Regulatory notices

End of last month, the settlement cycle of most of securities transactions has been shortened from T+2 to T+1 in the United States, as well as in other jurisdictions (Canada and Mexico), creating a mismatch between the settlement of transactions on funds’ assets and the subscription redemptions of fund units or shares.

To help the industry facing these issues on a compliance perspective, the Commission de Surveillance du Secteur Financer has published on June 20, 2024 two updated versions of the Circular CSSF 02/77 (which will be replaced by Circular CSSF 24/856 as of January 1, 2025) as well as of the CSSF FAQ on the Law of 17 December 2010.

ESAs have advised the European Commission with their opinion on how to improve the Sustainable Finance Disclosure Regulation (SFDR) ahead of its revision.

The Joint ESAs delivered on their own initiative their opinion on the assessment of the SFDR on June 18, 2024.

As a reminder, from July 1, 2024, only the API (S3) channel or the eDesk procedure will be authorised for the submission of AIFM reporting.

Any AIFM report submitted using the old transmission method (external channels) will not be processed by the CSSF.

The Finansinspektionen has notified the entities under its supervision that, effective September 30, 2024, the reporting for alternative investment funds managed by fund managers (AIFM) and their underlying funds (AIFs) must be submitted through the FIDAC reporting system.

According to the regulator, there is no impact on the reporting itself.

On June 4, 2024, ESMA published its Final Report on Greenwashing, Response to the European Commission’s request for input on “greenwashing risks and the supervision of sustainable finance policies”.

The European Commission issued a request to the European Supervisory Authorities (ESAs) in May 2022 to draft a Progress Report and a Final Report delivering advice on greenwashing risks and sustainability-related supervision. The Progress Report was issued a year ago presenting the common ESA’s high-level understanding of greenwashing and mapping areas more exposed to greenwashing risks across the Sustainable Investment Value Chain (SIVC).

On June 3, 2024, a Call for advice on the investment firms prudential framework was jointly published by EBA and ESMA.

This consultation follows the Call for Advice (CfA) to the EBA and ESMA issued in February 2023 with the goal of addressing various aspects outlined in the relevant articles pertaining to the post implementation review of Regulation (EU) 2019/2033 on the prudential requirements of investment firms (IFR) and Directive (EU) 2019/2034 on the prudential supervision of investment firms (IFD).

On May 31, 2024, the European Supervisory Authorities published the details of the DORA Dry Run exercise on reporting of the registers of information of contractual arrangements with the ICT third-party providers.

This dry run exercise was announced earlier in April and recently CSSF invited its supervised entities to participate on a voluntary basis.

The General Directorate of the Treasury, a division of the French Ministry of Economy, Finance, and Digital and Industrial Sovereignty, has recently released a Frequently Asked Questions document regarding the implementation of Article 29 of the Climate and Energy Law. This particular article focuses on the non-financial reporting requirements for French financial institutions.

This document provides further clarification on the application of Article 29 in relation to its scope, the consolidation of information at the level of the management company, the filing of the report with the Registrar, the format and medium of the report, mandates and dedicated funds in excess of EUR 500 million, its interaction with European sustainable finance regulations, the method of calculating exposure to the fossil fuel sector and, finally, the content of the report.

ESMA updated its website with several Q&As on European crowdfunding service providers for business (ECSPR), European Market Infrastructure Regulation (EMIR), Markets in Crypto-Assets Regulation (MiCA), Markets in Financial Instruments Regulation (MiFIR), Undertakings for Collective Investment Scheme (UCITS) and Alternative Investment Fund Manager Directive (AIFMD).

In particular the AIFMD and UCITS Q&As relate to performance fees.