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Regulatory Update: March 2021


By FactSet Insight  |  March 17, 2021

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.


Once again, this month environmental, social, and governance (ESG) regulatory developments were in the news.

  • European Supervisory Authorities (ESAs) published their final report on disclosures under the Sustainable Finance Disclosure Regulation (SFDR) including the draft Regulatory Technical Standards (RTS), on the content, methodologies, and presentation of disclosures.
  • The European Securities and Markets Authority (ESMA) published its final report on advice under Article 8 of the Taxonomy Regulation and proposed rules for taxonomy-alignment of non-financial undertakings and asset managers, which covers the information to be provided by non-financial undertakings and asset managers to comply with their disclosure obligations under the Non-Financial Reporting Directive (NFRD). This proposition outlines the three main Key Performance Indicators (KPIs) to align with the European Union (EU) Taxonomy: turnover, capital expenditure (CapEx), and operating expense (OPEX). Forthcoming changes to the NFRD are expected imminently.
  • The ESAs just published recommendations on the application of the SFDR. “The statement aims to achieve an effective and consistent application and national supervision of the SFDR, promoting a level playing field and protecting investors." In the joint statement, the three ESAs recommend the draft RTS be used as a reference when applying the provisions of the SFDR in the interim period between the application of SFDR (as of March 10, 2021) and the application of the RTS at a later date (around January 1, 2022).
  • ESMA sent a letter to the European Commission (EC) to express the need to match the growth in demand for ESG ratings and assessment tools with appropriate regulatory requirements to ensure their quality and reliability.
  • The EC published its report on the stakeholder consultation on the Renewed Sustainable Finance Strategy.
  • The European Insurance and Occupational Pensions Authority (EIOPA) sent an “Advice” to the EC on insurers’ KPIs on sustainability for non-financial reporting under the NFRD. The two proposed KPIs should help to promote the EU Green Deal and allocate capital to activities that foster environmental goals.

European Union

  • ESMA endorsed increasing corporate transparency through the creation of ESAP (European Single Access Point), a single access point for companies’ financial and non-financial information as part of the capital markets union action plan.
  • The ESAs submitted to the EC draft RTS on amendments to the key information document (KID) for packaged retail and insurance-based investment products (PRIIPs).

united states

SEC Requests Comment on Potential Money Market Fund Reforms

On February 4, the U.S. Securities and Exchange Commission (SEC) issued a press release soliciting comments on potential money market fund reforms, as highlighted in a December 2020 President's Working Group Report on Financial Markets. The report enumerated the following reform options:

  • Removal of tie between money market fund (MMF) liquidity and fee and gate thresholds
  • Reform of conditions for imposing redemption gates
  • Minimum balance at risk
  • MMF liquidity management changes
  • Countercyclical weekly liquid asset requirements
  • Floating net asset values (NAVs) for all prime and tax-exempt MMFs
  • Swing pricing requirement
  • Capital buffer requirements
  • Require liquidity exchange bank membership
  • New requirements governing sponsor support

The public comment period will remain open for 60 days following publication of the comment request in the Federal Register.

In Brief

  • ESMA proposes improvements to the transparency directive following the Wirecard case
  • The Global Legal Entity Identifier Foundation (GLEIF) to implement new policies, file formats in the global Legal Entity Identifier (LEI) system regarding legal entity events, fund relationships, and government entities. GLEIF’s users must plan to implement these changes to ensure uninterrupted access to LEI data beyond March 31, 2022.
  • ESMA, along with the different EU national competent authorities (NCAs), launched a common supervisory action on MiFID II product governance rules, aiming to assess the progress made by manufacturers and distributors of financial products in the application of the related key requirements.
  • The EC together with the ESAs will develop a strategy on supervisory data this year
  • The European Commission opened two consultations (each open until May 7) on important EU texts in the area of post-trading:

Marine Hutinel and Nels Ylitalo contributed to 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.