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1、Click here or press enter for the accessibility optimised versionINVESTMENT&CAPITAL MARKETSQ1 2023Click here or press enter for the accessibility optimised versionCONTENTSCONTENTSFOREWORDSUSTAINABILITY AND RESPONSIBLE INVESTMENTCAPITAL MARKETSINVESTMENT OPERATIONSDP23/1 on Finance for Positive Susta

2、inable ChangeSDRESMA Draft GuidelinesESG Data and RatingsTransition Plan Taskforce-IA responseGreen Finance Strategy&Powering Up Britain PlansUK Equity Market CompetitivenessMarket DataConsolidated TapeHMT Short Selling Regulation CfEInvestment ResearchEMIR 3.0T+1 SettlementCSDREMIR Refit ReportingC

3、lick here or press enter for the accessibility optimised versionFOREWORDFrom Galina DimitrovaFOREWORDWelcome to the IAs Investment&CapitalMarkets policy report for the first quarter of2023.With this report we bring together theIAs important investment and capital marketsactivity over the past few mo

4、nths.On the sustainability front,in January,the IAsubmitted its final response to the FCAsconsultation paper on SustainabilityDisclosure Requirements(SDR)andInvestment Labels,a consultation set to haveprofound implications for the way assetmanagers do business as well as forsustainable investing in

5、general.The IA is nowdeveloping its response to what is anotherhigh priority paper in the sustainability andresponsible investment space:FCA DiscussionPaper(DP)23/1 Finance for PositiveSustainable Change which was published inFebruary.This quarter,the IA has alsoresponded to the Transition Plan Task

6、forcesdraft disclosure framework and starteddrafting a response to HM Treasurysconsultation on bringing ESG ratings providersinto the regulatory perimeter.Finally,at theend of the quarter,the Government publishedthe UK Green Finance Strategy as well as itsPowering Up Britain plans for net zero anden

7、ergy security in the UK.This quarter also saw significant activity in thecapital markets space,with investment firmsundertaking the necessary preparations toensure they can meet accelerated settlementtimelines.The IA is a member of the UKAccelerated Settlements Taskforce and wehave also set up a for

8、um for members todiscuss the various potential benefits andchallenges of the transition to quickersettlement cycles.The Capital Markets Teamalso responded to the highly-anticipated FCAMarket Data Study as well as continuing itsbilateral engagement with the FCA on thedevelopment of a UK consolidated

9、tape.Investor access to high quality,affordable,reliable and consistent data remains a keypolicy priority for the IA.There is a lot more covered in the report.Wehope you continue to find it a useful resourceand please do not hesitate to get in touch ifyou have any questions or feedback.GALINA DIMITR

10、OVADIRECTOR,INVESTMENT ANDCAPITAL MARKETSThe Investment and Capital Markets hubpage can be found here.Click here or press enter for the accessibility optimised versionSUSTAINABILITYAND RESPONSIBLEINVESTMENTSUSTAINABILITYANDRESPONSIBLEINVESTMENTFCA DISCUSSION PAPER(DP)23/1:FINANCE FOR POSITIVE SUSTAI

11、NABLECHANGE:GOVERNANCE,INCENTIVESAND COMPETENCE IN REGULATEDFIRMSOn 10 February,the FCA published DiscussionPaper(DP)23/1 Finance for positivesustainable change:governance,incentivesand competence in regulated firms.The DPforms part of the commitment made in theFCAs strategy for positive change to b

12、eginstakeholder engagement on ESG governance,remuneration,incentives and training/certification in regulated firms.Through theresponses received to the DP,the FCA willconsider if introducing additional regulatoryexpectations in this area will be an effectivesolution to promote positive change.The DP

13、 examines firms sustainability-relatedobjectives and strategies,and how these aresupported by their firm governance andincentive arrangements,including how assetmanagers and asset owners organise andgovern their stewardship activities to influencepositive change.The DP also examines firmstraining an

14、d competence on sustainability.To help gather views,IA member engagementhas included bilateral meetings,a memberwebinar with the FCA in March and a memberroundtable in late March.The IA also issued asurvey to members to gain statistics andfurther information to help form the IAsresponse.Key themes t

