Global Trustee and Fiduciary Services Bite Sized Issue 7 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 7 | 2023 9 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 ESAs Put Forward Common Understanding of Greenwashing andWarn on Risks On 1 June 2023 the European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) published their respective Progress Reports on Greenwashing in the financial sector. In these reports the ESAs put forward a common high-level understanding of greenwashing applicable tomarket participants across their respective remits – banking, insurance and pensions and financial markets. The ESAs understand greenwashing as a practice where sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services. The ESAs state that this practice may be misleading to consumers, investors, or other market participants. The ESAs also highlight that sustainability-related misleading claims can occur and spread either intentionally or unintentionally and in relation to entities and products that are either within or outside the remit of the EU regulatory framework. The National Competent Authorities and the ESAs are, therefore, working tomeet expectations from stakeholders to ensure consumer and investor protection, support market integrity andmaintain a trusted environment for sustainable finance. Given the integrated nature of the financial system, the ESAs state that they work in a coordinatedmanner to address greenwashing. ESMA Progress Report The ESMA Progress Report helps to better understand greenwashing and provides market participants and regulators with a shared reference point in dealing with this phenomenon. The report identifies: • Risk areas; • The causes of greenwashing; and • Preliminary remediation actions. ESMA states that its Progress Report lays the ground for mitigating greenwashing risks in the future, throughout the sustainable investment value chain and in key sectors under ESMA’s remit. The ESAs will publish their final greenwashing reports in May 2024 and will consider final recommendations, including on possible changes to the EU regulatory framework. Link to ESMA Progress Report here ASIA SFC Publishes Annual Report 2022-23 On 21 June 2023 the Securities and Futures Commission (SFC) published its Annual Report 2022- 23, which sets out its achievements in the past year as well as its vision for nurturing high-quality market growth and upholding world-class regulation to advance Hong Kong’s position as a leading international financial centre. Highlights of the year included the introduction of Swap Connect, which commenced with northbound access in May 2023 and the launch of a new listing regime for specialist technology companies with limited or no revenue or profit track record. The investor identification regime for Hong Kong’s securities market, which took effect in March 2023, strengthened the SFC’s market surveillance capabilities. In addition, the Hong Kong Dollar-Renminbi (RMB) Dual Counter Model for the secondary market trading of a first batch of stocks was launched on 19 June 2023. During the year, the SFC consulted the public on the regulatory requirements for the new licensing regime for virtual asset trading platforms as well as on legislation for implementing a paperless securities market in Hong Kong. A separate consultation set out proposed risk management guidelines for licensed persons dealing in futures contracts to help them better manage business- related risks. The SFC also concluded a consultation to prepare for the new regime to bring depositaries of SFC-authorised collective investment schemes under its direct supervision.