Global Trustee and Fiduciary Services Bite-Sized Issue 11 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 11 | 2023 4 QUICK LINKS CRYPTO FUND LIQUIDITY MICA REMUNERATION SUSTAINABLE FINANCE/ ESG AUSTRALIA ASIA EUROPE NORTH AMERICA UNITED KINGDOM The joint policy statement explains, in summary, that a bonus cap is not routinely imposed in other leading international financial centres outside the EU. The bonus cap has been identified as a factor in limiting labour mobility. The final policy facilitates this objective by removing this barrier in the UK. The joint policy statement provides the regulators’ final policy as follows: • Changes to the Remuneration Part and the Disclosure (CRR) Part of the PRA Rulebook; • Changes to the Senior Management Arrangements, Systems and Controls (SYSC) 19D: Dual-regulated firms Remuneration Code that is part of the FCA’s Handbook; and • Updates to the PRA’s supervisory statement (SS) 2/17 – Remuneration. The requirements are effective from 31 October 2023. The changes will apply to a firm’s performance year which is ongoing on that date, and to future performance years. Link to PS9/23 here SUSTAINABLE FINANCE/ESG European Green Bonds: Council Adopts New Regulation to Promote Sustainable Finance On 23 October 2023 the European Council adopted a regulation creating the European green bond standard (EuGB) for issuers of bonds that wish to use the designation EuGB for their environmentally sustainable bonds. As stated in the European Council press release, all proceeds of European green bonds will need to be invested in economic activities that are aligned with the EU taxonomy for sustainable activities, provided the sectors concerned are already covered by it. The press release further states that for those sectors not yet covered by the EU taxonomy and for certain very specific activities there will be a flexibility pocket of 15%. This is to ensure the usability of the European green bond standard from the start of its existence. It goes on to note that the use and the need for this flexibility pocket will be re-evaluated as Europe’s transition towards climate neutrality progresses. The regulation will enter into force 20 days after publication in the EU’s Official Journal and will start applying 12 months after its entry into force. Link to Adopted Text here MAS Issues Guidelines for Financial Institutions on Transition Planning for a Net Zero Economy On 18 October 2023 the Monetary Authority of Singapore (MAS) issued a set of consultation papers proposing guidelines on transition planning by banks, insurers and asset managers to enable the global transition to a net zero economy. The key expectations that MAS has set out for FIs are as follows: • Engagement, rather than divestment, should be the key lever for FIs to steward their customers and investee companies to transition in an orderly manner. • FIs should take a multi-year approach, beyond the typical financing or investment time horizons, to facilitate a more comprehensive assessment of climate related risks. • A holistic treatment of risks enables better risk discovery. • FIs should consider environmental risks beyond climate-related risks in their transition planning. • Transparency supports accountability and promotes credibility. MAS states that the Guidelines build on its existing supervisory guidance to FIs and focuses on FIs’ internal strategic planning and risk management processes to prepare for both risks and potential changes in business models associated with the transition.