Global Trustee and Fiduciary Services Bite-Sized Issue 11 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 11 | 2023 2 QUICK LINKS CRYPTO FUND LIQUIDITY MICA REMUNERATION SUSTAINABLE FINANCE/ ESG AUSTRALIA ASIA EUROPE NORTH AMERICA UNITED KINGDOM FUND LIQUIDITY MASPublishes InformationPaper onStrengthening Liquidity RiskManagement Practices for FMCs On 12 October 2023 the Monetary Authority of Singapore (MAS) published an Information Paper on Strengthening Liquidity Risk Management Practices for Fund Management Companies (FMCs). In the information paper MAS states that FMCs should put in place effective liquidity risk management (LRM) frameworks and practices for collective investment schemes (CIS), to enable them to fulfil redemption requests in a timely and orderly manner and safeguard the interests of all investors, including those that have not made redemption requests. The information paper sets out MAS’ supervisory expectations of effective LRM frameworks and practices and includes key findings from its thematic liquidity inspections and review of prospectuses, which focused on CIS offered to retail investors. Areas covered in the information paper include governance, initial design of products, ongoing liquidity risk management, and stress-testing. MAS says that the findings, including examples highlighted in this information paper, are non- exhaustive. FMCs should also take guidance from International Organization of Securities Commissions’ publications on liquidity risk management. MAS states that FMCs should review their LRM frameworks and practices, taking account of the size, scale and complexity of their businesses and the risk profiles of the CIS that they manage. MAS also states that where FMCs observe any gaps in their LRM frameworks and practices, specific remediation/enhancement measures should be identified and implemented in a timely manner. FMCs should also continuously enhance their LRM frameworks and practices in a risk- based and proportionate manner. Link to MASWebsite here MICA EBA and ESMA Consult on Two Sets of Joint Guidelines Under MiCA On 20 October 2023 the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) published a Consultation Paper on two draft Joint Guidelines covering suitability assessment of members of the management body, and suitability of shareholders and members with qualifying holdings of issuers of asset referenced tokens (ARTs) and of crypto-asset service provider (CASPs). ESMA says that the guidance will provide clarity and harmonisation with respect to the criteria to assess the suitability of the management body, the shareholders and members with qualifying holdings, thus reducing the risk of arbitrage in the application of the rules. The supervisory bodies say that to foster and protect the integrity of the market in crypto assets and related services and to promote trust, it is important to ensure that the members of the management body of issuers of ARTs and CASPs as well as the persons that hold or wish to acquire qualifying holdings in them are suitable. The draft Joint Guidelines on the suitability assessment of the members of the management body of issuers of ARTs and CASPs provide common criteria to assess the appropriate knowledge, skills and experience of members of the management body as well as their good repute, honesty and integrity and if they are able to commit sufficient time to perform their duties. The draft Joint Guidelines on the suitability assessment of shareholders or members, whether direct or indirect, with qualifying holdings in issuers of ARTs or CASPs provide competent authorities common methodology to assess the suitability of the shareholders and members with direct or indirect qualifying holdings for purposes of granting authorisation as issuers of ARTs or as CASPs, and for carrying out the prudential assessment of proposed acquisitions. Comments to this consultation can be sent to the EBA, who will inform ESMA of all the comments received. The deadline for the submission of comments is 22 January 2024. Link to Consultation here