Welcome to the Regulation Round Up, a regular bulletin highlighting the latest developments in UK and EU financial services regulation.

Key developments in December 2023:

21 December

UK / Swiss Regulatory Co-operation: The UK and Swiss governments signed an agreement on mutual recognition in financial services, the Berne Financial Services Agreement.

SME Test: The delegated directive amending the Accounting Directive ((EU) 2013/34) to adjust the size criteria (balance sheet and net turnover) for micro, small, medium-sized (“SMEs”) and large companies by 25% to account for inflation has been published in the Official Journal.

Securitisation: The European Securities and Markets Authority (“ESMA”) published a consultation paper (ESMA12-2121844265-3053) on the securitisation disclosure templates under Article 7 of the EU Securitisation Regulation (2017/2402).

ESG: The European Commission published a draft notice that sets out additional guidance responding to frequently asked questions on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act ((EU) 2021/2178) made under Article 8 of the EU Taxonomy Regulation ((EU) 2020/852) on the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets.

20 December

ESG: The Council of the European Union published a press release announcing that it has agreed its negotiating mandate on the proposed Regulation on the transparency and integrity of environmental, social and governance (“ESG”) rating activities (2023/0177(COD)).

FCA Regulation Round-up: The UK Financial Conduct Authority (“FCA”) published its regulation round-up for December 2023.

Financial Policy Committee: The Bank of England published a letter from Andrew Bailey, Bank of England Governor, to Jeremy Hunt, Chancellor of the Exchequer, responding to a November 2023 letter setting out the remit and recommendations for the Financial Policy Committee (“FPC”) for 2023/24.

Primary Markets: The FCA published a consultation paper (CP23/31) seeking views on proposals for significant reform to the UK listing regime, summarising feedback received in response to CP23/10 and setting out detailed proposals, including the first tranche of the new UK Listing Rules.

Bonds / Derivatives: The FCA published a consultation paper (CP23/32) on improving transparency for bond and derivative markets.

Open-ended Funds: The Financial Stability Board (“FSB”) published a policy paper setting out revised policy recommendations to address structural vulnerabilities from liquidity mismatch in open-ended funds.

19 December

FSMA: The Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) (No 2) Order 2023 (SI 2023/1411) was published, amending the exemptions available from the restriction on communicating financial promotions applicable to high-net-worth individuals and self-certified investors. Please refer to our dedicated article on this topic here.

Primary Markets: The FCA published Primary Market Bulletin 46, which addresses specific questions raised by stakeholders in relation to market abuse and ESG.

ELTIF Regulation: ESMA published its final report on draft Regulatory Technical standards (“RTS”) under the Regulation on European Long-Term Investment Funds ((EU) 2015/760) (the “ELTIF Regulation”) as amended by Regulation (EU) 2023/606. Please refer to our dedicated article on the amended ELTIF Regulation here.

Decentralised Finance: IOSCO published a final report (FR/14/2023) setting out its policy recommendations for decentralised finance (“DeFi”). It has also published an umbrella note (OR02/2023) explaining the interoperability between the DeFi recommendations and the complementary final crypto and digital asset recommendations published in November 2023.

18 December

Short Selling: The FCA published an updated version of its webpage on the notification and disclosure of net short positions.

ESG: HM Treasury and the Department for Energy Security and Net Zero published a webpage with information about the Transition Finance Market Review.

EMIR: The UK Prudential Regulatory Authority (“PRA”) and FCA published a joint policy statement (PRA PS18/23 / FCA PS23/19) on changes to the UK bilateral margin requirements for non-centrally cleared derivatives under UK EMIR (648/2012).

15 December

ESG: ESMA published a consultation (ESMA32-992851010-1016) on draft guidelines on enforcement of sustainability information.

MiFID II / MiFIR: ESMA published an updated version of its Q&As on investor protection and intermediaries under the Markets in Financial Instruments Directive (2014/65/EU) (“MiFID II”) and the Markets in Financial Instruments Regulation (600/2014) (“MiFIR”).

FCA Handbook: The FCA published Handbook Notice 114, which sets out changes to the FCA Handbook made by the FCA board on 23 November 2023, and on 4 and 14 December 2023.

AIFMD: The European Commission has adopted delegated legislation (here and here) relating to cross-border marketing and management notifications relating to the Alternative Investment Fund Managers Directive (2011/61/EU) (“AIFMD”).

ESG: The Council of the EU and the European Parliament announced they have reached provisional agreement on the proposed Corporate Sustainability Due Diligence Directive, specifically referring to how the financial sector will be impacted. Please refer to our dedicated article on this topic here.

