Global Trustee and Fiduciary Services Bite-Sized Issue 6 2026

5 AIFMD CRYPTOASSETS FINTECH FSB IOSCO MIFID II/MIFIR MONEY MARKET FUNDS OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG T+1 ASIA PACIFIC EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 6 | 2026 Quick LInks Artificial Intelligence: EU Council and Parliament Agree to Simplify and Streamline Rules On 7 May 2026, the Council presidency and European Parliament (the co-legislators) negotiators reached a provisional agreement on a proposal to streamline certain rules regarding artificial intelligence (AI). The proposal forms part of the ‘Omnibus VII’ legislative package in the EU’s simplification agenda. The package includes proposals for two regulations aiming to simplify the EU’s digital legislative framework and the implementation of harmonised rules on AI. The European Commission (Commission) had proposed to adjust the timeline for applying rules on high-risk AI systems by up to 16 months, so that the rules start to apply once the Commission confirms the needed standards and tools are available. The Commission had also proposed further targeted amendments to the AI Act that would extend certain regulatory exemptions granted to SMEs to small mid-caps (SMCs) as well, reduce requirements in a very limited number of cases, extend the possibility to process sensitive personal data for bias detection and mitigation, reinforce the AI Office’s powers and reduce governance fragmentation. Given that provisions on high-risk AI systems are due to enter into force on 2 August 2026 , the co- legislators have treated the Commission’s proposal with utmost priority, and, in that perspective, broadly maintained the thrust of it. Main amendments introduced by the co-legislators The co-legislators added a new provision in the AI act, prohibiting AI practices regarding the generation of non-consensual sexual and intimate content or child sexual abuse material (CSAM). The provisional agreement also introduces a fixed timeline for the delayed application of high-risk rules: the new application dates would be 2 December 2027 for stand-alone high-risk AI systems and 2 August 2028 for high-risk AI systems embedded in products. Furthermore, the provisional agreement reinstates the obligation for providers to register AI systems in the EU database for high-risk systems, where they consider their systems to be exempted from classification as high-risk. It also reinstates the standard of strict necessity for the processing of special categories of personal data for the purpose of ensuring bias detection and correction. The provisional agreement postpones the deadline for the establishment of AI regulatory sandboxes by competent authorities at national level until 2 August 2027 and reduces the grace period for providers to implement transparency solutions for artificially generated content from 6 months to 3 months, with the new deadline set on 2 December 2026 . The deal between the co-legislators also clarifies the competences of the AI Office for the supervision of AI systems based on general-purpose AI models where the model and that systems are developed by the same provider by listing exceptions where national authorities remain competent, including law enforcement, border management, judicial authorities and financial institutions. As for the AI Act’s rules for industrial AI and their interplay with sectoral legislation in sectors such as medical devices, toys, lifts, machinery and watercraft, a compromise was found between the co-legislators on a mechanism that allows to resolve situations in which sectoral law has similar AI-specific requirements to the AI Act, by limiting the latter’s application in those specific cases through implementing acts. The provisional agreement also adds a new obligation for the Commission to provide guidance to assist economic operators of high-risk AI systems covered by sectoral harmonisation legislation in complying with the high-risk requirements of the AI act in a manner that minimises compliance burden. The provisional agreement must be now endorsed by the Council and the European Parliament before being submitted to a legal/linguistic revision with a view to the formal adoption of the legislative act by the co-legislators. Link to Council of the EU Announcement here