Global Trustee and Fiduciary Services Bite-Sized Issue 6 2023

Bite-Sized | 2023 Issue 6 3 QUICK LINKS AIFMD ANTI-MONEY LAUNDERING CMU — RETAIL INVESTMENT PACKAGE CBDC COSTS & CHARGES CRYPTOASSETS ELTIF IFD/IFR LIBOR TRANSITION MIFID II/MIFIR MONEY MARKET FUNDS OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG WHISTLEBLOWING AUSTRALIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM The new rules will enter into force twenty days after its publication in the Official Journal of the European Union. Link to Adopted Regulation on Information Accompanying Transfers of Funds and Certain Crypto-assets and Amending Directive (EU) 2015/849 here CMU — RETAIL INVESTMENT PACKAGE European Commission Proposes New Rules to Protect and Empower Retail Investors in the EU On 23 May 2023 the European Commission (the Commission) published its proposals for the Retail Investment Package (the Package) that places the consumers’ interests at the centre of retail investing. The aim is to empower retail investors to make investment decisions that are aligned with their needs and preferences, ensuring that they are treated fairly and duly protected. This will enhance retail investors’ trust and confidence to safely invest in their future and take full advantage of the European Union’s (EU) Capital Markets Union (CMU). One of the Commission’s three key objectives of the 2020 Capital Markets Union Action Plan was to make the EU an even safer place for citizens to invest in the long term. The Package aims to achieve that goal and encourage participation in EU capital markets, which has traditionally been lower than in other jurisdictions, such as the United States — even though Europeans have very high savings rates. The Commission states that boosting the CMU is also an essential means to channel private funding into its economy and to fund green and digital transitions. The Package in detail The package includes measures to: • Improve the way information is provided to retail investors about investment products and services, in ways that are more meaningful and standardised , by adapting disclosure rules to the digital age and investors’ growing sustainability preferences; • Increase transparencyand comparability of costs by requiring the use of a standard presentation and terminology on costs. This will ensure that investment products bring real value for money to retail investors; • Ensure that all retail clients receive at least annually a clear view of the investment performance of their portfolio ; • Address potential conflicts of interest in the distribution of investment products by banning inducements for “execution-only” sales and ensuring that financial advice is aligned with retail investors’ best interests. Stricter safeguards and transparency will also be introduced where inducements are allowed; • Protect retail investors from misleading marketing by ensuring that financial intermediaries are fully responsible for the use (and misuse) of their marketing communication, including where it is made via social media , or via celebrities or other third parties they remunerate or incentivise. • Preserve high standards of professional qualifications for financial advisors . • Empower consumers to make better financial decisions , by encouraging EU Member States to implement national measures that can support citizens’ financial literacy, regardless of their age, and social and educational background. • Reduce administrative burdens and improve the accessibility of products and services for sophisticated retail investors, by making the eligibility criteria to become a professional investor more proportionate. • Enhance supervisory cooperation to make it easier for national competent authorities and European Supervisory Authorities to ensure that rules are properly and effectively applied in a coherent manner across the EU and to jointly fight fraud and malpractices.