14 December

ESG: ESMA published a statement (ESMA34-472-373) providing an update on its adoption of guidelines on funds’ names using ESG or sustainability-related terms. Please refer to our dedicated article on this topic here.

MiFID II: ESMA published a discussion paper on investor protection topics linked to digitalisation under MiFID II.

13 December

Capital Markets: ESMA published the terms of reference for its task force on the effectiveness of EU capital markets.

ESG: The Network for Greening the Financial System published a technical document containing recommendations on the development of scenarios for assessing nature-related economic and financial risks.

ESG: The EU Platform on Sustainable Finance published a draft report and call for feedback on proposals for EU Taxonomy-aligning benchmarks.

ESG: ESMA announced that, in 2024, it will launch and carry out a common supervisory action with national competent authorities on the integration of sustainability in firms’ suitability assessment and product governance processes and procedures under MiFID II.

12 December

Basel 3.1: The PRA published a policy statement (PS17/23) on the first set of near-final rules on the implementation of the Basel 3.1 standards. 

08 December

Investment Advice: The FCA and HM Treasury published a joint discussion paper (DP23/5) setting out proposals to help people make more informed investment and pensions decisions. The proposals form part of the joint advice guidance boundary review.

ESG: The European Parliament published the report (A9-0417/2023) of its Economic and Monetary Affairs Committee (“ECON”) on the European Commission’s legislative proposal for a Regulation on the transparency and integrity of ESG rating activities (2023/0177(COD)).

Growth / Competitiveness: HM Treasury published a response to its call for proposals on measuring success in relation to the secondary growth and competitiveness objectives for the FCA and the PRA.

PRA Policy: The PRA published a consultation paper (CP27/23) on its approach to policy.

Edinburgh Reforms: The House of Commons Treasury Committee published a report (HC 221) on the progress of the Edinburgh Reforms.

07 December

Cryptoassets: The EBA published a consultation paper (EBA/CP/2023/37) on draft RTS specifying the requirements for policies and procedures on conflicts of interest for issuers of asset-referenced tokens under the Regulation on markets in cryptoassets ((EU) 2023/1114) (“MiCA”)

06 December

Money Market Funds: The FCA published a consultation paper (CP23/28) on updating the regime for money market funds (“MMFs”). HM Treasury also published a policy note on the UK MMF framework together with a draft version of the Money Market Funds Regulations 2024.

PRIIPs Regulation: The Joint Committee of the European Supervisory Authorities (“ESAs”) published an updated set of consolidated Q&As (JC 2023 22) on the Regulation on key information document (“KID”) requirements for packaged retail and insurance-based investment products (“PRIIPs”) (1286/2014) and related Delegated Acts.

Financial Stability: The Bank of England published the Financial Stability Report for December 2023 and the financial policy summary and record of the meeting of its FPC on 21 November 2023.

05 December

Remuneration: the FCA and the PRA jointly published a policy statement (PS16/23) on remuneration and enhancing proportionality for small firms.

Shadowing Banking: The PRA published a consultation paper (CP23/23) on the identification and management of step-in risk, shadow banking entities and groups of connected clients. 

ESG: ECON voted to adopt a draft report on the European Commission’s legislative proposal for a Regulation on the transparency and integrity of ESG rating activities.

04 December

Digital Pound: The House of Commons Treasury Committee published a report on the digital pound (a retail central bank digital currency in the UK).

ESG: The ESAs published a final report (JC 2023 55) on draft RTS on the review of principal adverse impacts and financial product disclosures in Commission Delegated Regulation (EU) 2022/1288, which supplements the Sustainable Finance Disclosure Regulation ((EU) 2019/2088) (“SFDR”). Please refer to our dedicated article on this topic here.

Commodity Derivatives: The FCA published a consultation paper (CP23/27) on reforming the commodity derivatives regulatory framework.

Overseas Funds Regime: The FCA published a consultation paper (CP23/26) on implementing the overseas funds regime.

ESG: IOSCO published a final report (FR12/23) on supervisory practices to address greenwashing.

01 December

Quarterly Consultation Paper: The FCA published its 42nd quarterly consultation paper (CP23/25).

Sanctions: The FCA published a Memorandum of Understanding it has entered into with the Office of Financial Sanctions (“OFSI”).

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of John Verwey John Verwey

John Verwey is a partner in the Private Funds Group. John advises on a wide number of regulatory issues at a national UK and European level, including firm authorisations, appointed representative arrangements, change in control, market abuse. He represents a variety of clients…

John Verwey is a partner in the Private Funds Group. John advises on a wide number of regulatory issues at a national UK and European level, including firm authorisations, appointed representative arrangements, change in control, market abuse. He represents a variety of clients that range from small start-up fund managers to established global fund advisers and managers.

