation and other, and other single-sector initiatives. 

As for the banking, credit and lending, the grid contains 28 initiatives. These include a number of regulatory revisions, new regimes and perimeter adjustments to promote good conduct and financial resilience in the sector, as well as initiatives geared towards enhanced competition and consumer protection. 

There are 10 initiatives for payment services and systems and market infrastructure, 8 initiatives for insurance and reinsurance, 7 initiatives for investment management, 6 initiatives for retail investment, 10 initiatives  for wholesale financial markets. 

On 23 May 2022, the Financial Conduct Authority (FCA) published the finalised guidance No FG22/3: finalised guidance on parts of the UK Money Market Funds Regulation (MMFR). 

This guidance relates primarily to two issues: 

1. the requirements in UK MMFR article 34(1)(a) for public debt Constant Net Asset Value (CNAV) MMFs and Low Volatility Net Asset Value (LVNAV) MMFs;
2. the portfolio requirements in UK MMFR articles 24 and 25 which, together, apply to all UK MMFs. Article 24 applies to short term MMFs (public debt CNAV MMFs, LVNAV MMFs and short term Variable NAV (VNAV) MMFs), and Article 25 applies to standard VNAV MMFs.

This guidance also reminds market participants that as per UK MMFR articles 24 and 25, if a MMF’s liquidity ceases to meet the portfolio requirements, then the MMF manager needs to prioritise the correction of that situation, taking due account of the fund investors’ (unitholders) interests. When deciding remedial action, the MMF manager will need to balance the speed at which it can return the fund to a position where the relevant portfolio requirements are satisfied against investor outcomes. The guidance also notes that articles 24 and 25 also provide for and envisage that MMFs may drop below minimum liquid asset requirements due to the exercise of subscription or redemption rights, or for reasons beyond the manager’s control.

On 4 May 2022, the Financial Conduct Authority (FCA) published findings of the good and poor practice from the FCA's investment platforms costs and charges review. 

The FCA focused on the experience of non-advised consumers. The FCA looked at how easy it is to access charging information and whether the information available helps them understand what they pay. 

The FCA was able to generally identify and compare the main platform charges and the fund charges were signposted. But activity-based charges were sometimes harder to locate, such as telephone trades costs, foreign exchange, and interest on cash. 

Good practice included the following: 

• single comprehensive lists of all fees and charges applicable;
• interactive tools, infographics, calculators and worked examples;
• simple and clear explanations of charges - for example via information buttons when hovering over terms or phrases used;
• platforms stating whether any exit fees apply or not. 

Poor practice related to: 

• a lack of a succinct comprehensive list of charges being clearly signposted;
• information being spread out across different webpages;
• too many links to different sections and pages;
• omission of a clear statement of the interest applying to any cash held or the information being ‘hidden away’ in legalistically worded terms and conditions. 

On 6 May 2022, the Financial Conduct Authority (FCA) published a briefing  on MIFIDPRU applications and notifications, and information about MIF returns.

In the briefing, the FCA provided information on the following: 

• MIFIDPRU applications and notifications. All MIFIDPRU permission application forms and MIFIDPRU notification forms are now available and must be submitted via Connect (https://connect.fca.org.uk/firms/aupo_sitelogin)
• Updated authorisation forms. 
• MIFIDPRU TP 7.4R(2)(b) notification. While feedback is still pending, firms and parent undertakings encouraged  to submit TP7 notifications now to ensure that they will meet the new deadline if it is extended.
• Reminder of the reporting completion guidance

On 27 My 2022, the Financial Conduct Authority (FCA) published notes for MiFID Annex for VOP applications. 

Providing the information requested in the MiFID Annex for VOP Applications will, together with information provided in other parts of this application pack enable firms to:

• Comply with its obligation to provide information under Article 7(2) of MiFID; 
• Supply the FCA with everything it needs to assess application against the Threshold Conditions in FSMA; 
• Supply the FCA with everything it needs to process the application and to prepare for the supervision of the firm (such as information relating to fees and prudential categories).

On 24 May 2022, the Financial Conduct Authority (FCA) published a statement on he proposed framework to assess and promote value for money in all FCA and TPR-regulated defined contribution pension schemes. 

In September 2021, the Pensions Regulator (TPR) and the FCA published a value for money discussion paper inviting views on developing a holistic framework and related metrics to assess value for money (VFM) in defined contribution (DC) pension schemes. 

The paper sets out and invited comments on three key elements of VFM:

• investment performance
• customer service and scheme oversight
• costs and charges.

This feedback statement summarises the responses the FCA received, which used to inform the development of proposals for consultation towards the end of this year. This paper does not provide not  policy response but next steps are included. 

On 27 May 2022, the Financial Conduct Authority (FCA) published Primary Market Bulletin 40.

In this edition, the FCA provided feedback on its consultation in PMB 34 and highlight changes to the Knowledge Base on the prospectus regime as a result of the consultation.

Changes to the Knowledge Base:

• update to one existing procedural note;
• update to 10 existing technical notes;
• four new technical notes. 

On 11 May 2022, the UK Government published a call for evidence on update to green finance  strategy.

