Global Trustee and Fiduciary Services Bite-Sized Issue 6 2023

Bite-Sized | 2023 Issue 6 4 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 Package touches on the entire investment journey of the consumer. It consists of an amending Directive, which revises the existing rules set out in the Markets in Financial Instruments Directive (MiFID II), the Insurance Distribution Directive (IDD), the Undertaking for Collective Investment in Transferable Securities (UCITS) Directive, the Alternative Investment Fund Managers Directive (AIFMD), and the taking-up and pursuit of the business of Insurance and Reinsurance Directive (Solvency II), as well as an amending Regulation, which revises the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation. Link to Commission Q&As here Link to Fact Sheet here Link to Legal Texts here CBDC Central Bank Digital Currencies: Ongoing Policy Perspectives On 25 May 2023 the Bank for International Settlements (BIS) Innovation Hub published a report on the work it has been doing with central banks on the potential for retail central bank digital currencies (CBDC). Since publishing a report in October 2020 setting out the common foundational principles and core features of a CBDC, and an executive summary and three detailed reports on systemdesign and interoperability , user needs and adoption and financial stability implications in September 2021, the group has continued to share ideas and perspectives on similar themes, which are summarised in the report: • Development of CBDC work requires careful consideration and engagement with a wide range of stakeholders, including the private sector and legislators. • To successfully meet its public policy objectives, a CBDC ecosystem should allow a wide range of private and public stakeholders to participate and, in doing so, deliver services which benefit end users. • The complex design questions and the potential risks arising from the implementation of any CBDC require careful consideration. • The evolving payments landscape requires central banks to give some consideration to how CBDCs may be used for wholesale and cross-border use cases. Alongside the summary, the report shares perspectives on how central banks can best engage industry and the public, what are the key legal issues related to retail CBDC, what tools may be needed to manage stressed conditions, and what could be the implications of using blockchain technology and associated concepts in CBDC. Link to the Report here Commencement of the e-HKD Pilot Programme On 18 May 2023 the Hong Kong Monetary Authority (HKMA) announced the commencement of the e-HKD Pilot Programme. A total of 16 firms from the financial, payment and technology sectors have been selected to participate in the first round of pilots for 2023. The pilots will take deep dives into potential use cases in six categories, including full-fledged payments, programmable payments, offline payments, tokenised deposits, settlement of Web3 transactions and settlement of tokenised assets. Under the Pilot Programme, the HKMA will conduct a series of pilots in close collaboration with various stakeholders to examine the use cases, as well as implementation and design issues relating to e-HKD. The outcomes and insights gained from each pilot will help refine the HKMA’s approach to the possible implementation of e-HKD. The HKMA stresses that it is not yet at a point where a firm decision can be made to introduce e-HKD. The HKMA expects to conduct more rounds of pilots with the industry in the future.