By: Gayle Bowen and Shane Geraghty
The European Commission (EC) has adopted the long awaited ELTIF 2.0 Delegated Regulation (RTS). Its version rejects a number of key proposals previously introduced by ESMA. In particular, the EC has returned to its original versions of Annex I and Annex II, with minor amendments.
Read MoreBy: Kai Zhang, Philip J. Morgan, Andrew J. Massey, and Hazel Doyle
The Financial Conduct Authority (FCA) has published its final rules for the UK’s Overseas Funds Regime (OFR) (see our prior blogs here and here which discuss eligibility and the expected OFR launch timetable).
Read MoreBy: Jim Bulling and Emre Cakmakcioglu
In May 2024, the NSW Anti-slavery Commissioner (Commissioner) published a Discussion Paper introducing a draft Code of Practice (Code) to reduce modern slavery in the financial services sector. The Commissioner sought feedback on both the Discussion Paper and Code by 15 July 2024.
Read MoreBy: Áine Ní Riain, Dr Philipp Riedl, and Ruth Hennessy.
The European Securities and Markets Authority (ESMA) has published its much anticipated Final Report: Guidelines on funds’ names using ESG or sustainability-related terms (Guidelines).
This follows a consultation on the subject between November 2022 and February 2023 and an update provided by ESMA last December.
Acknowledging the significant impact of fund names on investor decision-making, ESMA has determined that a fund with ESG- or sustainability-related terms in its name must apply at least 80% of its investments to meet environmental or social characteristics or sustainable investment objectives.
The Guidelines also apply exclusion criteria for certain terms in fund names:
Use of “sustainability”-related terms in fund names will require a commitment to “invest meaningfully” in sustainable investments. Similar use of “transition” or “impact” – related terms will require that the relevant fund’s investments used to meet the 80% threshold are on a clear and measurable path to transition or are made with the objective to generate a positive, measurable impact alongside a financial return.
The Guidelines will apply to all EU UCITS and EU AIFs, and it currently seems likely that they will also apply to non-EU funds marketed into the EU (this is a point on which we will be watching developments closely).
The Guidelines are expected to come into force in Q3 or Q4 2024, subject to completion of administrative formalities including a decision by national competent authorities on whether to apply them locally (which is generally expected). Existing funds will have an additional 3-month transition period before compliance becomes mandatory.
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: 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: Stacy L. Fuller, Kevin R. Gustafson, Christine Mikhael and Crystal Liu
On 15 April 2024, Cboe BZX Exchange, Inc. (Cboe) filed an application pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, as amended, with the Securities and Exchange Commission (SEC), to amend its exchange-traded funds (ETFs) listing standards to permit ETF share classes issued by open-end investment companies that offer mutual fund share classes pursuant to any exemptive relief to be granted by the SEC.
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: Kane Barnett and Prudence Birchall
The Parliamentary Joint Committee on Corporations and Financial Services (Committee) has commenced an inquiry into the wholesale investor test for offers of securities, and the wholesale client test for financial products and services (together, wholesale investor/client tests) in the Corporations Act 2001 (link here) (Inquiry).
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