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Key Regulatory Topics: Weekly Update 27 May - 9 June 2022

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Despite the celebratory Platinum Jubilee weekend, the UK regulators have been busy. The FCA issued its Primary Market Bulletin No. 40 and HM Treasury published a policy statement on critical third parties to the finance sector, as well as its response to the consultation on proposing a SMCR for FMIs. In the EU, the Regulation on a pilot regime for market infrastructures based on DLT was published in the OJ and ESMA has given speeches on delivering the Capital Markets Union and its priorities for EU retail fund investors. The ECON published draft reports on the proposed CRR III and CRD VI and the ESAs issued a statement clarifying draft RTS under the SFDR.

Capital Markets

Please see the ‘Markets and markets infrastructure’ section for the ESMA speech on delivering the Capital Markets Union.

FCA Primary Market Bulletin No. 40

On 27 May, the FCA published Primary Market Bulletin No. 40 in which it highlights the changes to its Knowledge Base on the prospectus regime that it will be making as a result of its consultation in Bulletin No. 34. The FCA consulted on changes to: (i) create a new technical note, Primary Market/TN/619.1 to adapt, as FCA Guidance, the ESMA Guidelines on disclosure requirements under the Prospectus Regulation. These have been augmented with the measures on specialist issuers in the March 2013 ESMA update of the CESR recommendations; and (ii) incorporate certain explanations in the ESMA Q&As and Prospectuses into technical notes. As a result of the feedback the FCA received, it is making further changes to the procedural note on drafting and approval of public offer prospectuses and to four technical notes on: (a) profit forecasts and estimates; (b) exemptions from the requirement to produce a prospectus; (c) the Prospectus Regulation advertisement regime; and (d) the guidelines on disclosure requirements under the Prospectus Regulation and Guidance on specialist issuers.

Primary Market Bulletin No. 40

Client Assets

Dormant Assets Act 2022 (Commencement) Regulations 2022

On 27 May, the Dormant Assets Act 2022 (Commencement) Regulations 2022 were published. The Regulations bring into force the Dormant Assets Act 2022 on 6 June, except for Section 34, which came into force on 24 February. Amongst other things, the Act enables authorised reclaim funds to accept a wider range of dormant assets, including certain assets in the insurance and pensions, investment and wealth management, and securities sectors. The Act also introduces a power for the Secretary of State or the Treasury to expand the Scheme to broaden the pool of eligible dormant assets in the future.


Conduct and Governance

HMT response to consultation on SMCR for FMIs

On 7 June, HMT published its response following its consultation in July 2021 proposing a Senior Managers and Certification Regime (SMCR) for financial market infrastructures (FMIs). The proposed creation of an SMCR for FMIs would enhance the accountability of senior managers and improve governance arrangements. The FMIs covered are central counterparties (CCPs), central securities depositories (CSDs), payment systems recognised under the Banking Act 2009, and specified service providers to such recognised payment systems. The majority of the respondents agreed with the regime in principle and acknowledged the effectiveness of the existing SMCR. Conversely, a few respondents disagreed with creating an SMCR for FMIs, and questioned the appropriateness of such a regime, and whether it would be too costly, disruptive, or time-consuming for FMIs. HMT’s response is contained in Chapter 4. In general, it believes that, while overall regulatory standards are set appropriately for FMIs, the existing regulatory regimes do not make sufficient provision for the oversight of individual conduct within these entities. HMT intends to design and put in place an SMCR for CCPs and CSDs, with particular detailed aspects of the regime set out in secondary legislation and regulators' rules, where appropriate. While HMT intends to ensure a relatively uniform SMCR in terms of powers and regulatory approach across FMIs, it intends to provide sufficient flexibility to the regime to ensure that the BoE is able to effectively apply the SMCR as appropriate to different types of firms. It also wishes to have the option to extend the SMCR to certain other systemic financial services entities in the future, should it decide to do so, and following further specific consultation. As such, HMT will legislate to create a new SMCR ‘gateway’, when parliamentary time allows, which will enable HMT to lay statutory instruments to apply the SMCR to CCPs, CSDs, and, in the future, potentially to recognised investment exchanges and credit rating agencies. HMT also intends to legislate to implement an SMCR for recognised payment systems and specified service providers. However, this will be taken forward separately to the creation of the gateway, and to a different, longer timeframe. This is to account for a forthcoming review of the regulatory perimeter for systemic firms in payments chains regulated by the BoE. HMT does not plan to launch any further consultations on the underlying framework for the SMCR. HMT will set out further details of its plans to implement the SMCR for CCPs and CSDs in due course.

Consultation response


Please see the ‘Fund Regulation’ section for a speech by Verena Ross, ESMA Chair, in which she discusses key priorities for EU retail fund investors.

Council of the EU publishes compromise text of proposed Directive on consumer credits

On 7 June, the Council of the EU published the latest Presidency compromise text of the proposed Directive on consumer credits to revise and replace the Consumer Credit Directive (CCD II). Changes compared to the EC’s proposal are marked in bold and underlined for new text, and by [...] for deleted text. The document also describes the main amendments to the EC’s proposal, including exclusions from the scope, an optional partial derogation for four new products, and a clarification of the provisions on pre-contractual information. The Presidency considers that the text, as set out in the Annex, reflects a balanced and fair compromise between the different views expressed by delegations. A note containing a joint statement by Estonia and Lithuania on the proposal was also published. The Council of the EU agreed its general approach on the proposed CCD II on 9 June.

Press release

Compromise text

Joint statement

General approach

Financial Crime and Sanctions

FATF report on UK’s progress in strengthening AML/CFT measures

On 9 June, the Financial Action Task Force (FATF) published a follow-up report on the UK’s progress in strengthening anti-money laundering and countering the financing of terrorism (AML/CFT) measures. Since the 2018 assessment of the UK’s AML/CFT measures, the country has taken a number of actions to strengthen its framework. In line with the FATF Procedures for mutual evaluations, the country has reported back to the FATF on the action it has taken since their mutual evaluation. Consequently, to reflect the UK’s progress, the FATF has now re-rated the country on Recommendation 13 from partially compliant to compliant. The UK is now compliant on 24 Recommendations and largely compliant on 15. The country remains partially compliant on 1 Recommendation due to some concerns about the operational independence of the UK financial intelligence unit and its ability to perform its key functions due to the lack of resources. The UK will remain in regular follow-up and will continue to inform the FATF of progress achieved on improving the implementation of its AML/CFT measures.


