2022 Proskauer Rose LLP. Section 76.1 et seq. Investment firms will be required to integrate investors sustainability preferences, i.e. number of reasons including connected world class research, pro-enterprise policy and an Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. 44/2001 of 22 December 20001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters; Federal Regulations means those federal regulations relating to cable television services, 47 C.F.R. The FCA published apress releaseannouncing the publication of final rules and related material relating to its first two policy statements on the Investment Firms Prudential Regime (IFPR). The Delegated Acts propose changes to the following: As per current regulatory standards, companies must prepare a suitability assessment when providing investment advice or making a decision on a clients portfolio. Promote economic activities that will contribute towards climate change mitigation. The next generation search tool for finding the right lawyer for you. AManco,
Regulation T, U or X means Regulation T, U or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. GTIL does not provide services to clients. All the Delegated Regulations and Directive will enter into force on 22 August 2021 and will all apply from 2 August 2022. In particular in the case of netting, the existing EU framework on the commitment approach (mainly the CESR Guidelines and the AIFMD Delegated Regulation both of which with a granular approach) provides very useful criteria as to the measures for including netting at an aggregate level, which have been positively tested over years in practice with satisfactory results both for regulators and asset managers. Questions? Delegated legislation integrating sustainability into UCITS Directive, AIFMD, MiFID II, Commission Delegated Regulation (EU) 2021/1255 of 21April 2021 amending Delegated Regulation (EU) No231/2013 as regards the sustainability risks and sustainability factors to be taken into account by Alternative Investment Fund Managers, Commission Delegated Regulation (EU) 2021/1254 of 21 April 2021 correcting Delegated Regulation (EU) 2017/565 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive, Commission Delegated Regulation (EU) 2021/1253 of 21 April 2021 amending Delegated Regulation (EU) 2017/565 as regards the integration of sustainability factors, risks and preferences into certain organisational requirements and operating conditions for investment firms, Commission Delegated Directive (EU) 2021/1270 of 21 April 2021 amending Directive 2010/43/EU as regards the sustainability risks and sustainability factors to be taken into account for Undertakings for Collective Investment in Transferable Securities, EU policy, regulatory and legislative updates, FCA updates webpage on how to apply for authorisation, ESMA launches call for Evidence on Pre-Hedging. EEA Regulations means the Immigration (European Economic Area) Regulations 2006. The increased digitisation of the workforce, changes in business models, globalisation, and remote working capabilities have led to a new approach to the delivery of services. Independence requirements for management companies, investment companies, and depositaries (Articles 20 to 24). The changes will require the firms to analyse sustainability preferences when identifying the potential target market. Commission Delegated Regulation (EU) 2021/1833supplementing the MiFID II Directive (2014/65/EU) by specifying the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level was published. The Taxonomy Climate Delegated Act will now be examined by the Council of the EU. European Securities and Markets Authority (ESMA) published astatementon making investment recommendations on social media. MiFID Delegated Regulation 2017/565/EU; and. See Article 80 Conflicts of interest in the AIFMD Delegated Regulation No. All Rights Reserved. The UCITS Directive and AIFMD draft delegated acts clarify notably the duties of investment fund managers (IFMs) to take into account the social and environmental factors and risks in their governance, organisation, conflicts of interest policies, investment due diligence as well as their risk policies and procedures. Firms are required to retain the necessary resources and expertise in order to effectively integrate sustainability risks.
