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Global regulatory update Q3 2023

05 December 2023

The summer saw a multitude of regulatory updates across many key jurisdictions. Those updates covered a range of topics from environmental, social, and corporate governance (“ESG”) to digital assets, anti-money laundering (“AML”), counter-financing of terrorism (“CFT”) and changes to several major regulations.

Welcome to our Q3 2023 regulatory update.



  • We noted the announcement from the European Securities and Markets Authority (“ESMA”) of its assessment of investment funds’ disclosures and sustainability risks. The goal is to assess the compliance of supervised asset managers with the Sustainable Finance Disclosure Regulation (“SFDR”), Taxonomy Regulation, and relevant implementing measures. The latter includes the relevant provisions in the Undertakings for the Collective Investment in Transferable Securities (“UCITS”) and Alternative Investment Fund Managers Directive (“AIFMD”) on the integration of sustainability risks.
  • Importantly, the European Commission launched two consultations (a targeted one and a public one) on the implementation of the SFDR, with both running until December 15 2023. The consultations are looking at key issues such as legal certainty, usability and fighting greenwashing.
  • In July 2023, ESMA released a public statement focusing on its expectations for sustainability disclosures for prospectuses under the Prospectus Regulation.
  • Keeping with SFDR, ESMA’s Securities and Markets Stakeholder Group released its advice to ESMA on the SFDR’s Principal Adverse Impact and financial product disclosures review released in April 2023.

Financial services regulatory and directives updates:

  • In the Markets in Financial Instruments Directive (“MiFID”) world, ESMA communicated earlier this summer about areas for improvement in firms’ disclosures of costs and charges.
  • Still within MiFID, ESMA also issued a statement on securities lending to retail clients.
  • In early July 2023, ESMA submitted to the European Parliament, the Council, and the European Commission its second report on national rules governing the marketing of investment funds under the regulation of cross-border distribution of funds.
  • On the topic of passporting, ESMA also released a report on revised technical standards for passporting under Article 34 of MiFID II. ESMA also provided an analysis of the cross-border investment services activity of firms during 2022.
  • On the crypto-assets side, ESMA issued a consultation, entitled the Markets in Crypto-Assets Regulation (“MiCA”), in early July. Another one followed in early October, with the third and final one expected in Q1 2024.
  • The European Insurance and Occupational Pensions Authority, ESMA, and the European Banking Authority issued several joint responses on draft regulatory technical standards for the Digital Operational Resilience Act (“DORA”). One focused on the harmony of certain information and communication technology (“ICT”) risk management tools, methods, processes and policies, another zeroed in on the register of information for all contractual arrangements on the use of ICT services provided by ICT third-party service providers, and a third focused on policy content for contractual arrangements on the use of ICT services supporting critical or important functions provided by ICT third-party service providers. A fourth focused on the criteria for the classification of ICT-related incidents, materiality thresholds for major incidents, and significant cyber threats.
  • Staying with DORA and the same stakeholders as above, we also noted the release of a joint response on criticality criteria and oversight fees for ICT third-party providers.
  • Other meaningful news included updates to the European Single Electronic Format reporting manual, ESMA providing an overview on the EU creditor market and updates to several Q&As, (with one on the implementation of the Credit Ratings Agencies regulation and another on the creditor regulation).

Country updates


  • Q3 2023 was a busy quarter in the UK, especially on crypto-asset related matters. The Financial Conduct Authority (“FCA”) issued an update setting out its expectations for UK crypto-assets businesses on compliance with the Financial Action Task Force Travel Rule.
  • Importantly, the FCA released a final warning to crypto-assets firms marketing to UK consumers (and those supporting them) to get ready for the financial promotions regime which comes into force on 8 October 2023. The regulator did however issue a communication addressed to crypto-assets firms stating that some activities in scope could have a delay in implementation to January 8, 2024. The FCA noted that more than 140 crypto-asset-related alerts were issued in the first 24 hours of the updated financial promotions regime.
  • Keeping with the topic of financial promotions, the FCA issued a Policy Statement (PS23/13) focusing on a gateway for firms that approve the financial promotions of uncertified firms.
  • Just before the end of June, the FCA released a consultation focusing on broadening the access of a Long-Term Asset Fund to retail investors.
  • There was also a consultation on the review of Solvency II from the Bank of England right before the end of June.
  • On the AML front, the FCA announced a review to assess how regulated firms treat domestic politically exposed persons. The outcome of this review is set to be issued in June 2024.
  • Moving to ESG, the Department for Business and Trade (“DBT”) published information on the government’s framework to create UK Sustainability Disclosure Standards (“UK SDS”) based on the International Financial Reporting Standards (“IFRS”) Sustainability Disclosure Standards. The UK SDS framework is set to be created by July 2024.
  • The UK government’s Green Technical Advisory Group (“GTAG”) issued a final report on the usability of Do No Significant Harm (“DNSH”) criteria, as well as a paper containing recommendations on the impact of the UK Green Taxonomy on other policy areas.
  • Other updates included the FCA publishing landing slots for UCITS operators which are exiting the temporary marketing permissions regime. HM Treasury also issued the Financial Services and Markets Act (“FSMA") 2023 (Commencement No. 2 and Transitional Provisions) Regulations 2023, while the FCA released its review of processes for fund managers and assessments of value for the funds they operate.