15、he IA has been hearing frommembers include:The need for the FCA to avoid a one-size-fits-all approach to the wide-ranging areasin the DP;A number of the areas in the DP are alreadycaptured by existing regulation,in particularproduct governance rules;FURTHER INFORMATION:Flora TudhopePolicy Adviser,Su

16、stainability&ResponsibleInvestmentflora.tudhopetheia.orgIA website hub page can be found here.The IA circulated a draft response tomembers shortly after Easter and is invitingcomments by COB 21 April ahead of the FCAssubmission deadline of 10 May.SUSTAINABILITY DISCLOSUREREQUIREMENTS(SDR)ANDINVESTME

17、NT LABELSAs outlined in our previous policy report,on 25January the IA submitted its response to theFCA consultation(CP)on SustainabilityDisclosure Requirements(SDR)andinvestment labels.Since then,the IA has beenin regular contact with the FCA and HMT todiscuss in detail the key changes we view aren

18、eeded to make a positive difference to theeffectiveness of the SDR regime.On 22 February,the IA also had theDue to the global nature of many of ourmembers,the FCA needs to consider thedifferent models and strategies of firms;andThe FCA seems to erroneously be treatingsustainability exceptionally com

19、pared toother risk factors.opportunity to provide views on SDR to theTreasury Select Committee sub-committee onFinancial Services Regulations.At that hearingwe reiterated our support for what the FCAare trying to achieve but made clear there is adifference between raising the bar for whatfunds can b

20、e labelled sustainable and aregime that doesnt accommodate the existingproduct universe where funds are legitimatelypursuing sustainable investment strategiesbut prevented from receiving a label due tothe proposed qualifying criteria.On 29 March,the FCA announced a delay tothe final SDR and investme

21、nt labels rules untilQ3.The FCA had originally planned to publishthe final rules by June 2023.The statementalso makes clear this consideration includestheir approach to the marketing restrictions,refining some of the criteria for the labels andclarifying how different products,assetclasses and strat

22、egies can qualify for a label.They will also clarify matters,including thatthe requirement to have primary andsecondary channels for achievingsustainability outcomes is not prescribed,and,that the FCA will not requireFURTHER INFORMATION:Carol ThomasHead of Sustainability&ResponsibleInvestmentcarol.t

23、homastheia.orgFlora TudhopePolicy Adviser,Sustainability&ResponsibleInvestmentflora.tudhopetheia.orgIA website hub page can be found here.independent verification of productcategorisation to qualify for a label.This was a welcome statement from the FCAand addresses many areas of concern the IAhas ra

24、ised with them.The FCA will continue toconvene the Disclosure and Labels AdvisoryGroup(DLAG),in which the IA participates,todiscuss these issues as their final rulesdevelop as well as continuing our bilateralengagement with the FCA on a regular basis.ESMA DRAFT GUIDELINES ON FUNDSNAMES USING ESG ORS

25、USTAINABILITY-RELATED TERMSIn late February,the IA responded to theEuropean Securities and Markets Authoritys(ESMA)consultation on draft guidelines on theusage of ESG or sustainability-related terms infund labelling.The consultation proposesquantitative thresholds criteria where fundnames use ESG or

26、 sustainability-relatedterminology.The key points in the IA response are:In principle,we find the use of quantitativethresholds appropriate when there is acommon criteria for how to determine thethresholds.However,this is not the case forfunds disclosing under SFDR Article 8 and 9funds,where each fu

27、nd has the ability todefine the criteria for the threshold.Wetherefore do not think that quantitativethresholds proposed by ESMA will promotecomparability between funds.Given we do not support the setting ofquantitative thresholds for sustainableinvestments in advance of agreed eligibilitycriteria f

28、or sustainable investments,we donot support the proposed threshold of 80%linked solely to the funds name.We also have concerns around theadditional threshold of at least 50%ofminimum proportion of sustainableinvestments for the use of the wordsustainable or any other sustainability-related term.It i

29、s unclear why there is aneed to differentiate between the use of theterm sustainable as opposed to other ESG-related terms,and under which of theheadings such terms would fall.FURTHER INFORMATION:Carol ThomasHead of Sustainability&ResponsibleInvestmentcarol.thomastheia.orgFlora TudhopePolicy Adviser

