Global Trustee and Fiduciary Services Bite-Sized Issue 4 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 4 | 2024 8 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 FINTECH FCA Report: Using Synthetic Data in Financial Services On 8 March 2024, the UK Financial Conduct Authority (FCA) published a report providing an overview of the opportunities and risks of synthetic data. The FCA states that synthetic data is one of many privacy enhancing technologies that can expand and support data sharing. While it has the potential to address important financial services public policy issues, such as financial crime and fraud, there are still open questions that are being researched. Recognising the potential for this technology to drive societal good and foster a more inclusive and fair financial landscape, the FCA set up the Synthetic Data Expert Group (SDEG) in March 2023. The group brings together 21 experts from across financial services, public sector, data and technology vendors, and consumer groups to further explore the use of synthetic data in financial markets. This report focuses on 3 key themes across the data lifecycle: • Data augmentation and bias mitigation system; • Testing and model validation; and • Internal and external data sharing for fraud controls. These themes, illustrated through real-world use cases and the experiences of expert practitioners, provide unique insights into the opportunities and challenges that can arise from using synthetic data in financial services. The FCA says that these insights will be of interest to industry participants including financial services, regulators and policymakers internationally. The key findings provide a helpful overview of the steps to consider when creating, using and sharing synthetic data, and the most relevant use cases across financial services. In addition to the report the, the FCA issued a survey to provide feedback on the report and inform its future work programme. Link to Report here Link to Survey here IFD/IFR European Commission Adopts RTS On 13 March 2024, the European Commission adopted regulatory technical standards (RTS) to supplement the Investment Firms Regulation (IFR) specifying the details of the scope and methods for prudential consolidation of an investment firm group. The RTS are intended to ensure that the proposed regulatory requirements ensure a proportionate and technically consistent framework for prudential consolidation of investment firm groups. The RTS cover four key aspects: • The scope of prudential consolidation; • The methods for prudential consolidation; • The methodology for prudential consolidation; and • The rules applicable to minority interests and additional Tier 1 and Tier 2 instruments issued by subsidiaries as part of prudential consolidation. Link to the RTS here