Global Trustee and Fiduciary Services Bite-Sized Issue 4 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 4 | 2024 23 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 The SEC’s final amendments expand the scope of entities subject to Rule 605, modify the categorisation and content of order information required to be reported under the rule, and require reporting entities to produce a summary report of execution quality. The amendments expand the scope of entities that must produce monthly execution quality reports to include broker- dealers with a larger number of customer accounts and single dealer platforms. In addition, the amendments expand the definition of “covered order” to include certain orders submitted outside of regular trading hours, certain orders submitted with stop prices, and certain short sale orders. The amendments will capture more relevant execution quality information for certain order types by requiring statistics to be reported from the time such orders become “executable.” Further, the amendments change how orders are categorised by order size as well as how they are categorised by order type. As part of the changes to the order size categories, the amendments modify Rule 605 to capture execution quality information for fractional share orders, odd-lot orders, and larger-sized orders. The amendments also modify the time-to-execution categories and require average time to execution to be measured in increments of a millisecond or finer and to be calculated for all orders. In addition, the amendments modify the information required to be reported under the rule, including adding realised spread time horizons and requiring new statistical measures of execution quality, such as average effective divided by quoted spread (a percentage-based metric that represents howmuch price improvement orders received) and size improvement statistics. Finally, the amendments require all entities subject to Rule 605 tomake a summary report publicly available. The amendments will become effective 60 days after the date of publication of the adopting release in the Federal Register. The amendments have a compliance date of 18 months after the effective date. Link to Rule Details here Link to Fact Sheet here Link to Statement by SEC Chair Gary Gensler here Link to Statement by SEC Commissioner Hester M. Peirce here Link to Statement by SEC Commissioner Caroline A. Crenshaw here Link to Statement by SEC Commissioner Mark T. Uyeda here Link to Statement by SEC Commissioner Jaime Lizarrage here UNITED KINGDOM FCA Publishes Handbook Notice 117 On 2 April 2024, the Financial Conduct Authority (FCA) published Handbook Notice 117 which, amongst other items, contained the results from its consultation (CP23/25) on minor rule amendments for authorised collective investment schemes. Of the original proposals, following review of the responses received, the FCA has decided to proceed with making most of the rules and guidance as consulted on. Regarding voting at general meetings, the FCA has decided that it would be clearer to make this an enabling rule and to set out explicitly that there is no requirement to update a fund’s instrument if holding a virtual or hybrid meeting is not in conflict with any provision in that instrument. The FCA states that it recognises that firms have been relying on its supervisory forbearance concerning virtual general meetings published in April 2020 to organise virtual meetings of unitholders under the existing rules, and some firms may be planning to hold meetings in the near future on that basis. To give firms time to make any necessary adjustments, the FCA will allow a transitional period before the amended rules on unitholder meetings take effect. The new rules will apply only to meetings held on or after 3 June 2024 and the forbearance will be withdrawn and no longer apply from this date. In addition, the FCA states that it considers it beneficial to make meeting minutes available on the website of the AFM (or a related entity) for greater transparency.