- Taxonomy Regulation Climate Delegated Act – Level 2 Climate Change TSC (1 January 2022)
- MiFID2/MiFIR – ESMA Guidelines on market data (1 January 2022)
- PRIIPs KID RTS (originally in January / moved to July 2022)
- CSDR (1 February 2022) ELTIF Regulation
- ESMA Guidelines on marketing communications (2 February 2022)
- MiFID2 ‘QUICK FIX’ AMENDMENTS (28 February 2022)
- IFD/IFR (30 April 2022)
- EU Commission proposal to amend AIFMD and UCITS Directive (Changes to be expected)
- ELTIF Regulation (Changes to be expected)
- SFDR (RTS delayed until 1 January 2023)
Delays
- End of transitional period for UCITS: The original end date of PRIIPs exemption for UCITS was 31st December 2021. It has now been confirmed that a 12-month extension will run until 31 December 2022.
Summary of each regulation
1. Taxonomy Regulation Climate Delegated Act – Level 2 climate change TSC (entry into force 1 January 2022)
Delegated Regulation no. (EU) 2021/2139 of 4 June 2021 was published in the Official Journal on 9 December 2021 and took effect on 1 January 2022. The Delegated Regulation sets out the technical screening criteria (TSC) under the Taxonomy Regulation. The TSC establishes the technical screening criteria for determining (1) the conditions under which an economic activity qualifies as “contributing substantially” to climate change mitigation or climate change adaptation and (2) for determining whether that economic activity causes no significant harm to any of the other environmental objectives.
2. MiFID 2/MiFIR – ESMA Guidelines on market data (entry into force 1 January 2022)
From 1st January 2022, the final ESMA guidelines on MiFIR/MiFID II obligations on market data will start to apply. The 19 separate guidelines clarify the following topics: (1) clear and easily accessible market data policies (2) provision of market data on the basis of costs (3) the obligation to provide market data on a non-discriminatory basis and (4) to keep data unbundled (5) per-user fees (6) transparency obligations on policies and finally (7) the obligation to make market data available free of charge 15 minutes after publication. The guidelines are non-binding but will apply to Member States National competent authorities (NCAs), trading venues, approved publication arrangements (APAs), consolidated tape providers (CTPs) and systematic internalisers (SIs). The ESMA guidelines can be found here: https://www.esma.europa.eu/sites/default/files/library/esma70-1564263_guidelines_mifid_ii_mifir_obligations_on_market_data.pdf
3. PRIIPs KID RTS (January 2022 moved to July 2022)
Following the Commission’s legislative proposals for quick fix amendments to the PRIIPs Regulation and the UCITS Directive in June 2021, the PRIIPs KID RTS is now expected to apply from July 2022 onwards instead of January 2022.
4. CSDR (entry into force 1 February 2022)
After having been introduced in 2014, the Central Securities Depositories Regulation (CSDR) came into force on the 1st of February 2022. It introduces new measures which aim at increasing the safety and efficiency of securities settlement. The following two requirements in the Settlement Discipline Regime will come into force on 1st February 2022 : (1) CSDR Article 6 – Measures to prevent settlement failure and (2) CSDR Article 7 Measures to address settlement fails. CSDR will create an EU wide harmonized set of prudential and organisational business standards. However, the UK Government announced it will not implement a similar regime following Brexit.
5. ESMA Guidelines on marketing communications (February 2022)
From 2 February 2022, ESMA guidelines for funds’ marketing communications under Article 4 of the CBDF Regulation started to apply. The guidelines specify the requirement for marketing communication promoting UCITS and AIFs (as well as EuSEFs, EuVECAs and ELTIFs).
6. MiFID 2 ‘Quick Fix’ Amendments (28 February 2022)
The MiFID II Quick fix amendments came into force on the 27th of February 2021 and EU Member States should have transposed its provisions into national law already (28 November 2021). Member States will have to apply the changes by 28 February 2022. The “Quick fixes ” key changes are: (1) Default communication methods will be switched from paper-tocan -electronic communication (retail clients will still be able to continue to receive paper communication if they wish) (2) Introduction of a new exemption from ex ante costs and charges. (3) temporary suspension of best execution reports (4) product switching and cost benefit analysis (5) new exemption from product governance requirements for simple corporate bonds and finally (6) research unbundling.
7. IFD/IFR – EBA’s Final Guidelines on internal governance and remuneration for investment firms under the Investment Firms Directive (IFD) (30 April 2022)
From 30 April 2022, Class 2 Firms will be bound by the new IFR/IFD remuneration and governance regime. All investment firms will have to comply with remuneration requirements under MiFID. The following aspects will have to be taken into consideration under the IFD (1) remuneration policies will have to respect the principle of equal pay for male and female workers for equal work and be gender neutral, (2) remuneration policies, award and pay-out of variable remuneration for identified staff.
8. EU Commission proposal to amend AIFMD and UCITS Directive – changes to be expected
Changes to the AIFMD and UCITS Directive to be expected. The Commission published a proposal to amend Level 1 AIFMD and the UCITS Directive. With regards to the AIFMD, the proposal particularly focuses on changes to liquidity risk management, loan originating AIFs, non-cooperative tax jurisdictions, and the future of NPPRs.
9. ELTIF Regulation – changes to be expected
Following the proposal by the European Commission to revise the regulation on ELTIFs, some changes are to be expected. Particularly, the proposal seeks to broaden the scope of ELTIF’s eligible assets and investments whilst at the same time ensuring greater flexibility fund rules and reducing barriers for retail investors.
10. Sustainable Finance Disclosure Regulation (SFDR) – Delay level 2 SFDR requirements
On 29 November 2021, the Commission confirmed that the application of RTS under the SFDR are deferred until 1 January 2023. In the UK, the FCA published in December 2021 its Policy Statement and Final Rules which introduces a new climate-related disclosure regime, the ESG Sourcebook, which will require firms to undertake annual disclosures at both entity and product level.
