Global Trustee and Fiduciary Services Bite-Sized Issue 10 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 10 | 2023 12 QUICK LINKS CBDC DIVERSITY & INCLUSION FINTECH FUND LIQUIDITY OPERATIONAL RESILIENCE SUSTAINABLEFINANCE/ESG ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Against the backdrop of these risks and vulnerabilities, the Joint Committee of the ESAs advises national competent authorities, financial institutions and market participants to take the following policy actions: • Financial institutions and supervisors should closely monitor the broader impact from strong increases in policy interest rates and sudden rises in risk premia and accounted for in risk management; • Financial institutions and supervisors should remain prepared for a deterioration in asset quality in the financial sector. Supervisors should continue to closely monitor asset quality and loan loss provisioning; • Financial institutions and supervisors should be aware of and closely monitor the impact of inflation risk. Inflation not only impacts financial institutions by its effects on asset quality and valuation, but also through rising expenditures and rising funding costs as a result of higher interest rates and other channels; and • Financial institutions should place high importance on effective risk management and governance arrangements, in particular in relation to liquidity risk and interest rate risk, as recent problems in the US and Switzerland highlight. Financial institutions need to remain resilient to the impact of future substantial interest rate changes. Link to Joint Committee Report here LUXEMBOURG Application of ESMA’s Guidelines of the on MiFID II Product Governance Requirements On 14 September 2023 the Commission de Surveillance du Secteur Financier (CSSF) published Circular CSSF 23/840 on the application of the European Securities and Markets Authority’s (ESMA) Guidelines on MiFID II product governance requirements. The purpose of the circular is to inform firms, including UCITS management companies and external alternative investment fund managers providing the investment services of portfolio management (in accordance with mandates given by investors on a discretionary, client-by- client basis) or investment advice, or reception and transmission of orders, that the CSSF, in its capacity as competent authority, will apply the ESMA Guidelines on MiFID II product governance requirements (ESMA35-43-3448) from 3 October 2023. The Guidelines are intended to aid firms acting as manufacturers and/or distributors to comply with MiFID II requirements to substantiate and document choices made in the context of their product governance arrangements, including with regard to the target market identification and related distribution strategies. The CSSF will integrate the Guidelines, issued with a view to promoting supervisory convergence in this field at European level, into its administrative practice and regulatory approach. Link to the Circular here NORTH AMERICA SEC Approves Revised Privacy Act Rule On 20 September 2023 the Securities and Exchange Commission (SEC) approved a rule to revise its regulations under the Privacy Act, which is the principal law governing the handling of personal information in the federal government. The final rule clarifies, updates, and streamlines the SEC’s Privacy Act regulations. In addition, the final rule revises procedural and fee provisions and eliminates unnecessary provisions. The final rule also allows for electronic methods to verify one’s identity and submit Privacy Act requests.