  • In August focusing on ESG matters, the Commission de Surveillance du Secteur Financier (“CSSF”) released its thematic review of the implementation of sustainability-related provisions in the investment fund industry.
  • The regulator communicated its new reporting module available for undertakings for collective investment administrators caught by reporting requirements under Circular 22/811.
  • A quick note on the Markets in Crypto-Assets and Transfer of Funds regulations: The CSSF’s communiqué on both matters reminded firms of upcoming key dates and dedicated links on the regulator’s website. It is also worth noting that, whilst on the topic of Crypto-Assets, the updated frequently asked questions on Virtual Asset Service Providers were released on August 17 2023.
  • The CSSF released a communiqué informing alternative investment fund managers of upcoming changes to how Alternative Investment Fund Managers Reporting will be transmitted to the regulator, with the current methodology being in place until June 30 2024.
  • The CSSF released Circular 23/839 in late July 2023, resulting in amending Circular 21/789 through changes to certain scoped entities as well as repealing Circulars 18/698 and 19/708 on procedures for the transmission of the management letter.
  • Specifically focusing on MiFID, the CSSF announced via Circular 23/840 that it would integrate ESMA’s guidelines on MiFID II product governance from October 3 2023.
  • Other noteworthy updates include the CSSF’s newsletters from July, August, and September


  • The Malta Financial Services Authority published Observations from Supervisory Inspections held with Issuers on the prevention of Financial Market Abuse.
  • The regulator also released a Feedback Statement on the proposed establishment of a framework for Notified Professional Investor Funds, as well as a circular aimed at reminding financial entities falling in the scope of the DORA Update and the Benchmarking Exercise on Regulation (EU) 2022/2554 on Digital Operational Resilience.



  • Moving over to the U.S., a significant update of Q3 cannot be anything other than the Securities and Exchange Commission (“SEC”) adopting changes to the Investment Advisers Act of 1940, impacting Private Funds Advisers in late August. The rules, which we outlined on our website, are set to significantly impact fund managers in the U.S.
  • In late September, the SEC also announced changes to the Investment Company Act Names Rules, with the objective to prevent funds registered under the Investment Company Act from misrepresenting their risks and investments from their names.
  • The SEC proposed new rules for Safeguarding Advisory Client Assets.
  • The Financial Crimes Enforcement Network issued additional guidance on beneficial ownership reporting requirements.

Cayman Islands:

  • The Cayman Islands government has published the Beneficial Ownership Transparency Bill 2023.
  • The Cayman Islands Monetary Authority (“CIMA”) released a Private Sector Consultation Paper proposing amendments – Part IX Sector Specific Guidance – Section 1: Virtual Asset Service Providers.
  • The CIMA also issued a summary Feedback Statement on the Nature, Accessibility, and Retention of Records for Trust Service Providers and Corporate Service Providers. The authority also published a Feedback Statement on the Prevention and Detection of money laundering (“ML”), terrorist financing (and proliferation financing (“PF”) in the Cayman Islands in relation to remote customer due diligence and ongoing monitoring provisions.
  • Cayman Islands legislation was published with amendments made through the Companies (Amendment of Schedule 4), Order, 2023, which replaced the list of approved stock exchanges.


  • The Bermuda Monetary Authority (“BMA”) released a Consultation Paper - Proposed Amendments for the Regulation of Investment Exchanges and Clearing Houses and Other Additional Changes to the Investment Business Act. The BMA also put out another Consultation Paper - Proposed Enhancements to the Regulatory Regime and Fees for Commercial Insurers, including Revised Draft Rules and Guidance Notes.
  • The BMA also issued a discussion paper on climate risk disclosures for commercial insurers.
  • The Government of Bermuda announced a public consultation paper as part of its considerations on introducing a corporate income tax to apply to Bermuda businesses.
  • The Governor of Bermuda provided Assent for the Personal Information Protection Amendment ("PIPA") Act (see Personal Information Protection Amendment Act 2023 (bermudalaws.bm) on July 18, 2023.


Hong Kong:

  • Hong Kong also saw an update on the increased challenges posed by crypto-assets, via the Hong Kong Monetary Authority (“HKMA”) releasing an alert focusing on crypto firms purporting to be banks. The Hong Kong Police Force and the Securities & Futures Commission (“SFC”) of Hong Kong later announced the establishment of a dedicated working group to enhance collaboration in monitoring and investigating illegal activities relating to Virtual Asset Trading Platforms.
  • Staying in the world of digital assets, the HKMA released its report on bond tokenisation/tokenization, outlining the learnings gained through the government’s first tokenised/ tokenized green bond offering, and outlining potential next steps to promote the wider use of tokenisation/tokenization technology in Hong Kong’s bond market. The SFC published its list of virtual asset trading platforms.
  • Hong Kong’s Cross-Agency Steering Group announced its priorities to further strengthen Hong Kong’s sustainable finance ecosystem.
  • To promote listing on the territory’s GEM index, especially for small and medium-sized enterprises, the Hong Kong Stock Exchange issued a consultation seeking feedback on proposed changes to listing requirements.


