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Sanne Regulatory Update Q4

Insight 14 December 2021

Sanne Regulatory Update Q4

Just like that we are in 2022. December is usually a busy time of year and pandemic aside, we continued to see increased activity from several key jurisdictions at the end of 2021.

While many parts of the world went into the festive season, we had no shortage of exciting new developments across the world like in the UK (with a spotlight on increasing the attractiveness of the country in a post-Brexit world) and the EU (AIFMD II, ELTIF II, ESAP to cite a few). Below is our Q4 2021 regulatory update.

  • Several key developments came out from the EU in the last quarter of the year. Finally, the AIFMD II proposals were issued in late November. See our Insights for further details. Other proposals issued also focused on the ELTIF and the European Single Access Point (ESAP) regulations.
  • The European Banking Authority published final revised guidelines on internal governance and final guidelines on remuneration under the Investment Firms Directive (IFD).
  • On tax, the EU’s version of country-by-country reporting was added into the Official Journal in early December. Its rules expect to apply at the latest from the commencement date of the first financial year starting on or after 22 June 2024. Earlier in the quarter, the EU also updated its list of non-cooperative jurisdictions for tax purposes.
  • ESMA issued Q&As focusing on several regulations: Benchmarks, Central Securities Depositories, EMIR, European crowdfunding service providers for business, MiFID II and MiFIR investor protection topics, Securitisation as well as on the application of the UCITS directive. ESMA also published guidelines applicable to UCITs and AIFs, focusing on performance fees as well as liquidity stress testing.
  • The ESG front saw several updates starting with ECOFIN issuing its conclusions on Climate Finance in early October. Later in the quarter and specifically on the EU’s SFDR/Taxonomy regulatory frameworks, we saw a final report on the draft regulatory technical standards of the Taxonomy Regulation, before the EU Commission recommended a delay in certain reporting requirements of the SFDR to June 2023. And on 9 December, the Taxonomy Regulation Climate Change Delegated Act was published, with details around conditions for an economic activity to be considered as “contributing substantially” to climate change mitigation or climate change adaptation, as well as whether that economic activity does no significant harm to any of the other environmental objectives.
  • On the digital side, the EU Council agreed on the EU’s Digital Finance package which was first presented in September 2020. With digital assets becoming increasingly at the centre of conversations, the Council also added crypto-assets in scope for existing rules around transfer of funds. Finally, with the ESEF regulation expected to be in force next year, ESMA issued various documents ranging from the conformance suite to the regulation’s taxonomy.
  • Staying within digital world but this time in Luxembourg, the CSSF recently issued guidance on virtual assets. The regulator followed-up a few days later with the implementation of a fast-track procedure for SFDR compliant UCITS and AIFs.
  • Other noteworthy updates from Luxembourg included a material IT outsourcing circular issued on 14 October as well a UCITS FAQ and a recurring newsletter.
  • In Ireland, a key development through the 2021 Irish Finance Bill, related to the implementation of the ATAD directive into local law. Please see our Insights for further details. The CBI also published an updated Q&A on AIFMD on 29 October 2021. Other Irish updates relate to a CBI implementation notice regarding the IFD/IFR, as well as a consultation focusing on potentially introducing macroprudential limits on leverage for Irish authorised property funds, subject to AIFMD.
  • In Mauritius, a key update was the issuance of a circular on the country’s National Code of Corporate Governance. Please see our Insights for further details.
  • Another much awaited development coming from Mauritius is the introduction of the Financial Services Crowdfunding Rules. The new rules confirm the expected leap forward that the Island have been waiting for, read our Insight.
  • The UK has seen many regulatory developments issued this quarter. The focus, as illustrated by the Treasury’s consultation on the regulatory framework now that the country is out of the EU, is the attractiveness of the UK as a destination for financial services, without compromising on investor protection.
  • With the COP26 being hosted in Edinburgh this year, it was expected for the UK to come out with more detail around its ESG framework. On 18 October 2021, the UK’s Green Finance roadmap was issued which, amongst other points, saw the introduction of a UK Sustainability Disclosure Requirements (SDR) regime. Please see our Insights for further detail. This was followed, two weeks later, by a consultation on the SDR and investment labels. Still within ESG, the UK Climate Financial Risk Forum also published a second set of guides on climate related financial risks, whereas the Government revealed regulatory disclosure requirements applicable to large companies.
  • With private assets growing in interest from Defined Contribution (DC) pension funds, the FCA issued a Policy Statement on the long-awaited Long-Term Asset Fund (LTAF). Please see our Insights for further details on the LTAF. With DC funds being a key target behind this regime, the Department of Work and Pensions started a consultation on removing performance fees and carried interest from the charge cap currently in place for these funds.