A particular area of focus for John is Alternative Investment Fund Managers Directive (AIFMD) and Markets in Financial Instruments Directive II (MiFID II).  This includes advising on pre-marketing and marketing strategies for fund managers, advising on the Level One and Lever Two requirements under AIFMD and implementing UK rules and legislation, and advising on the organizational and conduct of business requirements under MiFID II.

Photo of Andrew Wingfield Andrew Wingfield

Andrew Wingfield is a partner in the Corporate Department and a member of our Private Equity Mergers & Acquisitions Group. As businesses globally are impacted by the Coronavirus (COVID-19) pandemic, Andrew is a member of the firm’s Coronavirus Response Team helping clients respond…

Andrew Wingfield is a partner in the Corporate Department and a member of our Private Equity Mergers & Acquisitions Group. As businesses globally are impacted by the Coronavirus (COVID-19) pandemic, Andrew is a member of the firm’s Coronavirus Response Team helping clients respond and solve issues across myriad fronts.

Andrew undertakes a broad range of domestic and cross-border corporate and commercial work for both corporate and private equity clients, advising on acquisitions and disposals, joint ventures, mergers and public takeovers, flotations and equity capital markets and private equity investment.

He is called upon by financial institutions, private equity houses, management and corporates to lead on complex and high-value transactions. Andrew has a very strong financial institutions practice and has been recognized by Chambers UK and Legal 500 in recent years as the “go-to regulatory M&A lawyer” for regulated institutions such as banks, lenders, payment providers, insurance companies, wealth managers or other financial institutions transactions.

In addition, Andrew is widely recognized as a leading M&A and private equity lawyer. In Chambers UK, Andrew has been noted as “dynamic and commercial” and for providing “tailored, practical advice.” A client told Legal 500, “Andrew Wingfield – best lawyer I ever worked with. Super helpful, goes extra mile where needed.”

Photo of Richard Bull Richard Bull

Richard Bull is a partner in the Corporate Department and a member of our Private Equity and Mergers & Acquisitions Groups.

Richard advises on a wide range of corporate work, including M&A, private investments, corporate venturing, joint ventures and corporate restructurings. Richard has…

Richard Bull is a partner in the Corporate Department and a member of our Private Equity and Mergers & Acquisitions Groups.

Richard advises on a wide range of corporate work, including M&A, private investments, corporate venturing, joint ventures and corporate restructurings. Richard has extensive experience of acting on private equity, growth and expansion capital transactions of all types and sizes for sponsors and management teams, both of a domestic and international nature, with a particular focus in the financial services and technology industries.

Richard is described by Legal 500 “as one of the most capable PE lawyers in the market” and “truly excellent.” Richard was also identified by a survey of private equity sponsors undertaken by The Lawyer as one of the top private equity lawyers based in London, and as a highly regarded private equity and M&A lawyer by IFLR 1000.

Photo of Oliver R. Howley Oliver R. Howley

Oliver Howley is a partner in Proskauer’s Technology, Media & Telecommunications Group. He is a trusted advisor to businesses in the technology, manufacturing, sports and financial services sectors, providing valued input on IP, technology and data-related strategies and transactions.

Oliver is a multi-specialist…

Oliver Howley is a partner in Proskauer’s Technology, Media & Telecommunications Group. He is a trusted advisor to businesses in the technology, manufacturing, sports and financial services sectors, providing valued input on IP, technology and data-related strategies and transactions.

Oliver is a multi-specialist, with a day-to-day practice covering commercial contracts, IP, technology and data protection work. He regularly advises on the structuring and terms of contracts relating to the creation, licensing and monetisation of technology and data products, with a particular focus on machine learning and artificial intelligence systems. He also has extensive experience in advising on the IP, technology, data and carve-out aspects of corporate transactions (including joint ventures, acquisitions, disposals and investments) and on sponsorship, image rights and endorsement deals in the sports sector.

Oliver has been recognized as a “Rising Star” in The Legal 500 for consecutive years. Recent professional directories note that “no matter how complex the landscape, no detail escapes [Oliver’s] attention” and that his “logical… and forensic analytical approach make him a force to be reckoned with”. He also receives praise for his commercial contracts work and “niche in robotics and artificial intelligence”.

Photo of Mary Wilks Mary Wilks

Mary Wilks is an antitrust partner in the Corporate Department and a member of our Private Equity Transactions and Mergers & Acquisitions Groups.

Mary advises on a broad range of EU and UK competition law issues, including multijurisdictional mergers, behavioral investigations, complex supply…

Mary Wilks is an antitrust partner in the Corporate Department and a member of our Private Equity Transactions and Mergers & Acquisitions Groups.

