By: Matthew J. Rogers and Maxwell J. Black
On 2 May 2024, the Commodity Futures Trading Commission’s (CFTC) Technology Advisory Committee (Committee) released a report entitled Responsible AI in Financial Markets: Opportunities, Risks & Recommendations. The report discusses the impact and future implications of artificial intelligence (AI) on financial markets and further illustrates the CFTC’s desire to oversee the AI space.
Read MoreBy: Tsuguhito Omagari, Yuki Sako, Jason Nelms and Charmaine Mok
Financial Services Agency of Japan (FSA) proposed amendments to its supervisory guidelines applicable to managers of investment trust (toshin) funds and real estate funds, and is currently accepting comments until May 13. Of those, amendments relating to real estate funds would require managers to take additional measures to manage transactional conflicts of interest, specifically:
Read MoreBy: Áine Ní Riain, Aoife Maguire, Gayle Bowen, and Philip Morgan
The Financial Conduct Authority (FCA) has released updated information and, together with HM Treasury, a “roadmap,” on the UK’s Overseas Funds Regime (OFR). It intends to accept applications from new funds (i.e. those not in the Temporary Marketing Permissions Regime (TMPR)) from September 2024. This is a welcome development for managers of new EEA UCITS that are not currently able to access the UK retail market.
Read MoreBy: Grant F. Butler and Yuki Sako
Two proposals regarding oversight of the control of banks by asset managers were withdrawn at the 25 April board meeting of the Federal Deposit Insurance Corporation (FDIC). These proposals were a result of increasing concern by bank regulators regarding concentration in control of banks by institutional investors, particularly index funds.
Read MoreBy: Andrew Massey, Philip Morgan, and Omega Modi
The UK’s FCA has published consultation paper 24/7: Payment optionality for investment research. It proposes a new, more flexible, way to charge third-party investment research to clients.
The new payment option would sit alongside the two existing options under which research costs are either paid by firms from their own resources or charged to clients through a research payment account. The latter approach has not been popular because of its operational complexities, so research has been an out-of-pocket expense for many UK asset managers.
Read MoreBy: Matthew J. Rogers and Benjamin C. Skillin
On 10 April 2024, the National Futures Association’s (NFA) Business Conduct Committee (BCC) issued an order against 50.ai Investments LLC, a former NFA Member commodity pool operator and forex firm. The order stipulates that 50.ai Investments may not reapply for NFA membership or act as a principal of an NFA Member at any time in the future due to violating a suite of NFA compliance rules.
Read MoreBy: Lisa Lautier and Dhivya Kalyanakumar
On 28 March 2024, the Federal Court handed down its verdict on the greenwashing civil penalty action brought by the Australian Securities and Investments Commission (ASIC).
Read MoreBy: Áine Ní Riain and Shane Geraghty
On 20 March 2024, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) voted in favour of draft modernisation measures for the PRIIPs Key Information Document (KID).
Read MoreBy: Matthew Rogers and Annabelle North
Following up on its previously-issued Investor Alert warning investors on the use of so-called “AI washing” by advisers in their marketing materials, the Securities and Exchange Commission (SEC) announced on 18 March 2024 the settlements of charges against two investment advisers for “making false and misleading statements about their purported use of artificial intelligence (AI).”
Read MoreBy: Matthew Watts, Lisa Lautier and Dhivya Kalyanakumar
On 15 March 2024 the Australian Securities and Investments Commission (ASIC) issued a new legislative instrument extending existing regulatory relief previously only available to passively managed index tracking exchange traded funds (ETFs) so that it will now also apply to a broader range of ETFs (such as actively managed ETFs) quoted on a financial market operated by the ASX or Cboe.
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