Proposals reflect growing investor focus on the ESG performance of listed companies. By Chris Horton, James Inness, Rob Moulton, Anna Ngo, and Johannes Poon The UK Financial Conduct Authority (FCA) has launched a consultation setting out proposed changes to its Listing Rules (LRs) and Disclosure Guidance and Transparency Rules (DTRs). The proposals seek to: (i) … Continue Reading
By Paul A. Davies, Nicola Higgs, and Anne Mainwaring On 26 July 2021, the Board of the International Organization of Securities Commissions (IOSCO) published a consultation report (the Report) that proposes a set of recommendations to mitigate risks flowing from activities of ESG ratings and data products providers and to address some of the challenges … Continue Reading
FCA has published guiding principles on the design, delivery, and disclosure of ESG and sustainable investment funds. By Nicola Higgs, David Berman, Paul Davies, Anne Mainwaring, and Charlotte Collins On 19 July 2021, the FCA published a letter sent to chairs of authorised fund managers, which sets out the regulator’s expectations regarding disclosures by funds … Continue Reading
Discussion Paper opens debate on potential new rules to improve diversity in financial services. By Rob Moulton, David Berman, Paul Davies, and Charlotte Collins On 7 July 2021, the FCA, the PRA, and the Bank of England published a joint Discussion Paper on diversity and inclusion in the financial sector. The regulators, in particular the … Continue Reading
By Rob Moulton, Nicola Higgs, Anne Mainwaring, and Charlotte Collins The latest edition of our Private Bank Briefing provides a roundup of legal and compliance issues impacting private banks and their clients from Q2 2021. In this edition, we cover sustainable finance developments, the regulators’ expectations regarding operational resilience and outsourcing, and the PRA’s plans … Continue Reading
The FCA is consulting on extending its rules to standard listed issuers. By Paul A. Davies, Chris Horton, James Inness, Anna Ngo, and Charlotte Collins On 22 June 2021, the FCA published a Consultation Paper (CP21/18) on extending the application of the existing climate-related disclosure requirements for commercial companies with a UK premium listing to a wider scope of listed … Continue Reading
The FCA is proposing a disclosure regime for asset managers, life insurers, and pension providers. By Paul Davies, Nicola Higgs, Victoria Sander, David Berman, Anne Mainwaring, and Charlotte Collins On 22 June 2021, the FCA published a Consultation Paper (CP21/17) on introducing climate-related financial disclosure rules and guidance for asset managers, life insurers, and FCA-regulated … Continue Reading
Board members are expected to have adequate knowledge and understanding of climate-related and ESG risks. By Nicola Higgs, Paul A. Davies, and David Berman Legislators and regulators around the world have long recognised that one of the most effective ways to drive change is by focusing the minds of management — specifically by attaching individual … Continue Reading
The EBA consultation paper calls for the implementation of a Green Asset Ratio to measure banks’ sustainability performance. Regulators and sustainability-conscious investors increasingly expect banking institutions in the European Union to focus on environmental, social, and governance (ESG) issues and provide quantitative and qualitative disclosures relating to such issues, including climate change risks and the … Continue Reading
The package focuses on material sustainability reporting and disclosure obligations, as the EU looks to direct capital toward sustainable activities. By Paul A. Davies, Nicola Higgs, David Little, and Michael Green On 21 April 2021, one day prior to Earth Day and a US-led global climate summit, the European Commission adopted a much-anticipated package of … Continue Reading
For market participants pivoting toward ESG and digital assets, weighing the issues at the crossroads of these two megatrends is critical. By Paul A. Davies, Stuart Davis, Simon Hawkins, Nicola Higgs, Yvette D. Valdez, Thomas Vogel, Stephen P. Wink, and Deric Behar The huge rise in popularity of Bitcoin — and the growing interest by … Continue Reading
The CFTC continues to demonstrate a commitment to using its regulatory mandate to combat climate change risks to the US financial system. By Yvette D. Valdez, Douglas K. Yatter, Jean-Philippe Brisson, Paul Davies, Nicola Higgs, and Deric Behar On March 17, 2021, the Commodity Futures Trading Commission (CFTC) announced the establishment of an interdivisional Climate … Continue Reading
