Global Financial Regulatory Blog

Tag Archives: ESG

FCA Finds Further Improvement Needed on Design, Delivery, and Disclosure of ESG Funds

The FCA has set out good and poor practices for asset managers to consider in relation to funds with ESG or sustainable characteristics. By Nicola Higgs, Anne Mainwaring, and Charlotte Collins On 16 November 2023, the FCA published the findings from its review of how asset managers have been embedding current regulatory expectations regarding the … Continue Reading

SEC Adopts Changes to Names Rule for Registered Funds

The amendments aim to modernize the Names Rule and promote investor protection objectives by ensuring that a fund’s portfolio of holdings aligns with its name. By Laura N. Ferrell, Sarah E. Fortt, Betty M. Huber, Paul A. Davies, Nicola Higgs, Anne Mainwaring, Karmpreet (Preeti) Grewal, Austin J. Pierce, and Deric Behar The US Securities and … Continue Reading

UK Regulators Set Out Policy Proposals on Misconduct; Diversity and Inclusion

The FCA and the PRA have published their long-awaited consultations which aim to formalise how firms approach diversity and inclusion. By Sarah E. Fortt, Sarah Gadd, Nicola Higgs, Andrea Monks, Rob Moulton, Nell Perks, Becky Critchley, Charlie Bowden, Ella McGinn, and Charlotte Collins On 25 September 2023, the FCA and the PRA published separate but … Continue Reading

The Edinburgh Reforms — Where Are We Now?

As the pace of reform increases, we take a look at key developments and the timeline ahead. Significant progress has been made on the Edinburgh Reforms since they were announced in December 2022, with developments gathering pace before the summer break. Given the breadth and speed of the reforms, now is a good time to … Continue Reading

European Commission Clarifies Aspects of SFDR With Additional Guidance

The Commission has clarified requirements for financial product classifications and the definition of “sustainable investment” under the SFDR. By Paul A. Davies, Nicola Higgs, Michael D. Green, Anne Mainwaring, and James Bee In April 2023, the European Commission (Commission) published a series of answers to questions that the European Supervisory Agencies (ESAs) had raised in September 2022 on the legal interpretation of … Continue Reading

European Commission Consults on Further EU Taxonomy Environmental Objectives

The Commission is also consulting on proposed targeted amendments to the Taxonomy Climate Delegated Act and on the Taxonomy Disclosures Delegated Act. By Paul A. Davies, Michael D. Green, and James Bee On 5 April 2023 the European Commission opened a consultation on its proposal for four additional environmental objectives under the EU Taxonomy Regulation[1] (the Taxonomy), including: … Continue Reading

FCA Publishes Business Plan for 2023/24

The Future Regulatory Framework and Consumer Duty will be key areas of focus for the coming year. By Rob Moulton, Nicola Higgs, David Berman, Becky Critchley, and Charlotte Collins On 5 April 2023, the FCA published its Business Plan for 2023/24. The Business Plan sets out a number of priority areas for the regulator, tied … Continue Reading

UK Government Consults on Regulation of ESG Ratings Providers

The consultation considers what a potential regulatory regime would look like, and its proposed scope. By Nicola Higgs, Paul A. Davies, Becky Critchley, Anne Mainwaring, Ella McGinn, and Charlotte Collins On 30 March 2023, HM Treasury published a consultation on regulating ESG ratings providers, which ties in with and was published alongside the UK government’s … Continue Reading

FCA Seeks Improvements to ESG Benchmarks

The regulator is concerned that ESG-related disclosures are not meeting expectations. By Nicola Higgs, Becky Critchley, Anne Mainwaring, Ella McGinn, and Charlotte Collins The FCA has published a Dear CEO letter sent to benchmark administrators on 20 March 2023, expressing concerns about the quality of their ESG-related disclosures. The FCA’s concerns are based upon a … Continue Reading

European Parliament Publishes Proposed Changes to AIFMD and UCITS Directives

The “AIFMD II” proposals continue their progress through the EU legislative process with more detail provided, but in many areas specific criteria will not be known until Level 2 measures are developed. By Nicola Higgs, Jaime O’Connell, Denisa Odendaal, and Dianne Bell On 9 February 2023, the European Parliament’s Economic and Monetary Affairs Committee (ECON) … Continue Reading

DP 23/1: FCA Publishes Discussion Paper on Sustainability-Related Governance, Incentives, and Competence

The discussion paper aims to encourage industry-wide dialogue on sustainability related-governance, incentives, and competence. By Anne Mainwaring, Sara Sayma, and Dianne Bell On 10 February 2023, the FCA published DP23/1: Finance for positive sustainable change: governance, incentives and competence in regulated firms. The FCA considers that a firm’s governance, purpose, and culture are central to … Continue Reading

NYDFS Proposes Guidance on Climate Change Risk Management

The Guidance would increase expectations for regulated financial institutions to identify, measure, monitor, and control climate-related financial risks. By Betty M. Huber, Arthur S. Long, Pia Naib, Austin J. Pierce, and Deric Behar For the past few years, the New York State Department of Financial Services (DFS) Superintendent has prioritized setting the pace in climate … Continue Reading

Addressing the Evolving Landscape of ESG

Latham’s Global Co-Chair of the Financial Institutions Industry Group, Nicola Higgs, sits down with Lucy McNulty, host of the Following the Rules podcast, to discuss how financial services firms should adapt to the constant evolution of ESG requirements. In this podcast interview, host Lucy McNulty talks to Nicola Higgs, Latham’s Global Co-Chair of the Financial … Continue Reading

10 Key Focus Areas for UK-Regulated Financial Services Firms in 2023

Monitoring the progress of the Financial Services and Markets Bill and regulatory divergence between the UK and the EU will continue as a key theme in 2023.  The Financial Services and Markets Bill leaves a significant amount of the essential regulatory detail to be developed later by HM Treasury (through regulations), followed by development of … Continue Reading

FCA’s 2022/23 Business Plan: Key Highlights

As the FCA’s remit continues to grow, the regulator pledges flexibility in the face of global financial and geopolitical headwinds. By Rob Moulton, Anne Mainwaring, Jaime O’Connell, and Dianne Bell On 7 April 2022, the FCA released its new Business Plan as part of a package including  a three-year strategy document setting out the outcomes … Continue Reading

ESMA Consults on ESG-Related Amendments to Its Suitability Guidelines

Proposed changes seek to reflect the integration of sustainability considerations into MiFID II. By Nicola Higgs, Anne Mainwaring, Dianne Bell, and Charlotte Collins ESMA is consulting on updates to its Guidelines on the MiFID II suitability requirements, in light of upcoming changes that will embed sustainability considerations into the MiFID II framework. These changes will … Continue Reading

UK Government Releases Roadmap to Sustainable Investing

The roadmap introduces sustainability disclosure requirements for UK companies and reveals further developments in relation to a UK Green Taxonomy. By David Berman, Paul A. Davies, Nicola Higgs, Michael D. Green, Anne Mainwaring, and James Bee On 18 October 2021, the UK government released a report titled “Greening Finance: Roadmap to Sustainable Investing” (the Roadmap), which is intended to encourage UK businesses and … Continue Reading

FCA Proposes Enhanced Disclosures on Diversity and Inclusion for Listed Companies

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

IOSCO Consults on Regulation of ESG Data and Ratings Providers

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 Seeks to Improve Quality of ESG Fund Disclosures

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

UK Regulators Launch Discussion on Diversity and Inclusion

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

ESG and Cryptocurrency: Considerations for Market Participants

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

10 Key Focus Areas for UK-Regulated Financial Services Firms in 2021

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
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