Legal News

The rule obliges firms to ensure that any mention of a product or service’s sustainability features is consistent, fair, clear, and not misleading. It applies whenever a firm communicates directly in the UK, including the following specific situations: with clients in the UK about a product or service or when it issues a financial promotion, or signs off a financial promotion for communication, to a person in the UK Its arrival currently coincides with greenwashing being a leading enforcement focus for many regulators. Branding offerings as green or sustainable is widespread and viewed as a particularly key way to draw the attention of environmentally minded customers. In 2023, the European Commission found that 53% of sustainability claims were misleading or vague, and 40% lacked substantiation. These so-called green claims are increasingly facing ever growing scrutiny from regulatory authorities, activist shareholders, and...

Insurance Europe letter to European Commission On 14 May 2024, Insurance Europe stated it had contacted the European Commission, cautioning that the so‑called level 2 technical discussions on putting into practice the recently concluded Solvency II review, which defines capital rules for the industry, must mirror the political ambition that has been settled. The association dispatched its letter ahead of the commission’s expert group on banking, payments and insurance commencing technical conversations on the Solvency II review on 15 May 2024. ' The fine print will determine the outcome and, to capture the potential gains, the political ambition agreed yesterday needs to be carried through into the technical specifics that will follow,' said Olav Jones, the deputy director‑general of the......

Taxation: Council agrees on new rules for withholding tax procedures ( FASTER) On 4 May 2024, the Council adopted a general approach on quicker and more secure processes to obtain relief from double taxation, designed to stimulate cross-border investment and combat tax abuse. The Council Directive on Faster and Safer Relief of Excess Withholding Taxes ( FASTER) aims to make EU withholding tax procedures safer, more efficient and more reliable for cross-border investors, national tax authorities and financial intermediaries, such as banks or investment platforms. Aligning tax relief processes is crucial to improve how the capital markets union functions. I am pleased we have reached agreement on this significant proposal, which will also enable a much more effective fight against tax fraud. It will make investing abroad simpler and, we hope, prompt retail investors in particular to participate in European financial markets,...

The EBA publishes final draft technical standards under the Markets in Crypto- Assets Regulation The EBA has released three packages of final draft regulatory technical standards ( RTS) and one set of final draft ITS concerning authorisation to act as issuer of ARTs, the information required for the assessment of acquisitions of qualifying holdings in ART issuers, and the procedure for the approval of white papers for ARTs issued by credit institutions under Mi CAR. These standards are pivotal in governing access to the EU market for prospective ART issuers and for persons intending to exercise significant influence over such undertakings through the acquisition of qualifying holdings. The RTS on authorisation set out the information that must be included with an application to offer an ART to the public or to seek admission of an ART to trading, thereby enabling the competent...

The European Banking Authority ( EBA) relies on a database to circulate intelligence to domestic supervisors about grave AML and counter-terrorist financing failings at institutions such as banks and life insurers, together with the regulatory measures taken by authorities and steps pursued. The watchdog obliges regulators to file significant findings straight away in the European reporting system for material CFT/ AML weaknesses ( Eur Re CA). On 2 May 2024, the EBA said that, from May 2024, supervisors could enter in the database named individuals associated with serious AML-related deficiencies, whether they are customers, beneficial owners, or senior managers of financial firms and institutions. As the EBA explained, if a serious deficiency or a measure is tied to a national person, for example a customer or a beneficial owner, supervisors will be able to submit this information to Eu Re CA. A natural person is an...

The EBA will start collecting information on natural persons through its AML/ CFT database, Eu Re CA Beginning in May 2024, supervisors across the European Union ( EU) will be able to submit names of natural persons to Eu Re CA, the European Banking Authority’s ( EBA) EU-wide central database for anti-money laundering ( AML) and countering the financing of terrorism ( CFT). Through Eu Re CA, the EBA has helped to ensure that supervision is more informed, targeted and effective, improving the focus and quality of oversight. With this measure, the EBA will further reinforce the EU’s fight against money laundering ( ML) and terrorist financing ( TF), supporting more co-ordinated action. Eu Re CA contains information on serious AML/ CFT deficiencies within individual financial institutions, as identified by EU supervisors, enabling issues to be flagged and addressed more...

The Net- Zero Insurance Alliance According to the United Nations group, the Net‑ Zero Insurance Alliance, launched in 2021 under the United Nations Environment Programme ( UNEP), is being wound up and superseded by the Forum for Insurance Transition to Net Zero ( FIT), the UN said. UNEP will preside over the new body and says the forum will accelerate voluntary climate efforts across the insurance industry. Its agenda includes proposing optional net‑zero insurance indicators and goals, alongside developing transition plan frameworks to support net‑zero for organisations in the sector, among other priorities. Butch Bacani, who leads insurance at UNEP, described the forum as ‘an entirely new’ set‑up and undertaking too......

MEPs endorse new rules to regulate ESG ratings At its 24 April 2024 plenary, Parliament signed off rules designed to bring significant clarity and consistency to the way ESG ratings are produced and shared. The package, passed by 464 votes in favour, 115 against and 13 abstentions, will organise the landscape of ESG rating activities so investors can take more informed decisions and curb greenwashing. The measures were provisionally settled in February 2024 by a team of MEPs, headed by Aurore Lalucq ( S& D, FR), together with the Council Presidency on behalf of the Member States. These rules set out how ratings are undertaken and communicated with consistency. More transparency—break down the ESG rating As a principle, distinct E, S and G scores must be supplied rather than one composite ESG figure that bundles the three factors. In addition, where a rating covers the E...

At first reading, the European Parliament formally approved the legislative proposal for a directive of the European Parliament...

