Global Trustee and Fiduciary Services Bite-Sized Issue 2 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 2 | 2024 15 QUICK LINKS AIFMD ANTI-MONEY LAUNDERING CBDC CRYPTOASSETS CYBERSECURITY FINTECH FSB IOSCO MIFID II/MIFIR OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG ASIA EUROPE LUXEMBOURG NETHERLANDS NORTH AMERICA UNITED KINGDOM EUROPE ESMA Overview of Planned Consultation Papers 2024 On 19 January 2024 the European Securities and Markets Authority (ESMA) published an overview of the consultations currently planned for 2024. Planned consultations include: • Sustainable Finance – RTS under EU Green Bond Regulation – Q1 2024 . • UCITS – Call for Evidence on the review of the UCITS Eligible Assets Directive (EAD) – Q1-Q2 2024 . • AIFMD – Guidelines on the selection and calibration of liquidity management tools – Q2-Q3 2024 . • AIFMD – RTS on open-ended loan-originating AIFs – Q2-Q3 2024 . • AIFMD – RTS on the characteristics of liquidity management tools – Q2-Q3 2024 . • UCITS – Guidelines on the selection and calibration of liquidity management tools – Q2-Q3 2024 . • UCITS – RTS on the characteristics of liquidity management tools – Q2-Q3 2024 . • AIFMD – Technical standards and guidelines as part of AIFMD review (other than those relating to reporting) – 2025 . • UCITS – TA to the European Commission on possible amendments to the UCITS EAD – 2025 . Link to Full Overview here ESMA Explores Risk Exposures to Real Estate in EU Securities Markets and Investment Funds On 10 January 2024 ESMA published its first analysis of the exposures the EU securities and markets and asset management sector have to real estate. The analysis suggests that: • Debt levels in the real estate sector are elevated with wider risk implications from non-bank financial market players. • Interlinkages with the banking system are important and arise through entity exposures and activities. Through these, sector shocks may get transmitted across the EU financial system. Going forward, ESMA says interest rate risk can be expected to continue to shape real estate market exposures. And that credit risk indicators for real estate companies have started to show signs of deterioration and liquidity mismatches remain a key vulnerability for real estate investment funds. In the study, ESMA provides details of the evolution of this sector over the past five years. In particular: • There has been a broad-based valuation decline of the main equity and bond real estate indices. Valuation declines were also observed for listed real estate firms and real estate investment trusts along with increased trading activity and securities lending activity for these market participants. Real estate-related securities are also found to be used as collateral. • Leverage of real estate firms increased significantly over the past five years. • Next to credit institutions, investment funds are important investors in the real estate sector. They also belong to the main counterparties of some real estate firms in derivatives and securities financing transactions. Link to ESMA Analysis here