Global Trustee and Fiduciary Services Bite-Sized Issue 8 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 8 | 2023 15 QUICK LINKS ANTI-MONEY LAUNDERING CBDC COSTS & CHARGES CRYPTOASSETS CULTURE & CONDUCT CYBERSECURITY EMIR FINTECH FSB FUND LIQUIDITY MIFID II/MIFIR SUSTAINABLE FINANCE/ ESG AUSTRALIA ASIA IRELAND NORTH AMERICA UNITED KINGDOM It will replace the Banking Executive Accountability Regime (BEAR), which came into effect on 1 July 2018, and is solely administered by APRA. In addition to authorised deposit-taking institutions (ADIs), the FAR will also apply to insurance companies, superannuation trustees and licensed non-operating holding companies. It will be jointly administered by APRA and ASIC. The FAR will apply to ADIs six months after the Financial Accountability Bill 2023 receives Royal Assent, and to insurance and superannuation entities 18 months following Royal Assent. To support early engagement with entities and to enable the timely implementation of the FAR, APRA and ASIC have released a package of documents for consultation including: • Proposed Regulator rules that prescribe information for inclusion in the FAR register of accountable persons, including supporting detail about the ADI key function descriptions; and • Proposed Transitional rules that prescribe information to be provided by banking entities in relation to their existing accountable persons under the BEAR at the transition point. APRA and ASIC will consult on the list of specific key functions for insurance and superannuation entities in due course. However, these entities may wish to review the Regulator rules as their key functions are likely to be similar to the list included for ADIs. The list of data items for inclusion in the FAR Register, which are set out in the Regulator rules, are relevant to all accountable entities. APRA and ASIC are seeking industry feedback on the proposed Regulator rules, including ADI key functions and Transitional rules. The closing date for submissions is 17 August 2023. Further industry engagement will follow after the Bill is passed by Parliament and receives Royal Assent. Link to Consultation Documents here ASIA Joint SFC/HKMA Circular to Intermediaries: Streamlined Approach for Compliance with Suitability Obligations when Dealing with Sophisticated Professional Investors In a Joint Circular, published on 28 July 2023, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) noted questions and feedback from intermediaries concerning compliance with suitability obligations when they deal with sophisticated professional investors (“SPIs”) who possess higher levels of net worth and knowledge or experience, particularly in relation to the suitability assessment and product disclosure processes applied. The HKMA and the SFC updated the relevant frequently asked questions on in December 2022 to clarify the expected standards on how the suitability assessment could be conducted and how product information could be explained and disclosed to clients of different degrees of financial sophistication. Following this premise, intermediaries could tailor point-of-sale procedures to the personal circumstances of SPIs. The HKMA and the SFC consider it useful to provide intermediaries with further guidance on applying a proportionate and risk-based streamlining approach (the “Streamlined Approach”) when dealing with SPIs. Intermediaries may refer to the detailed guidance set out in Annex 1 and the frequently asked questions in Annex 2 to facilitate their application of this Streamlined Approach. In the joint circular the HKMA/SFC set out more information on the Streamlined Approach and state that intermediaries should bear primary responsibilities for ensuring the maintenance of appropriate standards of conduct and properly managing the risks associated with their business operations. These include having effective systems and controls in place to guard against misuse and detect red-flags (e.g., outsize or material transactions) arising from applying the Streamlined Approach. Link to Joint Circular here Link to Annex 1 here Link to Annex 2 here