Legal updates covering current topics.
We understand that it may be difficult to stay up-to-date with the boundless financial news flow. We have therefore compiled an update on the season’s key highlights and regulative changes in the financial sector, which we hope will help you stay on track.
Below you will find key highlights on a more general level and down below more detailed highlights concerning different types of licensed companies operating in the financial sector.
Anti-Money Laundering & KYC
• The EBA Guidelines on money laundering and terrorist financing risk factors
EBA has published its final revised Guidelines on money laundering and terrorist financing risk factors. The Guidelines set out factors that obliged entities under the AML Act should consider when assessing the money laundering and terrorist financing risks associated with a business relationship or an occasional transaction.
Read the revised Guidelines in full: EBA publishes final revised Guidelines on money laundering and terrorist financing risk factors | European Banking Authority (europa.eu)
• The Finnish Government proposal regarding amendments to the Act on Preventing Money Laundering and Terrorist Financing
The final Finnish government proposal regarding amendments to the Act on Preventing Money Laundering and Terrorist Financing has been published. The legislative amendments are expected to enter into force on 1 April and 1 September 2021.
Read the proposal in full (Finnish only): HE 261/2020 vp (eduskunta.fi)
ESG and Sustainable Finance
• Final report on RTS and joint ESA supervisory statement on the application of the SFDR
The European Supervisory Authorities (ESAs) have published their final report and draft Regulatory Technical Standards (RTS) under the Regulation on sustainability-related disclosures in the financial services sector (SFDR). Furthermore, the ESAs have published a joint supervisory statement on the application of the SFDR. The objective of the supervisory statement is to ensure consistent application of the SFDR within the period from the application date of the SFDR (10 March 2021) to the application date of the RTS.
Read more: The three European Supervisory Authorities publish Final Report and draft RTS on disclosures under SFDR (europa.eu)
ESAs issue recommendations on the application of the Regulation on sustainability-related disclosures (europa.eu)
• ESAs’ letter to the European Commission regarding priority issues relating to the application of the SFDR
The ESAs sent a letter to the European Commission regarding several important areas of uncertainty in the interpretation of SFDR. The priority areas relate to the application of the SFDR on registered and non-EU AIFMs, the application of the 500-employee threshold for principal adverse impact reporting, the meaning of promotion in the context of product promoting environmental or social characteristics, the application of Article 9 SFDR and the application of SFDR product rules to portfolios and dedicated funds.
Read in full: jc_2021_02_letter_to_eu_commission_on_priority_issues_relating_to_sfdr_application.pdf (europa.eu)
• ESAs consult on Taxonomy-related product disclosures
The ESAs have issued a consultation paper seeking input on draft RTS regarding the disclosures of financial products investing in economic activities that contribute to an environmental investment objective. The proposed RTS create a single rulebook for the SFDR and the Taxonomy Regulation.
Read in full: ESAs consult on Taxonomy–related product disclosures (europa.eu)
• EIOPA’s board of supervisors agree on changes to the PRIIPS Key Information Document
The ESAs have submitted draft RTS to the European Commission on amendments to the Key Information Document for packaged retail and insurance-based investment products (PRIIPs).
Read in full: EIOPA’s Board of Supervisors agrees on changes to the PRIIPs key information document | Eiopa (europa.eu)
News by Company Sector
Funds and fund management companies
• ESMA launches a common supervisory action with NCAs on the supervision of costs and fees of UCITS
ESMA is launching a common supervisory action (CSA) with National Supervisory Authorities (NCAs) on the supervision of costs and fees of UCITS across the EU. The CSA aim to assess the compliance of supervised entities with the relevant cost-related provisions in the UCITS framework, and the obligation of not charging investors with undue costs.
Read in full: ESMA launches a Common Supervisory Action with NCAs on the supervision of costs and fees of UCITS (europa.eu)
• ESMA publishes Cloud Outsourcing Guidelines
ESMA has published a final report on its Guidelines on outsourcing to cloud service providers. The Guidelines are intended to help firms identify, address and monitor the risks arising from cloud outsourcing arrangements.
Read in full: ESMA publishes cloud outsourcing guidelines (europa.eu)
• EIOPA identifies business model sustainability and adequate product design as strategic supervisory priorities
EIOPA has identified business model sustainability and adequate product design as two Union-wide strategic supervisory priorities relevant for NCAs.
Read in full: Business model sustainability and adequate product design identified as new strategic supervisory priorities for national supervisors | Eiopa (europa.eu)
• ESMA updates Q&A on costs and charges
ESMA’s Q&As on MiFID II and MiFIR investor protection and intermediaries’ topics includes one new Q&As on ‘Information on costs and charges’ that aim to give guidance on how firms can present ex-post costs and charges information to clients in a fair, clear and not misleading manner.
Read in full: ESMA updates Q&A on costs and charges (europa.eu)
• EBA publishes final draft technical standards under the IFD and IFR
EBA has published a number of final draft Technical Standards under the IFD and IFR, related to e.g. the prudential treatment of investment firms, identifying investment firms’ risk takers and variable remuneration.
Read more: EBA publish final draft technical standards on the prudential treatment of investment firms | European Banking Authority (europa.eu)
EBA publishes final draft technical standards to identify investment firms’ risk takers and to specify the instruments used for the purposes of variable remuneration | European Banking Authority (europa.eu)
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