Global Trustee and Fiduciary Services Bite-Sized Issue 8 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 8 | 2023 7 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 targeted improvements is helping drive industry-wide progress. Link to the Report here CYBERSECURITY SEC Adopts Rules on Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure by Public Companies On 26 July 2023 the Securities and Exchange Commission (SEC) adopted rules requiring registrants to disclose material cybersecurity incidents they experience and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy, and governance. The SEC also adopted rules requiring foreign private issuers to make comparable disclosures. The new rules will require registrants to disclose on the new Item 1.05 of Form 8-K any cybersecurity incident they determine to be material and to describe the material aspects of the incident’s nature, scope, and timing, as well as its material impact or reasonably likely material impact on the registrant. An Item 1.05 Form 8-K will generally be due four business days after a registrant determines that a cybersecurity incident is material. The disclosure may be delayed if the United States Attorney General determines that immediate disclosure would pose a substantial risk to national security or public safety and notifies the Commission of such determination in writing. The new rules also add Regulation S-K Item 106, which will require registrants to describe their processes, if any, for assessing, identifying, and managing material risks from cybersecurity threats, as well as the material effects or reasonably likely material effects of risks from cybersecurity threats and previous cybersecurity incidents. Item 106 will also require registrants to describe the board of directors’ oversight of risks from cybersecurity threats and management’s role and expertise in assessing and managing material risks from cybersecurity threats. These disclosures will be required in a registrant’s annual report on Form 10-K. The rules require comparable disclosures by foreign private issuers on Form 6-K for material cybersecurity incidents and on Form 20-F for cybersecurity risk management, strategy, and governance. The final rules will become effective 30 days following publication of the adopting release in the Federal Register. Link to Final Rule here Link to Fact Sheet here Statement by SEC Chair Gary Gensler here Link to Statement by SEC Commissioner Jaime Lizarraga here Link to Statement by SEC Commissioner Hester M. Peirce here Link to Statement by SEC Commissioner Caroline A. Crenshaw here Link to Statement by SEC Commissioner Mark T. Uyeda here EMIR EBA Publishes Validation Requirements on Initial Margin Models On 6 July 2023 the European Banking Authority (EBA) published its final draft Regulatory Technical Standards (RTS) on Initial Margin Model Validation (IMMV) under the European Markets Infrastructure Regulation (EMIR). These draft RTS set out the supervisory procedures to ensure the prudent use of initial margin models for OTC derivatives. In an accompanying Opinion, and as part of the ongoing negotiations on EMIR, the EBA calls on co-legislators to consider the establishment of a central validation function in the EU. In order to enhance compliance with the margin framework for non-cleared OTC derivatives laid down by the Basel Committee for Banking Supervision (BCBS) and International Organization of Securities Commissions (IOSCO), the final draft RTS on IMMV sets out the supervisory procedures for the validation of initial margin (IM) models applied for the exchange of IM. Furthermore, the final draft RTS on IMMV envisage a proportionate application of supervisory procedures – this entails a (i) standard supervisory procedure to ensure an in-depth validation of the largest banking counterparties and (ii) a pragmatic and simplified approach applied to smaller counterparties.