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Global regulatory update Q4 2023

25 January 2024

Happy New Year and welcome to 2024. The last quarter of 2023 saw a multitude of regulatory updates across key jurisdictions, with environmental, social, and governance (“ESG”), virtual assets, and several other key topics such as the Alternative Investment Fund Managers Directive (“AIFMD”) stealing the headlines.

Welcome to our Q4 2023 regulatory update.

Europe – EU updates

Crypto and digital assets:

  • Starting off with the Markets in Crypto-Assets (“MiCA”) regulation, the European Banking Authority (“EBA”) launched its third consultation package focusing on:
    • Draft Regulatory Technical Standards (“RTS”) to specify the highly liquid financial instruments with minimal market risk, credit risk, and concentration risk;
    • Draft RTS to further specify the liquidity requirements of the reserve of assets;
    • Draft RTS to specify the minimum contents of the liquidity management policy and procedures;
    • Draft RTS to specify the adjustment of own funds requirements and stress testing of issuers of asset-referenced tokens (“ART”) and e-money tokens (“EMT”);
    • Draft RTS to specify the procedure and timeframe to adjust its own funds requirements for issuers of significant ARTs or of EMTs;
    • Draft Guidelines on recovery plans to be drafted by issuers of ARTs and EMTs;
    • Draft Guidelines establishing the common reference parameters of the stress test scenarios for the liquidity stress tests;
    • Draft RTS on the methodology to estimate the number and value of transactions associated to uses of ARTs as a means of exchange and of EMTs denominated in a non-Member State currency;
    • Draft implementing technical standards (“ITS”) on the reporting on ARTs and EMTs denominated in a non-Member State currency; and
    • Draft RTS specifying the criteria for determining the composition of supervisory colleges for each issuer of a significant ART or of a significant EMT.
  • Simultaneously, the European Commission opened a feedback period seeking input on four draft delegated acts intended to supplement MiCA and focusing on:
    • Criteria for an ART or EMT to be classified as significant;
    • Supervisory measures on product intervention powers;
    • Procedural rules for the EBA to impose fines; and
    • Rules on the supervisory fees charged by the EBA.
  • The EBA issued guidance to Anti-Money Laundering / Countering the Financing of Terrorism (“AML/CFT”) supervisors of Crypto Asset Service Providers, focusing on the source of information for authorities to consider, as well as the importance of a consistent approach and employee training.


  • Moving on to another hot topic, ESG, European Securities and Markets Authority (“ESMA”) released an update on its proposed changes for the proposed guidelines of funds’ names, as well as a timeline for their publication, currently estimated to occur in Q2 2024.
  • ESMA published three explanatory notes focusing on its ESG regulatory framework, more specifically on:
    • Concept of estimates across the EU Sustainable Finance framework;
    • ‘Do No Significant Harm’ definitions and criteria across the EU Sustainable Finance framework; and
    • Concepts of sustainable investments and environmentally sustainable activities in the EU Sustainable Finance framework.
  • Importantly, the European Supervisory Authorities (“ESA”) (EBA, European Insurance and Occupational Pensions Authority (“EOPA”), and European Securities and markets Authority (“ESMA”), together with the ESA) released their final report on the draft RTS on the review of Principal Adverse Impact (“PAI”) and financial product disclosures in the Sustainable Finance Disclosure Regulation (“SFDR”). The ESAs also released a factsheet on investments, loans, insurance or pensions with a sustainable focus.
  • On November 21 2023, two Taxonomy Regulation delegated acts (the Amending Climate Delegated Act and the Taxonomy Environmental Delegated Act) were published in the EU Official Journal, both having a January 1 2024 application date (subject to a few limited exemptions).
  • ESMA announced a consultation on draft guidelines for supervision of corporate sustainability information.
  • The European Commission’s Platform on Sustainable Finance issued a draft report coupled with a call for feedback on proposals for voluntary EU Taxonomy benchmarks.
  • ESMA issued a report aiming to ensure that climate disclosures are better reported in financial statements, as well as a summary of the results of a fact-finding exercise on corporate reporting practices under the Taxonomy Regulation.
  • The EBA issued a proposal focusing on the introduction of voluntary EU label for green loans.
  • In mid-December 2023, the EU Council and Parliament announced reaching a provisional deal on the final text of the Corporate Sustainability Due Diligence Directive.
  • Closing off on ESG, the European Green Bonds regulation was published into the Official Journal of the EU, with a December 21 2024 application date.

