Global Trustee and Fiduciary Services Bite-Sized Issue 7 2024

4 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 Reports on ‘Decentralised Finance: Current Landscape and Regulatory Developments’ and ‘The Metaverse: Opportunities and Challenges for the Financial Services Industry’ On 25 June 2024, the Hong Kong Institute for Monetary and Financial Research (HKIMR), the research arm of the Hong Kong Academy of Finance (AoF), released two new Applied Research reports, titled “Decentralised Finance: Current Landscape and Regulatory Developments” and “The Metaverse: Opportunities and Challenges for the Financial Services Industry” respectively. The AoF says that the reports explore two frontier technologies, decentralised finance (DeFi) and the metaverse. Together they provide an in-depth analysis on these technologies and their uses in the financial services industry, as well as an overview of the regulatory landscape internationally and in Hong Kong. The AoF also says that they also discuss the findings of surveys and interviews, exploring local market practitioners’ engagement, opportunities and challenges, and the talent landscape associated with the evolution of these technologies. For example, surveyed respondents mentioned that they are exploring opportunities brought by DeFi and metaverse applications, amid a strong interest in expanding their involvement in virtual asset ecosystem over the coming years. The reports conclude with some considerations with an aim to facilitate the healthy development and application of these technologies within Hong Kong’s financial services industry. Link to DeFi Report here Link to Metaverse Report here European Commission Seeks Input from Industry on the Use of AI in Finance On 18 June 2024, the European Commission (EC) launched a targeted consultation and a workshop series to seek input from stakeholders on the use of artificial intelligence (AI) in finance. The EC says that the initiatives cover use cases, benefits, barriers, risks, and stakeholder needs. The consultation and workshops target all financial stakeholders. The input received will enable the EC to provide guidance to the financial sector for the implementation of the AI Act, the EU’s legal framework for AI, in their specific market areas. The EC says that stakeholders are invited to respond to the consultation by 13 September 2024 and that views are particularly welcome from companies that already provide or develop AI systems. In addition, the EC says that a series of workshops co-hosted with the European Supervisory Authorities and national supervisors will give stakeholders the opportunity to present projects and exchange information about the latest developments. Registration for the workshops, which will take place in autumn, is open until 26 July 2024. Link to Consultation here Link toWorkshop Registration here Central Bank of Ireland Announces Plans to Establish Innovation Sandbox Programme in 2024 On 4 June 2024, the Central Bank of Ireland (Central bank) confirmed it will establish an Innovation Sandbox Programme later this year. The Central Bank says that the programme will provide regulatory advice and support for innovative projects that promote better outcomes for society and the financial system. The Central Bank has outlined that the Innovation Sandbox Programme will take a thematic approach, with themes and a call for potential participants to issue in the coming months, and the first programme to commence later this year (Quarter 4). The programme will be open to applications from anyone developing innovations for the financial system and will have a transparent application process. The Central Bank says that feedback received on its approach has been broadly positive. The consultation responses included a number of recommendations, which the Central Bank has carefully considered and has made some adjustments where appropriate. The Central Bank also says that given the predominantly EU-basis of most regulatory requirements and the importance of protecting consumers interests, it does not propose to provide derogations or waivers from regulation. The sandbox will apply the regulatory framework proportionally, with an outcome focused, risk- based approach.