Global Trustee and Fiduciary Services Bite-Sized Issue 8 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 8 | 2023 6 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 report and submit the draft technical standards to the European Commission for endorsement by 30 June 2024 at the latest. Link to the Consultation Paper here The Crypto Ecosystem: Key Elements and Risks On 11 July 2023 the Bank for International Settlements (BIS) published a report, submitted to the G20 finance ministers and central bank governors, reviewing the key elements of the crypto ecosystem and assesses their structural flaws. There are three main takeaways: • First, due to underlying economic incentives, the crypto ecosystem is characterised by congestion and high fees, which lead to fragmentation. • Second, despite an original ethos of decentralisation, crypto and decentralised finance (DeFi) often feature substantial de-facto centralisation, which introduces various risks. • Third, while DeFi mostly replicates services offered by the traditional financial system, it amplifies known risks. Moreover, as DeFi does not finance activity in the real economy, its growth is driven by the speculative influx of new users, with substantial risks to investors. The report outlines policy options to mitigate the multiple risks crypto poses to investors, the traditional financial system and the economy at large. Link to the Report here CULTURE & CONDUCT FMSB Conduct & Culture Management Information Research Published On 24 July 2023 the Financial Markets Standards Board (FMSB) published a Spotlight Review on Conduct & Culture Management Information (CCMI). The Spotlight Review gives unique insight, on an aggregated and anonymised basis, into how 24 major global financial firms source and deploy their CCMI. In this Spotlight Review, three stages of development are provided for reference and reflect progress on various aspects of oversight such as: 1. Outcomes-focused rather than just rule adherence; 2. Targeting specific behaviours for change; and 3. Sophistication of analytics and implementation of change and interpersonal development programmes. Most firms are spread across Stages 1 and 2 with a few firms now exploring Stage 3. Organisations are beginning to explore how best to support staff at large to demonstrate good behaviour as the norm. This is recognised as an emerging area of potential competitive advantage. Key messages from the Spotlight Review included: • Conduct metrics have remained largely unchanged over the past five years. • Culture metrics will benefit from expanded focus on the drivers of behaviour. • Firm-wide and end-to-end coordination of data collection, analysis, reporting and follow-up can help deliver more complete reporting. • Including external data sources and creating data in support of newmetrics can drive more informed results. • Behavioural science is becoming more widely embedded with some firms endeavouring to build in-house expertise. • Regulatory recognition of behaviour-led strategies for firm-wide culture development and