Global Trustee and Fiduciary Services Bite-Sized Issue 8 2024

7 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 Addressing leverage-related vulnerabilities in NBFI is a key area of current policy focus, and the FSB expects to publish by the end of 2024 a consultation report with proposed policy solutions. The report also outlines further work that will help the FSB determine whether collectively the reforms, once implemented by jurisdictions, have sufficiently addressed systemic risk in NBFI. Link to Letter here FUND LIQUIDITY ESMA Consults on Liquidity Management Tools for Funds On 8 July 2024, the European Securities and Markets Authority (ESMA) published consultations on draft guidelines and technical standards under the revised Alternative Investment Fund Managers Directive (AIFMD) and the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive. In the draft Regulatory Technical Standards (RTS) on the characteristics of Liquidity Management Tools (LMTs) ESMA defines the constituting elements of each LMT, such as calculation methodologies and activation mechanisms. ESMA also published draft Guidelines on LMTs of UCITS and open-ended AIFs, providing guidance on howmanagers should select and calibrate LMTs, in light of their investment strategy, their liquidity profile and the redemption policy of the fund. ESMA says these draft RTS and guidelines are designed to promote convergent application of the Directives for both UCITS and open-ended AIFs and make EU fund managers better equipped to manage the liquidity of their funds, in preparation for market stress situations. Additionally, they intend to clarify the functioning of specific LMTs, such as the use of side pockets, a practice that currently varies significantly across the EU. ESMA welcomes responses to the consultations by 8 October. Following this, ESMA will deliver the final RTS and guidelines by 16 April 2025. Link to Consultation Paper on the Draft Regulatory Technical Standards on Liquidity Management Tools under the AIFMD and UCITS Directive here Link to Consultation Paper on the Guidelines on Liquidity Management Tools of UCITS and open-ended AIFs here MAR ESMA Does Not Find Evidence to Ban Pre-hedging But Warns on Risks On 12 July 2024, the European Securities and Markets Authority (ESMA) published the Final Report on the feedback received to the 2022 Call for Evidence on pre-hedging. ESMA concludes that pre-hedging is a voluntary market practice which might give rise to conflicts of interest or abusive behaviours. Whereas ESMA does not find arguments to ban this practice at this stage, it also flags that these risks should be considered when issuing any future guidance. Link to Final Report here MIFID II/MIFIR NewQ&As Available On 12 July 2024, the European Securities and Markets Authority (ESMA) updated the following Questions and Answers: • ESMA_QA_847: Interpretation of “emission allowances” under C(4) Link to Q&As here