Ministry of Justice post-legislative assessment of the Fraud Act 2006

On 8 June, the Ministry of Justice published a memorandum, which provides an updated post-legislative assessment of the Fraud Act 2006 for submission to the House of Lords Select Committee on the Fraud Act 2006 and Digital Fraud. A post-legislative assessment of the Fraud Act 2006 was previously conducted in 2012 and concluded that the Act was working well. This memorandum assesses whether the Fraud Act 2006 remains an effective tool for tackling fraud that is able to cope with rapidly developing technology. The responses obtained in the review show that fifteen years on, the Fraud Act 2006 continues to deliver on its objectives and is still regarded as an incredibly useful piece of legislation. The offences are wide enough to cover most fraudulent offending, including those which are digitally enabled, and flexible enough to adapt to developing technology. Practitioners are satisfied that the core offences are fit for purpose and meet their needs and do not require amendment. Respondents overwhelming felt that the common law offence of conspiracy to defraud continues to be useful and should remain. Its ability to address the complexity and scale of multi-handed frauds is not otherwise capable of being caught under the Act is invaluable and it should be left alone. Some useful suggestions were made on how the wider fraud framework could be improved which may be beneficial to explore. Concerns were raised in relation to sentencing, where it was felt that the maximum sentence for Fraud Act offences does not align with other offences, such as money laundering. The maximum penalty is prescribed by the Fraud Act, so this is an area that could be reviewed to see if an alignment is necessary. Other responses raised concerns that sentencing practices are inconsistent. There was also support for the expansion of the ‘failure to prevent’ model. The memorandum notes that the Law Commission was asked to review the current corporate criminal liability regime and its Corporate Criminal Liability review commenced in 2020. This will consider whether the Identification Doctrine needs reform and/or whether an expansion of the ‘failure to prevent model’ would be beneficial. The Commission is expected to publish its report and options paper shortly.


OFSI enforcement and monetary penalties guidance published

On 8 June, the Office of Financial Sanctions Implementation (OFSI) updated its guidance on enforcement and monetary penalties for breaches of financial sanctions. In this guidance, OFSI sets out: (i) an explanation of the powers given to HMT in the Policing and Crime Act 2017; (ii) a summary of its compliance and enforcement approach; (iii) an overview of how it will assess whether to apply a monetary penalty, and what it will take into account; (iv) an overview of the process that will decide the level of monetary penalty; and (v) an explanation of how it will impose a monetary penalty, including timescales at each stage and rights of review and appeal. OFSI will periodically review this guidance in response to feedback and as it learns from using these powers. The new guidance will apply to all cases where the potential breach takes place on or after 15 June.


ESAs’ joint report on withdrawal of authorisation for serious breaches of AML/CFT rules

On 1 June, the European Supervisory Authorities (ESAs) (the EBA, ESMA and EIOPA) published a joint report (dated 31 May) that provides a comprehensive analysis on the completeness, adequacy and uniformity of the applicable laws and practices on the withdrawal of authorisation for serious breaches of the rules on anti-money laundering (AML) and countering the financing of terrorism (CFT). The joint report fulfils the Council of the EU’s 2018 AML action plan, in which the ESAs were requested to clarify some aspects of the interaction between serious breaches of AML/CFT rules. The report examines the following four action points articulated in Objective 5 of the AML Council Action Plan: (i) clarify the degree of discretion of the prudential supervisors and the criteria for the withdrawal of the authorisation once a serious breach of AML/CFT rules has been ascertained, while taking into account the different practices and legal frameworks in Member States; (ii) ensure a uniform interpretation of the language referring to serious breaches of AML/CFT rules in the CRD IV Directive; (iii) ensure a consistent consideration of the consequences of licence withdrawal, particularly in terms of the need to preserve critical functions in the bank, the involvement of resolution authorities, depositor protection and the possibility to suspend payment of deposits by the deposit guarantee scheme; and (iv) identify measures available to prudential authorities to address prudential concerns stemming from money laundering / terrorist financing risks and breaches of AML/CFT rules. The report advocates for the introduction in all relevant EU sectoral laws of a specific legal ground to revoke licences for serious breaches of AML/CFT rules. It also calls for the inclusion of assessments by competent authorities of the adequacy of the arrangements and processes to ensure AML/CFT compliance as one condition for granting authorisation or registration. The report highlights the importance of the appropriate integration of AML/CFT issues into prudential regulation and supervision, including in the proposal for the Markets in Crypto-Assets Regulation (MiCA), currently under negotiation. Furthermore, the report clarifies the nature of the decision to revoke licenses as a last resort measure, subject to a discretionary and proportionality assessment. It also lays down uniform criteria for the notion of serious breach of AML/CFT rules, highlighting that the identification of a serious breach is subject to a case-by-case assessment by the AML/CFT supervisor. Finally, the report provides a preliminary analysis of the interaction between serious breaches of AML/CFT rules and the crisis management and resolution frameworks as well as a first mapping of operational and legislative criticalities.

Joint ESAs report


Please see the ‘Prudential Regulation’ section for the BCBS principles on climate-related financial risks, cryptoassets' prudential treatment and G-SIB assessment methodology.

Please also see the ‘Markets and markets infrastructure’ section for the ESMA speech on delivering the Capital Markets Union.

Regulation on pilot regime for market infrastructures based on DLT published

On 2 June, Regulation (EU) 2022/858 on a pilot regime for market infrastructures based on distributed ledger technology (DLT) was published in the OJ. The Regulation also amends the MiFID II Directive, MiFIR and the CSDR. It will come into force on 22 June 2022 and will apply from 23 March 2023, except for Articles 8(5), 9(5), 10(6) and 17, which will apply from 22 June, and Article 16, which will apply from 4 July 2021.


