Learn about the most important compliance and regulatory news developments courtesy of FactSet's Regulatory team.
The EC announced the composition of the new Platform on Sustainable Finance. The Platform aims to advise the Commission on the EU Taxonomy and the EU sustainable finance framework more broadly, with a reinforced focus on usability. This new mandate runs for two years.
The French Market Authority - AMF is proposing the introduction of minimum environmental requirements in European law that must be met by financial products to be classified as Article 8 or Article 9 under the Sustainable Finance Disclosure Regulation (SFDR).
The Council and the European Parliament reached a provisional agreement on creating European green bonds standards. This agreement has yet to be confirmed and adopted by both to enter into force. It will start applying 12 months after its entry into force.
Proposed SEC Rule: Safeguarding Advisory Client Assets
On February 15, the SEC issued a proposal for a new rule under the Investment Advisers Act of 1940 to safeguard client assets with corresponding amendments to the recordkeeping rule under the Advisers Act and to Form ADV. The SEC cited section 223 of the Dodd-Frank Act as authority for the rulemaking and cited certain instances of malfeasance, asset type changes (crypto, privately offered securities), and industry practice changes (custodial disclaimers) as reasons for the amendments.
The breadth of proposed amendments is significant. The proposal’s discussion of the amendments spans over 200 pages and includes topics such as in-scope assets and activities, qualified custodian protections, notice and client communication requirements, and surprise examination requirements.
In-scope firms should acquaint themselves with the proposal and engage in the rule-making process. Comments will be accepted up to 60 days following the publication of the proposal in the Federal Register.
Final SEC Rule: Shortening the Securities Transaction Settlement Cycle
Following the 2017 reduction of the standard securities settlement cycle from T+3 to T+2, on February 15, the SEC issued final rules and rule amendments, outlined as follows:
Amending paragraph (a) of Rule 15c6-1 to shorten the standard settlement cycle for most broker-dealer transactions from T+2 to T+1
Amending paragraph (b) to exclude security-based swaps from the paragraph (a) requirements
Amending paragraph (c) to shorten the standard settlement cycle for firm commitment offerings priced after 4:30 p.m., eastern time from T+4 to T+2
Adopting a new rule Rule 15c6-2 to require a broker-dealer to either enter into a written agreement or implement policies and procedures that address completing allocations, confirmations, and affirmations no later than the end of the trade date
Amending Rule 204-2 under the Advisers Act to require registered investment advisers to record allocations, confirmations, and affirmations for 15c6-2(a) securities transactions
Adopting a new Exchange Act rule, Rule 17Ad-27, to require CMSPs to implement policies and procedures to facilitate straight-through processing (STP) and to file a related annual report with related XBRL format requirements.
The compliance date for each of the final rules is May 28, 2024.
Marine Hutinel and Nels Ylitalo contributed to this article.
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