Financial service regulatory and directives updates:

  • Importantly, in November 2023, the final text amending the original AIFMD, commonly referred to as AIFMD II, was published. AIFMD II is set to bring several key changes in fields such as loan origination, changes to reporting or delegation and substance requirements.
  • The EU Council and Parliament also reached a provisional agreement on amendments to the Solvency II Directive and certain new rules on insurance recovery and resolution.
  • The European Council adopted the European Single Access Point (“ESAP”) regulation, paving the way for increased transparency to public financial and non-financial information about EU companies and EU investment products. The ESAP regulation will come into force 20 days after its publication in the EU Official Journal.
  • ESMA issued a final report on EU collateralised loan obligation (“CLO”) credit ratings, highlighting risks of conflicts of interest relating to methodology changes.
  • ESMA also published Q&As on PRIIPs KID, as well as an updated Q&A on the Markets in Financial Instruments Directive (“MiFID”) II and Markets in Financial Instruments Regulation (“MiFR”).
  • Looking into Anti Money Laundering (“AML”), the European Council and Parliament agreed on the creation of the future European Authority for Countering Money Laundering and Terrorist Financing (“AMLA”) and subsequently agreed the procedure to select a seat for AMLA in one of nine Member States.
  • Further to the Financial Action Task Force (“FATF”) plenary in October 2023, the EU published its updated list of high-risk countries for AML purposes, removing the Cayman Islands and Jordan from the list. This change should come into effect 20 days after publication into the EU Official Journal.
  • On the tax side, a notable update was the removal of the British Virgin Islands, Costa Rica, and Marshall Islands from the EU’s list of non-cooperative jurisdictions for tax purposes.
  • Another development was the provisional agreement between the EU Council and Parliament on the so-called EU Artificial Intelligence Act during December 2023, potentially catching several types of financial institutions in the EU.

Europe – Country updates


  • First, with ESG, the Transition Plan Taskforce published consultation papers on sector- specific guidance such as banks, asset owners, or asset managers.
  • Staying within ESG, the Financial Conduct Authority (“FCA”) released its review of ESG compliance by Authorised Fund Managers (“AFMs”), highlighting certain areas of poor practice (e.g., products being inconsistently aligned with their ESG and sustainability goals even if they referenced them in their name; holdings seemingly inconsistent with a fund’s ESG or sustainability objective).
  • Importantly, the FCA published its Policy Statement PS23/16, completing the Sustainability Disclosure Requirements (“SDR”) rules in the UK.
  • The FCA published its final report on its review of the implication of the Investment Firms Prudential Regime, highlighting certain areas for improvement around group internal capital adequacy and risk assessment (“ICARA”) processes, internal intervention points, wind-down assessments, liquidity assessments, operational risk capital assessments, and regulatory data submissions.
  • Another key update focused on the UK Government, as the UK Chancellor released his Autumn Statement speech, highlighting certain areas of reform such as pension funds, allowing long-term asset funds (“LTAF”), Property Authorised Investment Funds (“PAIF”), and fractional shares to be included selected ISAs and changes to stamp duty reserve tax.
  • The FCA wrote to CEOs of wealth management and stockbroking firms about the regulator’s expectations on financial crime, consumer duty, and wider expectations.
  • Crypto and digital assets were also a key topic in the UK, with HM Treasury’s Technology Working Group publishing its report on fund tokenisation.
  • The UK’s Public Offers and Admissions to Trading Regulations (and its Explanatory Memorandum) was laid before Parliament in late November 2023, with the aim to replace the EU transposed Prospectus Regulation, creating a regime specific to the UK.
  • The FCA also launched a consultation aimed at exploring ways to update the UK Money Market Funds regime, as well as another one on the implementation of the Overseas Fund Regime.
  • The regulator also announced a consultation aimed at improving the attractiveness of the UK’s listing regime.
  • The FCA released a statement addressing a few concerns relating to costs and charges disclosures in PRIIPS KIDs, UCITS KIIDs, and MiFID II requirements.
  • A year after its introduction, the UK’s Treasury Committee released its assessment of the impact of the Edinburgh Reforms on the UK economy.
  • The FCA reminded market participants that the threshold under the new Short Selling (Notification Threshold) Regulations 2023 will increase from 0.1% to 0.2% from February 5 2024.
  • Moving into AML matters, the UK updated its high-risk country list in early December 2023, adding Bulgaria, Cameroon, Croatia, Nigeria, South Africa, and Vietnam to that list, and removing Albania, Cayman Islands, Jordan, and Panama from it. Additionally, the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) (No 2) Order 2023 (SI 2023/1411) was published on December 19 2023, bringing certain changes to the exemptions from the restriction on communicating financial promotions to certain high net worth individuals.
  • Artificial intelligence was a recurring buzzword in the UK too, notably through the release of the Bank of England’s response to an earlier Discussion Paper focusing on AI in financial services.


