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Regulatory Update: April 2022


By FactSet Insight  |  April 28, 2022

Each month, FactSet's Regulatory team offers a rundown of the most important developments in compliance and regulatory news. Read on to see which stories dominated the conversation last month.

Environmental, Social, and Governance (ESG)

European Union

  • Last month, the three European Supervisory Authorities (ESAs), which include the European Banking Authority (EBA), the European Securities Market Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA), updated their joint supervisory statement on the application of the Sustainable Finance Disclosure Regulation (SFDR). This includes an updated new timeline, expectations about the explicit quantification of the product disclosures under Article 5 and 6 of the EU Taxonomy regulation, and the use of estimates.
  • The European Investment Bank (EIB) published the fourth edition of its Climate Survey. The survey highlights, among other items, the interconnection between the climate crisis and the recovery from the COVID-19 crisis.
  • The Project Task Force on European Sustainability Reporting Standards (PTF-ESRS) of the European Financial Reporting Advisory Group (EFRAG) has released one additional working paper on the first draft standards on sustainability reporting.
  • ESMA published its Final Report on the EU Carbon Market. The report presents an in-depth analysis of the trading of emission allowances (EUA) and emission allowance derivatives based on data gathered from different sources, including various regulatory reports (EMIR, MiFIR transaction reporting, MiFID II etc.). ESMA did not acknowledge any current major deficiencies in the functioning of the EU carbon market but formulated several policy recommendations to improve market transparency and monitoring.
  • The European commission launched a targeted consultation on the functioning of the ESG ratings market in the European Union and the consideration of ESG factors in credit ratings. This consultation aims to help the Commission to have a better insight on the functioning of the market for ESG ratings, and to understand how credit rating agencies (CRAs) incorporate ESG risks in their creditworthiness assessments. The consultation is open until June 6, 2022.
  • The European Commission has finally adopted the SFDR Delegated Regulation, setting out technical standards under the SFDR. The requirements will now be subject to scrutiny by the European Parliament and the Council. They are scheduled to apply from January 1, 2023.


  • On March 21, the U.S. Securities and Exchange Commission (SEC) published its long-awaited proposal on the enhancement and standardization of climate-related disclosures for investors. The proposal is extensive and would require registrants to provide climate-related information in registration statements and annual reports, including information about material climate-related risks, greenhouse gas emissions, and certain climate-related financial metrics in registrants’ audited financial statements. The SEC is soliciting comments on the proposal, with over two hundred questions. Comments on the proposal are due by May 20.
  • The Network for Greening the Financial System (NGFS) formed a new task force to address nature-related risk. The task force aims to act as an incubator that explores, develops, and harmonizes relevant nature-related considerations and efforts in collaboration with the NGFS workstreams, expert networks, and members.
  • The International Financial Reporting Standards (IFRS) Foundation’s International Sustainability Standards Board (ISSB) published proposals establishing a comprehensive global baseline of sustainability disclosures for the capital markets. The ISSB also launched a related consultation on its first two proposed standards: one sets out general sustainability-related disclosure requirements and the other specifies climate-related disclosure requirements. The consultation is open to feedback until July 29 and will be finalized by the end of this year.
  • Hong Kong’s Centre for Green and Sustainable Finance (GSF Centre) has launched the new GSF Data Source Repository. This repository will contain a set of available data sources for assisting climate risk management and other green and sustainable finance related analysis and research. The repository will be reviewed and updated on an ongoing basis.


  • The ESAs issued a joint warning statement to retail investors on the highly risky and speculative nature of crypto assets. The report set out key steps consumers can take to ensure they make informed decisions.
  • Working with the National Competent Authorities (NCAs), ESMA has carried out a supervisory engagement with investment funds. The exercise focused on liquidity risk in corporate debt and real-estate funds. The results showed that the funds included in the scope of the analysis do not pose any substantial risk for financial stability but ESMA found that there was room for improvement in funds’ liquidity stress testing.
  • EIOPA submitted the amended Implementing Technical Standards (ITS) to the European Commission, laying down supervisory reporting and disclosure requirements under Solvency II. The draft proposals of ITS consider feedback received following a public consultation in 2021.
  • The European commission officially launched its EU Digital Finance Platform. This new website will give innovative financial firms, national and European supervisors, and others interested in digital finance a dedicated space to connect, exchange ideas, and build dialogue. With the platform, the European Commission hopes to encourage innovation and contribute to achieving a true single market in digital financial services.
  • The ESAs issued their first joint risk assessment report for 2022. The report highlights the increasing vulnerabilities across the financial sector as well as the rise of environmental and cyber risks due to the Russia/Ukraine conflict and its economic consequences.

United States

March 2022 saw the publication of multiple SEC proposals in areas as diverse as climate-risk disclosures (discussed above), market infrastructure, credit ratings, cybersecurity, and special purpose acquisition company (SPAC) transactions.

  • Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure: The SEC has proposed new disclosure requirements for publicly reporting companies about material cybersecurity incidents, policy and procedure, board oversight, and updates about previously reported incidents. Comments on the proposal are due by May 9.
  • Removal of References to Credit Ratings from Regulation M: Continuing reforms required by Dodd-Frank, the SEC is proposing changes in relation to credit ratings in the distribution process.
  • Definition of Dealer and Government Securities Dealer: Citing major changes in the market for government securities, including electronification, market cap, and the emergence of new liquidity providers, the SEC is proposing changes to definitions of “dealer” and “government securities dealer” under the Securities Exchange Act of 1934. If the changes are adopted, it will bring multiple entities in-scope as regulated entities. Comments are due by May 27.
  • Special Purpose Acquisition Companies, Shell Companies, and Projections: In a much-anticipated release published on March 30, the SEC proposed a sweeping set of reforms in relation to SPACs and de-SPAC transactions. The proposal includes five new proposed rules (under Regulation S-X, S-K, the Securities Act, and the Investment Company Act) and an extensive set of amendments to rules, forms, schedules, and items under the Securities Act, the Exchange Act, and Regulations S-X, S-K and S-T. Comments are due by the later of 30 days following publication in the Federal Register or May 31.


Crypto Assets

  • The Organization for Economic Co-operation and Development (OECD) has published a consultation document seeking input on a new tax transparency framework for crypto assets and amendments to the Common Reporting Standard for the automatic exchange of financial account information between countries.
  • The Australian Government has released a paper seeking industry feedback by the end of May on proposed new crypto-asset licensing and custody requirements. In addition, the government is launching a request for advice from the Council of Financial Regulators (CFR) on potential policy responses to address the issue of de-banking for financial technology firms, digital currency exchanges, and remittance providers.
  • The UK Financial Conduct Authority (FCA) has issued a new guidance setting out areas that risk-regulated entities need to consider when interacting with crypto assets and warns about their present risks to market integrity and consumers, particularly when used as a speculative investment.
  • The Financial Stability Board (FSB) published its work program for 2022. The FSB’s priorities include addressing financial risks from climate change, supporting international cooperation, and coordination on current financial stability issues, harnessing the benefits of digital innovation while containing its risks.


The Financial Action Task Force (FATF) published its latest report on the State of Effectiveness and Compliance with the FATF Standards. Overall, the report finds that countries have made huge progress in improving technical compliance to better tackle money laundering, terrorist, and proliferation financing. Nevertheless, the report also highlights that “many countries still face substantial challenges in taking effective action in line with the risks they face.” This includes difficulties in investigating and prosecuting high-profile cross-border cases and preventing anonymous shell companies and trusts being used for illicit purposes.

Marine Hutinel and Nels Ylitalo contributed to this article.

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.