HMT consultation on managing failure of systemic DSA firms

On 31 May, HMT published a consultation on managing the failure of systemic digital settlement asset (DSA) (including stablecoin) firms. This consultation seeks views on both the intention to appoint the Financial Market Infrastructure Special Administration Regime (FMI SAR) as the primary legal framework through which to address the failure of a systemic DSA firm, as well as the necessary amendments that will be required to ensure the FMI SAR can operate effectively with regard to such a firm. DSAs include stablecoin as well as wider forms of digital assets used for payments/settlement. Both the FMI SAR and the Payment and E-Money Special Administration Regime (PESAR) could potentially be applied to the administration of a systemic DSA firm which is not a bank. However, HMT considers FMI SAR to be the most appropriate regime, primarily because it considers that the BoE, rather than the FCA, should be the lead regulator in the administration of systemic DSA firms. As a result, HMT intends to make suitable amendments to the FMI SAR, as it applies to such DSA firms now brought into scope, to ensure risks to financial stability can be addressed under the regime. The FMI SAR’s primary objective focuses on continuity of services. Therefore, HMT intends to add to the FMI SAR an additional objective covering the return or transfer of funds and custody assets when the FMI SAR is applied in relation to systemic DSA firms, and to make any necessary further amendments consequential to this. HMT also intends to enable the BoE to direct administrators as to which objective should take precedence in an administration, and to introduce specific regulations in support of the FMI SAR to ensure that it can operate effectively when applied to DSA firms, including so that the additional objective can be effectively managed by administrators. In addition, in recognition of the regulatory overlap between authorities, including with regard to consumer protection, HMT considers it appropriate that the BoE shall be required to consult the FCA before it seeks a special administration order for a systemic DSA firm that is subject to regulatory requirements imposed by both the BoE and FCA, or directs administrators with regard to the regime’s objectives. The deadline for responses is 2 August. Separately, HMT will be consulting in the coming months on the regulatory perimeter for systemic payments firms at large.


CMA findings of ‘Lessons Learned’ review into Open Banking

On 27 May, the CMA published the findings and recommendations of a review to identify lessons from Open Banking for the CMA’s approach to designing, implementing and monitoring remedies in its market investigations. The review follows the discovery of significant governance failures at the Open Banking Implementation Entity (OBIE) which were identified by an independent report in 2021. The review found that the technical solutions to achieve the Open Banking remedy have, and continue to be, successfully implemented. However, the CMA did not fully anticipate the scale and complexity of its remedy and it failed to foresee or manage some of the key risks inherent in the delivery of the project, in particular in relation to governance at the OBIE and relationships with key stakeholders. The review makes seven recommendations to the CMA: (i) build more effective Board oversight and risk management of the end-to-end strategy for complex remedies; (ii) set out processes and governance for CMA Board and Executive oversight of the delivery and implementation of remedies; (iii) consider questions relating to implementation at the remedies design phase; (iv) ensure key factors are considered where a remedy establishes a new entity or large and enduring CMA function; (v) include gateways in the remedy delivery and implementation process; (vi) implement effective and agile internal governance and stakeholder engagement in remedy delivery and implementation; and (vii) conduct an evaluation case study of complex market investigation remedies. The CMA will publish a further update next year on its progress in implementing this work programme on remedies.

Press release


Fund Regulation

Please see the ‘Sustainable Finance’ section for ESMA’s supervisory briefing on sustainability risks and disclosures in the area of investment management.

ESMA priorities for EU retail fund investors

On 31 March, ESMA published a speech by Verena Ross, ESMA Chair on the key priorities for EU retail fund investors. Ms Ross covers three topics: (i) the PRIIPs review – ESMA considers that a significant number of changes to the PRIIPs regulation are needed and encourage the EC and the co-legislators to consider a broad review of the PRIIPs framework, not merely the Level 1 legislation. ESMA considers that performance and past performance information in the PRIIPs KID is a key topic for consideration. Ms Ross also stresses that any review should harness the opportunities provided by digital disclosure; (ii) costs and fees of investment funds – Ms Ross discusses highlights from ESMA’s report on the Common Supervisory Action (we have covered this item below). Ms Ross also states that in order to promote retail participation in funds’ investment, she favours the creation of online calculator tools allowing retail investor to calculate the costs and fees of funds distributed across the EU; and (iii) sustainability and greenwashing – the ESAs will shortly publish a statement clarifying several areas of its RTS that it is aware have been unclear to market participants. ESMA also plans to issue a comprehensive set of formal Q&As after the delegated regulation is published in the OJ on the practical application of the rules, covering the SFDR disclosures and the additional taxonomy-related product disclosures. Ms Ross also highlights the dangers of greenwashing, explaining that status as “Article 8” or “Article 9” funds are being used in marketing material by fund managers as quality labels for sustainability. The purpose of Article 8 disclosures is to highlight any kind of environmental or social characteristics promoted by such products, however small it might be. Ms Ross advises investors to not take the mere presence of an Article 8 disclosure as an indication of sustainability per se. The ESAs will work with NCAs to reduce such "over-disclosure" by investment funds, to avoid misleading disclosures to investors about the greenness of a product.


ESMA report on supervision of costs and fees in investment funds

On 31 May, ESMA published a report on the Common Supervisory Action (CSA) on costs and fees for investment funds that was carried out with NCAs during 2021. The CSA’s aim was to assess, foster and enforce the compliance of supervised entities with key cost-related provisions in the UCITS framework, in particular the obligation of not charging investors with undue costs. The main findings include: (i) there is room for improvement on the application of the ESMA supervisory briefing on the supervision of costs in UCITS and AIFs, particularly for smaller management companies; (ii) questions arise concerning compliance with delegation rules where portfolio managers i.e. delegates, exercise significant influence or even decide the level of costs; (iii) divergent market practices exist as to what industry reported as “due” or “undue” costs; (iv) some NCAs discovered conflicts of interest at UCITS managers, in particular in cases of related-party transactions; (v) in some instances there is a lack of policies and procedures on efficient portfolio management (EPMs) and lack of clear disclosures as required under the ESMA Guidelines on ETFs and other UCITS issues; and (vi) widespread use of fixed fee splits arrangements for securities lending continues, with unfavourable results for retail investors. On the topic of investor compensation, ESMA stresses the importance of ensuring that investors are adequately compensated in all cases where they were charged with undue costs or fees and also in cases where there were calculation errors that resulted in a financial detriment for investors. ESMA invites NCAs to use this opportunity to consider enforcement actions where a significant regulatory breach is identified.

Press release

Final report

Markets and Markets Infrastructure

Please see the ‘FinTech’ section for the publication of the Regulation on pilot regime for market infrastructures based on DLT. Please also see the ‘Conduct and Governance’ section for HMT’s response to its consultation on a proposed SMCR for FMIs.

