Global Trustee and Fiduciary Services Bite Sized Issue 7 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 7 | 2023 4 QUICK LINKS CRYPTOASSETS CYBER DORA ELIGIBLE ASSETS DIRECTIVE FINANCIAL STABILITY BOARD FINTECH LTAF MICA MIFID II/MIFIR NBFI SUSTAINABLE FINANCE/ ESG ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM The Veritas Toolkit version 2.0, developed by an MAS-led consortium of 31 industry players, will help financial institutions (FIs) carry out the assessment methodologies for the Fairness, Ethics, Accountability and Transparency (FEAT) principles. MAS state that the FEAT principles provide guidance to firms offering financial products and services on the responsible use of AI and data analytics. The consortium also published a white paper detailing the key lessons learnt by seven FIs, which piloted the integration of Veritas methodology with their internal governance framework. These include the importance of having: • A consistent and robust responsible AI framework that spans geographies; • A risk-based approach to determine the governance required for the AI use cases; and • Responsible AI practices and training for the new generation of AI professionals in the financial sector. In the coming years, the consortiumwill focus on training in the area of responsible AI and facilitate more FIs’ adoption of the Veritas Methodologies and Toolkit. MAS has also worked with some AI solution providers to integrate the Veritas Toolkit with their AI solutions so that they can better serve their financial sector customers. Link to Full SFC Announcement here Link toWhitepaper – FromMethodologies to Integration here MAS Proposes Framework for Digital Asset Networks On 26 June 2023 the Monetary Authority of Singapore (MAS) published a report proposing a framework for designing open, interoperable networks for digital assets (i.e., tokenised real- economy and financial assets). The report, ‘Enabling Open and Interoperable Networks, was jointly developed with subject matter experts at the Bank for International Settlements’ (BIS) Committee on Payments and Market Infrastructure (CPMI), with contributions from participating financial institutions. The report also considers how the CPMI-IOSCO principles for financial market infrastructures can be applied to evolving models of digital asset networks, taking reference from industry pilots launched under Project Guardian, which is MAS’ collaborative initiative with the financial industry to test the feasibility of applications in asset tokenisation and Decentralised Finance. The report is part of MAS’ effort to ensure that emerging digital asset networks are underpinned by international standards which promote safe and efficient financial market infrastructure. MAS also announced an expansion of Project Guardian to test the potential of asset tokenisation across more financial asset classes. To support this, MAS has established the Project Guardian Industry Group, comprising 11 financial institutions (FIs) which will lead industry pilots in asset and wealth management; fixed income; and foreign exchange. In the area of asset and wealth management, pilots range from digital structured products to tokenised investment vehicles. In the area of fixed income and foreign exchange, there are pilots in tokenised asset-backed securities, tokenised bonds, and tokenised bank liabilities. Link to Report here LTAF FCAWidens Retail and Pensions Access to LTAF On 29 June 2023 the Financial Conduct Authority (FCA) published new rules in its Policy Statement PS23/7 on ‘Broadening Retail and Pensions Access to the Long-termAsset Fund’ (LTAF). LTAF is a new type of open-ended authorised fund, which the FCA introduced in 2021, which the FCA designed with the purpose of being able to invest efficiently in long-term, illiquid assets, such as venture capital, private equity and private debt, real estate and infrastructure.