Global Trustee and Fiduciary Services Bite-Sized Issue 7 2024

7 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 second set of guidelines concerns the assessment of the suitability of shareholders or members with direct or indirect qualifying holdings in a supervised entity. This assessment is a key aspect of the gatekeeping function exercised by supervisory authorities, considering the significant influence that these persons may exercise on the management of the supervised entity. Link to Joint Guidelines here OPERATIONAL RESILIENCE FINMA Guidance on Operational Risk Management by Fund Management Companies and Managers of Collective Assets On 12 June 2024, the Swiss Financial Market Supervisory Authority (FINMA) published guidance on the management of operational risks by fund management companies and managers of collective assets. FINMA says in the guidance, that it describes weaknesses it has identified and measures aimed at achieving appropriate risk management. In its ongoing supervision, FINMA has determined that operational risks at supervised institutions are increasing due to digitalisation. At the same time, FINMA has increasingly noticed weaknesses in operational risk management by fundmanagement companies andmanagers of collective assets. Against this background, FINMA is issuing guidance to make fund management companies and managers of collective assets aware of the importance of appropriate operational risk management. In this guidance, FINMA lists the general principles of appropriate risk management, which also apply to the management of operational risks. FINMA also describes measures to ensure appropriate management of risks in the areas of information and communication technology, data, cyber, business continuity, legal and compliance as well as outsourcing. Link to FINMA Press Release here Link to Guidance here PRIIPS ESAs Update Q&As on the PRIIPs KID On 28 June 2024, The ESAs (ESMA, EBA and EIOPA) published an update to its ‘Consolidated questions and answers (Q&A) on the PRIIPs Key Information Document (KID). Under Chapter I, General Topics, a new Question 13 has been added – Do FX forwards fall within the scope of the PRIIPs Regulation? The answer to the question is Yes. Article 4(1) of the PRIIP Regulation defines PRIP as an investment, where, regardless of the legal form of the investment, the amount repayable to the retail investor is subject to fluctuations because of exposure to reference values or to the performance of one or more assets which are not directly purchased by the retail investor. Under Article 4(3), PRIIPs are defined as a product that is a PRIP and/or an insurance-based investment product. FX forwards are financial instruments under point 4 of Annex C to Directive 2014/65/EU. Their value, and consequently the amount repayable to investors, fluctuates during the holding period in response to changes in relevant interest rates and FX rates. As a result, they should be considered as PRIPs within the meaning of Article 4(1) and as PRIIPs within the meaning of Article 4(3) of the PRIIPs Regulation. Link to Updated PRIIPs Q&A here