In its Final Report published on 1 June 2021, ESMA sets out its final guidelines on the MiFID/MiFIR obligations on market data.

The Guidelines will ensure better and uniform application of these MiFID II/MiFIR obligations. The Guidelines will apply to national competent authorities, trading venues, approved publication arrangements, consolidated tape providers and systematic internalisers, from 1 January 2022.

The Guidelines will be translated into all EU official languages and then the regular comply or explain procedure will be carried out ahead of full application of the Guidelines.

On 8 June 2021, ESMA issued an opinion on the product intervention measures relating to turbos, proposed by the Dutch Authority for the Financial Markets (AFM).

AFM's measures concern "turbos" which are high-risk leveraged products with which investors speculate that the prices of the underlying asset, such as a share, an index or a currency, will rise or fall.

ESMA's opinion concludes that the proposed measures are justified and proportionate. In addition, ESMA encourages all National Competent Authorities (NCAs) to monitor turbos in their respective markets to assess whether similar risks for retail investors as those identified by the AFM could arise there.

On 16 June 2021, ESMA published its 2020 Annual Report. ESMA's 2020 Annual Report reviews ESMA's achievements in 2020 against its priorities and objectives in meeting its mission of enhancing investor protection and promoting stable and orderly financial markets in the European Union.

The Report provides an overview of the work carried out by ESMA in 2020. ESMA's 2020 key achievements included its work on:

• Promoting Supervisory Convergence
• Assessing risks to investors, markets and financial stability
• Completing a Single Rulebook for EU financial markets
• Directly supervising specific financial entities

On 24 June 2021, the European Commission (EC), the European Central Bank in its banking supervisory capacity (ECB Banking Supervision), the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) issued a joint statement through which they strongly encourage market participants to use the time remaining until the cessation or loss of representativeness of USD LIBOR, GBP LIBOR, JPY LIBOR, CHF LIBOR and EUR LIBOR to substantially reduce their exposures to these interest rates.

In order to achieve this result, the joint statement strongly encourages market participants to:

• stop using the 35 LIBOR settings, including USD LIBOR, as a reference rate in new contracts as soon as practicable and by 31 December 2021 at the latest;
• limit the use of any LIBOR setting published under a changed methodology only to contracts that are particularly difficult to amend ahead of LIBOR's cessation; and
• include robust fallback clauses nominating alternative rates in all contracts referencing LIBOR.

The EC, ESMA, ECB Banking Supervision and the EBA will continue to closely monitor the situation and LIBOR exposures.

On 25 June 2021, ESMA has published a press release regarding the registration of the first two securitisation repositories (SRs) under the Securitisation Regulation (SECR).

The following entities are registered as SRs for the European Union:

1. European DataWarehouse GmbH based in Germany; and
2. SecRep B.V. based in the Netherlands.

The registration decisions became effective on 30 June 2021. The registered SRs can be used by reporting entities to fulfil their obligations under SECR. The SRs are required to provide direct and immediate access free of charge to investors and potential investors as well as to all the entities listed in Article 17(1) of SECR to enable them to fulfil their respective obligations.

As of 30 June 2021, reporting entities must make their reports available through one of the registered SRs.

President Joe Biden is placing global anti-corruption efforts at the center of U.S. foreign policy, issuing a new directive to federal agencies to prioritize efforts to confront the problem.

The instructions came in the form of a National Security Study Memorandum which formally establishes the fight against corruption as a core national security interest. The memo directs a 200-day interagency review of how to improve anti-corruption measures, culminating in a report and recommendations to the president

The report finds that the States and Jurisdictions evaluated by MONEYVAL on average showed a moderate level of effectiveness in their efforts to combat money laundering and terrorist financing. As a consequence, on average, their level of compliance with AML/CTF standards is below satisfactory.

Through its nine FATF-Style Regional Bodies (FSRBs), the FATF brings together a global network of 205 jurisdictions that have each committed at the highest political level, to implementing the FATF Recommendations. This table provides an up-to-date overview of the ratings that assessed countries obtained for effectiveness and technical compliance. These should be read in conjunction with the detailed mutual evaluation reports, which are available on this website.

