Financial Services Regulation and Compliance - Investment Firms May 2023
ESMA highlights the risks arising from the provision of unregulated products and/or services by investment firms
On 25 May 2023, ESMA issued a public statement warning of the significant risk where investors may misunderstand the protections they are afforded when investing in unregulated products and/or services offered by a firm that also provides regulated products. ESMA points to a ‘halo effect’ that may provide potentially misguided reassurance in relation to the unregulated products and/or services offered by that investment firm, although such products may present heightened risks relating to complexity, illiquidity or even fraud. ESMA recommends certain activities to improve clarity and disclosure.
Proposal for a Regulation of the European Parliament and of the Council Amending Regulation (EU) No1286/2014 on the modernisation of the key information document
On 25 May 2023, the European Commission published a proposed amendment to Regulation No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) to adapt disclosures to the digital environment and to the evolving needs of retail investors. The proposal will also provide further clarity on the scope of PRIIPs with regards to corporate bonds with make-whole clauses and immediate annuities.
Easy access to corporate information for investors: provisional agreement reached on the European Single Access Point (ESAP) (370/23)
On 23 May 2023, provisional agreement was reached on three proposals creating a European Single Access Point (ESAP) as part of the Capital Markets Union Action Plan. This scheme will offer a single point of access to public financial and sustainability-related information about EU companies and EU investment products. ESAP will not impose any additional information reporting requirements on European companies, as the relevant information has already been made public. The ESAP platform is expected to be available from summer 2027.
Proposal for a regulation of the European Parliament and of the Council on European green bonds
On 10 May 2023, the European Parliament and European Council published the final compromise text of the EU Green Bond Standard Regulation. This Regulation will establish a voluntary ‘gold standard’ allowing issuers to demonstrate that they are funding legitimate green projects aligned with the EU Taxonomy. Investors will be able to more easily assess, compare and trust that their investments are sustainable, thereby reducing the risk of greenwashing in relation to green bonds. Next, the European Council and European Parliament will formally ratify the text.
For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.
Date published: 15 June 2023