Global Trustee and Fiduciary Services Bite-Sized Issue 6 2024

AIFMD NewQ&As Published On 28 May 2024, the European Securities and Markets Authority (ESMA) updated the following Questions and Answers: • Performance fees (ESMA QA 2174) – Where a manager applies an additional reference indicator to the performance fee model (e.g., a hurdle rate on top of the High-Water Mark model or the benchmark model), should the minimum performance reference period be applied to the additional reference indicator? • Performance fees (ESMA QA 2176) – Can the manager of a Fund of Funds (FoF) charge performance fees? Link to NewQ&As here CMU ESMAMakes Recommendations for More Effective and Attractive Capital Markets in the EU On 22 May 2024, the European Securities and Markets Authority (ESMA) published its Position Paper on “Building more effective and attractive capital markets in the EU”. The Paper includes 20 recommendations to strengthen EU capital markets and address the needs of European citizens and businesses. ESMA says that the actions proposed in this paper go beyond changes to financial regulation, and are thus directed not only to capital market supervisors but also to EUMember States, the European Commission and EU Co-legislators as well as to the financial industry. Key proposals • EU citizens: Simple, cost-efficient investment options are crucial for empowering citizens to invest their savings in capital markets that serve their long-term needs. ESMA’s key recommendations in this area include the development of basic long-term investment products and pension systems that are suitably incentivised and contribute to the development of capital markets. This should be complemented by efforts to improve financial education. • EU companies: Diverse and sustainable financing options are critical for fuelling growth and innovation in the EU, especially for SMEs. Key recommendations in this area by ESMA include developing a conducive ecosystem for public companies and fostering pan-European markets while addressing barriers to integration, particularly for market infrastructures. • EU regulation and supervision: EU capital markets must be agile to respond to evolving needs. ESMA’s key recommendations to address this include modernisation of the EU’s regulatory framework, to account for new tools such as effective forbearance powers. At the same time, supervisory consistency amongst EU supervisors should be prioritised, while further centralisation of supervision at EU level should be evaluated. Link to Position Paper here Securities Services Bite-Sized Global Trustee and Fiduciary Services QUICK LINKS AIFMD CMU CRYPTOASSETS EMIR FINTECH IFD/IFR MAR MIFID II/MIFIR OPERATIONAL RESILIENCE SECURITISATION SUSTAINABLE FINANCE/ESG UCITS ASIA EUROPE UNITED STATES UNITEDKINGDOM Issue 6 | 2024