Mary advises on a broad range of EU and UK competition law issues, including multijurisdictional mergers, behavioral investigations, complex supply and distribution arrangements, and foreign investment controls including, notably, the UK’s newly adopted National Security and Investment Act. She advises clients on the competition aspects of transactions including M&A, equity investments, consortium transactions and secondaries.

Mary works across all sectors, with particular experience in consumer products, healthcare, TMT and financial services.

Mary regularly counsels clients on their engagement with the Competition and Markets Authority, the European Commission, and other prominent international enforcement agencies and regulatory authorities.

Mary Wilks has a reputation as an “excellent lawyer” who “plays a leading role on a range of high-profile cases.” According to sources, “She is always fully on top of the detail but also able to pull out the most important points for the case.

Prior to joining Proskauer, Mary was a counsel in the antitrust, competition and trade department at another leading law firm in London.

Photo of Rachel Lowe Rachel Lowe

Rachel E. Lowe is a special regulatory counsel in the Corporate Department and a member of the Private Investment Funds Group.

Rachel advises on financial services regulation specializing in sustainable finance and ESG regulation. She has particular expertise in drafting and advising on…

Rachel E. Lowe is a special regulatory counsel in the Corporate Department and a member of the Private Investment Funds Group.

Rachel advises on financial services regulation specializing in sustainable finance and ESG regulation. She has particular expertise in drafting and advising on the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation. Rachel has also supported with EU MiFID and AIFMD sustainability updates for clients, including from a governance and organizational perspective, as well as providing drafting and training support. She also advises on the Corporate Sustainability Reporting Directive (CSRD), including analysis of its applicability for large international group structures.

From a UK perspective, Rachel supports clients with the TCFD-related requirements in the Financial Conduct Authority’s ESG Sourcebook and is increasingly engaged on the UK’s Sustainability Disclosure Requirements (SDR).

More broadly, Rachel has worked with litigation colleagues to assist clients with understanding and mitigating greenwashing-related legal and regulatory risk.

Photo of Amar Unadkat Amar Unadkat

Amar Unadkat is a special regulatory counsel in the Corporate Department and a member of the Private Funds Group.

Amar advises on a variety of financial services regulatory and compliance matters both from a UK and European perspective. Amar regularly advises his clients…

Amar Unadkat is a special regulatory counsel in the Corporate Department and a member of the Private Funds Group.

Amar advises on a variety of financial services regulatory and compliance matters both from a UK and European perspective. Amar regularly advises his clients on issues relating to the Alternative Investment Fund Managers Directive (“AIFMD”), the second Markets in Financial Instruments Directive (“MiFID II”), as well as the latest ESG developments. Amar also focusses on UK regulatory compliance matters, including the FCA’s change of control regime, the appointed representative regime and the Senior Managers & Certification Regime.

Amar’s clients include private equity firms, investment managers and advisers, firms in the FinTech space, wealth management businesses, banks and sovereign wealth funds.

Photo of Sulaiman Malik Sulaiman Malik

Sulaiman Malik is an associate in the Corporate Department and a member of the Private Funds Group.

Sulaiman advises clients on a range of UK and international financial regulation. He advises private equity funds, hedge funds, sovereign wealth funds and other asset managers…

Sulaiman Malik is an associate in the Corporate Department and a member of the Private Funds Group.

Sulaiman advises clients on a range of UK and international financial regulation. He advises private equity funds, hedge funds, sovereign wealth funds and other asset managers, as well as banks, FinTechs, broker-dealers and governments.

Prior to joining Proskauer, Sulaiman trained at Simmons & Simmons in London, where he was seconded to Brevan Howard. He has also spent time at the UK’s Ministry of Justice and as an adviser to the Mayor of Brisbane, in Australia.

Sulaiman is a passionate advocate for diversity and inclusion. He previously worked at Rare, a market-leading diversity consultancy, and provides pro bono legal advice to a range of community and civil rights organizations.

Photo of Michael Singh Michael Singh

Michael is an associate in the Private Funds Group in the Corporate Department.

Michael advises clients on a variety of regulatory issues both from a UK and European perspective. He also helps clients on fund related transactions. His clients include private equity firms…

Michael is an associate in the Private Funds Group in the Corporate Department.

Michael advises clients on a variety of regulatory issues both from a UK and European perspective. He also helps clients on fund related transactions. His clients include private equity firms, investment managers, FinTech companies and wealth management businesses.

He is dual-qualified as a German lawyer (“Rechtsanwalt”) and Solicitor of England and Wales and previously was in-house counsel at Deutsche Bank.