  • The Commission de Surveillance du Secteur Financier (“CSSF”) was a busy regulator on several fronts, starting with a communiqué on the availability of an online reporting solution via eDesk for the collection of data for Investment Fund Managers (“IFMs”) and Institutions for Occupational Retirement Provision (“IORP”) under SFDR. The regulator also issued the results of an examination of corporate reporting practices under the Taxonomy Regulation.
  • On the virtual assets side, the CSSF published an updated FAQ on virtual assets focused on Undertakings for Collective Investments (“UCIs”) (e.g., UCITS, Alternative Investment Fund (“AIF”). Keeping within the UCITS world, the regulator published a communiqué on UCITS marketing notifications. The CSSF also published a revised FAQ on UCITS.
  • Moving to AIFMD’s Annex IV reporting framework, the CSSF released a communiqué and a technical guidance document focusing on the recent changes to the ESMA technical guidance.
  • As a reminder to the Circulars 21/788, 21/789, and 21/790, the CSSF reminded market participants that the reports for IFMs and Unregulated collective investment schemes (“UCIS”) with a financial year-end December 31 2023 and January 31 2024, are available in the CISERO module as well as providing feedback on certain reports and comments issued to the CSSF on the reporting.
  • Closing off with AML, the CSSF released Circular 23/843, adopting EBA guidelines on money laundering and terrorist financing risk factors when providing access to financial services. The CSSF also issued a communiqué on the 2023 survey on financial crime.
  • Other useful documents include the CSSF’s newsletters for October, November and December 2023, as well as updated FAQs on Specialised Investment Funds (“SIFs”) and société d'investissement en capital à risque (“SICAR”) that do not qualify as AIFs and another one on SICARs.


  • Q4 2023 was also a busy quarter in Malta, with the Malta Financial Services Authority (“MFSA”) starting with a circular highlighting key aspects of the SFDR RTS that require further attention from accredited companies.
  • On the crypto and virtual assets side, the MFSA issued a circular to Virtual Financial Assets (“VFA”) Service Providers on updates to chapter 3 of its VFA Rulebook, highlighting proposals to align the requirements applicable to VFA Service Providers to those found within Title V of the MiCA Regulation.
  • Focusing on AML, the Maltese Financial Intelligence Analysis Unit (“FIAU”) published a Q&A focused on AML/CFT requirements for Investment Services Providers.
  • Several fund regimes also saw key updates, as the MFSA introduced a frameworkfor Notified Private Investment Funds (“PIF”), streamlining the registration process for PIFs, as well as released guidance on applications for notification, conversion, and/or extension of notification of Notified Alternative Investment Funds (“NAIF”).
  • Other noteworthy updates included the publication of a guidance note outlining the MFSA’s expectations regarding post-authorisation requirements for Company Service Providers and the update of the MFSA Corporate Governance Manual for directors of Collective Investment Schemes (“CIS”) to enhance governance, conduct, and culture in the CIS sector.


  • As part of its Feedback Statement - Consultation Paper 152, the Central Bank of Ireland (“CBI”) announced that UCITS Management Companies and AIFMs approved on or before November 27 2023 will have until May 27 2024 to comply with new own funds requirements communicated as part of this Feedback Statement.
  • The CBI also issued Consultation Paper 155, more specifically proposing to add a new European Long-Term Investment Fund (“ELTIF”) chapter in the CBI’s AIF Rulebook in order to support the establishment of ELTIFs in Ireland.



  • In the US, Financial Crimes Enforcement Network (“FinCEN”) announced the extension of the deadline for companies created or registered in 2024 to file Beneficial Ownership information reports from 30 days to 90 days until January 1 2025. As a reminder, the Corporate Transparency Act incorporating the FinCEN Beneficial Ownership reporting requirement becomes effective on January 1 2024.
  • In late November 2023, the Securities and Exchange Commission (“SEC”) adopted a new rule (Rule 192 in the Securities and Exchange Act) aimed at prohibiting conflicts of interest in certain securitisation More details can be found in the SEC’s Fact Sheet on the rule.
  • Moving specifically over to California, we saw the passing of a new law (Senate Bill 54) requiring diversity and inclusion disclosures for Private Funds with a California nexus.

