Global Trustee and Fiduciary Services Bite-Sized Issue 10 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 10 | 2023 11 QUICK LINKS CBDC DIVERSITY & INCLUSION FINTECH FUND LIQUIDITY OPERATIONAL RESILIENCE SUSTAINABLEFINANCE/ESG ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM EUROPE ESMAWork Programme 2024 On 28 September 2023 the European Securities and Markets Authority (ESMA) published its work programme for 2024. In 2024, ESMA plans to: • Develop rules for sustainable finance as part of the new European Green Bond Regulation and will deliver its final report on greenwashing, proposing actions to combat this practice. • Finalise technical standards for the European Single Access Point (ESAP) and continue preparatory work on the necessary IT infrastructure that will support it. • Conclude the work on technical standards and guidelines in relation to the MiCA regulation and the Digital Operational Resilience Act (DORA). • Work to enhance financial stability and investor protection also through tasks mandated in the asset management area under the recently concluded reviews of the Alternative Investment Fund Managers (AIFMD), Undertakings for Collective Investment in Transferable Securities (UCITS) Directives, and the Central Securities Depositories Regulation (CSDR). • Assist in the finalisation (and possibly start of implementation) of the new Retail Investment Strategy, and will also in 2024 assess whether the National Competent Authorities (NCAs) have sufficiently improved their supervision of investment firms’ cross-border activities. To enhance investor understanding, ESMA will engage with retail investors through coordinated communication with NCAs, complementing and amplifying their actions and messages. • Continue to adapt its supervisory efforts to be ready for the entry into application of DORA in 2025, and begin the process of selecting and authorising Consolidated Tape Providers (CTPs) in the EU. In addition, the ongoing reviews of the European Market Infrastructure Regulation (EMIR) as well as the new Listing Act may also lead to newmandates for ESMA in 2024. Finally, effective use of data and Information and Communication Technologies is a key part of ESMA’s strategy for 2023-2028, and ESMA will work on further improving data quality outputs for all supervisory data and enhance the ability to share and analyse this data, in close cooperation with NCAs and other EU authorities. Link to the 2024 Annual Work Programme here ESAs Warn of Risks Resulting from a Fragile Economic Outlook On 18 September 2023 the three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) issued their Autumn 2023 Joint Committee Report on risks and vulnerabilities in the EU financial system. The Report underlines the continued high economic uncertainty. The ESAs warn national supervisors of the financial stability risks stemming from the heightened uncertainty, and call for vigilance from all financial market participants. The ESAs state that recent years have presented a series of adverse events, i.e., the Russian aggression against Ukraine, the energy crisis, and US mid-sized banks turmoil in March 2023, which most financial institutions have navigated well. Nonetheless, the European economy continues to experience a period of heightened uncertainty which presents material financial stability risks that necessitate vigilance from all financial market participants. The economic outlook remains fragile, not least amid persistently elevated geopolitical risks, high inflation, and an uncertain macro-financial outlook. Market implications from turmoil in the banking sector in March also highlight the continuing sensitivity of the European financial system to exogenous shocks and the high ongoing market uncertainty. Market nervousness and bad news about parts of the financial system could spread rapidly and lead to a general jump in risk aversion. The increase in interest rates generated heterogeneous impacts on the financial sector. This resulted in increased net interest income for banks, reduced profitability for insurers and liquidity risks for the asset management sector.