  • Another noteworthy initiative was the launching of a new Asset Holding Company regime as part of the Finance Bill 2021-22 and effective from 1 April 2022, as well as a Policy Statement on the review of the listing rules framework.
  • The IFPR will come into effect on 1 January 2022 and to that effect, the FCA issued a final set of rules on the regime followed by a final Policy Statement on 26 November 2021.
  • The UK also saw a consultation launched on its Appointed Representatives regime as well as another one on the Mandatory Disclosure Rules. The latter were introduced as a divergence from the previous DAC6 regime in place in the UK. Please see our earlier Insights for further details.
  • A further consultation was launched with a focus on corporate re-domiciliation.
  • On the securitisation front, the FCA started examining UK Securitisation repositories whereas the Government issued a summary of responses on the taxation of securitisation structures. In addition to this on 13 December 2021, HM Treasury issued its response to the call for evidence on the UK Securitisation Regulation issued earlier in 2021.
  • The FCA issued its November regulatory initiatives grid, a useful tool to navigate regulatory change by the regulator.
  • In late September 2021, the SEC’s Asset Management Committee published its report on Private Investments and making those more accessible to retail investors. Please see our Insights for further details.
  • On 8 December 2021, the Financial Crimes Enforcement Network (FinCEN) issued a proposal for a rule on beneficial ownership reporting. The rules would apply to both domestic and foreign reporting companies with exceptions for large operating companies, subsidiaries and pooled investment vehicles. FinCEN has left until 7 February 2022 for comments on the rules to be provided before moving on to finalising the rules.
  • Sill in the US, the IRS issued guidance on Carried Interest whereas the Federal Reserve, FDIC and Office of the Comptroller of the Currency issued a joint statement on crypto-asset policy.
  • Moving to the Cayman Islands, the quarter started with a consultation on transparency requirements for trusts followed a few weeks later by the issuance of a refreshed a Beneficial Ownership Enforcement manual by the Cayman Islands General Registry.
  • Other noteworthy Cayman Islands updates relate to the announcement of a revision of cancellation procedures for Private Funds and the publication of the Tax Resident in Another Jurisdiction (TRO) form under the Economic Substance.
  • In Singapore, the quarter started off with a consultation on improving its Limited Partnership regime. The consultation would close on 1 November 2021 after having introduced concepts such as a new definition of a "fund limited partnership”, the expansion of the legal forms a GP/LP can take or the introduction of a re-domiciliation framework.
  • The Monetary Authority of Singapore issued a consultation on proposing changes to the Complex Products Regime which was introduced after the Global Financial Crisis, before publishing a response to the feedback received earlier in the year during a consultation focusing on corporate governance guidelines.
  • Other noteworthy news from Singapore related to the ACRA’s consultations on changes to the Accountants Act as well as an update on penalties applicable to annual lodgments by Singapore-incorporated companies, VCCs and LLPs applicable from 14 January 2022.
  • In Hong Kong, the Securities and Futures Commission issued revised AML/CFT guidelines for licensed corporations before releasing FAQs on AML and CFT two weeks later. The regulator also issued updated FAQs relating to structured investment products under the Code on Unlisted Structured Investment Products.
  • On 16 December, Hong Kong’s Cross-Agency Steering Group provided an update on its progress towards making Hong Kong a leader in green and sustainable finance.
  • Still in Hong Kong but focusing on listed assets, the HK Exchange issued a consultation paper on SPACs. In mid-November, the HK Exchange also issued a new set of rules applicable to listings and set to be effective from 1 January 2022. Key amendments relate to having one common set of core shareholder protection standards or the ability for certain overseas issuers in Greater China to secondary list.


The international scene saw several key updates. FATF’s outcome from its fifth plenary session was issued on 21 October before the body released a consultation on beneficial ownership a week later. In the UK, the JMLSG issued a consultation on the “monitoring customer activity” section of its Guidance. ESG was another topic of importance, with an IFRS update on its ESG framework coming out in early November whereas IOSCO called for increased oversight on ESG ratings and data product providers. The TCFD issued its 2021 report along with an updated implementation guide and new guidance on metrics and transition plans.

Other insights from Paul Séjournant

Insight 4 August 2022
Bringing new insights to regulatory compliance: Private Funds CFO feature
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Insight 2 August 2022
Q2 2022 regulatory update
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Insight 29 July 2022
Update on the Trust Registration Service
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