Global Regulatory Development – Page 2 – Global Investment Law Watch

CFTC Proposes Rule to Address Margin Adequacy and Treatment of Separate Accounts by FCMs

Feb 23 2024

On February 20, 2024, the CFTC approved a proposed rule that would apply a margin adequacy requirement to all futures commission merchants (FCMs), with respect to their customers. The new requirement—titled Regulation 1.44—is designed to ensure that an FCM does not permit a customer to withdraw funds from its account if the remaining balance would be insufficient to meet the customer’s initial margin requirements.

Not Done Yet: Australia’s Odyssey Into Regulating Artificial Intelligence (AI)

Feb 20 2024

By: Daniel Knight and Jack Clark

On 31 January 2024, ASIC Chair Joe Longo outlined ASIC’s position on Australia’s AI regulatory landscape: while current laws offer some regulation, they fall short in effectively addressing the risks associated with AI.

FinCEN Proposes AML Requirements on Registered Investment Advisers (including Exempt Reporting Advisers)

Feb 16 2024

By: Richard F. Kerr, Jennifer L. Klass, and Annabelle H. North

On 13 February 2024, the Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking (NPRM) that would impose anti-money laundering (AML) and counter-terrorist financing (CFT) requirements on Securities and Exchange Commission-registered investment advisers (the SEC, and such investment advisers, RIAs) and exempt reporting advisers (ERAs). FinCEN previously made similar rule proposals in both 2003 and 2015, which were never finalized.

Europe: Agreement on EU ESG Ratings Regulation

Feb 08 2024

By: Hilger von Livonius and Philipp Riedl

On 5 February 2024, the EU Council and the EU Parliament agreed on a provisional text for the ESG Ratings Regulation (the Regulation).

Under the Regulation, in-scope EU providers of ESG ratings will require a licence from, and be supervised by, European Securities and Markets Authority (ESMA).

In-scope ESG ratings will provide an opinion on a company’s or a financial instrument’s sustainability profile, by assessing its exposure to sustainability risk and its impact on society and the environment.

Australia: Climate-related Financial Disclosure: Exposure Draft Legislation

Feb 06 2024

By: Lisa Lautier and Rebecca Mangos

The Australian Government has released Treasury Laws Amendment Bill 2024: Climate-related financial disclosure, which is draft legislation confirming mandatory reporting of climate-related financial disclosure requirements.

Europe: BaFin Clarifies the German Approach to the ELTIF 2.0 Regime

Feb 05 2024

By: Hilger von Livonius and Philipp Riedl

As anticipated in our earlier blog on ELTIF 2.0, Regulation (EU) 2023/606 amending the Regulation on European long-term investment funds (ELTIF Regulation) has been in force since 10 January 2024. There is a lot of hope in the German market that the revised ELTIF regime will finally help this product to achieve a breakthrough.

EUROPE: UK’s Overseas Funds Regime Moves a Step Closer with Confirmation that Most EEA UCITS Will Be Deemed Equivalent

Feb 02 2024

By: Shane Geraghty, Aoife Maguire, Andrew Massey, Philip Morgan, and Courtney Hunter

The UK’s overseas funds regime has been in development for several years and is finally close to becoming a reality. It will create a more streamlined method by which non-UK funds given “equivalence” status may be marketed to UK retail investors.

OCC Announces New Bank Merger Policies

Feb 01 2024

By: Grant F. Butler , Robert M. Tammero, Jr, Yuki Sako, and Aiden D. O’Leary

On 29 January 2024, Acting Comptroller Hsu gave a speech articulating his vision that the US banking system should support the diversity, dynamism and the size of the US economy, and unveiling proposed updates to the OCC merger application review processes. Shortly thereafter, the OCC issued a notice of proposed rulemaking (NPR) proposing to (i) eliminate automatic expedited approval based on passage of time and inaction by the OCC, which would result in every bank merger or consolidation application requiring a deliberate approval by the agency; and (ii) adopt a policy statement containing factors and indicators considered by the agency in reviewing such applications, and principles that will guide the OCC decision making process, including factors such as financial stability, financial and managerial resources and future prospects, and convenience and needs. OCC is accepting comments on the NPR which are due 60 days after publication in the federal register.

CFTC Requests Comment on the Use of Artificial Intelligence in CFTC-Regulated Markets

Jan 30 2024

By: Cheryl L. Isaac, Matthew J. Rogers, and Benjamin C. Skillin

On 25 January, 2024, multiple Divisions of the Commodity Futures Trading Commission (CFTC) issued a Request for Comment (RFC) on the use of Artificial Intelligence (AI) in CFTC-regulated derivatives markets. The RFC seeks information on the current and potential uses of AI as well as the risks associated with using it. The RFC is intended to complement the Biden Administration’s Executive Order urging federal agencies to promote the safe, secure, and trustworthy development of AI. The CFTC staff views the RFC as an opportunity to “identify the highest priorities and return-on-investment projects with AI use cases” and enhance the CFTC’s data-driven approach to policy, surveillance, and enforcement.

SEC Staff Publishes FAQs on Tailored Shareholder Reports

Jan 23 2024

By: Cal Gilmartin, Abigail Hemnes, Michael Davalla and Benjamin Skillin

This past Friday, the SEC staff issued a set of responses to FAQs on the Tailored Shareholder Reports (TSRs) Rule. While these responses only represent the views of the staff of the Division of Investment Management and have no legal force or effect, they provide welcome clarity and guidance on certain elements of the Rule that had been the subject of discussion across the industry.

Catagory:Global Regulatory Development