Global Trustee and Fiduciary Services Bite-Sized Issue 6 2024

11 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 Global Trustee and Fiduciary Services Bite-Sized | Issue 6 | 2024 The initiative to develop the proposed VCoC is supported and sponsored by the SFC. Led by the International Capital Market Association (ICMA), the Hong Kong ESG Ratings and Data Products Providers VCoCWorking Group (VCWG) modelled the draft VCoC on international best practices recommended by the International Organization of Securities Commissions (IOSCO). The draft VCoC is described as being interoperable as it is viewed as being consistent with the expectations introduced in other major jurisdictions. It is available in both English and Chinese to encourage wider adoption by providers. The SFC also outlines that the draft VCoC includes a self-attestation document to provide information on adherence to the code by the providers in a structured format. The SFC states that this will facilitate end users, such as SFC-licensed intermediaries, to compare the conduct of ESG ratings and data products providers during their due diligence and ongoing assessment processes. The one-month public consultation will end on 17 June 2024. Link to Consultation here UK Sustainability Disclosure Requirements: Implementation Update 2024 On 16 May 2024, the UK government published its ‘Sustainability Disclosure Requirements (SDR): Implementation Update 2024’ document which aims to deliver – as stated by the UK government – on one of its key commitments, as set out in the 2023 Green Finance Strategy, to provide industry with clear information, timeframes, and milestones for each of the core elements of SDR. The UK government states that, building on global best practice and leading standards, SDR is a framework to facilitate and streamline the flow of robust, decision useful information between corporates, consumers and investors and capital markets. This document is stated to have the aim of providing stakeholders with a concise summary of how SDR fits together across the UK financial services sector, wider economy, and when they can expect to engage with proposals. Link to Document here In addition to the SDR Implementation Update 2024, the UK government published a policy paper on the framework and terms of reference for the development of UK sustainability reporting standards. The stated purpose of the Policy Paper is to explain the UK government’s process for endorsing the IFRS Sustainability Disclosure Standards for use within a UK context, and the associated roles and responsibilities of the UK government, UK regulators, standard-setters and advisory committees. In addition, the document explains how the UK government, the Financial Conduct Authority (FCA) and other parties will work together to co-ordinate future decisions to implement UK Sustainability Reporting Standards. Link to the Policy Paper here ESMA Guidelines Establish Harmonised Criteria for use of ESG and Sustainability Terms in Fund Names On 14 May 2024, the European Securities and Markets Authority (ESMA), published its final report containing Guidelines on funds’ names using ESG or sustainability-related terms (Guidelines). The stated objective of the Guidelines is to ensure that investors are protected against unsubstantiated or exaggerated sustainability claims in fund names, and to provide asset managers with clear and measurable criteria to assess their ability to use ESG or sustainability-related terms in fund names. The Guidelines establish that to be able to use these terms, a minimum threshold of 80% of investments should be used to meet environmental, social characteristics or sustainable investment objectives. The Guidelines also apply exclusion criteria for different terms used in fund names: • “Environmental”, “Impact” and “Sustainability”-related terms: exclusions according to the rules applicable to Paris-aligned Benchmarks (PAB); and • “Transition, “Social” and “Governance”-related terms: exclusions according to the rules applicable to Climate Transition Benchmarks (CTB).