Global Trustee and Fiduciary Services Bite-Sized Issue 1 2025

7 QUICK LINKS AIFMD CRYPTOASSETS EMIR FINTECH MIFID II/MIFIR MMF NBFI OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG ASIA IRELAND LUXEMBOURG NETHERLANDS NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 1 | 2025 In addition, the RTS and TA include changes related to the discontinuation of reporting of data for the purpose of transparency calculations. Going forward, ESMA says it will perform these calculations using transaction data reported under Article 26 of MiFIR. By removing this reporting obligation and the reuse of the other already reported data, ESMA aims at reducing the reporting burden for market participants. The final report with the draft RTS has been submitted to the European Commission for adoption. Link to Final Report here MMF SFC Circular to Management Companies of SFC-authorised Money Market Funds On 17 December 2024, the Securities and Futures Commission (SFC) published a circular highlighting its requirements and expectations for management companies (Managers) of SFC- authorised money market funds (MMFs) and sets out good practices for managing the liquidity risk of such funds in an attached Appendix. The SFC says Managers are required to maintain and implement effective liquidity risk management policies and procedures to monitor the liquidity risk of the MMFs under their management, taking into account factors including the funds’ investment strategy and objectives, investor base, liquidity profile, underlying obligations and redemption policy. Managers should refer to the SFC’s guidance on liquidity risk management of SFC-authorised funds set out in the Circular to management companies of SFC-authorized funds on liquidity risk management dated 4 July 2016. The SFC reminds Managers that MMFs are required to invest in high-quality money market instruments. They must take into account both the credit quality and liquidity profile in determining the quality of a money market instrument. Managers should have a prudent internal procedure for assessing whether or not a money market instrument invested by their MMFs is of high quality, having regard to multiple factors, including but without over-reliance on external credit ratings. MMFs are generally not expected to invest in unrated or low-investment-grade money market instruments. Also, Managers are reminded to exercise due care, skill and diligence in managing the liquidity of their MMFs at all times, taking into account prevailing market conditions (such as interest rate changes and their potential impact on MMFs), and to ensure fair treatment of both redeeming and remaining investors in meeting redemption requests. The SFC says it is important to have in place an effective liquidity risk management framework to provide for reasonable liquidity cost, mitigate material dilution and protect the interests of remaining investors upon others’ redemption. As such, in the case of an early termination of fixed-term deposits held by the MMFs, redeeming investors should bear any penalties imposed by the depositing entities, and Managers are required to properly allocate to redeeming investors an appropriate share of loss of accrued income resulting from the downward adjustments of interest rates receivable by the MMFs. Managers are advised by the SFC that they should review their current policies and procedures to assess the adequacy of their action plans and availability of LMTs, including the ability to use anti- dilution LMTs, and implement necessary enhancements such as revisions of the funds’ offering documents to ensure such tools are available for use when needed. The SFC has identified some good practices as set out in the Appendix attached to the Circular. Whilst not binding, the SFC says that these examples should assist Managers in managing the liquidity risk of MMFs under their management. Link to Circular here