Global Trustee and Fiduciary Services Bite-Sized Issue 12 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 12 | 2023 5 QUICK LINKS AIFMD BENCHMARK REGULATION CBDC COSTS & CHARGES CRYPTOASSETS FUND LIQUIDITY LIBOR TRANSITION MiCA OPERATIONAL RESILIENCE UK PRIIPs SUSTAINABLEFINANCE/ESG ASIA EUROPE IRELAND NORTH AMERICA UNITED KINGDOM IOSCO Finalises its Policy Recommendations for Crypto and Digital Asset Markets On 16 November 2023 the International Organization of Securities Commissions (IOSCO) published its Final Report with Policy Recommendations for Crypto and Digital Asset (CDA) Markets. These recommendations are central to the delivery of a coordinated global regulatory response to the significant investor protection and market integrity risks posed by centralised cryptoasset intermediaries called crypto asset service providers (CASPs). IOSCO’s detailed and targeted recommendations elaborate the regulatory expectations, either through application of existing rules or development of new rules, depending on the jurisdiction, to address the key areas of harm observed in these markets. The CDA Recommendations set a clear and robust international regulatory baseline to ensure that CASPs meet the standards of business conduct that apply in traditional financial markets. The Recommendations cover six key areas, consistent with the IOSCO Objectives and Principles for Securities Regulation and relevant supporting IOSCO standards, recommendations, and good practices: 1. Conflicts of interest arising from vertical integration of activities and functions, 2. Market manipulation, insider trading and fraud, 3. Custody and client asset protection, 4. Cross-border risks and regulatory cooperation, 5. Operational and technological risk, and 6. Retail distribution. Link to Policy Recommendations here FCA and Bank of England Publish Proposals for Regulating Stablecoins On 6 November 2023 the FCA and the Bank of England (the Bank) issued discussion papers on their proposed approach to regulating stablecoins. The proposed regulatory approach put forward by the FCA and the Bank looks to harness the potential benefits stablecoins could provide to UK consumers and retailers, in particular by making payments faster and cheaper. The FCA states that its proposals to regulate stablecoins aim to protect consumers, prevent money laundering with a robust set of rules and to safeguard financial stability. The FCA’s Discussion Paper explores the proposed regulation around issuing and holding stablecoins that claim to maintain a stable value relative to a fiat currency by holding assets denominated in that currency. The Bank’s Discussion Paper outlines how it would regulate operators of systemic payment systems using stablecoins – payments systems which, if widely used for retail payments in the UK, could otherwise pose risks to financial stability. The Bank would also regulate other entities providing services to these payment systems, such as stablecoin issuers and wallet providers, where they could otherwise pose financial stability risks. Responses to the discussion papers must be submitted by 6 February 2024. In addition to the discussion papers the Prudential Regulatory Authority (PRA) published a Dear CEO letter, on how it expects deposit-takers to address the risks that arise from issuing multiple forms of digital money, while welcoming the benefits that could come from innovation in this area.