The consultation is intended to gather views and evidence from stakeholders to support the Government in developing an update to the Green Finance Strategy, planned for publication in late 2022. The updated strategy will take stock of progress and set out how the UK can better ensure the financial services industry is supporting the UK’s energy security, climate and environmental objectives.

The consultation closes on 22 June 2022.

On 24 May 2022, the Bank of England (BoE) published the results of the Climate Biennial Exploratory Scenario (CBES), which explores the financial risks posed by climate change for the largest banks and insurers operating in the UK.

The banks and insurers participating in the Climate Biennial Exploratory Scenario (CBES) were asked to use three scenarios to look at how climate-related risks could affect them. Two scenarios featured policies to limit global temperature rises (Early Action scenario and Late Action scenario), the third featured unchecked global warming (No Additional Action scenario). Each scenario examines the risks that could develop over a period of 30 years. The participating entities then modelled how their businesses could be affected in each scenario.

The key findings of the CBES: 

• Projections of climate losses are uncertain. Scenario analysis in this area is still in its infancy and there are several notable data gaps. UK banks and insurers have made progress but still need to do much more to understand and manage their exposure to climate risks.
• At an aggregate level UK banks and insurers are likely to be able to absorb the costs of transition that fall on them. The overall costs will be lowest with early and well-managed action to reduce greenhouse gas emissions and so limit climate change. Some costs that initially fall on banks and insurers will ultimately be passed on to their customers.
• Governments set public climate policy, which will be a key determinant of the speed and shape of changes in the global economy. Banks and insurers have a collective interest in managing climate related financial risks in a way that supports that transition over time.

On 31 May 2022, the UK Government called for evidence on the financial sector and the UK’s net zero transition. 

The  role of financial institutions in winding down the financing of fossil fuel extraction and promoting the transition to green energy in pursuit of the Government’s climate and environment targets is being investigated. 

The submissions are welcome until 30 June 2022. 

On 13 May 2022, the Ministerial Order 2022-234 of May 6, 2022 amending Ministerial Order 2021-703 of November 8, 2021 relating to the list of States or territories whose anti-money laundering, combating the financing of terrorism or combating corruption systems are strategically deficient, as referred to in Article 14-1 of Act 1.362 of August 3, 2009, as amended was published in the Journal de Monaco – Bulletin Officiel de la Principauté. 

Article 1 of Ministerial Order No. 2021-703 of November 8, 2021, as amended, referred to above, is amended as follows:

Pursuant to Article 14-1 of Act No. 1.362 of August 3, 2009, as amended, referred to above, the list of States or territories whose anti-money laundering, combating the financing of terrorism or combating corruption systems show strategic deficiencies, is as follows

• Afghanistan
• Albania
• Barbados
• Burkina Faso
• Cambodia
• United Arab Emirates
• Haiti
• Cayman Islands
• Jamaica
• Jordan
• Mali
• Malta
• Morocco
• Myanmar/Burma
• Nicaragua
• Pakistan
• Pakistan
• Panama
• Philippines
• Senegal
• South Sudan
• Syria
• Trinidad and Tobago
• Turkey
• Vanuatu
• Yemen
• Zimbabwe

On 20 May 2022, the Sovereign Ordinance No. 9.259 of May 12, 2022 amending Sovereign Ordinance No. 1.284 of September 10, 2007 implementing Law No. 1.338 of September 7, 2007 on financial activities, as amended was published in the Journal de Monaco – Bulletin Officiel de la Principauté.

The following amendments were made:

• Definition of financial activities the exercise of which in Monaco requires authorisation from the CCAF (modernised wording in Art. 1 L. 1.338 – new section I bis and new Art. 2-1 SO n° 1.284):
  1°) “Portfolio management activity on behalf of third parties”: the discretionary and individualised management of portfolios including one or more financial instruments under a mandate from a third party;
  2°) “Management of mutual funds or other undertakings for collective investment under Monegasque law”: the management of one or more mutual funds or undertakings for collective investment under Monegasque law;
  3°) “Activity of receiving and transmitting orders on behalf of third parties”: receiving and transmitting orders for financial instruments on behalf of a third party;
  4°) “Advice and assistance activity”: providing personalised recommendations to a third party for the activities referred to in points 1°) to 3°) of Article 1 of LawNo. 1.338 of 7 September 2007, as amended, referred to above;
  5°) “Activity of management of undertakings for collective investment governed by foreign law”: the fact of managing one or more undertakings for collective investment governed by foreign law.
• Modalities of application of the stricter conflict of interest rules for authorised companies (new art. 23-1 and 23-2 L. n° 1.338 – new art. 7-1 to 7-4 OS n° 1.284) ;
• Modalities of the obligation to record telephone conversations and electronic communications of all services that authorised companies provide and all transactions that they carry out; list of relevant information to be retained and duration of their retention (5 years); modalities of access to information by the CCAF to monitor compliance with the obligations (new Art. 23-2 L. n° 1.338 – new art. 12-1 to 12-4 OS n° 1.284 which will come into force on the first day of the third month following the publication of OS No. 1.284 in the Journal de Monaco, i.e. on 1 August 2022).
• Rules of procedure concerning the CCAF’s investigations and documentary and on-the-spot checks, criteria of integrity and absence of conflicts of interest applicable to the members of the CCAF, modalities of the CCAF’s meetings and deliberations (new Articles 25-1 to 25-3, 28-1 to 28-5 of SO No. 1.284);
• Annual verification of the CCAF’s budgetary accounts: transmission of the closure of the accounts to the Minister of State for examination by the Controller General of Expenditure (new Art. 11-4 Law No. 1.338, new Art. 26-1 SO No. 1.284).