30、,Sustainability&ResponsibleInvestmentflora.tudhopetheia.orgIA website hub page can be found here.We currently understand that discussions areongoing as to whether ESMA will or will notcontinue with the Fund Names Guidelines.ESG DATA AND RATINGSESG Data and Ratings Code of ConductWorking Group(DRWG)T

31、he IA continues its participation in the FCAsESG Data and Ratings Working Group(DRWG)which is developing a voluntary Code ofConduct on ESG data and ratings.In additionto the main group,there are two sub-groups,While we understand the logic behindcreating minimum exclusions,we believethe minimum safe

32、guards proposed byESMA should apply consistently with thoseprescribed in SFDR,rather than introducingfurther complexity.Members also expressed concerns aboutthe length of the transitional period:sixmonths is not enough time to implementthe name changes or adapt portfolios toabide with the proposed g

33、uidelines and weare therefore suggesting a transition periodof at least 12 months.one focusing on terminology andtransparency(which the IA participates in)andanother focusing on governance,conflicts ofinterest and systems and controls.Discussionshave centred around,inter alia,framing theCode of Cond

34、uct Principles in terms ofactivities and services,rather than entities,oralternatively using a mix of both approaches.In terms of compliance options,the Group hasdiscussed the risks and opportunities of a“comply or explain”and“apply and explain”models and how this would support or hinderuptake of th

35、e voluntary code of conduct.TheDRWG is still working towards a June 2023deadline for a draft Code of Conduct to be outfor consultation.HMT Consultation on Future regulatoryregime for ESG ratings providersAs part of the Governments Green FinanceStrategy package published at the end ofMarch,HMT has pu

36、blished its consultation onbringing ESG ratings providers into the FCAsregulatory perimeter.HMT considers there isclear benefit to be gained from improving theFURTHER INFORMATION:Carol ThomasHead of Sustainability&ResponsibleInvestmentcarol.thomastheia.orgFlora TudhopePolicy Adviser,Sustainability&R

37、esponsibleInvestmentflora.tudhopetheia.orgIA website hub page can be found here.transparency of methodologies,governanceand processes of ESG ratings providersthrough regulation but proposes excludingESG data from the scope of regulation as itconsiders ESG data is less processed thanESG ratings and d

38、oes not include anassessment,where they see the greatest riskof harm to arise.The IA will be responding tothis consultation,which has a deadline of 30June.TRANSITION PLAN TASKFORCE-IARESPONSEIn February,the IA submitted its response tothe Transition Plan Taskforces(TPT)draftdisclosure framework to d

39、evelop a sector-neutral framework and accompanyingimplementation guidance.The TPT was launched in 2022 to develop a“gold standard”for private sector climatetransition plans in the UK and will also informand build on international disclosurestandards.The IA has continued involvementin the Governments

40、 Transition Plan Taskforce(TPT)as a member of its Delivery Group.The TPT is expected to publish its finalframework and implementation guidance inQ3 2023.Its next phase of work will focus ondelivering more detailed guidance and sector-specific frameworks.As set out in the 2023 Green Finance Strategy,

41、the UK Government has committed toconsulting on the introduction ofrequirements for the UKs largest companiesto disclose their transition plans.This willcomplement existing requirements in placefrom the FCA which require plans to beproduced on a comply or explain basis.Thisconsultation is likely to

42、take place once theTPT has completed its work in autumn/winter 2023.In addition,the IA has joined a new AssetManagement Working Group of the TransitionPlan Taskforce.As the TPT finalises thedisclosure framework it will also developsector-specific guidance for a small numberof sectors to support it.T

43、he investmentmanagement sector is one of the first sectorsfor which such guidance is being created,along with electric utilities&powerFURTHER INFORMATION:Carol ThomasHead of Sustainability&ResponsibleInvestmentcarol.thomastheia.orgPaul ScapingPublic Policy Specialistpaul.scapingtheia.orgIA website h

44、ub page can be found here.generators and food&agriculture.Our sectorhas been chosen as an early test case for thissector-specific guidance due to the volume ofexisting but disparate guidance which existsfor investment managers,which this exercisehopes to bring together.The working groupsbegan work i