Statement follows. The Commission calls on IRELAND, FRANCE and LATVIA to correctly transpose the 5th Anti- Money Laundering Directive The European Commission has chosen to launch an infringement procedure, formally dispatching letters of formal notice to Ireland and France ( INFR(2023)2188 and ( INFR(2024)2037)), as well as issuing an additional letter of formal notice to Latvia ( INFR(2023)2028), owing to the incorrect transposition of the 4th and 5th Anti- Money Laundering Directives (4th AML Directive as amended by the 5th AML Directive). While these Member States had notified a complete transposition of the amended Directive, the Commission has, nevertheless, identified several......

The press release follows: MEPs approve update of EU rules regulating the insurance sector On 23 April 2024, MEPs backed reforms to the insurance rulebook, known as Solvency II, together with a fresh framework for the recovery and resolution of insurance firms. These compromises, informally reached in December 2023 between Member States under the EU Presidency and Parliament negotiators led by Markus Ferber ( EPP, DE), were adopted in plenary. Solvency II update: 549 in favour, 56 against, 9 abstentions Recovery and resolution framework: 475 in favour, 37 against, 99 abstentions More money into the real economy Revisions to Solvency II will unlock substantial capital previously held in reserve, enabling the sector to steer more finance towards the economic recovery and, notably, the European Green Deal. The assumed cost-of-capital rate used to set reserve levels will fall from 6% to...

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Committee Members of European Parliament ( MEPs) want to enhance customers’ control over their financial data. Economic and monetary affairs MEPs have set out fresh, innovation‑friendly rules intended to help customers safeguard their financial information and make efficient use of it to secure improved financial services. On Thursday, MEPs backed a plan for a harmonised EU‑level framework governing access to financial data, passing it by 43 votes to one, with five abstentions recorded. The regime would cover customer information handled by financial institutions across the wider sector, extending past payment account data to encompass a broader range of records. With the owner’s consent, data — including details of savings holdings, investments in financial instruments, insurance‑based investment products, and information gathered to conduct suitability and appropriateness assessments — would be made available to enable the creation and delivery of bespoke, data‑driven financial products and...

EU regulators tabled an inducement ban — preventing asset managers from paying financial advisers to push particular investment products — within the retail investment strategy, designed to place consumers’ interests at the heart of retail investing. The limited ban would have covered non-advised services, meaning products people buy without any financial advice. Yet the plan drew strong opposition from several national governments. In a document viewed by MLex, Belgium stated it wouldn’t be possible to reach agreement on a partial ban, and introduced substantial alterations to the draft now under discussion in the Council of the EU......

Interest has largely been fuelled by the belief that public markets will deliver lower returns in the years ahead, while superior performance is increasingly expected to arise within private markets. Consequently, institutional investors, pension schemes and other allocators are directing bigger slices of their capital towards the private markets through private equity, private credit, direct lending, loan origination, infrastructure, property and venture capital vehicles. [1] Ireland remains, undoubtedly, a premier domicile for tightly regulated investment funds, notably undertakings for collective investment in transferable securities, exchange-traded funds based on such undertakings, and money market funds. Yet, for a range of reasons, it supports comparatively smaller pools of alternative assets than peer jurisdictions and faces the prospect of not being ideally positioned to seize the upward momentum of the private funds arena. We consider it essential that Ireland strengthens its private funds toolkit to...

During preparatory sessions on 12 and 15 April 2024, EU envoys from Bulgaria, the Czech Republic, Estonia, Ireland, Luxembourg, Poland and Sweden rejected a draft calling for alignment of corporate tax rules, whereas France’s ambassador backed the move, according to an EU official who asked not to be named. Those governments did not reply to requests for comment. Draft summit conclusions reviewed by Law360 told EU finance ministers and the European Commission to pursue alignment of pertinent elements of domestic corporate insolvency regimes and corporate tax law to encourage equity investments......

The papers elaborate on proposals France had already put forward in an earlier memo on a capital markets union, shared back in February 2024. According to the dedicated paper, a long-horizon European savings vehicle would pool households’ deposits and channel them to meet the real economy’s needs, particularly equity funding, SMEs and infrastructure. France proposes moving away from the Pan‑ European Personal Pension Product template—the sole EU effort in this area, which did not succeed......

DIGITAL FINANCE AND INNOVATION— JOINT COMMITTEE The European Supervisory Authorities ( ESAs)— EBA, EIOPA and ESMA—announced on 12 April 2024 that, in the month of May 2024, they will commence a voluntary exercise to gather registers of information on relevant contractual arrangements for the use of ICT third‑party service providers by financial entities. Under the Digital Operation Resilience Act ( DORA), from the start of 2025, financial entities must maintain registers of information about their use of ICT third‑party providers. In this dry run exercise, such information will be sourced from financial entities through their......

Some specialists and smaller EU nations argue that economic gaps between larger and smaller members mean the current set-up, which usually requires unanimous consent among EU countries on tax matters, safeguards the smaller states. Other analysts, along with the EU’s executive branch, say the voting system should be reworked, particularly if the EU expands, to make decision-making nimbler. With more countries able to block deals on their own, it would become harder for the bloc to function and to take decisions on areas such as taxation and foreign policy where unanimity still applies, said Apostolos Thomadakis of the Centre for European Policy Studies in Brussels. That differs from qualified majority voting, used for most other questions. Under that approach, a proposal is adopted if at least 55% of EU member countries support it and they represent at least 65% of the EU...

The Future Ireland Fund and the Infrastructure, Climate and Nature Fund would safeguard the nation’s public finances amid continuing pressures on public spending and possible future economic slowdowns, according to Finance Minister Michael Mc Grath in a 4 April 2024 official press statement unveiling the proposed legislation. The measure was formally introduced in Dáil Éireann......