Global Investment Law Watch – Page 5 – Exploring the legal and regulatory issues affecting the worldwide investment community.

FINRA’s Findings: Member Firms Get Failing Grade in Crypto Communications

Jan 25 2024

By: Richard Kerr, Eden Rohrer, and Aiden O’Leary

On 23 January 2024, the Financial Industry Regulatory Authority (FINRA) published its findings from a 2022 targeted exam sweep, which may serve as a warning to broker-dealers offering crypto asset products. FINRA conducted a sweep reviewing communications made between 1 July 2022 and 30 September 2022 by member firms in connection with crypto assets and crypto-related products and services, focusing on compliance with FINRA Rule 2210 (Communications with the Public). The exam focused not only on written material, but also on communications made via websites, podcasts, advertisements, social media, and other public channels.

Europe: Progress Update on Irish Funds Sector Review

Jan 25 2024

By: Shane Geraghty and Gayle Bowen

The Irish Department of Finance has published a Progress Update on their ongoing review of the funds sector in Ireland. The review, under interlinked themes of open markets, resilient markets and developing markets, is seeking to ensure that the Irish funds sector is resilient, future-proofed, supportive of macro-prudential stability, and continues to meet international best-practice standards.

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.

Europe: Responsibility of UCITS Management Companies and AIFMs for producing PRIIPs key information documents confirmed

Jan 16 2024

By: Áine Ní Riain and Lucy Deane

Under the EU PRIIPs Regulation “manufacturers” are required to prepare a key information document (KID) where relevant packaged retail investment products (including most funds) are made available to retail investors.

2024: The Year of the Spot Bitcoin ETP

Jan 11 2024

By: Peter J. Shea, Richard F. Kerr, Keri E. Riemer, and Aiden D. O’Leary

The US Securities and Exchange Commission (SEC) is making 2024 a significant year for exchange-traded products (ETPs) by declaring effective the registration statements of ten Bitcoin ETPs, and approving their listing on one of the major stock exchanges. This is a monumental step to bringing access to Bitcoin to a broader retail market in the US For over a decade, the staff of the SEC (Staff) had denied or otherwise blocked applications to list spot Bitcoin ETPs, claiming, in part, that there were insufficient protections against market manipulation in the underlying Bitcoin market. The approvals issued this week unlock – although do not widely open – a previously dead bolted door to registered products offering direct exposure to Bitcoin, providing an opportunity for retail investors to have easier access to exposure to Bitcoin in a regulated product.

New Year, New CPO/CTA Exemption Affirmations and CPO FinCEN Requirements

Jan 03 2024

By: Clifford C. Histed, Kenneth Holston, Cheryl L. Isaac, and Matthew J. Rogers

Happy New Year! As we kick off 2024, we note that the National Futures Association (NFA) published its annual Notice to Members with guidance on the annual affirmation requirement for certain exempt commodity pool operators (CPOs) and commodity trading advisors (CTAs). If you rely on an exemption or exclusion from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5) or 4.5, or an exemption from CTA registration under 4.14(a)(8), you must file an annual affirmation in the NFA’s Exemptions System by 29 February 2024, and a multi-factor authentication is now required for access. Failure to make this affirmation will result in your registration exemption being withdrawn on 1 March 2024.

In addition, the NFA also issued a Notice to Members regarding the Financial Crimes Enforcement Network (FinCEN) final rule implementing the Corporate Transparency Act beneficial ownership information (BOI) reporting requirements. Although CFTC-registered entities (including CPOs and CTAs) are exempt from these requirements (see 31 U.S.C. §5336(a)(11)(B)(xiv)), certain pooled investment vehicles will be required to comply. Commodity pools that are operated or advised by an SEC-registered broker-dealer or investment adviser are generally exempt, but a limited number of other commodity pools will be subject to the new rule.

Accordingly, CPOs with non-exempt commodity pools will need to file BOI reports with FinCEN, including identifying information about individuals who directly or indirectly own or control the commodity pool. FinCEN recently extended the BOI reporting deadline for certain reporting companies, with the relevant compliance dates as follows:

Commodity pools created or registered before 1 January 2024: file BOI reports by 1 January 2025.
Commodity pools created or registered in 2024: file BOI reports within 90 calendar days after registration is effective.
Commodity pools created or registered on or after 1 January 2025: file BOI reports within 30 calendar days after registration is effective.

For commodity pools created or registered after 1 January 2024, a CPO will also need to report information about the “company applicants,” meaning the individual or individuals who directly file the document that creates or registers the commodity pool.

Please feel free to contact the authors of this blog post with any questions.

Europe: ESMA Provides Update on Fund ESG Naming Rules

Dec 21 2023

By: Áine Ní Riain and Lucy Deane

On 14 December, the European Securities and Markets Authority (ESMA) issued a Public Statement updating its proposals for guidelines on funds’ names using ESG or sustainability-related terms, following its consultation on the same guidelines (ESMA34-472-373, the Guidelines) that ran from November 2022 to February 2023.

Europe: ESMA Publishes Long-Awaited Final Report on ELTIF 2.0 Regulatory Technical Standards

Dec 20 2023

By: Gayle Bowen and Shane Geraghty

On 19 December, the European Securities and Markets Authority (ESMA) published its final report setting out draft Regulatory Technical Standards under the amended European Long-Term Investment Funds Regulation.

ICMA’s Code of Conduct for ESG Ratings and Data Products Providers – A Step Towards Consistent Global Standards

Dec 18 2023

By: Carolyn Sng and Sook Young Yeu

The International Capital Market Association (ICMA) has released a voluntary code of conduct for ESG ratings and data products providers (the Code), reflecting recommendations by the International Organization of Securities Commissions (IOSCO). The Code is intended to be internationally interoperable and may be used by jurisdictions where no local code or regulation is in place.

Australia: Proposed Licensing Exemptions for Foreign Financial Services Providers (FFSPs) Before Parliament

Dec 15 2023

By: Jim Bulling and Laura McFadzean

On 30 November 2023, the Australian Government tabled a Bill proposing Australian Financial Services Licence (AFSL) exemptions for FFSPs in Australia.