Global Trustee and Fiduciary Services Bite-Sized Issue 4 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 4 | 2024 2 QUICK LINKS AIFMD BENCHMARK REGULATION CBDC COSTS & CHARGES CRYPTOASSETS CYBERSECURITY DIVERSITY & INCLUSION FINTECH IFD/IFR LIBOR TRANSITION MIFID II/MIFIR OPERATIONAL RESILIENCE PRIIPS RETAIL INVESTMENT STRATEGY SETTLEMENT SUSTAINABLE FINANCE/ESG UCITS ASIA LUXEMBOURG NORTH AMERICA UNITED KINGDOM • 32(2) – Marketing of units or shares of EU AIFs in Member States other than in the home Member State of the AIFM; and • 33(2) and 33(3) – Conditions for managing EU AIFs established in other Member States and for providing services in other Member States. This Regulation applies from 14 April 2024. Link to Regulation (EU) 2024/912 here Link to Regulation (EU) 2024/913 here Alternative Investment Fund Manager Hosting On 25 March 2024, the UK Financial Conduct Authority (FCA) published a statement on Alternative Investment Fund Managers (AIFMs) using the host model to employ staff on secondment from a third-party to help manage the AIF. In this model, seconded staff help the AIFM to carry out regulated tasks, for example, portfolio management of assets of the AIF, or administrative jobs like dealing with customers. In some cases, the AIFMmay be a principal firm and the person seconded to the AIFMmay come from one of its appointed representatives (ARs). Harm caused by AIFM host model In 2023, the FCA reviewed firms using the host AIFMmodel to assess how well they understood and complied with their regulatory responsibilities. The FCA focused on situations where secondees from an AR were placed with an AIFM principal firm. During the 2023 review, the FCA found potential harm from: • A lack of oversight of seconded staff; • Insufficient involvement in investor due diligence; and • Inadequacies in capital adequacy calculations. The FCA also found misleading claims from third-parties that had seconded staff to an AIFM. In its statement the FCA sets out its findings from the 2023 review and provides guidance for firms operating the AIFM host model. The statement covers: • Oversight of secondees and potential conflicts of interest; – AIFM’s supervision responsibilities; • Investor due diligence; – AIFMs financial crime responsibilities; • Capital adequacy; – AIFMs responsibilities when assessing financial resources. Link to FCAWebpage here BENCHMARK REGULATION ECONMEPs Vote on New Rules for Benchmarks On 4 March 2024, the Economic and Monetary Affairs Committee (ECON) of the European Parliament voted in favour of developing new rules applicable to critical benchmarks, significant benchmarks, EU Climate Transition Benchmarks (EU CTB), EU Paris-aligned Benchmarks (EU PAB) and certain commodity benchmarks, in order to assure adequate supervision. ECON also decided that the current threshold of a total average value of at least EUR 50 billion to define a significant benchmark should be retained. Other benchmarks would be subject to a voluntary supervision regime.