Global Trustee and Fiduciary Services Bite-Sized Issue 2 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 2 | 2024 4 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 CRYPTOASSETS ESMA Consults on Reverse Solicitation and Classification of Crypto-assets as Financial Instruments Under MiCA On 29 January 2024 the European Securities and Markets Authority (ESMA) published two Consultations Papers on guidelines under Markets in Crypto Assets Regulation (MiCA), one on reverse solicitation and one on the classification of crypto-assets as financial instruments. Consultation paper on guidelines on reverse solicitation In this consultation, ESMA is seeking input on proposed guidance relating to the conditions of application of the reverse solicitation exemption and the supervision practices that National Competent Authorities (NCAs) may take to prevent its circumvention. The proposed guidance confirms ESMA’s previous message that the provision of crypto-asset services by a third-country firm is limited under MiCA to cases where the client is the exclusive initiator of the service. This exemption should be understood as very narrowly framed and must be regarded as the exception. A firm cannot use it to bypass MiCA. Consultation paper on guidelines on conditions and criteria for the classification of crypto-assets as financial instruments In this consultation paper, ESMA is seeking input on establishing clear conditions and criteria for the qualification of crypto-assets as financial instruments. This initiative, which follows on from previous work by ESMA, is aimed at bridging the gap between the MiCA regulation and the Markets in Financial Instruments Directive II (MiFID II) and ensuring consistency across the EU. The proposed guidelines aim at providing NCAs and market participants with structured but flexible conditions and criteria to determine whether a crypto-asset can be classified as a financial instrument. To do so, the draft aims to strike a balance between providing guidance and avoiding establishing a one-size-fits-all approach. The consultation period for both consultations closes on 29 of April 2024. Link to Consultation on Reverse Solicitation here Link to Consultation on Classification of Crypto-assets as Financial Instruments here CYBERSECURITY CSA Publishes Recommended Standard for More Secure Transactions Made Via Mobile Applications On 10 January 2024 the Cyber Security Agency of Singapore (CSA) published a recommended standard that will help local app developers and providers enhance mobile app security. Billed the “Safe App Standard” (the Standard), it provides a common benchmark and guidance to local app developers and providers on the necessary security controls and best practices to better protect their applications, and in turn, their end-users, against common malware and phishing attempts. Overall, the Standard will boost the security posture of mobile applications deployed in Singapore and enhance the protection of user data and app transactions. According to CSA’s 2022 Cybersecurity Awareness Survey, over eight in 10 of 1,051 respondents reported installing utility applications such as banking, e-commerce and transportation applications on their mobile devices. With increasingly prevalent mobile app usage, many users could be exposed to potential risks such as monetary loss and unauthorised access to their confidential data. The Standard will also be updated in view of the evolving risk landscape. The first version of the Standard published on 10 January is targeted at applications that perform high-risk transactions; defined as those that allow transactions with some or full access to users’ financial accounts, which when compromised, can possibly result in significant monetary losses. These transactions include changes to financial functions such as registration of third-party payee details and increase of fund transfer limit.