Global Trustee and Fiduciary Services Bite-Sized Issue 10 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 10 | 2023 2 QUICK LINKS CBDC DIVERSITY & INCLUSION FINTECH FUND LIQUIDITY OPERATIONAL RESILIENCE SUSTAINABLEFINANCE/ESG ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM In Sela, the rCBDC ledger is operated by the central bank without compromising end user privacy as personal identifiers are obfuscated. Retail payments are therefore settled directly on the central bank’s balance sheet in a privacy-preserving manner, meaning instant finality for transactions. A novel type of intermediary, the Access Enabler, is a core part of the system. It handles all customer-facing rCBDC services without ever “holding” end users’ rCBDC at any point in the process, thus eliminating the need to hold funds to ensure liquidity or to reduce settlement risk. Moreover, the Access Enabler does not need to hold funds on its own balance sheet . This removes two significant sources of costs, complexity and risk when compared with current payment service providers. Link to the Report here Link to Opening remarks at the Project Sela report launch conference by Howard Lee, Deputy Chief Executive, HKMA here DIVERSITY & INCLUSION FCA and PRA Propose Measures to Boost Diversity and Inclusion in Financial Services On 25 September 2023 the Financial Conduct Authority and the Prudential Regulation Authority published consultation papers setting out proposals to boost diversity and inclusion to support healthy work cultures, reduce groupthink and unlock talent. The measures also aim to enhance the safety and soundness of firms and improve understanding of diverse consumer needs. Increased diversity and inclusion in regulated financial services firms can deliver better internal governance, decision making and risk management. The proposals include new rules and guidance to make clear that misconduct such as bullying and sexual harassment poses a risk to healthy firm culture. This guidance will help ensure firms can take decisive and appropriate action against employees for such behaviour. The proposals set flexible, proportionate minimum standards, placing more requirements on larger firms. Proposals set out for firms include requirements to: • Developadiversity and inclusion strategy setting out howthe firmwillmeet their objectives andgoals. • Collect, report and disclose data against certain characteristics. • Set targets to address under-representation. Each firmwill need to come up with solutions that meet the requirements of their business. Most of these requirements, including setting targets, regulatory reporting and disclosure, would only apply only to the largest firms (the definition proposed is more than 251 employees). The proposed rules aim to see increased diversity and inclusion in firms translate into better internal governance, decision making and risk management. Both regulators believe that this contributes to promoting the safety and soundness of firms, policy holder protection and better outcomes for markets and consumers. Both consultations are open until 18 December 2023. The regulators welcome comments on the proposed approach taken and the feedback will be used to develop final rules planned for publication in 2024. Link to FCA CP23/20 here Link to PRA CP18/23 here