45、n March 2023 and each workinggroup will include both users and preparers oftransition plans.UK GREEN FINANCE STRATEGY&POWERING UP BRITAIN PLANSMarch ended with the publication by theGovernment of more than 30 publications aspart of what was variously described ingovernment as the Green Day or Energy

46、Security Day.The Government had been required to reissueits Net Zero Strategy by the end of March2023 after a judicial review found last year thatthe strategy issued in 2021 was inadequate.The Government has previously said thejudge has made no criticism about thesubstance of our plans to meet net z

47、ero.Nonetheless,the Government has used theopportunity to reflect more recentdevelopments,includingin energy security policy,and updated the NetZero Strategy with two Powering Up Britainplans focused on net zero and energysecurity.Other publications included theVallance Review of pro innovation regu

48、lationof technologies in green industries,a strategicforeign policy framework for internationalclimate and nature action,formal responses tothe Skidmore Review and the Climate ChangeCommittees annual progress report,and most significantly for us a refreshed GreenFinance Strategy.The IA is continuing

49、 to review the content ofthe Green Finance Strategy,alongside thePowering Up Britain plans,and is using it as abasis for engagement with DESNZ,HMT andother Government departments on net zeroand green finance.A page has been createdon the IA website to track significantannouncements from the Green Fi

50、nanceStrategy.These announcements include establishing aframework to assess ISSB sustainabilitystandards for their suitability for adoption intothe UK,ongoing support for the TransitionFURTHER INFORMATION:Paul ScapingPublic Policy Specialistpaul.scapingtheia.orgIA website hub page can be found here.

51、Plan Taskforce,a commitment to deliver a UKGreen Taxonomy after a consultation inautumn 2023,and a Transition Finance MarketReview to consider what the UK financial andprofessional services ecosystem needs to doto become a leading provider of transitionfinancial services and innovative instruments.T

52、o coincide with the release of theseGovernment documents,a range of otherorganisations who work closely with theGovernment have also published updates.Among them,the Integrity Council for theVoluntary Carbon Market(ICVCM)haspublished Core Carbon Principles,settingfundamental principles for high-qual

53、ity creditsthat create real,verifiable climate impact,based on the latest science and best practice.The Climate Financial Risk Forum(CFRF),ofwhich the IA is an observer member,haspublished its latest round of guides to helpthe financial sector develop its approach toaddressing climate-related financ

54、ial risks andopportunities.The guides,which are writtenby industry for industry,include a guide toscenario analysis for investment managers,anupdate to the CFRF Climate DisclosuresDashboard,and an analysis of the 2021/22Climate Biennial Exploratory Scenario(CBES).These publications are timely,as the

55、 IA isworking with its Climate Change WorkingGroup(CCWG)to update the IAs annualClimate Change Action Plan and considerwhether revisions are necessary to the IAPosition on Climate Change.The IA published its first climate changeaction plan in 2020.The document sought toclearly state the IAs support

56、for the ParisAgreement goals and the UKs ClimateChange Act,while committing to several areasof work which we would undertake with,andon behalf of,the wider industry.We will nowseek to identify new or ongoing commitmentsto make in the 2023-24 Action Plan whichalign with the Governments priorities.FUR

57、THER INFORMATION:Carol ThomasHead of Sustainability&ResponsibleInvestmentcarol.thomastheia.orgFlora TudhopePolicy Adviser,Sustainability&ResponsibleInvestmentflora.tudhopetheia.orgPaul ScapingPublic Policy Specialistpaul.scapingtheia.orgClick here or press enter for the accessibility optimised versi

58、onCAPITAL MARKETSCAPITALMARKETSUK EQUITY MARKETCOMPETITIVENESSIn the context of the decline in UK equitylistings and UK share ownership,and ongoingdiscussions across industry and Governmentregarding the competitiveness andattractiveness of UK equity capital markets,the IA has established a new worki

59、ng groupto:This group met for the first time on 22 March.Itwas agreed that next steps would include areview of existing reviews and proposals,andthat the group would look toReflect on reform/developments regardingthe effectiveness and attractiveness of UKcapital markets to date;ANDhelp the IA to out