EC extends EMIR temporary exemption for pension scheme arrangements until June 2023

On 9 June, the EC published a report on the temporary exemption under EMIR from the central clearing obligation for entities operating Pension Scheme Arrangements (PSAs), in relation to certain types of over-the-counter (OTC) derivatives. The exemption has been extended several times since 2012, and currently runs until 18 June. In the report, the EC explains its decision to extend the exemption for the last time until June 2023. Since the last EC report in May 2021, the expert group on PSAs has met three times. Participants confirmed that PSAs are largely ready to clear, have clearing arrangements in place and clear some trades voluntarily. However, PSAs underlined that the underlying issue of access to cash remains. The EC believes that since 2019, there has been substantial progress towards central clearing for PSAs, including some PSAs partially moving to central clearing on a voluntary basis. Nevertheless, further operational steps are needed. In particular, EU CCPs should use the allotted time to further develop their facilitated access and collateral transformation models, to increase their attractiveness to PSAs. At the same time, pension funds should ensure that they possess sufficient organisational competences and capacities to handle clearing of their derivative portfolios. For these reasons, the EC will prolong the clearing exemption for PSAs for a final year. From 19 June 2023, PSAs will be required under EMIR to clear.


BoE consultation paper on derivatives clearing obligation

On 9 June, the BoE published a consultation paper on the derivatives clearing obligation. This consultation paper sets out the BoE’s proposal to modify the scope of contracts which are subject to the clearing obligation under UK EMIR, by adding Overnight Index Swaps (OIS) that reference the Secured Overnight Financing Rate (SOFR) and, subsequently, removing contracts referencing USD Libor. This forms part of the BoE’s work to reflect the reforms to interest rate benchmarks and in particular, the discontinuation of the USD Libor benchmark in June 2023. This consultation paper follows on from the policy statements that were published in September and December 2021 that finalised changes to the clearing obligation to reflect the discontinuation of certain other interest rate benchmarks by January. As the publication of the most widely used USD Libor settings were due to continue until June 2023, and in the interest of international coordination, the BoE did not propose any changes to the clearing obligation in respect of contracts referencing USD Libor and SOFR when consulting on the changes finalised in 2021. In the light of the changes in market activity observed since then, and in line with recent announcements made by the Commodity Futures Trading Commission (CFTC), the BoE proposes to: (i) add OIS contracts that reference SOFR to the clearing obligation, to come into force on 31 October; and (ii) subsequently remove contracts that reference USD Libor, to come into force around the same time as a number of CCPs contractually convert these contracts and remove them from their list of contracts eligible for clearing. The details of the proposed contracts to be added to the clearing obligation are set out in Section 2. This consultation closes on 21 July. Following consideration of any responses, the BoE will submit the proposed technical standards to HMT for approval. Subject to approval, the BoE intends to make and publish the amendments to BTS 2015/2205 in September.

Consultation paper

Implementing Decisions on EMIR equivalence for CCPs in five non-EU jurisdictions published in the OJ

On 9 June, following their adoption by the EC on 8 June, the Implementing Decisions on the equivalence of the regulatory framework for CCPs in five non-EU jurisdictions under EMIR were published in the OJ. The Implementing Decisions in relation to Chile, Malaysia and Indonesia allow CCPs in these jurisdictions to apply for recognition by ESMA. Once recognised, such CCPs will be able to provide central clearing services in the EU to EU clearing members and trading venues. The Implementing Decisions in relation to India and South Africa amend existing Implementing Decisions for these jurisdictions to reflect certain changes to the legal and supervisory frameworks in both jurisdictions. The Implementing Decisions relating to Chile, Indonesia and Malaysia come into force on 29 June, and the Implementing Decisions relating to India and South Africa come into force on 10 June.

Implementing Decision (Chile)

Implementing Decision (Malaysia)

Implementing Decision (Indonesia)

Implementing Decision (South Africa)

Implementing Decision (India)

ESMA final report and draft amending RTS on EMIR commodity derivative clearing thresholds

On 3 June, ESMA published its final report, which includes draft amending RTS, on the commodity derivative clearing threshold (CT). The “EMIR Refit” Regulation introduced a mandate in EMIR for ESMA to periodically review the CTs and propose to update them where necessary, in order to ensure that the CTs remain appropriate. This report presents the amending RTS proposing to change the CT for commodity derivatives. ESMA conducted a review of the CTs in November 2021. A summary of the feedback to the discussion paper, alongside ESMA’s response, is in section 4 of the final report. ESMA believes that the CT framework needs to be amended to better recognise the benefits of clearing. ESMA has therefore recommended in its high-level response to the EC consultation on the targeted review of EMIR, that instead of distinguishing between OTC and Exchanged Traded Derivatives for the purpose of the CTs, the distinction should be between cleared versus non-cleared, such that only derivatives not cleared at an authorised or recognised CCP should count towards the CTs. In the meantime, and in order to alleviate temporarily the impact of the current energy prices on NFCs, ESMA has developed an RTS proposing to increase the CT for commodity derivatives by EUR 1 billion. Once the EMIR framework review is finalised, ESMA will reassess the CTs based on the new methodology, including the applicable CT for commodity derivatives. However, ESMA stands ready to review the level of the CT at any point in time should the conditions change. Lastly, this report focuses on this particular aspect of the CT review for which there is urgency to act, whereas the rest of the feedback to the discussion paper will continue to be handled as part of the broader workstream looking at the regular review of the CTs. In preparing the report, ESMA took into account the feedback from the public consultation on the discussion paper, consulted the European Systemic Risk Board and requested advice from the Securities and Markets Stakeholder Group. ESMA has sent the draft amending RTS to the EC for endorsement. Additionally, ESMA will continue to periodically review the CTs to ensure they are fit for purpose and well-calibrated, in particular in the case of material changes in market circumstances.

Final report

ESMA final report and draft RTS suspending CSDR mandatory buy-in rules

On 2 June, ESMA published its final report, including draft RTS, suspending the application of the mandatory buy-in rules under the Central Securities Depositories Regulation (CSDR) and Commission Delegated Regulation (EU) 2018/1229 (the RTS on settlement discipline). ESMA proposes to suspend the application of the CSDR mandatory buy-in regime for three years. The proposed amendment to the RTS on settlement discipline is based on the expected changes to the CSDR buy-in regime presented in the EC’s legislative proposal for the CSDR Review which was published in March, and on the amendment made to the CSDR through the DLT Pilot Regulation, which allows ESMA to propose a later start date for the CSDR buy-in regime. The CSDR settlement discipline regime has applied from 1 February. However, market participants have conveyed their concerns about having serious difficulties to implement the mandatory buy-in regime on the scheduled date due to: (i) the absence of clarity regarding some open questions necessary for the implementation of the buy-in requirements; and (ii) the uncertainty as to whether the EC’s legislative proposal on amending the CSDR would include amendments to the mandatory buy-in rules and the extent of any potential amendments. The draft RTS have been sent to the EC for endorsement in the form of a Commission Delegated Regulation. Following endorsement by the EC, the Commission Delegated Regulation will then be subject to the non-objection of the EP and of the Council of the EU. ESMA’s December 2021 statement will remain in place until the buy-in regime is formally suspended.

