Global Trustee and Fiduciary Services Bite-Sized Issue 1 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 1 | 2024 9 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 OPERATIONAL RESILIENCE UK Regulators Issue Joint Proposals on Critical Third Parties On 7 December 2023 the Bank of England (the Bank), Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) (collectively the ‘regulators’) issued a consultation on proposals to oversee and strengthen the resilience of services provided by critical third parties (CTPs) to UK regulated financial services firms (‘firms’) and financial market infrastructure entities (FMIs). The proposals in the consultation paper (PRA CP26/23; FCA CP23/30) follow the discussion paper published in July 2022 (DP3/22 – Operational resilience: Critical third parties to the UK financial sector) . They include how the regulators may identify potential CTPs and recommend them for designation to HM Treasury (HMT). Other proposals in the CP include: • A set of fundamental rules that would apply to all the services CTPs provide to UK firms and FMIs, and act as a general statement of their obligations under the proposed regime; • A set of more granular operational risk and resilience requirements, to apply only to CTPs’ material services to firms and FMIs, such as requirements on technology and cyber resilience, as well as on supply chain risk, change and incident management; • Requirements for CTPs to provide certain information and assurance to the regulators, including submitting an annual self-assessment, and conducting regular testing of their ability to provide material services in severe but plausible disruption (‘scenario testing’); and • Requirements for CTPs to notify the regulators, the firms and FMIs they provide services to, of specific disruptions which may adversely impact the services provided. CTPs will not be authorised or overseen in their entirety by the regulators, but the third-party services they provide will be overseen against these proposals, once finalised. Feedback to the CP is open until 15 March 2024. Subject to feedback, the regulators propose to publish final requirements and expectations for CTPs in H2 2024. Link to Bank of England Press Release here Link to CP26/23-FCA23/30 here SUSTAINABLE FINANCE/ESG The CSRD’s European Sustainability Reporting Standards Published in Official Journal On 22 December 2023, Commission Delegated Regulation (EU) 2023/2772, which sets out the first set of European Sustainability Reporting Standards (ESRS) specifying information that in- scope undertakings are required to report in accordance with the Accounting Directive (2013/34/ EU) as amended by the Corporate Sustainability Directive (CSRD) ((EU) 2022/2464), was published in the Official Journal of the European Union (EU). Annex I to the Delegated Regulation sets out the following ESRS standards applicable to all undertakings in scope of CSRD: • General requirements (ESRS 1) and general disclosures (ESRS 2); • Standards on environmental disclosures covering climate change (ESRS E1), pollution (ESRS E2), water and marine resources (ESRS E3), biodiversity and ecosystems (ESRS E4) and resource use and circular economy (ESRS E5); • Standards on social disclosures covering own workforce (ESRS S1), workers in the value chain (ESRS S2), affected communities (ESRS S3) and consumers and end-users (ESRS S4); and • Standards on governance (ESRS G1).