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The European Commission has published a Summary Report summarising the responses to its September 2023 consultations on the Sustainable Finance Disclosure Regulation (SFDR).   

On 22 April 2024, the Financial Conduct Authority (FCA) and the Bank of England (including the Prudential Regulation Authority (PRA), together the Bank) published updates on their approach to artificial intelligence (AI). The FCA's update is available here and the Bank's update is available here.

Introduction

On 23 April 2024, the FCA published FG24/3, its finalised non-handbook guidance on the new "anti-greenwashing rule" which was introduced as part of the package of measures establishing the Sustainability Disclosure Requirements (SDR) regime (which we covered here).  The guidance, like the rule itself, will apply from 31 May 2024 – in just over a month's time.

Continuation vehicles are typically structured as limited partnerships, with the investors (both rolling and new) constituting limited partners in the vehicle and the GP acting as manager of the vehicle. From a regulatory perspective, this continuation vehicle will typically fall within one of two regulatory categories: an alternative investment fund (“AIF”) or a non-AIF collective investment scheme (“CIS”).

The FCA has published a consultation paper (CP24/7) on Payment Optionality for Investment Research. This sets out the regulator's considered proposals in the light of one of the recommendations from the Independent Research Review (IRR) – i.e. that buy-side firms should have the option - once again - of being able to buy research on a bundled basis, subject to certain conditions.

Travers Smith has advised one of Sweden's leading advisors and intermediaries of insurance and financial products, Söderberg & Partners, on the acquisition of a significant minority stake in financial services group, Fidelius, for an undisclosed sum as part of its drive to increase its footprint in the UK. The acquisition completed recently, following approval from the Financial Conduct Authority (FCA).

The UK's departure from the European Union has not led to all EU-derived law being jettisoned; on the contrary, a significant proportion of it has been retained. This briefing explains what retained EU law is, why it's important and how it's affected by the Retained EU Law (Revocation and Reform) Act 2023.

On 1 March 2024, the FCA issued an interim update (Update) to its August 2022 and February 2023 portfolio letters (Portfolio Letters) to alternative asset management firms setting out its updated supervisory priorities.

The EU Regulation on Digital Operational Resilience (DORA) will apply from 17 January 2025 to most financial entities in the EU. DORA's increased focus on third-party risk management includes detailed requirements for provisions that must be included in existing and new ICT contracts.

Following the entry into force of the Financial Services and Markets Act 2023 ("FSMA 2023"), the Bank of England, FCA and PRA (the "Regulators") are consulting on new rules and a joint Supervisory Statement on their new powers to regulate critical third parties ("CTPs") which are designated by HM Treasury because of their systemic importance to authorised firms and financial market infrastructures ("FMIs"). This significant expansion of the Regulators' supervisory remits will usher in an entirely new era for CTPs, which (including those that are not based or even incorporated in the UK) will need to comply with a range of rules on governance, operational continuity and regulatory engagement as well as other areas.  

Travers Smith has advised one of Sweden's leading advisors and intermediaries of insurance and financial products Söderberg & Partners on the acquisition of the independent financial advisory company Timothy James & Partners from current owner Waverton Investment Management Group.

I try to learn from the past, but I plan for the future by focusing exclusively on the present. That's where the fun is.

Our ESG timeline archive sets out past UK and EU legal and regulatory developments relating to ESG and wider sustainable business topics from January 2023 onwards. As with the main timeline, the timeline archive can be filtered according to your business type or the relevant ESG theme.

Travers Smith LLP is delighted to announce the promotion of three lawyers to Senior Counsel, effective from 1 January 2024.  

Introduction

SDR is widely seen as the UK's answer to the EU Sustainable Finance Disclosure Regulation (SFDR), which is currently under review by the European Commission (in fact, we understand that the Commission has an eye on SDR as part of that review). While narrower in scope than SFDR in some respects, it goes further in others insofar as it provides for a set of formal product labels and imposes minimum standards for labelled­ products and non-labelled products that have ESG-related terms in their names (although some will already be familiar with the FCA's ‘Guiding Principles’ for authorised ESG and sustainable investment funds, which sets out expectations in terms of design, delivery and disclosure in relation to such funds).

On 10 November 2023, the text of an Amending Directive that will make amendments to the EU Alternative Investment Fund Managers Directive (EU AIFMD) was published. This set of changes is referred to as "AIFMD II".

Funds Partner Jeremy Elmore and Financial Services & Markets Senior Consultant Simon Witney have featured in the latest edition of Private Equity International's Impact Investing Report. In this keynote interview, Jeremy and Simon discuss how greater clarity, precision and standardisation can help the impact investing market reach its full potential.

 Travers Smith LLP has advised Clipway on its establishment as a new global GP and strategic investment from Carmignac and General Atlantic. Clipway is a new global private equity secondaries firm that leverages proprietary technology to optimise investment strategy. The Clipway team, headquartered in London with an office in New York, is led by veteran secondaries investors and managing partners Vincent Gombault and Ingmar Vallano. 

On 2 October 2023, the European Securities and Markets Authority (ESMA) published a trends, risks and vulnerabilities (TRV) risk analysis report on ESG names and claims in the EU fund industry (the report). While undoubtedly of interest, it should be noted that this is not the reply to ESMA's 2022 fund names consultation – we are still waiting for that (see below for details).