Fortnightly News Blog – 4 June 2024

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Sustainable Investment / ESG

ESG in action

In the UK, the anti-greenwashing rule came into effect on 31 May – Ignites Europe reports on the rush to meet the deadline.

And the British Standards Institution (BSI) has launched a consultation on new standards for the assessment, governance, documentation and communication of sustainable funds. The consultation is open for comment until 21 June 2024.

Labels locked down

Both Morningstar Sustainalitics and Clarity AI have reported on the potential fallout from the European Securities and Markets Authority‘s (ESMA) tougher ESG labelling rules. Headlines are that it could result in over 1,600 funds being forced to rebrand unless they divest $40bn of stock, according to Morningstar and reported in Financial News. And Clarity AI finds that 44% of environmental impact funds with environmental and impact related terms in their names in English are in breach of ESMA’s ESG guidelines. More details from Clarity AI here and Ignites Europe here.

For those in any doubt about the potential impact of incorrect labelling, DWS is reported to be facing a fine of almost €20m in Germany for overstating its sustainable investment credentials, in Ignites Europe.

Chair of the Irish Fund Directors Association (IFDA), Lisa Martensson, voices her concerns in Ignites Europe about fund directors ‘still grappling’ with the EU’s Sustainable Finance Disclosure Regulation (SFDR) due to its ‘lack of definitive guidance’.

Market News

Consumer climate

Investment Week explores how Consumer Duty has started changing the way the asset management industry relates to and considers consumers, here.

For the latest insights into Consumer Duty for fund boards, Fund Boards Council (FBC) is hosting a digital meeting, Consumer Duty: New FBC research and panel with the FCA, on Monday, 10 June 2024. Key findings from FBC research will be followed by a panel discussion with the FCA’s Chris Douglas, responsible for supervising a portfolio of large and medium sized asset managers, and M&G’s Laurence Mumford, chair of the fund board. 

FBC Corporate Members can register in the Member Portal.

Abridged agenda

Financial Conduct Authority (FCA) Chair, Ashley Alder, provided latest insights on the FCA agenda for UK asset management at the Bloomberg Buy-side Forum. FBC Corporate Members can also get the lowdown from the FCA‘s Camille Blackburn, along with responses to questions from the floor at the recent FBC iNED Council Meeting. Read the write-up.

AI influence

ESMA has published a Public Statement on the use of Artificial Intelligence (AI) in the provision of retail investment services.

Employee expansion

PWC‘s latest ‘Observatory for Management Companies’ reports on the employee growth in Luxembourg’s Management Companies. The full report is here and Investment Officer‘s article with key details is here.

Tokenisation, in principle

Clearing and settlement specialists Euroclear, Clearstream and DTCC have published a joint blueprint outlining six principles that aim to promote the successful adoption of tokenisation and digital asset securities, excluding cryptocurrencies. Ignites Europe reports.

People Focus

The FCA has appointed Dr Felix Martin as chair of its new, independent Cost Benefit Analysis (CBA) panel. Money Marketing has the details.

Several of the news outlet cited in this blog require registration or subscription. Also, FBC takes no responsibility for the accuracy or quality of the news in the links provided above, and nor are the views and comments representative of FBC or its members, unless expressly stated. Content stored on the FBC portal is freely accessible for FBC members.

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