  • Moving to Singapore, the Singapore Exchange RegCo released a column setting out key points to consider, to develop a climate transition plan. The RegCo also issued a consultation paper on proposed changes to the futures trading rules and other rulebooks.
  • The Monetary Authority of Singapore (“MAS") updated its (frequently asked questions) on licensing and business conduct for entities other than fund management companies.
  • The MAS released a communication announcing the final notice of its stablecoin regulatory framework.
  • On AML matters, the regulator opened a consultation aimed at strengthening the protection and surveillance against MLin Singapore’s single-family office sector.
  • Following a consultation on Competency Requirements for Representatives conducting regulated activities in 2020, the MAS released a response to feedback.


  • ESG remained an area of focus in Australia, notably with the Australian Securities and Investments Commission commencing two civil penalty proceedings for allegations of greenwashing and warning of its continued targeted surveillance activity. Furthermore, the Australian Competition and Consumer Commission published draft guidance for businesses to improve the integrity of environmental and sustainability claims made.
  • The Financial Accountability Regime was passed by parliament. Replacing and extending the Banking Executive Accountability Regime, the new regime imposes new accountability obligations on banks, insurers, and superannuation funds, to strengthen and increase individual and entity-level accountability across the financial services sector.
  • Continuing to drive transparency across the superannuation industry, the Australian Prudential Regulation Authority (“APRA”) released the results of its annual superannuation performance test, which included several trustee-directed products for the first time. The APRA also completed its new prudential standard on operational risk aimed at better managing risks and responding to business disruptions amongst banks, insurers, and superannuation trustees.
  • Following the release of the Privacy Act Report in February 2023, the government provided its response to the 116 recommendations proposed. Providing its broad approval of several changes to Australia’s privacy regime, the government has noted that consultation for many matters is necessary. It is committed to introducing draft legislation in 2024.

Middle East

United Arab Emirates:

  • The UAE’s Minister of Justice announced, via Ministerial Decision 1109/2022, the creation of a new federal prosecution entities for economic crimes and ML.
  • The Virtual Asset Regulatory Authority (“VARA”) published a revised Custody Services Rulebook, permitting Staking from Custody Services in accordance with the prescribed requirements of the amended rulebook.
  • The members of the UAE Sustainable Finance Working Group have launched a consultation on Principles for Sustainable-Related Disclosures for Reporting Entities (report).


  • The Dubai International Financial Centre (“DIFC”) announced several consultation papers during Q3 including: a New Digital Assets Law (Consultation Paper 4 of 2023), a New Law of Security and Financial Collateral Regulations (Consultation Paper No. 5 of 2023) and related amendments to Employment Law, Operating Law, Trust Law, and to the Foundations Law.
  • The DIFC also enacted amendments to the Data Protection Regulations with the objective of enhancing the current data protection framework.
  • The Dubai Financial Services Authority signed a Memorandum of Understanding with the UAE’s Financial Intelligence Unit to advance coordination and cooperation of AML, CFT, and illegal business measures.



  • The International Organization of Securities Commissions (“IOSCO”) issued a consultation on policy recommendations to address market integrity and investor protection concerns arising from crypto and digital asset markets.
  • Crypto-asset topics saw a significant amount of interest, starting with the Institute for International Finance responding to the IOSCO’s earlier consultation on policy recommendations for crypto and digital asset markets.
  • The Bank for International Settlements released a paper focusing on risks from crypto-assets in emerging markets.
  • The International Monetary Fund and the Financial Stability Board (“FSB”) released policy and regulatory recommendations to identify and respond to macroeconomic and financial stability risks associated with crypto-assets.
  • ESG considerations were also numerous, as the Principles for Responsible Investments issued a report aimed at listing the key climate metrics investors would need to engage with their investments more effectively.
  • The World Federation of Exchanges issued a consultation on its Green Equity Principles Guidance as well as its Green Equity Principles, with the aim to design a global framework that individual exchanges can use to establish a ‘green’ offering for listed equities.
  • The Task Force for Nature-related Financial Disclosures released its final recommendations (and a much shorter executive summary) on its proposed disclosures.
  • The IFRS’ International Accounting Standards Board announced an exploration of ways to improve reporting of climate-related and other uncertainties in financial statements.
  • Other topics saw the FSB launching a consultation seeking feedback on Money Market Funds reforms. The FSB also published an update on the implications of leverage in non-bank financial intermediation, while the IOSCO launched a consultation focusing on proposed good practices for leveraged loans and securities backed by pools of loans in private finance.



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