Global Trustee and Fiduciary Services Bite-Sized Issue 4 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 4 | 2024 4 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 new project will seek to explore innovative financial market infrastructure (FMI) that aims to facilitate seamless interbank settlement of tokenised money through wCBDC. The project will initially focus on tokenised deposits issued by commercial banks and made available to the general public. With wCBDC as the foundation, tokenised deposits can be used for tokenised asset transactions, unlocking new opportunities for optimisation and innovation in the tokenisation era. At the core of Project Ensemble is a wCBDC Sandbox that the HKMA will launch this year to further research and test tokenisation use cases that include, among others, settlement of tokenised real-world assets (e.g., green bonds, carbon credits, aircraft, electric vehicle charging stations, electronic bills of lading and treasury management). Project Ensemble forms a key part of the HKMA’s broader portfolio of initiatives to facilitate the development of the tokenisation market, comprising e-HKD and collaboration with the BIS Innovation Hub Hong Kong Centre. It will also build on the experimentation of tokenised deposit use cases that the HKMA conducted with selected banks in 2023. The HKMA states that it will engage relevant international stakeholders, including other central banks and organisations, to join future experiments and exploration in the wCBDC Sandbox. Finally, if the wCBDC Sandbox garners sufficient interest from the industry, the HKMA states it will conduct a “live” issuance of the wCBDC at the appropriate time. Link to Full Announcement here COSTS & CHARGES Payment of Variable Remuneration in non-SNI IFR Investment Firms: Findings of Non-compliance During the EBA’s Benchmarking Exercise on Remuneration Practices for Financial Year 2022 On 7 March 2024, the Commission de Surveillance du Secteur Financier (CSSF) published a communiqué on findings from its data collection in the framework of the benchmarking exercise on remuneration practices led by the European Banking Authority (EBA) for the financial year 2022. The sample used for the exercise notably included class 2 investment firms (non-SNI IFR IF, hereinafter “the entities”). When examining the reports submitted by the concerned entities, the CSSF states that it noticed the existence of violations of their legal obligations regarding the awarding and payment of any variable remuneration to individuals identified as material risk takers (MRT), detailed in (3) and (4) of Article 38-22 of the Law of 5 April 1993 on the financial sector, as amended. The CSSF states that the purpose of the communiqué is to shed light on these situations of non- compliance in order to remind the entities of their legal obligations when it comes to awarding and paying variable remuneration, as well as to inform the market about the measures undertaken by the CSSF as a response to these violations. The communiqué details: 1. Legal framework applicable to the awarding and payment of variable remuneration in non-SNI IFR IF. 1.1 Application of the proportionality principle at the individual level. 1.2 Application of the proportionality principle at the institutional level. 2. Violations of the applicable legal obligations detected by the CSSF. 2.1 Non-compliance with the regulation applicable to the derogation on an institutional level. 2.2 Non-compliance with the regulation applicable to the derogation on an individual level. 3. Actions undertaken by the CSSF pursuant to its findings. Link to Communiqué here