Global Trustee and Fiduciary Services Bite-Sized Issue 1 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 1 | 2024 17 QUICK LINKS BENCHMARKS REGULATION CSDR CYBERSECURITY DEFI DIGITALISATION DORA ELTIF FSB FUND LIQUIDITY MONEYMARKET FUNDS OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG ASIA EUROPE IRELAND NORTH AMERICA UNITED KINGDOM The Feedback Statement responds to submissions from stakeholders, describes changes made to the Central Bank’s approach to the ASP in response to those submissions, and announces the publication of the final ASP Guidelines, which came into force on 13 December 2023. Link to Feedback Statement here Link to Guidelines here NORTH AMERICA SEC Adopts Rules to Improve Risk Management in Clearance and Settlement and Facilitate Additional Central Clearing for the U.S. Treasury Market On 13 December 2023 the Securities and Exchange Commission (SEC) adopted rule changes to enhance risk management practices for central counterparties in the U.S. Treasury market and facilitate additional clearing of U.S. Treasury securities transactions. The rule changes update the membership standards required of covered clearing agencies for the U.S. Treasury market with respect to a member’s clearance and settlement of specified secondary market transactions. Additional rule changes are designed to reduce the risks faced by a clearing agency and incentivise and facilitate additional central clearing in the U.S. Treasury market. Specifically, the amendments require that covered clearing agencies in the U.S. Treasury market adopt policies and procedures designed to require their members to submit for clearing certain specified secondary market transactions. These transactions include: all repurchase and reverse repurchase agreements collateralised by U.S. Treasury securities entered into by a member of the covered clearing agency, unless the counterparty is a state or local government or another clearing organization or the repurchase agreement is an inter-affiliate transaction; all purchase and sale transactions entered into by a member of the clearing agency that is an interdealer broker; and all purchase and sale transactions entered into between a clearing agency member and either a registered broker dealer, a government securities broker, a government securities dealer. Further, the amendments permit broker-dealers to include customer margin required and on deposit at a clearing agency in the U.S. Treasury market as a debit in the customer reserve formula, subject to certain conditions. In addition, the amendments require covered clearing agencies in this market to collect and calculate margin for house and customer transactions separately. Finally, the amendments require policies and procedures designed to ensure that the covered clearing agency has appropriate means to facilitate access to clearing, including for indirect participants. The amendments also include an exemption for transactions in which the counterparty is a central bank, sovereign entity, international financial institution, or natural person. The amendments will go into effect in two phases, with the changes regarding the separation of house and customer margin, the broker-dealer customer protection rule, and access to central clearing required to be completed first, by 31 March 2025. After that time, the requirement to clear specific transactions would go into effect in two phases, with cash transactions being required to be cleared before repurchase transactions are required to be cleared. Compliance by the direct participants of a U.S. Treasury securities central clearing agencies with the requirement to clear eligible secondary market transactions would not be required until 31 December 2025, and 30 June 2026, respectively, for cash and repurchase transactions. The adopting release is published on SEC.gov and will be published in the Federal Register. Link to Rule Details here Statement by SEC Chair Gary Gensler here Statement by SEC Commissioner Hester M. Peirce here Statement by SEC Commissioner Jaime Lizarraga here Statement by SEC Commissioner Caroline A. Crenshaw here Statement by SEC Commissioner Mark T. Uyeda here SEC Office of the Investor Advocate Publishes Its Policy Recommendations on Mandatory Arbitration and Registered Index-Linked Annuities Research On 5 December 2023 the Office of the Investor Advocate of the SEC published its Report on Activities (the Report) for the Fiscal Year 2023 to Congress. The Report highlights the work of the Office during the fiscal year.