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.
A new law has been presented to New Zealand’s parliament introducing mandatory climate-related disclosures for most listed issuers, along with large registered banks, licensed insurers, and registered managers of investment schemes. It will require the financial sector to disclose the impacts of climate change on their business and explain how they aim to manage climate-related risks and opportunities.
These disclosures should be required for financial years commencing in 2022, meaning the first disclosures for around 200 organizations will be made in 2023.
The UK's Financial Conduct Authority (FCA) has appointed Sacha Sadan director of environment, social, and governance (ESG). He will oversee developing and advocating for the FCA’s approach to sustainable finance domestically and internationally.
On April 9, the U.S. Securities and Exchange Commission (SEC), Division of Examinations, issued a risk alert highlighting staff findings of disparities between ESG disclosures and practices observed in recent exams of investment advisers, registered investment companies, and private funds offering ESG products and services. Among other staff observations, section III of the alert enumerated the following:
On April 19, the U.S. Treasury announced a coordinated climate policy strategy to “bring to bear the full force of the Treasury Department on domestic and international policymaking, leveraging finance and financial risk mitigation to confront the threat of climate change.” Treasury indicated it will focus on a range of climate-related policy work on 1) climate transition finance, 2) climate-related economic and tax policy, and 3) climate-related financial risks. Treasury is creating a new Climate Hub and appointing a climate counselor to coordinate efforts.
On April 15, the European Securities and Markets Authority (ESMA) published its final report on the European Markets Infrastructure Regulation (EMIR) and Securities Financing Transactions Regulation (SFTR) data quality. The report highlights the progress in improving EMIR data quality for regulatory and supervisory use. Regarding SFTR, ESMA highlighted the fact that the SFTR reporting regime was launched only recently, and therefore presents a limited overview of SFTR data quality in terms of key data quality indicators.
The following consultations are still open on the ESMA website:
The FCA is to establish a “regulatory nursery” to ensure closer oversight of newly authorized institutions. This should help to avoid having firms that recently gained regulatory status be treated in the same way as a firm with a long track record.
On April 26, the UK announced the establishment of a global anti-corruption sanctions regime. The UK has made its first 22 designations under this new regime, including individuals in Russia, South Africa, Honduras, Nicaragua, Guatemala, and South Sudan.
Marine Hutinel and Nels Ylitalo contributed to this article.