Final report

ECB opinion on proposed Regulation amending MiFIR

On 1 June, the ECB published an opinion on a proposed Regulation amending MiFIR as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising trading obligations and prohibiting receiving payments for forwarding client orders. The ECB makes general observations on the proposed Regulation, including: (i) consolidated tape. The ECB welcomes the introduction of the proposed enhanced regime for the “consolidated tape” and the competitive bid process for the selection of a consolidated tape provider for each asset class; (ii) pre-trade transparency regime for equities (dark trading). The ECB welcomes the proposed Regulation's streamlining of the pre-trade transparency regime for equities. At the same time, it is noted that the interaction between the abolition of the venue specific volume cap and the lowering of the EU-wide cap is complex, as these proposed changes are expected to have diverging effects on transparency. The ECB suggests, therefore, that the pre-trade transparency regime for equities, in particular the calibration of the volume cap, should be kept under review; (iii) prohibition of payment for order flow (PFOF). The proposal includes a further restriction of PFOF – the ECB considers that PFOF can impede market efficiency and the transparency of European capital markets; (iv) ending open access for exchange-traded derivatives. While the ECB supports measures that strengthen EU clearing markets, it is important to consider the possible implications that the removal of the open access provision could have for competition, innovation and market integration, and to carefully balance potentially competing objectives; and (v) other MiFIR provisions and their impact on ECB/ ESCB market transactions. The ECB notes that certain MiFIR provisions could be further improved in the light of the ECB/ESCB’s experience with conducting market operations on EU trading venues. These include the EC’s empowerment to extend the exemption from MiFIR transparency requirements to other central banks, as well as maintaining full exemption of ESCB securities financing transactions from the supervisory reporting obligation. Where the ECB recommends that the proposed regulation is amended, specific drafting proposals are set out in a separate technical working document accompanied by an explanatory text.


ESMA speech on delivering CMU

On 1 June, ESMA published a speech by Verena Ross, ESMA Chair, on delivering the Capital Markets Union (CMU). Key points include: (i) MiFIR Review and the establishment of a consolidated tape. Ms Ross emphasises that ESMA is overall very supportive of the EC’s proposal and fully shares its ambitions. ESMA would however suggest an adequate timeframe allowing for the launching of the procedure, for entities to apply and for ESMA to select and subsequently authorise a successful candidate. ESMA considers that a staggered approach may be a good idea, meaning that the consolidated tape for certain asset classes could be prioritised over others; (ii) the trading venue perimeter. Ms Ross mentions ESMA's recent consultation on a proposed ESMA opinion, which intends to clarify what a multilateral system is, and provides guidance on when systems should seek authorisation as a trading venue. The opinion aims at enhancing supervisory convergence in the EU and levelling the playing field between market participants. She explains that ESMA is currently analysing the feedback received and will finalise its opinion in the next few months. She also emphasises that ESMA is working with competent authorities in assessing the different systems on a case-by-case basis, as the features and complexity of such systems vary greatly. ESMA does this by looking at concrete cases where the dividing line concerning trading venue authorisation is blurred and discussing the merits of each case at case-specific sessions of its standing committees; (iii) digital transformation and cryptoassets. Ms Ross notes that ESMA believes that the EC’s Digital Finance Package, which includes a Regulation on Markets in Crypto-Assets (MiCA), is a welcome step, and that ESMA is already reflecting on how it will fulfil the mandates it may be given. She explains that ESMA would see it as appropriate to play a greater role when it comes to the authorisation and supervision of significant Cryptoasset Services Providers; and (iv) commodities and circuit breakers. Ms Ross notes that ESMA is currently reflecting carefully on the additional tools that could be put in place to better identify potential risks to orderly markets at an early stage so that market infrastructures, and ultimately authorities, can take action as necessary before those risks materialise. In particular, it is looking at how transparency in these markets, for instance through additional information on the OTC positions held by market participants trading on-venue commodity derivatives, could allow market participants, trading venues and regulators to better identify risks and maintain orderly markets. Ms Ross also mentions the role of circuit breakers in times of market stress, and notes that a discussion on their design might be needed.


FCA portfolio letter to data reporting services providers

On 31 May, the FCA published a portfolio letter sent to data reporting services providers (DRSPs). The key potential risks of harm that the FCA identifies are: (i) the market is concentrated among a small number of DRSPs; this could limit clients’ opportunity to switch provider and may lead to lower incentives to provide high quality services; (ii) DRSPs may have inadequate systems and controls to identify incomplete and potentially erroneous trade or transaction reporting data which undermines their core function of promoting market transparency and integrity; (iii) insufficient operational resilience may lead to disruption for market participants, consumers and regulators, or the loss, compromise, or lack of availability of data. The FCA sets out its expectations and what actions it will take in relation to each harm. Other risks identified by the FCA include: (a) a lack of focus on DRSP business, such as a lack of profile and prioritisation of the activities of the DRSP, compared with other activities of the entity/group; (b) notifications to the FCA are not consistent across the portfolio; and (c) operators of DRSPs offer a variety of unregulated services to clients to facilitate trade and/or transaction reporting, which require controls to prevent any adverse impacts to the regulated service. The FCA expects DRSPs to consider the issues raised in the letter and take the necessary action to ensure that the risks are appropriately mitigated.


Payment Services and Payment Systems

Please see the ‘FinTech’ section for the HMT consultation on managing failure of systemic DSA firms, as well as the CMA findings of a ‘Lessons Learned’ review into Open Banking. Please also see the ‘Conduct and Governance’ section for HMT’s response to its consultation on a proposed SMCR for FMIs.

EPC clarification paper on SEPA Request-To-Pay scheme rulebook

On 30 May, the EPC published a clarification paper on the Single Euro Payments Area (SEPA) Request-to-Pay (SRTP) scheme rulebook. The purpose of the clarification paper is to provide guidance and, where feasible, recommendations to the SRTP scheme participants on matters that are not as such described in version 2.0 of the SRTP scheme rulebook, which was published on 30 November 2021. It should be noted that the clarification paper is a living document which will be updated from time to time once new questions and/or issues arise that need further clarification.