In recent years Ireland has become an epicentre for Foreign Direct Investment (FDI) for a As such, existing risk management policies should be updated to reflect the risk of sustainability. Discover how EY insights and services are helping to reframe the future of your industry. HM Treasury published itsresponseto the call for evidence on the Payments Landscape Review. All Rights Reserved. The long-awaited so-called level 2 measures for Directive 2014/91/EU of 23 July 2014 as regards depositary functions, remuneration policies and sanctions (Directive UCITS V) provide for the following: Written contract appointing the depositary (Article 2).The Delegated Regulation sets out the minimum requirements for the written agreement to be entered into between the investment company or the management company for each of the common funds that the management company manages on the one hand and the depositary on the other hand. This can be achieved by reviewing the current requirements and proposed changes via a gap analysis and implementing an action plan based on the results. The FCA published a newwebpagesetting out Q&As on the FCA's new powers under the retained EU law version of the Benchmarks Regulation ((EU) 2016/1011) (UK BMR). Considering the guidance provided earlier this year by ESMA, as published on 1 February 2016 in its UCITS Q&A, the revision of the depositary agreements should be finalised promptly and in accordance with the requirements outlined in the Delegated Regulation once the Luxembourg legislator has adopted the law implementing Directive UCITS V. According to our latest information, the respective parliamentary vote should take place in April 2016. Please contact [emailprotected]. The changes will impact all EU firms that are subject to the AIFMD, UCITS and/or MiFID regulations. Accessibility Standards means accessibility standards and specifications for Texas agency and institution of higher education websites and EIR set forth in 1 TAC Chapter 206 and/or Chapter 213. The Prudential Regulation Authority (PRA) published areporton climate-related financial risk management and the role of capital requirements. ACCA. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one anothers acts or omissions. Being well-prepared for an audit is an efficient audit. attractive tax regime. Tell us who you are to view our scope of services, adapted to your profile and your sector of activity. CSD Regulations means the CSDs rules and regulations applicable to the Issuer, the Agent and the Notes from time to time. Changes to the Outsourcing legislation, specifically when offshoring. Specific rules apply in case of two-tier structures and additional requirements exist when a group link exists between the management company or the investment company and the depositary. On 24 March 2016, the European Commission Delegated Regulation EU 2016/438 (the Delegated Regulation) supplementing the UCITS V Directive with regard to obligations of depositaries was published in the Official Journal of the European Union. They also introduce new key concepts and factors on sustainability that need to be considered by firms when adapting their processes in line with the proposals. If you would like to learn how Lexology can drive your content marketing strategy forward, please email [emailprotected]. Alignment of definition of sustainability risks with SFDR. Our Business Process Outsourcing (BPO) model is tailored for growing multinational companies to support the transition and transformation of finance functions and business growth. Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. However, the assessments do not take into consideration the clients sustainability preferences and whether they wish to integrate environmentally friendly financial instruments into their portfolio. Market Abuse Regulation means Regulation (EC) No / of the European Parliament and of the Council on insider dealing and market manipulation (market abuse); General Regulations means the Charitable Incorporated Organisations (General) Regulations 2012. Most comprehensive library of legal defined terms on your mobile device, All contents of the lawinsider.com excluding publicly sourced documents are Copyright 2013-. Besides mitigating such credit exposures, we welcome the entry into force of the AIFMD Delegated Regulation of 12 July 2018, applicable since April 2020 that introduces the obligation for the depositary to perform a reconciliation as often as is necessary between its internal accounts and registers and those of a third party to whom the depositary has delegated the custody function. Basel III Regulation means, with respect to any Affected Person, any rule, regulation or guideline applicable to such Affected Person and arising directly or indirectly from (a) any of the following documents prepared by the Basel Committee on Banking Supervision of the Bank of International Settlements: (i) Basel III: International Framework for Liquidity Risk Measurement, Standards and Monitoring (December 2010), (ii) Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems (June 2011), (iii) Basel III: The Liquidity Coverage Ratio and Liquidity Risk Monitoring Tools (January 2013), or (iv) any document supplementing, clarifying or otherwise relating to any of the foregoing, or (b) any accord, treaty, statute, law, rule, regulation, guideline or pronouncement (whether or not having the force of law) of any governmental authority implementing, furthering or complementing any of the principles set forth in the foregoing documents of strengthening capital and liquidity, in each case as from time to time amended, restated, supplemented or otherwise modified. Norton Rose Fulbrights Financial services: Norton Rose Fulbright, LLP 2022. Attorney Advertising. Authorised by Chartered Accountants Ireland (CAI) to carry on investment business. At Grant Thornton we meet the challenges of our clients. On 2 August 2021 various amending measures were published in the EU Official Journal which will require EU Alternative Investment Fund Managers, EU UCITS management companies and EU MiFID investment firms (including portfolio managers and adviser/arrangers) to integrate sustainability risks and factors into their policies and procedures. The changes require senior management to be responsible for the integration of sustainability risks. Regulation T, U or X" means Regulation T, U or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. Firms will need to update their existing conflicts of interest identification process to include conflicts of