Global Trustee and Fiduciary Services Bite-Sized Issue 3 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 3 | 2024 9 QUICK LINKS AIFMD CYBERSECURITY DIGITALISATION DORA EMIR LIBOR FSB IOSCO MICA MIFID II/MIFIR MONEY MARKET FUNDS OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG ASIA EUROPE IRELAND LUXEMBOURG NORTH AMERICA SWITZERLAND UNITED KINGDOM Council and European Parliament Agree to Delay Sustainability Reporting for Certain Sectors and Third-country Companies by Two Years On 7 February 2024, a Council of the EU (the Council) press release described how the Council and the European Parliament “ reached a provisional deal on a directive on the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings amending the Corporate Sustainability Reporting Directive (CSRD) .” The Council’s press release states that the agreement that has been reached “ will give more time for companies to prepare for the sectorial European Sustainability Reporting Standards (ESRS) and for specific standards for large non-EU companies, which will be adopted in June 2026, two years later than the originally scheduled date .” The press release also states that the “ date of application for third country companies will remain the financial year 2028, as set out in the CSRD .” As set out in the press release, the provisional agreement reached between the Council and European Parliament now needs to be endorsed and formally adopted by both institutions. Link to Council of the EU Press Release here Link to Commission Proposal here Council of the EU and European Parliament Reach Provisional Agreement on ESG Ratings On 5 February 2024 the Council of the EU (the Council) and European Parliament reached provisional agreement on a proposal for a regulation on environmental, social and governance (ESG) rating activities, which the Council’s press release states “ aims to boost investor confidence in sustainable products .” It also states that “ the new rules aim to strengthen the reliability and comparability of ESG ratings by improving the transparency and integrity of the operations of ESG ratings providers and preventing potential conflicts of interests .” And additionally, “ under the new rules, ESG rating providers will need to be authorised and supervised by the European Securities and Markets Authority and comply with transparency requirements, in particular with regard to their methodology and sources of information .” The Council and European Parliament also clarified the circumstances under which ESG ratings fall under the scope of the regulation, providing “ further details on the applicable exclusions .” The press release goes on to state that the agreement also “ clarifies the territorial scope of the regulation, by setting out what constitutes operating in the EU .” Also, the Council and Parliament agreed that “ if financial market participants or financial advisers disclose ESG ratings as part of their marketing communications, they will include information about the methodologies used in such ESG ratings on their website .” The press release states that this was done through an amendment of the EU Sustainable Finance Disclosure Regulation. Finally, the Council’s press release adds that the “ provisional political agreement is subject to approval by the Council and the Parliament before going through the formal adoption procedure ” and that the “ regulation will start applying 18 months after its entry into force ”. Link to Council of the EU Press Release here Link to Note on the Confirmation of the Final Compromise Text here Link to Final Compromise Text of the ESG Regulation here UK FCA Publish New Sustainability Disclosure and Labelling Regime Webpage On 2 February 2024, the UK’s Financial Conduct Authority (FCA) published a new webpage on its forthcoming sustainability disclosure and labelling (“SDR”) regime, which includes sections explaining, amongst other issues: • Who the regime is for; • Non-exhaustive considerations of how the regime affects firms; • An infographic explaining implementation timeframes; and