60、line a definitive buysideposition on what further steps could helpimprove and maintain the competitivenessof UK equity capital markets.define key metrics for what success wouldlook like,recognising that in all instances theclient must come first.The UK authorities have carried out severalreviews of

61、the UK listing and marketsenvironment,including:The IA has fed into each of these reviews andremain closely engaged with policy makers,regulators,and key industry stakeholders onthis topic.The IA has also prepared apresentation with a summary of all thesereviews,their keyKalifa Review of UK FinTech

62、sector;Hill Review of UK Listings Review;UK Prospectus Regime Review;Wholesale Markets Review;Financial Services Future RegulatoryFramework Review;Secondary Capital Raising Review;FCA Improving Equity Secondary Markets;FCA Primary Markets Effectiveness Review;A new Capital Markets Industry Taskforce

63、was established and is expected to publishrecommendations in due course.FURTHER INFORMATION:Hugo GordonSenior Policy Adviserhugo.gordontheia.orgEdward HenleyAssistant Policy Adviseredward.henleytheia.orgIA website hub page can be found here.recommendations and their current statuses,as well as the I

64、As views on the keyrecommendations.Should members wish to receive a copy ofthis presentation,then please do reach out toIAs Investment&Capital Markets Team.We also recently joined the CityUKs CapitalMarkets Group,a cross-industry membergroup which aims to identify and addressbarriers to UK competiti

65、veness andattractiveness.FCA MARKET DATA STUDYThe FCA has launched a market studyfocusing on competition in the provision ofbenchmarks,credit ratings data,and marketdata vendor services.For each of the markets in scope the FCA willexamine how firms compete with one anotherto win and retain customers

66、,considering theimplications of these market dynamics on thestructure of the markets and on price,qualityof data,and service and on innovation.The IA has submitted a response highlightingconcerns regarding growing data costs forinvestment managers which do not seem tobe correlated with a growth in q

67、uality of dataor a growth in costs for data providers.Wealso highlight a number of areas where poorcompetition in the wholesale data market hasled to worse outcomes for investmentmanagers and their clients.In our response we make a series ofrecommendations,including:Data fees being tied to costs,wit

68、h costincreases based on a reasonable profitmargin,or demonstrable growth inoperating expenses(excluding contractingand audit costs).Rationalisation of licensing agreements,forexample,by requiring standardized contractterms and standards.Greater pricing transparency through publicavailability of pri

69、cing lists or models.An option for enterprise licencing of marketdata(i.e.having one licence with a dataprovider for use throughout the firm).FURTHER INFORMATION:Hugo GordonSenior Policy Adviserhugo.gordontheia.orgIA website hub page can be found here.We will continue to engage with the FCAthroughou

70、t the period of the Market Study.CONSOLIDATED TAPEThe IA has an active consolidated tapeworking group which continues to engageregularly with the FCA and other relevantbodies to discuss the approach to developinga UK consolidated tape(CT).As a reminderthe IA continues to advocate for:Encouraging the

71、 FCA to explore concernsregarding market data providers disclaimingliability for accuracy,completeness,andtimeliness of delivery,and to considerwhether this would amount to an unfaircontract term for a paid data provisionservice.One consolidated tape per asset class;equities and ETFs,fixed income,an

72、d(intime)a derivatives CT.An equities and ETF CT should offer real-time pre-trade and post-trade data.A CTfor bonds should only capture post-tradedata and take into account appropriatedeferral regimes.Recent intel suggests that the FCA will bepublishing the following consultation papersthroughout th

73、e remainder of the year:We support the FCAs regulatory objectiveto facilitate competition and recommend aCT provider be appointed via a competitivetender process,with the contract reviewedon a regular basis.There should be mandatory contribution ofdata free of charge by all venues andApproved Public

74、ation Arrangements(APAs)to the CT.Consumption of the consolidated tapeshould be voluntary.The consolidated tape should be cost-effective for all market participants toaccess.A consultation paper on the framework for abond CT is expected to be published inearly Q3.This CP is also likely to include ad