Cayman Islands:

  • An important update was the removal of the Cayman Islands from the FATF’s grey list after “significant progress” was demonstrated on its AML/CFT regime. As shown above, this is impacting the UK and the EU’s own high-risk lists.
  • The Cayman Islands Monetary Authority (“CIMA”) announced it changed several investment strategy list options as part of fund applications and Fund Annual Return (“FAR”) filings through its Regulatory Enhanced Electronic Forms Submission (“REEFS”) portal, effective November 15 2023.
  • Finally, later in December 2023, the Cayman Islands Government published its Beneficial Ownership Transparency Act, 2023, bringing several changes to the current beneficial ownership regime in place.
  • Finally, just before 2024 started, CIMA issued a Supervisory Circular in respect how it monitors AML/CFT remediation by financial institutions.


  • Moving over to Bermuda, the Bermuda Monetary Authority (“BMA”) updated the Investment Fund Guidelines in early December.
  • The Bermuda Corporate Income Tax (“CIT”) Act 2023 received the governor’s assent and was posted to the official gazette on December 27 2023, after the legislation was approved on December 17 2023 and will apply to Bermuda businesses that are part of large Multinational Enterprise Groups (“MNE”), with annual revenue of €750m or more. The proposed CIT is expected to take effect in January 2025.


Hong Kong:

  • Moving into Asia, the Securities and Futures Commission (“SFC”) released a circular setting out the requirements for SFC- approved funds with exposure to virtual assets of more than 10% of their net asset value for public offerings in Hong Kong. The SFC also released a new circular focusing on the updated guidance on streamlined measures for SFC-approved funds.
  • The SFC, in partnership with the Hong Kong Monetary Authority (“HKMA”), released three Circulars dedicated to virtual assets and tokenised securities:
    • Circular on intermediaries’ virtual asset-related activities (which was superseded by another circular on December 22 2023);
    • Circular on intermediaries engaging in tokenised securities-related activities; and
    • Circular on tokenisation of SFC- approved investment products.
  • The Hong Kong Exchanges and Clearing Limited (“HKEX”) and the China Beijing Green Exchange announced the signing of a memorandum of understanding (“MOU”) to explore cooperation in a number of areas, including building an ESG ecosystem, promoting green and sustainable finance, and contributing to the green development of the Belt and Road Initiative. HKEX also published its conclusions to the consultation on the GEM reforms proposals, with revised rules coming into force on January 1 2024.
  • The HKMA released a circular focusing on the sale and distribution of green and sustainable investment products.
  • The SFC released a circular to accredited corporations, SFC- accredited virtual asset service providers and associated entities announcing the update of the AML/CFT self-assessment checklist.
  • The SFC announced that the entry into force of the latest amendments to its Securities and Securities and Futures (Contracts Limits and Reportable Positions) Rules would come into effect on December 22 2023.
  • Finally, HKEX announced a reduction from 0.13% to 0.1% of the stamp duty on stock transactions with an effective date of November 17 2023.


  • The Monetary Authority of Singapore (“MAS”) launched a few consultations during Q4 2023:
    • Consultation Paper on Repeal of Regulatory Regime for Registered Fund Management Companies;
    • Consultation Paper on Proposed Guidelines on Transition Planning for Asset Managers;
    • A response to feedback the Consultation Paper on Proposed Changes to Complex Products Regime;
  • The MAS updated its FAQ on licensing and business conduct (other than for Fund Management Companies) as well as the guidelines on licensing, registration and conduct of business for Fund Management Companies.
  • MAS also announced a partnership with the industry focusing on asset tokenisation initiatives.
  • Switching to ESG, MAS published its final Code of Conduct for ESG Rating and Data Product Providers and a checklist for providers to self-attest their compliance with the Code of Conduct. The regulator also launched the Singapore-Asia Taxonomy for Sustainable Finance in early December, setting out detailed thresholds and criteria for defining green and transition activities that contribute to climate change mitigation across eight focus sectors.
  • MAS launched a digital platform, Gprnt, allowing for the collection of ESG-related data.
  • The Singapore Exchange Regulation and Centre for Governance and Sustainability (“CGS”) published a review of listed issuers’ sustainability reporting, finding improvements since the first review carried out in 2019.
  • On AML matters, the MAS announced a consultation focused on facilitating Financial Institution to Financial Institution (“FI to FI”) information sharing for AML/CFT purposes.
  • Finally, MAS issued several guidelines on outsourcing (one for financial institutions, another one for financial institutions other than banks and one for banks).


