AMIC Regulatory Update
 


ICMA April publications

 

14 April – ICMA has published its latest Quarterly Report. The asset management section this quarter provides updates on AMIC’s work related to the Review of the ELTIF Regulatory Framework, its response to the IOSCO Bond ETF survey, as well as regular AMIC summary of activities.
 

21 April – AMIC and EFAMA submitted a joint response to the IOSCO consultation of fund liquidity management in open-ended funds.
 

22 April - The ICMA European Repo and Collateral Council (ERCC) has published a consultation paper on the role of repo in green and sustainable finance, exploring the sustainability aspects of repo and collateral as well as assessing the existing opportunities and potential risks in this area.
 

26 April – ICMA is opening a representative office in Brussels.

 

 


AMIC April Regulatory Update

Sustainable finance

21 April – Sustainable finance package

The European Commission adopted on 21 April 2021 an ambitious and comprehensive package of measures to help improve the flow of money towards sustainable activities across the European Union. This package includes the EU Taxonomy Climate Delegated Act, the proposal for the new Corporate Sustainability Reporting Directive (CSRD) as well as six amending Delegated Acts, with one covering the consideration of sustainability preferences when distributing financial products.

21 April – Commission welcomes provisional agreement on the European Climate Law

The Commission has welcomed provisional agreement between the co-legislators on the European Climate Law. As one of the key elements of the European Green Deal, the European Climate Law enshrines the EU's commitment to reaching climate neutrality by 2050 and the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

26 April – CDP publishes its Financial Services Disclosure Report

The CDP has published its Financial Services Disclosure Report. Their flagship report finds that "portfolio emissions are over 700x larger than direct emissions - and the risks of inaction are huge. Financial institutions must urgently decarbonize their portfolios, by disclosing the impact of their financing activities, setting science-based targets and aligning all financing activity with the Paris Agreement."

Fintech

21 April - Europe fit for the Digital Age: Commission proposes new rules for Artificial Intelligence

The Commission has proposed new rules and actions aiming to turn Europe into the global hub for trustworthy Artificial Intelligence (AI). The combination of the first-ever legal framework on AI and a new Coordinated Plan with Member States will guarantee the safety and fundamental rights of people and businesses, while strengthening AI uptake, investment and innovation across the EU. New rules on Machinery will complement this approach by adapting safety rules to increase users' trust in the new, versatile generation of products.

21 April - BoE statement on Central Bank Digital Currency

On 19 April 2021, the Bank of England (BoE) and HM Treasury announced the joint creation of a Central Bank Digital Currency (CBDC) taskforce to coordinate the exploration of a potential UK CBDC.
 
Investment Funds

8 April - ESMA report highlights liquidity concerns for alternative investment funds

ESMA has published its third annual statistical report on the Alternative Investment Fund (AIF) sector. "The main risks faced by the sector relate to a mismatch between the potential liquidity of the assets, and the redemption timeframe offered to investors. This is particularly the case for real estate funds and funds of funds. For hedge funds, the issue of leverage is key at more than 900%, in a sector valued at EUR 354bn in net asset value (NAV), including EUR 269bn for hedge funds with UK AIFMs."

14 April - Retail clients continue to lose out due to high investment products costs

ESMA has published its third annual statistical report on the cost and performance of European Union (EU) retail investment products. In the report ESMA finds that the costs of investing in key financial products, such as UCITS funds, retail alternative funds, and structured investment products (SRPs) remain high and diminish the investment outcome for final investors.
 
30 April - FCA consults on strengthening investor protections in SPACs

The FCA has launched a consultation on proposed changes to its Listing Rules for certain special purpose acquisition companies (SPACs). The FCA is proposing that SPACs that comply with higher levels of investor protection should not be subject to suspension when they identify an acquisition target.

Supervisors

9 April – AMF 2021 priorities for Action and Supervision

The AMF has published its action and supervisory priorities. In 2021, their focus will be on the economic recovery, reforms to shape future financial regulation and speeding up the transition to sustainable finance. For asset management companies, the focus will be on  best selection and best execution obligations, preventing market abuse in asset management companies, transparency of costs and fees in collective investment management, valuation and liquidity of real estate funds, monitoring and control of asset management companies by depositaries.
 
27 April - New MAS-Industry Group to Strengthen Singapore's Fund Management Ecosystem

The Monetary Authority of Singapore (MAS) announced a new partnership between MAS and the private sector to strengthen Singapore’s value proposition as a leading full-service asset management and fund domiciliation hub.
 
Brexit

28 April - Parliament formally approves EU-UK trade and cooperation agreement

The European Parliament voted with a large majority in favour of granting its consent to the agreement setting the rules of the future EU-UK relationship. The agreement will enter into force on 1 May.

MiFID

7 April - ESMA publishes final report on SME growth markets

ESMA has published its Final Report on the functioning of the regime for SME Growth Markets (GM) under MiFID/MiFIR. It contains recommendations and possible amendments to the MiFID II framework to the SME GM regime which are needed to improve the attractiveness of the regime.
 
8 April - ESMA makes recommendations for organised trading facilities under MiFID II/MiFIR

ESMA has published its Final Report on the functioning of Organised Trading Facilities (OTFs). The report contains recommendations and possible amendments to MiFID II/MiFIR with a view to reducing the level of complexity for market participants and making the legal framework more effective.
 
19 April - FCA consults on the new UK prudential regime for MiFID investment firms
 
The FCA is consulting on their second phase of proposed rules to introduce the UK Investment Firm Prudential Regime (IFPR). The aim of the new regime is to streamline and simplify the prudential requirements for MiFID investment firms that are prudentially regulated by the FCA in the UK (FCA investment firms). The consultation covers: own funds requirements, basic liquid asset requirement, risk management & governance, remuneration requirements, regulatory reporting requirements.
 
29 April- FCA consults on changes to UK MIFID’s conduct and organisational requirements
 
The FCA is consulting on amendments to the UK MIFID’s conduct and organisational requirements. The changes proposed are similar than one recently adopted by the EU. It concerns (1) research unbundling rules (exemption for small cap below £200 m, FICC and changes introduced for independent research providers) and (2)  the removal of two sets of best execution reports (RTS 27 and 28).
 

 


ICMA Quarterly Members' briefing

 

ICMA podcast      

IOSCO bond ETF survey - Arthur Carabia
27 April 2021 ICMA’s Arthur Carabia discusses ICMA's response to the IOSCO bond ETF survey. Find out more in the ICMA Quarterly Report for the second quarter of 2021.

 

 

 




 

ICMA podcast      

Monthly Market update: ICMA Asset Management & Investors Council
21 April 2021 Robert Parker, Chair of ICMA’s Asset Management and Investors Council, reviews the market events of the past weeks, including Q1 GDP growth and recovery, stabilisation of the US 10 year treasury yields and geopolitical risks to be considered by investors.

 

Check the ICMA Media Library for more podcasts and webinars.
 

 

Contact us

+44 20 7213 0348
amic@icmagroup.org
www.icmagroup.org/amic


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