Clarification paper

Prudential Regulation

EBA consults on draft RTS on identifying connected clients under CRR

On 8 June, the EBA published a consultation on draft RTS on the identification of a group of connected clients under Article (4)(1)(39) of the CRR. These draft RTS revise and partially replace the previous EBA guidelines on connected clients, which have applied since 1 January 2019. Sections of the guidelines related to the circumstances of control, economic dependencies and their interaction, will be repealed and transferred without substantial changes to the RTS. All explanatory examples, as well as further guidance on the alternative approach for exposures to central governments and supervisory expectations with regard to control and management procedures for identifying connected clients, will stay in the guidelines. The consultation runs until 8 September and the EBA will hold a public hearing on 13 July.


ECON draft reports on proposed CRR III Regulation and CRD VI Directive

On 6 June, the European Parliament's Economic and Monetary Affairs Committee (ECON) published draft reports on: (i) the EC’s proposal for a Regulation amending Regulation (EU) No 575/2013 (CRR) as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor (CRR III Regulation) (Draft report 1); and (ii) a Directive amending Directive 2013/36/EU (CRD IV Directive) as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks (CRD VI Directive) (Draft report 2). Both draft reports are dated 23 May, and contain draft European Parliament legislative resolutions, with the text setting out multiple possible amendments to the proposed Regulation and Directive.

Draft report 1

Draft report 2

PRA publishes updated RPS templates and tables for banks

On 1 June, the PRA published updated remuneration policy statement (RPS) templates and tables for banking firms to record remuneration policies, practices and procedures and assess compliance with the remuneration rules. The RPS tables allow firms to keep a record of all material risk takers (MRTs) identified for the current performance year. The updated templates and tables include: (i) RPS template for level one firms; (ii) RPS template for level two firms; (iii) RPS template for level three firms; (iv) RPS tables for level one firms; (v) RPS tables for level two and three firms; and (vi) RPS table 8: material risk takers exclusions. The templates and tables have been updated to reflect changes made to the Remuneration Part of the PRA Rulebook following the PRA’s December 2021 policy statement on the identification of MRTs (PS28/21).


RPS template for level one firms

RPS template for level two firms

RPS template for level three firms

RPS tables for level one firms

RPS tables for level two and three firms

RPS table 8: material risk takers exclusions

BCBS principles on climate-related financial risks, cryptoassets' prudential treatment and G-SIB assessment methodology

On 31 May, the BCBS published a press release following its meeting on 27 May. The following topics were covered: (i) climate-related financial risks. The BCBS has finalised principles for the effective management and supervision of climate-related financial risks, following its consultation last year. The principles will be published in the coming weeks and promote a principles-based approach to improving risk management and supervisory practices to mitigate climate-related financial risks. These principles form part of the BCBS’ broader assessment of potential measures, spanning disclosure, supervisory and regulatory measures, to address climate-related financial risks to the global banking system. The BCBS will provide an update on its work across these dimensions in due course; (ii) cryptoassets. The BCBS has progressed its work on the prudential treatment of banks' cryptoasset exposures. Recent developments have further highlighted the importance of having a global minimum prudential framework to mitigate risks from cryptoassets. The BCBS plans to publish a second consultation paper over the coming month, with a view to finalising the prudential treatment around the end of 2022; (iii) G-SIB assessment methodology. The BCBS has completed its targeted review of the treatment of cross-border exposures within the European banking union (EBU) on the methodology for G-SIBs. The BCBS agreed to give recognition in the G-SIB framework to this progress through the existing methodology, which allows for adjustments to be made according to supervisory judgment. Under the agreement, a parallel set of G-SIB scores will be calculated for EBU-headquartered G-SIBs and used to adjust their bucket allocations. The parallel scores recognise 66% of the score reduction that would result from treating intra-EBU exposures as domestic exposures under the G-SIB scoring methodology. The Committee's agreement will not affect the classification of any banks as G-SIBs or the scores or bucket allocations of banks outside of the EBU; and (iv) risks and vulnerabilities to the global banking system. The BCBS noted the importance for banks and supervisors to continue to closely monitor, assess and mitigate risks and vulnerabilities facing the banking system, including those resulting from the ongoing Ukraine conflict.

Press release

Recovery and Resolution

SRB updates 2022 MREL policy

On 8 June, the SRB published an updated version of its 2022 policy for the minimum requirement for own funds and eligible liabilities (MREL). The policy has been revised based on experience gained and stakeholder feedback and applies to the 2022 resolution planning cycle. The updates to the policy are highlighted in red text in track changes in the document. The update takes into account new regulatory developments, such as the end of the supervisory leverage relief measures of the ECB, as well as changes to the CRR recently agreed by the EU co-legislators on the indirect holding of internal MREL and the MREL calibration for banks with a multiple point-of-entry resolution strategy (the “daisy chain proposal”). The policy has also further enlarged the coverage of entities under internal MREL and made the subordination policy more dynamic, taking into account evolving balance sheets prior to resolution. It also complements the SRB approach to internal MREL waiver applications in a new annex.


EBA guidelines on publication of write-down and conversion and bail-in exchange mechanic

On 7 June, the EBA published a consultation paper on draft guidelines addressed to resolution authorities on the publication of the write-down and conversion and bail-in exchange mechanic under BRRD. The draft guidelines provide a clear framework for resolution authorities to publish their approach to using the bail-in tool. They aim to set out the minimum elements that authorities should publish about their exchange mechanics. Authorities that have not done so yet are expected to start publishing a high-level document from January 2024 setting out the key aspects of their favoured approach – in particular if they intend to make use of interim instruments, and those that have already published information are expected to check if that publication complies with these draft guidelines. Authorities should continuously update their documents as they further develop their approach. The deadline for comments is 7 September and the final report is anticipated by the end of 2022.

Consultation paper

Sustainable Finance

Please see the ‘Fund Regulation’ section for the ESMA priorities for EU retail fund investors, and a speech by Verena Ross, ESMA Chair, in which she discusses key priorities for EU retail fund investors, including sustainability. Please also see the ‘Prudential Regulation’ section for the BCBS principles on climate-related financial risks, cryptoassets' prudential treatment, and G-SIB assessment methodology.