interest that may arise as a result of integration of sustainability risks into the organisational arrangements. Furthermore, hedge funds that are engaging in active ownership have been found to earn excess returns, and they may thus have an incentive to do so (Clifford, 2008). Ensure financial services and capital are reoriented towards sustainable investments; and. Quarterly indirect tax update August 2022. ISA Regulations means The Individual Savings Account Regulations 1998, as amended or replaced from time to time. Passionate about sustainability. Data Protection Regulation means Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation); AIFM Regulation means Commission Delegated Regulation (EU) No. Loss of financial instruments and liability discharge (Articles 18 and 19).The Delegated Regulation specifies the conditions and circumstances under which financial instruments held in custody are considered to be lost and how the depositary can escape its liability in case of a force majeure event. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. The Financial Action Task Force published aconsultation paperon amendments to recommendation 24 on transparency and beneficial ownership of legal persons. Will your NFT investments soon be subject to VAT? Firms will need to review and update their existing business plan, systems and policies to incorporate the concept of sustainability into their daily operations. Select your location Close country language switcher, EY Luxembourg Partner, Sustainability Leader. All Rights Reserved. A draft delegated directive amending the Commission Directive 2010/43 implementing certain provisions of the UCITS Directive, A draft delegated regulation amending the Commission Regulation 231/2013 implementing certain provisions of AIFMD, Two delegated acts amending two delegated acts implementing MiFID II requirements on product governance, organizational requirements and operating conditions of investment firms, on sustainability-related disclosures in the financial services sector (SFDR), on the EU taxonomy for sustainable activities (Taxonomy), establishment, implementation and maintenance of clear and document decision-making procedures and organisational structure specifying reporting lines, allocation of responsibilities with proper discharge, internal control mechanisms to ensure compliance with decisions and procedures, internal reporting and communication and effective information flows with any third party involved, maintenance of adequate and orderly records of business and internal organisation, the implementation of the investment policy in the prospectus, the fund rules, the instrument of incorporation or the offering documents, the investment strategies approval process, the investment policy/strategy/risk limits implementation/compliance for each managed UCITS, the approval / periodic review of the adequacy of internal procedures for undertaking investment decisions for each managed UCITS, the approval / periodic review of the risk management policy, arrangements, processes and techniques, including the risk limit system, the investment policy/strategy/risk limits implementation/compliance for each managed AIF, the approval / periodic review of the adequacy of internal procedures for undertaking investment decisions for each managed AIF. The UCITS Directive and AIFMD delegated acts provide very similar requirements. If the depositary entrusts a UCITS assets to a third party located in a third country, the depositary is now required to ensure, notably on the basis of independent legal advice, that in the event of insolvency of that third party, the assets of the UCITS held by the latter in custody will be unavailable for distribution among, or realisation for the benefit of, creditors of that third party. The FCA published apolicy statementon a new authorised fund regime for investing in long-term assets (PS21/14). Prospectus Regulation means Regulation (EU) 2017/1129. TUPE Regulations means the Transfer of Undertakings (Protection of Employment) Regulations 2006, as amended. Firms will need to ensure that appropriate organisational arrangements are in place and internal controls, systems and processes are re-designed to include analysis of sustainability factors and detection of sustainability risks. 575/2013 on prudential requirements for credit institutions and investment firms of the European Parliament and of the Council of June 26, 2013, as the same may be amended or replaced from time to time. EY helps clients create long-term value for all stakeholders. IFMs should conduct their analysis jointly with the project carried out to reach compliance with the SFDR and the Taxonomy. Adequate resources must be available and appropriate staff expertise is required to maintain compliance and eliminate activities that may present risks to preserving sustainability. We bring together extraordinary people, like you, to build a better working world. These acts will focus on clients sustainability preferences and will place a new obligation on managers to identify these preferences and manage client portfolios accordingly. 2015/35). EY is a global leader in assurance, consulting, strategy and transactions, and tax services. November 2021: A series of discussion papers will be published focussing on Sustainability Disclosure Requirements. For full functionality of this site it is necessary to enable JavaScript. GTIL and the member firms are not a worldwide partnership. Obligations of the depositary (Articles 3 to 17).Further details are provided in the Delegated Regulation relating to oversight duties, cash monitoring, safekeeping duties with regard to assets held in custody and other assets, due diligence when selecting and appointing third parties, segregation and insolvency protection of UCITS assets when delegating custody functions. In the EU the AIFMD Delegated Regulation includes conversion methodologies for derivative instruments for the calculation of the exposure of an AIF in accordance with the gross method, including delta adjustments for options, to avoid overstate the market risk of funds. For more information about our organization, please visit ey.com. Become your target audiences go-to resource for todays hottest topics. The BoE published thefinancial policy summary and recordof the meeting of its Financial Policy Committee. The Financial Stability Board (FSB) published aspeechby the FSB Chair, that among other things, considers how the FSB will address ongoing and future financial stability challenges in 2022 and beyond.
