Global Trustee and Fiduciary Services Bite-Sized Issue 4 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 4 | 2024 9 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 LIBOR TRANSITION The European Money Markets Institute Publishes Feedback on Proposed Changes to Euribor® Methodology On 6 March 2024, the European Money Markets Institute (EMMI) published the final results of its consultation on changes to the Euribor® Methodology. The proposed enhancements to the Euribor® methodology are designed to ease the burden on contributing institutions and attract more banks to the panel. Launched in October of last year, the consultation included the redefinition of Level 2.3 components and the introduction of eligibility tests. These changes have the potential to enhance the benchmark’s accuracy and reliability. According to EMMI, the redefinition of Level 2.3 encompasses various adjustments, including an expanded calculation starting point and a refined Market Adjustment Factor (MAF) to better reflect interest rate fluctuations and changes in perceived credit risks. Additionally, feedback from stakeholders prompted the introduction of an additional control parameter to address exceptionally adverse market conditions, leading to the discontinuation of Level 3 contributions under the previous methodology. Implementation of the NewMethodology EMMI has announced its decision to implement the newmethodology and associated governance framework in a phased manner. The migration of Panel Banks to the revised calculation methodology will occur gradually, and is expected to start around mid-May 2024 and spanning a six-month period. This approach aims to facilitate a smooth transition while minimizing disruptions to market participants. Furthermore, EMMI states that it will ensure that any public reports reliant on the Euribor® methodology undergo necessary adjustments to accommodate the changes. Link to the Consultation Feedback here Statement on the End of Euroyen TIBOR On 6 March 2024, the Japanese Financial Services Agency (JFSA) announced that the JBA TIBOR Administration (JBATA) had published a document titled ‘Statement on the end of Euroyen TIBOR’ (Publication of the Results of Public Consultation on permanent cessation of Euroyen TIBOR and related issues). JBATA has decided on the permanent cessation of all tenors (i.e., 1-week, 1-month, 3-month, 6-month, and 12-month) of Euroyen TIBOR at the end of December 2024. The JFSA expects market participants to take timely and appropriate actions for transitioning away from Euroyen TIBOR aiming towards orderly cessation of its publication, given the recent JBATA’s decision and the JFSA’s initiatives to date. The JFSA says it will also encourage financial institutions to take appropriate actions as needed, considering the situation of transition away from contracts referencing Euroyen TIBOR and of negotiations with customers by them. Link to the Statement here MIFID II/MIFIR ESMA Clarifies Application of Certain MIFIR Provisions, Including Volume Cap On 27 March 2024, the European Securities and Markets Authority (ESMA) published a statement, including practical guidance supporting the transition and the consistent application of the revised Markets in Financial Instruments Regulation (MiFIR). The statement covers guidance on equity transparency and non-equity transparency; the systematic internaliser (SIs) regime; designated publishing entities (DPEs); and reporting. Regarding the volume cap, following the publication by the European Commission, ESMA confirms that DVC data will continue to be published, with the next publication scheduled for early April.