Global Trustee and Fiduciary Services Bite-Sized Issue 7 2024

10 QUICK LINKS CBDC CYBERSECURITY DIVERSITY DORA FINTECH IOSCO MICA OPERATIONAL RESILIENCE PRIIPS RETAIL INVESTMENT PACKAGE SUSTAINABLE FINANCE/ ESG T+1 TOKENISATION ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 7 | 2024 • Simplification to the way disclosures are presented to investors; • Other technical suggestions including on which products should fall under the scope of SFDR and on how to improve disclosures regarding the negative impact of investments on people and the environment; and • The need for consumer testing before putting forward any policy proposals to review the SFDR, such as to introduce a categorisation system and/or an indicator. Link to ESAs Joint Opinion here T+1 Speech: ‘Shortening the Settlement Cycle: Benefitting Everyday Investors’ On the 20 June 2024, Securities and Exchange Commission (SEC) Chair Gary Gensler delivered a speech before the Accelerated Settlement in the UK Conference called ‘Shortening the Settlement Cycle: Benefitting Everyday Investors.’ Speaking in his capacity as Chair of the SEC and not on behalf of his fellow SEC Commissioners or staff, Chair Gensler spoke about the importance of shortening the settlement cycle, stating that it lowers risk, increases efficiency, boosts liquidity, and promotes the resiliency of markets. He added that cutting the clearance and settlement cycle in half also reduces the amount of margin or collateral that must be placed with the clearinghouse. It also lowers operational and counterparty risk. As the UK considers its own transition to T+1, Chair Gensler set out some of the key takeaways from the US experience. This included comments under the following headings: • It’s a team sport. • Importance of T+0 allocations, confirmations, and affirmations. • Importance of setting a firm implementation date. • Some business models may need to shift. • We already live in a world where settlement cycles are not aligned. In looking forward, Chair Gensler stated, in his view, that it’s appropriate for regulators and market participants around the globe to start to consider the possibility of shortening the settlement cycle for currency trading. And particularly, if Europe and the UK were to join the major markets of North America and Asia in moving to T+1, [we] should start to engage now in conversations, along with central banks, about the possibility of shortening the currency trading settlement cycle. Link to Speech here Update of the CSSF FAQ Providing Clarifications for UCITS in Relation to Shortened Settlement Cycle in the US On 20 June 2024, the Commission de Surveillance du Secteur Financier (CSSF) published an update of its CSSF FAQ regarding Circular CSSF 02/77 (which will be replaced by Circular CSSF 24/856 as of 1 January 2025) as well as of the CSSF FAQ on the Law of 17 December 2010. The CSSF says that in the context of the move of the standard settlement cycle fromT+2 to T+1 amongst others in the US, UCITSmay be facing operational challenges, including froman investment compliance perspective, resulting notably from timing gaps between the settlement cycles on the asset side (securities transactions) and on the liability side (subscriptions/redemptions). The CSSF states that the updates to both FAQs aim at clarifying the expectations of the CSSF in relation to investment compliance. The clarifications have been included in the following FAQs: • FAQ regarding Circular CSSF 02/77 (new question 4.a and modification of question 4 that has become question 4.b)