On 13 May 2022, the Comissão de Valores Mobiliários (CVM) published Circular Letter CVM/SEP 03/22 - Mandatory communication to the CVM about corporate demands by publicly-held and foreign companies.

According to the technical area, the information provided for in the referred standard must be sent to the CVM through the Empresas.NET system, using the Communication on Corporate Demands category. The SEP highlights that the deadlines for submitting this data are set out in Annex I of the Resolution.

If any information involving the matter also constitutes a material act or fact, the issuer must comply with the terms and deadlines established by CVM Resolution 44, being allowed to disclose only the notice of material act or fact if it has all the information required in Annex I of CVM Resolution 80 and clarify that the communication takes place in compliance with CVM Resolutions 80 and 44.

In addition, SEP emphasizes that the provisions of Annex I are optional for corporate claims initiated before the entry into force of CVM Resolution 80.

Annex I of CVM Resolution 80 defines the characteristics of the parties and considers a corporate demand to be any judicial or arbitration process whose claims are, in whole or in part, based on corporate legislation or the securities market, or on the rules issued by the CVM.

On 9 May 2022, the Comissão de Valores Mobiliários (CVM) published Circular Letter CVM/SIN 4/2022 - Updates to the Investment Fund Management System (SGF).

One of the updates is the replacement of the standard used by administrators of FGTS Privatization Mutual Funds (FMP-FGTS) to send the Daily Report , required by CVM Instruction 279. The change will standardize the format with the report of investment funds regulated by CVM Instruction 555. The new version must be used within 60 days.

The circular letter also guides on the insertion of a new mandatory information field for the registration of investment funds. It must be filled in by the fund administrator with the data (code) from the Union Collection Guide (GRU), used to pay the fund's registration inspection fee. This functionality is already available and applies to all investment funds, including those regulated by CVM Instruction 279.

It is also important to note that this information will be cross-referenced with that available on other CVM databases, for the purpose of confirming the payment of said fee.

For the daily reports of FMP-FGTS funds, the CVM systems will reject the 1.0 standard from the competency document of 5/7/2022, to be sent to the CVM by 6/7/2022.

On 18 May 2022, the Comissão de Valores Mobiliários (CVM) published Circular Letter CVM/SIN 5/2022 - guidance on the nature of BDR-ETFs (Brazilian Depositary Receipts - Exchange Traded Fund).

BDR-ETFs must be treated as domestic assets to verify eligibility and application limits of investment funds regulated by CVM Instruction 555 .

The circular letter points out that, as they are traded in the country, BDR-ETFs do not fit into the concept of "financial assets abroad".

CVM Instruction 555, in certain points, explains the nature of an asset abroad for some traded in Brazil, as occurs, for example, for the BDR level I. But there is no provision that provides for the treatment of BDR-ETF as an asset abroad. It is also important to note that this clarification is in line with Circular Letter CVM/SIN 01/2021, which deals with ETFs traded in Brazil that pursue foreign indices.

On 10 May 2022, the Brazilian Financial and Capital Markets Association (ANBIMA) published guide for standardization of fixed income securities documents.

Among the assets included in the guide are debentures, commercial notes, CRIs (Receivables Certificates of Real Estate) and CRAs (Certificates of Agribusiness Receivables). The material was created at the request of the market, which identified opportunities to improve the issuance of fixed income securities in Brazil.

The guide proposes an ordering of clauses and a specific pricing methodology for each asset class. The highlight is the standardization of the securitization term for CRIs and single-backed CRAs. In this case, the guide indicates minimum information that the document must have and proposes calculation methodologies that vary according to the index to which the certificate is linked (DI, IPCA or exchange rate variation).

On May 2022, United Nations Environment Programme – Finance Initiative (UNEP FI) published the report One Earth Climate Model: Sectoral Pathways to Net-Zero Emissions. 

Commissioned by the UN-convened Net-Zero Asset Owner Alliance and the European Climate Foundation, the One Earth Climate Model (OECM) provides a much-needed roadmap for sectoral decarbonization. By clearly defining scope 3 emissions, while avoiding double-counting, the model and the latest results offer detailed and standardised net-zero pathways for 12 industry sectors.

This ground-breaking research, led by the Associate Professor Sven Teske from the University of Technology Sydney (UTS), gives investors an opportunity to evaluate their relative alignment with a net-zero transition in the real economy and to ultimately align their investment decisions with the latest science.

Investors should make full use of the report (including key results of the Global OECM 1.5 °C Pathway and comparison with IEA Net-Zero by 2050), the booklet (explaining the rationale, assumptions and results step by step), and the datasets behind the model.