Global Trustee and Fiduciary Services News and Views Issue 50

Prime, Futures and Securities Services | Financial Services Regulation 74 Its purpose is to support cross-sector common understanding of relevant cybersecurity and cyber-resilience terminology; work to assess and monitor financial stability risks of cyber risk scenarios; and support information sharing as appropriate. The FSB has committed, after considering the responses it receives, to finalise the lexicon for delivery to the G20 Leaders’ Summit in Buenos Aires in November of this year. What does the future hold? Within Europe, each piece of post-crisis regulation has a review clause, but each of the reviews has a different due-by date. The EU Commission’s CMU Action Plan also has a segment that has reviewed the post-implementation phase of legislation to determine what improvements can be made. These are being applied on a staggered basis during the period from 2017 up until 2019. Adopting a different stance, the US administration believes that the raft of post-crisis regulation has encumbered its asset management industry. A late 2017 Treasury report on the asset management and insurance industries communicated a desire to deregulate and take a path that begins to fork from that of other countries. In China, they’re looking at restructuring and opening up access to markets for foreign investment, while tightening up control over the conduct of the asset management business by financial institutions. Uncertainty exists given that in the future, UK rules may diverge — but that’s still to unfold. Outside of the US, the continued application of a banking-style policy to open-ended funds is still creating tension. While a need for debate on leverage and liquidity risk management is now well understood, a narrow focus on widely held open-ended funds remains to be questioned. Global supervisory bodies such as IOSCO, the FSB and the ESRB continue work in this area. In terms of sustainability and the desired growth of capital markets, Europe is leading the way (as covered in more detail within this publications segment on Sustainability and ESG). The pension industry also faces unique challenges, where low fertility rates, twinned with longevity, cause issues in terms of pension adequacy. The previous segment of this publication looked at the increasing use of financial innovation by regulators and by other participants across the asset management industry. This final segment provides further details on: the European regulatory timeline over the next few years, along with more detailed articles that discuss the SEC’s proposed rules on the standards of conduct for investment professionals; a delegate’s view of the AIFMD; global fund managers’ possible routes into China; and the Guiding Opinions on regulating the asset management business of financial institutions in China. Andrew Newson Senior Fiduciary Analyst, Regulatory Services Global Trustee and Fiduciary Services Citi Amanda Hale Head of Regulatory Services Global Trustee and Fiduciary Services Citi 1 Mark Carney, Chair of the Financial Stability Board, “Ten years on: fixing the fault lines of the global financial crisis”, 21 April 2017, http://www.fsb.org/wp-content/uploads/BdF- Financial-Stability-Review.pdf. Link here . 2 Remarks by Dietrich Domanski, Secretary General, Financial Stability Board — Remarks to the ASIFMA Board, 24 May 2018, http://www.fsb.org/wp-content/uploads/Remarks-to- the-ASIFMA-board.pdf. Link here . 3 Ibid. 4 http://www.fsb.org/wp-content/uploads/P020718.pdf 2 July 2018.