Global Trustee and Fiduciary Services Bite-Sized Issue 8 2024

21 QUICK LINKS AIFMD CBDC CRYPTOASSETS CSDR FINTECH FSB FUND LIQUIDITY MAR MIFID II/MIFIR OPERATIONAL RESILIENCE REMUNERATION SUSTAINABLE FINANCE/ ESG UCITS ASIA PACIFIC EUROPE IRELAND NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 8 | 2024 The SEC is applying to RILA and registered market value adjustment annuity advertisements and sales literature a current SEC rule that provides guidance as to when sales literature is materially misleading under the Federal securities laws. Finally, the SEC is adopting technical amendments to Forms N-6 and N-3 to correct errors from prior SEC rulemakings. Link to Final Rule here Link to Fact Sheet here Statement by Chair Gary Gensler here Statement by Commissioner Hester M Peirce here CFTC Announces Supervisory Stress Test Results On 1 July 2024, The Commodity Futures Trading Commission (CFTC) issued Supervisory Stress Test of Derivatives Clearing Organisations: Reverse Stress Test Analysis and Results, a report detailing the results of its fourth Supervisory Stress Test (SST) of derivatives clearing organisation (DCO) resources. Among other findings, the 2024 report concluded the DCOs studied hold sufficient financial resources to withstand many extreme and often implausible price shocks. The CFTC said the purpose of the analysis was twofold: (1) to identify hypothetical combinations of extreme market shocks, concurrent with varying numbers of clearing member (CM) defaults, that would exhaust prefunded resources (DCO committed capital, and default fund), and unfunded resources available to the DCOs (this represents the reverse stress test component), and (2) to analyse the impacts of DCO use of mutualised resources on non-defaulted CMs. In the process of conducting this reverse stress test, the interconnectedness of DCOs through clearing members was explored. The results of this 2024 stress test analysis show: • All individual DCOs hold sufficient financial resources to withstand many extreme and often implausible price shocks, along with multiple defaults of their CMs. In some cases, DCOs can withstand the default of all CMs that have losses resulting from highly implausible price shocks. • Potential costs to non-defaulting members do not appear to be problematic. Under a very extreme and likely implausible scenario, with shocks three times one of the most volatile days in recent years, concurrent with three synchronised defaults, costs at the clearing members paying the vast majority of default funds and assessments represented only 0.07% of the Tier 1 capital of their parent entities, on average. • The effects of interconnectedness were muted across DCOs, except for extremely implausible scenarios. Extreme events for one DCO are not commonly extreme events at the other DCOs, nor are the extreme losses for clearing members at one DCO experienced to the same extent at other DCOs at which they are a member. Link to Report here UNITED KINGDOM Apply to be UK UCITS Man Co On 31 July 2024, the Financial Conduct Authority (FCA) published a webpage detailing how to apply to the FCA to become a management company (ManCo) for a UK UCITS, what permissions are needed and howmuch applicants need to pay. The FCA states that firms will only be eligible to apply for the permission of managing a UK UCITS if they will be managing a fund established in the UK that is either an investment company with variable capital (ICVC), an authorised unit trust (AUT) or an authorised contractual scheme (ACS), which are all types of authorised fund. If a firms intends to apply for the permission of managing a UK UCITS, before making its application it should request a meeting through the FCA’s Pre-Application Support Service (PASS). If a firm intends to manage [an AIF] it should read the FC’s webpages on Alternative Investment Fund Managers (AIFMs) or Investment Managers depending on the intended business model.