Global Trustee and Fiduciary Services Bite-Sized Issue 2 2026

5 QUICK LINKS AIFMD BENCHMARKS REGULATION CRYPTOASSETS FINTECH FUND LIQUIDITY MIFID II/MIFIR MONEY MARKET FUNDS OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG T+1 ASIA PACIFIC EUROPE NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 2 | 2026 AI in Financial Services: Emerging Global Norms On 12 January 2026, the International Regulatory Strategy Group (IRSG) published a report that maps how jurisdictions are approaching AI in financial services, identifying where global coherence is emerging and setting out practical steps for policymakers, regulators, and international standard setters to promote the safe and responsible innovation of AI in financial services. The IRSG said its analysis determines that AI largely amplifies existing risk rather than introducing wholly new ones and advocates for interoperable, principles-based supervision anchored in existing technology-neutral rules and that no new hard global rules on AI should be created. Key findings include: • Most jurisdictions draw on OECD/G20/G7 principles, yet implementation spans prescriptive rulebooks (e.g., EU) to non statutory, outcomes focused supervision (e.g., UK), and voluntary co created guidance (e.g., Singapore); • AI is a general purpose technology that can magnify model risk, data governance, third party concentration, and cyber threats (particularly for generative AI) but does not introduce wholly new financial sector risks; • Given AI’s rapid evolution, rigid international rulebooks risk obsolescence. Interoperability, aligned taxonomies and indicators, and compatible supervisory tools are the pragmatic way forward; and • Data localisation and extra territorial measures can fragment markets and impede responsible innovation; cross border cooperation and proportionate oversight are essential. Link to the Report here FUND LIQUIDITY HKMA Circular on Liquidity Risk Management On 7 January 2026, the Hong Kong Monetary Authority (HKMA) issued a circular detailing good industry practices on liquidity risk management based on observations from recent supervisory reviews of authorised institutions (AIs). The HKMA said that, in the light of lessons learned from the 2023 Banking Turmoil in the US and Europe, it has provided guidance to assist AIs in enhancing interest rate risk and liquidity risk management amid the evolving operating environment for banks. Meanwhile, the HKMA has conducted a range of reviews of AIs’ liquidity risk management focusing on stress-testing, contingency planning and monitoring tools. Good practices identified from these reviews are highlighted below. (i) Liquidity stress-testing Growing digitalisation of banking services and popularity of social media may exacerbate the speed and scale of deposit outflows in times of stress. As pre-emptive measures, many AIs have already reviewed and enhanced their liquidity stress-testing framework by recalibrating the pace of deposit outflows to factor in characteristics of their deposit bases and the potential amplification of stress through digital channels. Several AIs have also fully deployed reverse stress tests to identify the levels of stress which might potentially threaten their resilience and developed measures to address the identified vulnerabilities. (ii) Contingency planning Putting in place robust and operationally feasible contingency funding plans (CFPs) would help AIs to respond swiftly to liquidity shocks. In addition to conducting regular and comprehensive drills, AIs have maintained a sufficient liquidity cushion for handling contingencies outside business hours, strengthened their funding arrangements with Head Offices or parent banks, and enhanced the capability to generate timely liquidity information in times of stress. The internal audit function of some AIs also evaluates periodically the adequacy of their CFPs and readiness of the AIs to execute the plans.