Global Trustee and Fiduciary Services Bite-Sized Issue 7 2024

13 QUICK LINKS CBDC CYBERSECURITY DIVERSITY DORA FINTECH IOSCO MICA OPERATIONAL RESILIENCE PRIIPS RETAIL INVESTMENT PACKAGE SUSTAINABLE FINANCE/ ESG T+1 TOKENISATION ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 7 | 2024 The Newsletter also covers the following ESMA work during May 2024: • ESMA’s Statement with initial guidance to firms using Artificial Intelligence technologies when they provide investment services to retail clients. Following its public statement of 14 December 2023, guidelines establishing harmonised criteria for the use of ESG and sustainability terms in fund names were shared; • ESMA’s Final Report on the rules on conflicts of interests of crypto-asset service providers (CASP) under the Markets in Crypto Assets Regulation (MiCA); • A combined report on the 2023 Common Supervisory Action (CSA) and the accompanying Mystery Shopping Exercise (MSE) on marketing disclosure rules under MiFID II was released, as well as a reminder on rules for sharing information during pre-close calls; • ESMA’s Statistics on Securities and Markets Report, with the objective of increasing access to data of public interest. ESMA also sent out a reminder to Credit Rating Agencies of their obligation to provide full visibility of the events that have led to the discontinuation of a specific rating; • Consultations on the MiFIR review: – A consultation on non-equity trade transparency, reasonable commercial basis (RCB) and reference data, – A second one on Consolidated Tape Providers and their selection, and – A third one on proposed changes to the rules for position management controls and position reporting • Finally, ESMA’s Call for Evidence on the review of the UCITS Eligible Assets Directive. The newsletter also features an announcement by ESMA on the 11th Joint ESAs Consumer Protection Day, and a full overview of all publications, together with information on next month’s speaking appearances of ESMA staff and vacancies. Link to ESMA Newsletter here ESRB Publishes EU NBFI Risk Monitor 2024 On 13 June 2024, the European Systemic Risk Board (ESRB) published the EU Non-bank Financial Intermediation Risk Monitor 2024 (NBFI Monitor). This edition of the annual series highlights the key cyclical and structural risks associated with NBFI, specifically investment funds and other financial institutions (OFIs), in 2023. The NBFI Monitor uses both entity and activity-based monitoring to provide a holistic assessment of financial stability risks. The ESRB says that at the current juncture, structural vulnerabilities in NBFI could amplify cyclical risks to EU financial system stability owing to the impact of higher interest rates. Tighter financing conditions, coupled with slow growth, could amplify credit risk. This could lead to losses and put a strain on NBFIs engaged in liquidity transformation, especially those with direct exposures to interest rate-sensitive sectors such as real estate, or those that rely on leverage. These risks could materialise in all NBFI segments according to the ESRB. This edition of the report shows that high leverage, which is typically associated with alternative investment funds (AIFs), can also build up in some undertakings for collective investment in transferable securities (UCITS) that pursue hedge fund-like strategies. It also explores interconnectedness, including the market footprint of investment funds andOFIs, as well as cross-exposures within the investment fund sector. TheNBFI Monitor 2024 also includes three special features focusing on specific risks and vulnerabilities. • Ownership structure of EU fund managers. • Growth of private finance. • Money Market Funds. Link to NBFI Risk Monitor 2024 here