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Regulatory Update: October 2021


By FactSet Insight  |  October 6, 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.


The European Commission (EC) adopted the text of the Solvency II review so that insurance companies can scale up long-term investment in Europe’s recovery from the COVID-19 pandemic. This review also aims to make the insurance and reinsurance sector more resilient to weather future crises and better protect policyholders.

The review consists of the following elements:

The legislative package will now be discussed by the European Parliament and Council.

Environmental, Social, and Governance (ESG)

  • The International Swaps and Derivatives Association (ISDA) published two new papers examining the ESG market, seeking to facilitate the establishment of robust standards and best practices for the sector. The first paper focuses on key performance indicators (KPIs) for sustainability-linked derivatives and the second one is an accounting analysis for ESG-related transactions and the impact on derivatives and the related accounting treatments.
  • The EC published a study on the development of tools and mechanisms for the integration of ESG factors into the European Union’s (EU’s) banking prudential framework and into banks' business strategies and investment policies.
  • The EFRAG Project Task Force on European sustainability reporting standards (PTF-ESRS) published a working paper titled “Climate standard prototype.”
  • In prepared remarks delivered before the Principles for Responsible Investment, Securities and Exchange Commission (SEC) Chair Gary Gensler stated that he has asked SEC staff to develop a mandatory climate risk disclosure rule, driven by investor demand, for consideration by the Commission by the end of 2021. His remarks included additional discussion of potential ESG fund disclosures and the Names Rule, signaling potential alignment with Sustainable Finance Disclosure Regulation (SFDR) requirements in the EU.

European Union

  • The European Supervisory Authorities (ESAs), which include the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Securities and Markets Authority (ESMA), issued their second joint risk assessment report for 2021. The report highlights the increasing vulnerabilities across the financial sector, the increase of cyber risk, and the materialization of event-driven risks.
  • The EC has published the long-awaited packaged retail and insurance-based investment products (PRIIPs) key information document (KID) regulatory technical standards (RTS). This changes the transition date from Undertakings for the Collective Investment in Transferable Securities (UCITS) key investor information documents (KIIDs) to PRIIPs KIDs to July 1, 2022. The Financial Data Exchange Templates (FinDatEx) PRIIPs working group is revising and reviewing the European PRIIPs Template (EPT) accordingly. The EPT 2.0 should be circulated for public consultation by the end of October 2021.
  • EIOPA consults on the amendments of supervisory reporting and public disclosure documents under the Solvency II review. The consultation is open until October 17, 2021.
  • The EBA launched a public consultation on new guidelines on the role, tasks, and responsibilities of anti-money laundering/combating the financing of terrorism (AML/CFT) compliance officers. This consultation runs until November 2, 2021.
  • ESMA consults on proposals for improvements to the MiFID II framework on best execution reports. Feedback must be submitted by December 23, 2021.


  • ESMA published several reports on the use of sanctions under UCITS and the Alternative Investment Fund Managers Directive (AIFMD), breaches of MiFID II, and the joint Annual Report on Prospectus Activity and Sanctions.
    • MiFID II: National competent authorities (NCAs) imposed sanctions of €8.4 million for MiFID II breaches in 2020
    • UCITS: 100 sanctions were issued during 2020 totaling €1.1 million
    • AIFMD: Financial penalties decreased in 2020 to €3.3 million from €9 million in 2019
  • Hong Kong’s Securities and Futures Commission (SFC) published the consultation conclusions on proposed amendments to its AML/CFT guidelines for the securities sector. The amendments align the guidelines with Financial Action Task Force (FATF) AML/CFT standards, which include additional guidance to facilitate the implementation of risk-based AML/CFT measures by securities industry participants.
  • The Australian government has announced new reforms to modernize Australia’s autonomous sanctions laws to enable the imposition of targeted financial sanctions and travel bans against individuals and entities.
  • On August 2, President Biden’s executive order—expanding E.O. 13959—took effect, prohibiting U.S. investments in 59 Chinese companies.

Marine Hutinel and Nels Ylitalo contributed to this article.

Disclaimer: 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.