ESMA and the EBA advise on KPIs for transparency on institutions’ environmentally sustainable activities, and the EBA consults on prudential disclosures of ESG risks under the CRR. By Nicola Higgs, Suzana Sava-Montanari, and Axel Schiemann On 26 February 2021, both the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) issued guidance … Continue Reading
The report’s recommendations cover a number of areas, including culture and strategy, monitoring and reporting, investor engagement, policy formation and employee training, and philanthropy. By Paul A. Davies and Michael D. Green A new report from the UK Independent Anti-Slavery Commissioner draws attention to how the financial services industry can help address the issue of … Continue Reading
This annual publication outlines some of the primary focus areas in 2021 for UK-regulated financial services firms. Some of these topics are attracting attention because they are an emerging trend, or because they are at a key stage in the implementation cycle. Other topics are longstanding, but remain at the top of the PRA’s and … Continue Reading
Regulators consult on an investor identification regime and outsourcing requirements, and issue guidance on electronic storage of regulatory records and environmental risk management By Farhana Sharmeen, Simon Hawkins, Kenneth Y.F. Hui, and Marc Jia Renn Tan This blog post summarises key regulatory developments in Hong Kong and Singapore during December 2020, including: The SFC’s consultation … Continue Reading
FCA director highlights areas of concern in relation to ESG reporting and provides recommendations. By Paul A. Davies, Nicola Higgs, Michael D. Green, and Anna Lewis-Martinez Richard Monks, Director of Strategy at the UK Financial Conduct Authority (FCA), recently delivered a speech on the environmental, social, and governance (ESG) reporting regime and how it can … Continue Reading
The US prudential regulator is paying attention to climate risks, and will likely act to mitigate those risks if they threaten financial stability. By Alan W. Avery, Pia Naib, Deric Behar, and Kristina S. Wyatt In its November 2020 Financial Stability Report (the Report), the Board of Governors of the Federal Reserve System (Federal Reserve) … Continue Reading
The UK Government presents initiatives designed to green the UK economy and bolster attractiveness as an international financial centre. By Paul A. Davies and Michael D. Green On 9 November 2020, Rishi Sunak, Chancellor of the Exchequer, announced several initiatives designed to help the UK tackle climate change, while maintaining its position as an “open, … Continue Reading
In its finalized rule amending ERISA, the DOL makes financial factors paramount in a fiduciary’s responsibility to investors. By Paul A. Davies, Nicola Higgs, Kristina S. Wyatt, and Deric Behar On October 30, 2020, the US Department of Labor (DOL) published Financial Factors in Selecting Plan Investments (the Rule) and a related Fact Sheet, a … Continue Reading
As COVID-19 sharpens the focus on corporate culture and ESG, organisations should be aware of heightened regulatory scrutiny. Corporate culture remains high on the financial regulatory agenda, and it’s likely to attract even more attention in the future. The impact of the COVID-19 pandemic has sharpened the focus on organizational culture and the social and … Continue Reading
ESG and the reasonable investor test under MAR. By David Berman, Rob Moulton, and Nicola Higgs Background Historically, “profit maximisation” has been regarded as the sole (or predominant) objective for investors. Today, however, an ever-increasing proportion of investors have additional/alternative — sustainability (or ESG)-related — objectives[i]. These investors are not seeking profit at all costs … Continue Reading
A watershed CFTC report highlights the dangers of climate change to the US economy, and provides a broad risk-mitigation roadmap. By Jean-Philippe Brisson, Paul A. Davies, Nicola Higgs, Yvette D. Valdez, R. Andrew Westgate, Kristina S. Wyatt, and Deric Behar On September 9, 2020, the US Commodity Futures Trading Commission’s (CFTC’s) Climate-Related Market Risk Subcommittee … Continue Reading
The PRA expands its supervisory expectations for firms on managing climate-related financial risk — publishing a Dear CEO guidance letter. By Nicola Higgs and Anna Lewis-Martinez On 1 July 2020, the PRA published guidance in the form of a Dear CEO letter to banks, insurers, and other PRA-regulated firms on managing climate-related financial risk. The … Continue Reading