EC letter to ESAs on amendments to SFDR RTS on pre-contractual information about exposure to fossil gas and nuclear energy activities

On 9 June, a letter was published from John Berrigan, DG FISMA, to the European Supervisory Authorities (ESAs) (the EBA, ESMA and EIOPA) on amendments to RTS related to product exposure to gas and nuclear activities under the SFDR. Mr Berrigan refers to the 13 draft RTS compiled in the SFDR Delegated Regulation, which was adopted by the EC on 6 April. On 9 March, the EC formally adopted a Complementary Climate Delegated Regulation covering nuclear and fossil gas activities. The EC considers it necessary to make amendments to the SFDR Delegated Regulation to ensure that investors receive information reflecting the provisions set out in the Complementary Climate Delegated Regulation. If the EC does not adopt such amendments, several areas in the SFDR Delegated Regulation might risk, if not adjusted, not to appropriately reflect the new factual and regulatory situation. The EC is therefore inviting the ESAs to jointly propose amendments to the RTS in relation to the information that should be provided in pre-contractual documents, on websites, and in periodic reports about the exposure of financial products to investments in fossil gas and nuclear energy activities. The amendments shall ensure that the disclosures about the degree to which investments are in environmentally sustainable economic activities provide for full transparency about investments in sectors and sub-sectors of the economy covered by and compliant with the Complementary Climate Delegated Regulation, in particular on the proportion such investments represent within all investments and in environmentally sustainable economic activities. These amendments shall ensure full transparency on the proportion of investments in sectors and sub-sectors of the economy that derive revenues from activities listed in Template 1 of Annex III to the Complementary Climate Delegated Regulation. The ESAs are invited to jointly submit the amendments to the draft RTS by 30 September at the latest. In view of the urgency of the matter, the ESAs may decide to rely on the procedure foreseen in Article 10 of the ESAs Regulations for matters of particular urgency.


Corrigendum to Taxonomy Regulation published in the OJ

On 9 June, a corrigendum to the Taxonomy Regulation was published in the OJ. The corrigendum replaces the first sentence of recital 43 on page 22 which refers (among other things) to an EC communication on public procurement for a better environment. The corrigendum corrects the date of this communication to 16 July 2008 (originally, it incorrectly read 16 July 2018). No substantial changes are added.


IPSF updated CGT instruction report and table of activities and new FAQs

On 3 June, the International Platform on Sustainable Finance (IPSF) published amended versions of its Common Ground Taxonomy (CGT) instruction report and CGT table of activities, and new FAQs on its CGT table. In light of the feedback received and further assessments following its November 2021 call for feedback, the IPSF updated the CGT activities’ table with additional activities contributing to climate change mitigation. The current version of the CGT covers 72 climate change mitigation activities that share common ground for both the EU and China taxonomies with regard to the “substantial contribution” criteria. A summary of the responses to the earlier call for feedback was also published.

Updated CGT instruction report

Updated CGT table of activities

FAQs on CGT activities table

Summary of consultation responses

ESAs statement clarifying draft RTS under SFDR

On 2 June, the European Supervisory Authorities (ESAs) (the EBA, ESMA and EIOPA) published a statement to clarify their draft RTS under the SFDR. The statement includes: (i) clarifications related to the disclosure of principal adverse impact (PAI) of investment decisions on sustainability factors; (ii) guidance related to pre-contractual financial product disclosures; (iii) guidance related to periodic financial product disclosures; (iv) guidance in relation to taxonomy-related financial product disclosures; (v) guidance related to “do not significantly harm” (DNSH) disclosures; and (vi) guidance related to disclosures for financial products with investment options. The clarifications concern the draft RTS with regard to the content, methodologies and presentation of disclosures pursuant to Article 2a(3), Article 4(6) and (7), Article 8(3), Article 9(5), Article 10(2) and Article 11(4) of the SFDR from 4 February 2021 and the draft RTS with regard to the content and presentation of disclosures pursuant to Article 8(4), 9(6) and 11(5) of the SFDR from October 2021. The ESAs also note that the EC has adopted a Delegated Regulation containing the provisions from both of the draft RTS, and that this statement does not refer to the text by the EC. In the absence of the Delegated Regulation, the ESAs published a supervisory statement in February 2021 in order to mitigate the risk of divergent application and updated it in March.


ESMA supervisory briefing on sustainability risks and disclosures in the area of investment management

On 31 May, ESMA published a supervisory briefing to ensure convergence across the EU in the supervision of investment funds with sustainability features, and in combating greenwashing by investment funds. ESMA aims for this work to help combat greenwashing by establishing common supervisory criteria for NCAs. The briefing covers: (i) guidance for the supervision of fund documentation and marketing material, as well as guiding principles on the use of sustainability-related terms in funds’ names; and (ii) guidance for convergent supervision of the integration of sustainability risks by AIFMs and UCITS managers. ESMA will work closely with NCAs to combat greenwashing, by promoting further supervisory convergence in supervising investment funds with sustainability features. This may include updating the supervisory briefing if needed considering experiences after the SFDR RTS start applying on 1 January 2023.

Press release


NGFS publishes 2022-24 work program

On 30 May, the NGFS published its work program, detailing its priorities for the next two years. The NGFS has launched four workstreams to: (i) foster progress towards incorporating climate-related and environmental risks within supervisory frameworks and practices; (ii) undertake climate scenario analysis and promote its use within the financial system more broadly; (iii) deepen the collective understanding of how climate change, and the actions designed to mitigate it, should be considered in relation to the conduct of monetary policy; and (iv) create a forum for NGFS banks to discuss issues and share approaches in order to develop best practices that assist central banks on the transition to net zero. The NGFS is also launching two taskforces: (a) to consider biodiversity loss and nature-related financial risks; and (b) to identify good practices on how central banks and supervisors can design and develop an in-house training/capacity building strategy, map training needs and supply, and facilitate the upskilling of central bankers and supervisors. The mandates for these workstreams and taskforces are available on the NGFS Charter webpage.

Press release

NGFS Charter

Other Developments

FOS announces new Chief Executive and Chief Ombudsman

On 8 June, the Financial Ombudsman Service (FOS) announced it has appointed Abby Thomas to the role of Chief Executive and Chief Ombudsman. Ms Thomas currently works for Virgin Media O2 and will take up her new role in the autumn.

