Global Trustee and Fiduciary Services Bite-Sized Issue 11 2024

5 QUICK LINKS CULTURE CRYPTOASSETS ELTIFS EMIR FINANCIAL STABILITY BOARD FINTECH MIFID II/MIFIR OPERATIONAL RESILIENCE SUSTAINABILITY T+1 ASIA/PACIFIC EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 11 | 2024 ASIC says its findings revealed nearly half of licensees did not have policies in place that considered consumer fairness or bias, and even fewer had policies governing the disclosure of AI use to consumers. ASIC states that understanding and responding to the use of AI by financial firms is a key focus for it, which made addressing the poor use of AI a key focus area in its latest Corporate Plan. ASIC says it will continue to monitor how licensees use AI as it has the potential to significantly impact not just consumer outcomes, but the safety and integrity of the financial system. Where there is misconduct, ASIC says it will take enforcement action if appropriate and where necessary. Link to Press Release here Link to ASIC Report 798 here SFC: Encouraging Progress Made in Asset Management Pilot Use Case in the Project Ensemble Sandbox On 28 October 2024, the Securities and Futures Commission (SFC) announced a step forward in the realm of asset management, as one of the Project Ensemble Sandbox participants successfully completed a first-of-its-kind simulation of the dealing and trading process of a tokenised money market fund (MMF) using tokenised deposits (TD) within the Sandbox environment. Following the launch of the Project Ensemble Sandbox in August 2024, the SFC says it has been working closely with the Hong Kong Monetary Authority (HKMA), in which the SFC provides regulatory guidance to Sandbox participants to support their experimentation on tokenisation use cases under different themes. The SFC has also been co-leading with the HKMA to advance the tokenisation initiatives within the asset management sector. The SFC says that this pilot test would pave the way for further exploring atomic settlement of tokenised funds and money on a 24/7 basis in real-world business scenario, which could increase operational efficiency, reduce costs and appeal to international investors across various time zones. Link to SFC Announcement here SFC Sets Out Vision to Foster a Vibrant Fintech Ecosystem in Hong Kong On 28 October 2024, the SFC set out its vision for fostering a healthy and robust fintech ecosystem in Hong Kong by outlining several major areas of its initiatives to balance market development and investor protection. The SFC says that in a speech delivered at the Fintech Week 2024, Dr Eric Yip, the SFC’s Executive Director of Intermediaries, detailed these initiatives to further develop and scale up Hong Kong’s virtual asset market: Swift licensing process for virtual asset trading platforms (VATPs) The SFC expects the first batch of formal licences to be granted to deemed-to-be-licensed VATP applicants by the end of this year. Consultative panel for VATPs The consultative panel is expected to be launched in early 2025. Together with feedback from other stakeholders, the panel’s deliberation will form the foundation of the SFC’s forthcoming white paper on regulatory priorities for the virtual asset industry. Further regulatory building blocks relating to virtual assets The SFC is working with the HKSAR Government and other regulatory bodies to develop proposals for regulating the provision of virtual asset trading services, and the provision of virtual asset custody services. Tokenisation and Project Ensemble The SFC continues to support tokenisation-related industry initiatives. Link to SFC Press Release here