  • Australian Securities & Investments Commission (“ASIC”) announced its 2024 enforcement priorities, with specific communication around misconduct in the superannuation sector.
  • ASIC commenced its first civil penalty proceedings against a superannuation fund for alleged non-compliance with the internal dispute resolution (“IDR”) requirements, which came into effect on October 5 2023. ASIC contends that insufficiently trained employees contributed to the failures in implementing the IDR procedures. Additionally, another superannuation fund received infringement notices for alleged false or misleading statements in their marketing material in relation to investment performance.
  • The Australian Prudential Regulation Authority (“APRA”) released a Phase 2 discussion paper, forming part of its superannuation data transformation and aimed at enhancing the collection of data on investments (including indirect investment costs), registrable superannuation entity (“RSE”), RSE licensee profile and RSE licensee financials. APRA also released insights on superannuation performance later that month, as well as an update to all Registrable Superannuation Entity licensees on the revocation of superannuation reporting standards.
  • Cyber security and resilience remained a key focus area for regulators and the government with APRA reminding entities under its regulation of its priorities, including the need to uplift operational resilience. In December 2023, APRA imposed additional license conditions on a superannuation fund in response to the identification of significant deficiencies in its cyber controls. ASIC highlighted the importance of making cyber security and resilience a top priority throughout a firm’s supply chain as part of its release of Report 776, detailing the results of its June 2023 cyber pulse survey.
  • ASIC also released a consultation paper focusing on proposed data changes to the ASIC Derivative Transaction Rules (Reporting) 2024.

Middle East and Africa

United Arab Emirates:

  • On November 6 2023, the National Anti-Money Laundering and Combating Financing of Terrorism and Financing of Illegal Organizations Committee (“NAMLCFTC”), in collaboration with UAE supervisors, issued guidance on combating the use of prohibited virtual asset service providers (“VASP").
  • The UAE did not escape the crypto and virtual assets increased focus, with the Virtual Assets Regulatory Authority (“VARA”) taking a first-of-its-kind regulatory position on the issuance of specific categories of virtual assets backed by real-world assets.
  • Finally, the UAE also focused on ESG, with the country’s Sustainable Finance Working Group launching its ‘Principles for the Effective Management of Climate-related Financial Risks’.

Dubai International Financial Centre (“DIFC”):

  • Moving over to the DIFC, an important update saw the Dubai Financial Services Authority (“DFSA”) releasing an amended Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Module as part of its rule-making instrument (No. 356) 2023.
  • The DFSA also released several consultation papers, outlined here, focusing on key topics such as AML (more specifically, enhanced due diligence and the appointment of a Money Laundering Reporting Officer (“MLRO”), market rules (more specifically, annual financial reports and prospectus for security tokens and funds investing in crypto tokens) or collective investment rules (more specifically, record keeping and information memorandum requirements).

Abu Dhabi Global Market (“ADGM”):

  • Closing off the UAE with the ADGM, the Financial Services Regulatory Authority (“FSRA”) revised its Anti-Money Laundering and Sanctions Rules and Guidance. Minor changes have been made to the provisions relating to wire transfers in order to provide greater clarity that the FATF “Travel Rule” applies to virtual assets.
  • The FSRA also announced changes to its Regulations and Fees Rules, as well as released a discussion paper on IT risk management.
  • Finally, in early October 2023, the FSRA published amendments to its Common Reporting Standards (“CRS”) to ensure continued and improved implementation of the CRS rules in the UAE.


  • In Mauritius, the Financial Services Commission (“FSC”) issued several guidelines, one of which focuses on digital signatures and represents a significant change in approach away from wet ink signatures.
  • The FSC also released guidelines on its regulatory sandbox as well as cloud computing services.


  • Crypto assets were also a key trending topic within global companies, as the International Organization of Securities Commission (“IOSCO”) published its final report listing out its 18 recommendations for the regulation of crypto and digital assets, and within the IOSCO’s six IOSCO Objectives and Principles for Securities Regulation areas:
    1. Conflicts of interest arising from vertical integration of activities and functions,
    2. Market manipulation, insider trading and fraud,
    3. Custody and client asset protection
    4. Cross-border risks and regulatory cooperation
    5. Operational and technological risk, and
    6. Retail distribution
  • The Financial Stability Board (“FSB”) published a report highlighting some of the risks to financial stability caused by multifunction crypto-asset intermediaries.
  • The Bank for International Settlements (“BIS”) Basel Committee issued a public consultation on a Pillar 3 disclosure for climate-related financial risks.
  • Staying with ESG, IOSCO released its final report presenting supervisory practices across its members to address greenwashing, providing an overview of initiatives undertaken in various jurisdictions to address greenwashing, in line with IOSCO recommendations published in November 2021, and the subsequent call for action in November 2022.
  • The FSB and IOSCO published a joint press release focused on addressing vulnerabilities from liquidity mismatches and providing documents on policy and guidance recommendations.

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