The International Capital Market Association published an updated version of itsguideto reporting repo transactions under both the EU and UK versions of the Regulation on reporting and transparency of securities financing transactions (SFTR). In particular, all IFMs need to review and update their governance structures, resources and allocation of responsibilities, their investment decision-making and due diligence policies as well as their risk policies and control framework to adapt them in a proportionate manner to the scope of their activities. The Financial Stability Board published aprogress reporton the regulation, supervision and oversight of global stablecoin arrangements. ThePackaged Retail and Insurance-based Investment Products (UCITS Exemption) (Amendment) Regulations 2021 (SI 2021/1149)were published, together with anexplanatory memorandum. The Delegated Regulation comes into force on 12 April 2016 and will apply from 13 October 2016. Consideration should also be given notably to the legislation applicable to benchmark administrators, investee companies and distributors or advisors in order to set up appropriate communication and data flows. 2020 EYGM Limited. instructions how to enable JavaScript in your web browser
Depositaries of UCITS and AIFs have until 1 April 2020 to comply with new rules on safekeeping duties following the publication of: (1) Commission Delegated Regulation (EU) 2018/1618 amending Delegated Regulation (EU) 231/2013 (the "AIFMD Delegated Regulation"); and (ii) Commission Delegated Regulation (EU) 2018/1619 amending Delegated Regulation (EU) 2016/438 (the "UCITS Delegated Regulation") (together the "Delegated Regulations"). The European Supervisory Authorities (that is, the EBA, EIOPA and ESMA) published ajoint final report(JC 2021 50) on draft regulatory technical standards (amending RTS) regarding the content and presentation of sustainability disclosures under Articles 8(4), 9(6) and 11(5) of the Sustainable Finance Disclosure Regulation ((EU) 2019/2088) (SFDR). This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. HM Treasury published a policy paper,Greening Finance: A Roadmap to Sustainable Investing. The Network for Greening the Financial System (NGFS) published aninterim reporton biodiversity and financial stability. On 2 August 2021, the following were published in the Official Journal of the EU: The Delegated Regulations and Directive enter into force on 22 August 2021. Audit readiness need not be a complex challenge. Asking the better questions that unlock new answers to the working world's most complex issues. Requirement to consider sustainability risks in management companies or AIFMs : Requirement to maintain resources & expertise for the effective integration of sustainability risks, Requirement to integrate sustainability risks in the management of UCITS in a proportionate manner. https://ie.linkedin.com/in/dwayne-price-b7343a18, instructions how to enable JavaScript in your web browser, Financial Accounting and Advisory Services (FAAS), Delegated Acts incorporating sustainability issues and considerations, Privacy statement professional engagements, Grant Thornton Ireland response to the conflict in Ukraine. The below table outlines the type of business activity the new requirements are applicable to: Firms that are in scope of the AIFMD, UCITS and MiFID regimes need to become familiar with the changes that are applicable to their business activity and analyse how they will comply with the new obligations. The Delegated Acts are expected to apply in October 2022. They shall apply those measures from 1 August 2022. On 21st April 2021, the European Commission adopted Delegated Acts (non-legislative acts adopted by the European Commission to amend or supplement legislation) amending the current UCITS, AIFMD and MIFID II legislation as part of its wider initiative to continue transforming EUs economy into a sustainable financial system and become carbon neutral by 2050. While many companies have difficulty completing audit requests on schedule, our experience shows that with the right approach, you can meet your deadlines comfortably. GTIL and each member firm is a separate legal entity. In addition to cookies that are strictly necessary to operate this website, we use the following types of cookies to improve your experience and our services:Functional cookiesto enhance your experience (e.g. The insights and services we provide help to create long-term value for clients, people and society, and to build trust in the capital markets. Draft UCITS delegated directive as regards the sustainability risks and sustainability factors to be taken into account for Undertakings for Collective Investment in Transferable Securities, Draft AIFMD delegated regulation as regards sustainability risks and sustainability factors to be taken into account by Alternative Investment Fund Managers, Draft MiFID delegated directive as regards the integration of sustainability factors and preferences into the product governance obligations, Draft MiFID delegated regulation as regards the integration of sustainability factors, risks and preferences into certain organisational requirements and operating conditions for investment firms. The CSSF has set up a filing procedure for making the updates to precontractual documents required under the SFDR. . Business Solutions, Governance, Restructuring & Bankruptcy, Employee Benefits & Executive Compensation, Environmental, Social and Corporate Governance (ESG), Commission Delegated Regulation (EU) 2021/1833, Greening Finance: A Roadmap to Sustainable Investing, Packaged Retail and Insurance-based Investment Products (UCITS Exemption) (Amendment) Regulations 2021 (SI 2021/1149), ESG investing and climate transition: Market practices, issues and policy considerations, Financial markets and climate transition: Opportunities, challenges and policy implications, Subscribe to our publications for professional legal insights.
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