Press release

HMT policy statement on critical third parties

On 8 June, HMT published a policy statement on critical third parties (CTPs) to the finance sector. The policy statement is designed to enable the regulators to directly oversee services that CTPs provide to firms. This will enable the regulators to ensure that services CTPs provide to firms in the finance sector are resilient, thereby reducing the risk of systemic disruption. Under this regime: (i) HMT will be able to designate certain third parties which provide services to firms as “critica”’. Designation will then be made by secondary legislation taking into account high-level criteria such as the number and type of services a third party provides to firms and the materiality of these services. This designation framework will be set out in primary legislation; (ii) once a third party has been designated as “critical”, the regulators will be able to exercise a range of powers in respect of any material services that the third party provides to the finance sector. In particular, the financial regulators will be able to make rules relating to the provision of these material services, gather relevant information from critical third parties, and take formal action (including enforcement) where needed; (iii) a rule-making power will allow the financial regulators to set minimum resilience standards that CTPs will be required to meet. It will also allow the financial regulators to require CTPs to take part in a range of targeted forms of resilience testing, to assess whether the standards are being complied with. HMT intends to legislate for this regime when parliamentary time allows. The regulators will then issue a joint discussion paper. Following royal assent, the financial regulators anticipate publishing a further consultation paper on their proposed rules, building on feedback to their discussion paper and based on their proposed, new statutory powers. Following the finalisation of the regulators’ rules, HMT will then expect to begin designating the first CTPs under this new regime.

Policy statement

HMT policy statement on review of BoE CRD scheme

On 7 June, HMT published a policy statement on a review of the BoE’s cash ratio deposit (CRD) scheme. The CRD scheme funds the BoE’s monetary policy and financial stability functions. HMT previously consulted in September 2021 on the way banks and building societies contribute to funding the BoE's monetary policy and financial stability functions, and proposals for an alternative funding arrangement. Overall, respondents supported the proposal of a new levy, and a summary of consultation responses was published on 24 February. Key themes in the responses related to the cohort of payers, the implementation and operation of the proposed levy and alternatives to the levy. As a result, HMT decided to replace the current CRD scheme with the BoE levy, a new levy for funding the BoE policy functions. This means the BoE will no longer need to fund the income shortfall through its own capital or reserves. A levy-based arrangement will ensure that the income received by the BoE is in line with its forecast expenditure for its policy related activities. This will not only provide increased certainty to the BoE over its funding, but also increased certainty to payers over the size of their annual contribution, which they will be notified of annually. HMT intends to legislate when Parliamentary time allows. Following the Royal Assent of primary legislation, HMT will take forward steps for secondary legislation. When the new levy scheme is introduced, the BoE will publish a standalone framework document outlining its approach to levying policy costs. This document will outline the costs that will be recovered through the levy, including the true-up mechanism to align to actual costs incurred, the mechanism to determine average eligible liabilities on which the levy will be calculated, and the circumstances under which the BoE may deem it necessary to modify the eligible liabilities data. HMT will continue to monitor the effectiveness of the funding model used to meet the BoE’s policy costs and will conduct a further formal review within at least five years of legislation being introduced and publish a report in respect of that review.

Policy statement

FCA policy statement on preventing claims management phoenixing by FS firms

On 7 June, the FCA published a policy statement which sets out the final rules aimed at preventing claims management phoenixing by financial services (FS) firms. The new rules prohibit claims management companies (CMCs) from carrying out regulated claims management activity in certain circumstances on claims and potential claims to the Financial Services Compensation Scheme (FSCS), where the CMCs have relevant connections to the claims. The rules also require CMCs to tell the FCA of connections they have to FS firms that could be relevant connections for these purposes. The ban is intended to ensure that FS firms pay due regard to the interests of customers, that a CMC does not seek to profit from past misconduct of individuals connected with it, that the FSCS is not used to pay compensation costs that could in some instances have been avoided, and no part of the compensation paid by the FSCS will go to those who caused that loss. The ban will also allow CMCs to participate fairly in the market without connections to failed FS firms giving some an unfair advantage. The legal instrument accompanying this policy statement contains final rules and guidance. The rules and guidance will come into force on 7 July. Affected firms need to ensure that they are able to comply by that date. To help firms comply with the first notification requirement, the FCA will send a request by email for the required information.

Policy statement

FCA Handbook Notice No. 99

On 27 May, the FCA published Handbook Notice No. 99. The Handbook Notice describes the changes made to the FCA Handbook and other material made by: (i) Part 4A Permission (Own-Initiative Variation and Cancellation) Instrument 2022 (FCA 2022/14) which sets out the FCA’s new power to vary or cancel firms’ permissions, without their consent, when the firm is not carrying on any regulated activities within the scope of those permissions; (ii) Perimeter Guidance (Commodity Derivatives Exemption) Instrument 2022 (FCA 2022/17) and Technical Standards (Markets in Financial Instruments) (Ancillary Exemption) Instrument 2022 (FCA 2022/18) which make changes to the Ancillary Activities Test in light of no available overall market data provided by ESMA; (iii) Listing Rules and Prospectus Regulation Rules (Prospectus Guidance and Guidelines) Instrument 2022 (FCA 2022/19) which makes changes to the Handbook consequential to the changes to the Knowledge Base in PMB 40 (see Capital Markets section); (iv) Investment Firms Prudential Regime (Amendment) Instrument 2022 (FCA 2022/20) which extends the deadline for the MIFIDFRU TP 7.4R(2)(b) notifications until 29 June 2022. It also extends the scope of MIFIDPRU TP 7 to include former IFPRU investment firms and former consolidating UK CRR parent undertakings where those entities did not obtain approvals under the UK CRR before 1 January 2022; (v) Training And Competence Sourcebook (Amendment No 10) Instrument 2022 (FCA 2022/21) which makes changes to provide firms and relevant employees with greater flexibility to choose the most appropriate and effective continuing professional development activities; (vi) Listing Rules (Open-Ended Investment Companies) (Amendment) Instrument 2022 (FCA 2022/22) which makes changes to clarify the FCA’s policy position by adding a new limb to LR 14.1.1R; (vii) Conduct of Business Sourcebook (MiFID Org Regulation Amendment) Instrument 2022 (FCA 2022/23) which changes provisions in the Handbook that copy out an EU delegated regulation in line with changes made by to the onshored version of that regulation; and (viii) Conduct of Business Sourcebook (Amendment) Instrument 2022 (FCA 2022/24) which makes changes to the research rules for Collective Portfolio Managers in COBS Annex 1 to mirror changes already made in COBS 2.3A so they are subject to the same requirements as investment firms. All instruments have entered into force except Part 2 of the Training And Competence Sourcebook (Amendment No 10) Instrument 2022 which comes into force on 29 July.

Handbook Notice No. 99