Global Trustee and Fiduciary Services Bite-Sized Issue 3 2025

4 QUICK LINKS CRYPTOASSETS CSDR EMIR FINTECH FSB OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG T+1 ASIA PACIFIC EUROPE IRELAND LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 3 | 2025 Eurosystem Expands Initiative to Settle DLT-based Transactions in Central Bank Money On 20 February 2025, the Governing Council of the European Central Bank (ECB) announced that it has decided to expand its initiative to settle transactions recorded on distributed ledger technology (DLT) in central bank money. The ECB says the initiative will follow a two-track approach. First, as soon as feasible, the Eurosystemwill develop and implement a safe and efficient platform for such settlements in central bank money through an interoperability link with TARGET Services. Second, the Eurosystemwill look into a more integrated, long-term solution for settling DLT-based transactions in central bank money. This will also include international operations, such as foreign exchange settlement. The ECB says a concrete time plan will be announced in due course. The ECB says the initiative will contribute to establishing an integrated European market for digital assets, in line with the Governing Council’s call for promoting a digital capital markets union in its statement of 7 March 2024, building on the Eurosystem’s exploratory work on new technologies for wholesale central bank money settlement, conducted between May and November 2024. Link to Eurosystem Statement here Industry Body Helps Asset Managers Integrate AI into their Business Models On 5 February 2025, the European Fund and Asset Management Association (EFAMA) launched its AI-system Assessment Tool, which is designed to support firms of all sizes navigate the regulatory complexities of AI. Developed together with EFAMA member experts from across the industry, EFAMA says the Assessment Tool will help firms document and assess AI use cases in line with the EU AI Act and other interdependent regulations, including GDPR, MiFIR and DORA, using a free-of-charge standardised tool. The launch of the tool coincides with the publication by the European Commission of guidelines on prohibited AI practices, which form part of the EU AI Act’s risk-based classification framework. Link to Announcement here Use of AI in Banking, Pensions and Other Financial Services to be Subject of New Inquiry by MPs On 3 February 2025, the Treasury Select Committee (TSC) launched an inquiry to consider the potential impacts of the increased use of Artificial Intelligence (AI) in banking, pensions and other financial services. The TSC says this inquiry could explore how AI is currently used by City firms as well as what opportunities it brings for innovation in the financial services sector. MPs may also consider: • The potential impact on employment in the sector and ask how the UK compares to other countries in both its competitiveness and approach. • The extent to which AI could jeopardise financial stability and question if there is the potential for increased cyber security risks. • What safeguards may be needed to protect financial consumers, particularly vulnerable ones who may be at risk of bias. The inquiry commenced with a Call for Evidence (CfE), which seeks to gather information on: How AI is currently used in different sectors of financial services and how this is likely to change over the next ten years? • To what extent can AI improve productivity in financial services? • What are the risks to financial stability arising from AI and how can they be mitigated?