Global Trustee and Fiduciary Services Bite-Sized Issue 5 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 5 | 2024 6 QUICK LINKS CYBERSECURITY DIVERSITY DORA ELTIF EMIR FINTECH FSB IOSCO SUSTAINABLE FINANCE/ESG UCITS ASIA EUROPE NETHERLANDS NORTH AMERICA UNITED KINGDOM FSB FSB Proposes Measures to Enhance the Liquidity Preparedness of Non-bank Market Participants for Margin and Collateral Calls During Times of Market-wide Stress On 17 April 2024, the Financial Stability Board (FSB) published a consultation report on liquidity preparedness for margin and collateral calls. The FSB says that its report sets out eight proposed policy recommendations to enhance the liquidity preparedness of non-bank market participants for margin and collateral calls in centrally and non-centrally cleared derivatives and securities markets (including securities financing such as repo). The FSB states that its report highlights the need for policy adjustments to deal with liquidity strains in the NBFI sector arising from spikes in margin and collateral calls during times of market stress, such as the March 2020 market turmoil, Archegos, and the commodities markets turmoil and stress in liability-driven investment funds in 2022. To achieve this, the FSB is proposing eight high-level and cross-sectoral policy recommendations that build on and complement existing rules and regulations on liquidity risk management across different sectors and jurisdictions. The recommendations cover liquidity risk management and governance, stress testing and scenario design, and collateral management practices of non-bank market participants, focussing on liquidity risks arising from spikes in margin and collateral calls. They apply to non-bank market participants that may face margin and collateral calls, including insurance companies, pension funds, hedge funds, other investment funds and family offices. They are proposed to apply proportionately with a focus on non-bank market participants with material exposures to spikes in margin and collateral calls during times of stress. The deadline for comments is 18 June 2024. Link to Consultation Report here IOSCO IOSCO Publishes its UpdatedWorkplan On 12 April 2024, the Internal Organization of Securities Commissions (IOSCO) published its updated Workplan for 2024 (2024 Workplan) which IOSCO says directly supports its overall two- year Work Program published on 5 April 2023. IOSCO states that new workstreams are announced to reflect increased focus on use of Artificial Intelligence (AI), tokenisation and credit default swaps, as well as additional work on transition plans and green finance. The revised 2024 Workplan continues to set out IOSCO’s priorities under five themes: 1. Protecting Investors. 2. Addressing new risks in Sustainability and Fintech. • New – IOSCO will turn its attention to key new technological developments in financial markets relating to the use (AI) and Financial Asset Tokenisation. • New – IOSCO’s AI workstream is a two-year policy initiative that aims to ensure the development of a shared understanding among IOSCOmembers on the issues, risks and challenges presented by emerging AI technology through the lens of market integrity, financial stability and investor protection. It also aims to assist members in their policy responses. • New – Having delivered its crypto-asset policy roadmap at the turn of the year, IOSCO will also turn its attention to monitoring the implementation of its crypto & digital assets and decentralized finance (so-called DeFi) recommendations. • New – IOSCO will establish a new workstream on green finance to identify trends and potential emerging risks from new green products. It will continue its engagement with the ISSB, finalise its work on voluntary carbon markets and conduct its review of the proposed assurance and ethics standards by the International Auditing and Assurance Standards Board and the International Ethics Standards Boards for Accountants.