Transparency International's new Global Corruption Barometer - EU 2021 is one of the largest, most detailed surveys of people's views and experiences of corruption across the bloc. Despite widely held beliefs to the contrary, corruption is a problem in the EU. Governments across the region and EU institutions need to make an immediate and concerted effort to ensure the lives of ordinary people are free of corruption. The statement includes specific recommendations for action.

As per article 61C of AML Law, CySEC published a Directive regarding the establishment of a Register of Explicit Trusts and Similar Legal Arrangements in the Republic, in which information on explicit trusts, similar legal arrangements, the actual beneficiaries of explicit trusts and the actual beneficiaries of similar legal arrangements needs to be included.

As per article 61E of AML Law, CySEC publishes a Directive regarding the establishment and procedures for the Register of Providers of Services relating to Cryptocurrency-Asset ("CASPs"). The Register is mandatory for:

• CASPs providing or carrying out services or activities from Cyprus, regardless of their registration in a relevant registry of another EU Member for these services.
• CASPs providing or carrying out services or activities to Cyprus, except for businesses that have already registered in a relevant registry of another EU Member state for these services.

Jurisdictions under increased monitoring are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.

The FATF added Haiti, Malta, Philippines, and South Sudan as Jurisdictions with strategic deficiencies. On the opposite, the FATF welcomes Ghana's significant progress in improving its AML/CFT regime. Thus, Ghana is therefore no longer subject to the FATF's increased monitoring process.

Delegates representing 205 members of the Global Network and observer organisations including the International Monetary Fund, the United Nations and the Egmont Group of Financial Intelligence Units took part in the virtual meeting of the FATF Plenary with the below main outcomes:

• finalised a report about the scale and ML techniques of environmental crimes. The report published on 28^th of June.
• finalised a second 12-month review of the implementation of FATF's revised Standards on virtual assets and VASPs. The report published on 5^th of July.
• finalised two reports exploring the challenges and opportunities of new technological innovation to make AML/CTF efforts more effective- One report published on 1 July.
• Finalised a report to protect data protection and privacy, while enabling governments and institutions to fight financial crime - The report published on 1 July.
• finalised a report for government authorities that identifies concrete actions to improve asset recovery outcomes. There is no indication of when the report will be published.
• finalised a report on the funding behind ethnically or racially motivated terrorism, also referred to as extreme right-wing terrorism (ERW). The report published on 30^th of June.
• revised its Standards (R.1 and INR.1) to require countries, financial institutions and designated non-financial businesses and professions (DNFBPs) to identify, assess, understand and mitigate their proliferation financing risks. The report published on 29^th June.

The Financial Action Task Force (FATF) is considering potential amendments to Recommendation 24 on the transparency and beneficial ownership (BO) of legal persons. At this stage, the FATF has not approved any draft amendments to R.24. The FATF will consider the views received and propose revisions to the text of R.24 for discussions at its October 2021 meetings. Deadline for comments was the 20^th of August.

The European Court of Auditors ("ECA") published a report on EU efforts to fight ML in the banking sector. The ECA observations/recommendations are that:

• EU-level action in the fight against ML/TF has weaknesses.
• The EU's list of risky third countries is not tailored to the potential threats to the EU
• Transposing EU AML/CFT legislation is complex, transposition is uneven, and assessment by the Commission is slow
• EBA and ECB should work to better incorporate ML/TF risk into prudential supervision
• The ECB has started to integrate ML/TF risks into prudential supervision but, despite improvements, information-sharing is not fully efficient

The Investment Firm Prudential Regime (IFPR) is the FCA's first policy statement in the UK since Brexit.

The IFPR is on course to come into force in January 2022, after 2 more consultation papers are published. The topics covered by the IFPR:

1. The Categorisation of Investment firms
2. Prudential consolidation and the group capital test
3. Own funds and own funds requirements
4. Own funds requirements - transitional provisions
5. Concentration risk and K-CON (will apply to firms with permission to deal on own account)
6. Reporting Requirements

PS21/6 contains near final rules and any changes made will only happen if they are essential.

If you require any assistance or information in understanding how this could potential impact your business, please speak with our Compliance Department.