75、iscussion paper on an equities CT.The FCAs consultation paper on improvingthe transparency regime for non-equityinstruments is likely to be published in earlyQ4.FURTHER INFORMATION:Hugo GordonSenior Policy Adviserhugo.gordontheia.orgFrancesca BluckPolicy Leadfrancesca.blucktheia.orgIA website hub pa

76、ge can be found here.HMT SHORT SELLING REGULATION:CALL FOR EVIDENCEAs part of the Edinburgh reforms packagepublished on 9 December,HMT alsopublished a Call for Evidence(CfE)on theShort Selling Regime(SSR).The main objectives of the CfE are to ensurethe that the UKs approach to regulating theshort se

77、lling of shares admitted to tradingreflects the specificities of UK markets and toascertain whether the current publicdisclosure requirements are working asoriginally intended or,if there are any aspectsof the regime which have resulted indiscouraging short selling activities to theextent that it ha

78、s a detrimental effect on thefunctioning of the market.This CfE does notextend to reviewing the SSR and how itapplies to sovereign debt or UK sovereigncredit default swaps,instead this part of theregime will be consulted on at a later date.The IA submitted its response to HMTs CfE on3 March.The main

79、 takeaways from ourresponse are as follows:European Consolidated TapeAhead of the MiFID/R trilogue discussionswhich are due to commence on 17th April,EFAMA sent a final letter to senior officials atthe European Commission,EuropeanParliament,and the Swedish Presidencyreiterating EFAMAs long standing

80、position thatin order for a consolidated tape to meet thedemands of the market and to becommercially viable,a consolidated tape forequities and ETFs must be reasonably priced,provide real-time pre-trade date,offering 5layers of best bid and offer and post-tradetrade delivered on a voluntary consumpt

81、ionbasis.A position that not only the IA supportsbut is reflective of the European Parliamentspositioning.It is thought that the trialogue negotiationsaround the future of an equities/ETF CT areset to be politically contentious,with someother stakeholders offering support for a lessambitious equitie

82、s and ETF CT,which is morealigned with the positioning of the EuropeanCommission,whos position on the CT doesnot extend to real-time pre-trade data.FURTHER INFORMATION:Hugo GordonSenior Policy Adviserhugo.gordontheia.orgFrancesca BluckPolicy Leadfrancesca.blucktheia.orgIA website hub page can be fou

83、nd here.Since submitting our response,HMT havereached out to us to discuss in more depthour position relating to position reports to theFCA.As a result the IA continues to work withmembers of our Buyside Traders Committeeto ensure we actively reflect the views of ourmembership to HMT.INVESTMENT RESE

84、ARCHA.HM Treasury ReviewIA members consider the reinstatement ofthe reporting threshold to 0.2%would be animprovement on the current situation.However,this threshold is still extremely lowwhen compared to the 3%threshold setunder the Transparency Directive for longpositions.Therefore,we recommend an

85、initial threshold of 0.5%is set.We also suggest that a cost-benefit analysisis undertaken,including reaching out toindividual member firms to betterunderstand the implications firms face insubmitting position reports to the FCA atsuch granular levels.Overall,the IA supports the continuation ofthe SS

86、R,given short selling plays an importantand beneficial role in the orderly and effectivefunctioning of financial markets.Amongstother benefits,short selling aids liquidity,pricediscovery and risk management.However,wedo consider that there are areas of the regimewhich could benefit from reform,notab

87、ly:The Public Disclosure Requirements:Disclosure requirements position reportingto the FCA:The IA recommends that public disclosurerequirements are repealed in their entirety,given the unintended consequences theserequirements can have on the marketincluding but not limited to exposing themarket to

88、manipulation including copycatbehaviour,price squeezes and increasedvolatility;andShould this not be a viable option then theIA would suggest consideration is given toaligning the short selling regime to theregime implemented for long selling.FURTHER INFORMATION:Hugo GordonSenior Policy Adviserhugo.

89、gordontheia.orgFrancesca BluckPolicy Leadfrancesca.blucktheia.orgIA website hub page can be found here.To evaluate options to improve the UKmarket for investment research and providerecommendations to this effect.Inparticular:On 3 April Treasury published a Call forEvidence aimed at gathering furthe

90、r viewsinforming these objectives,the deadline forwhich is 24 April.The IA will be submitting aresponse.Consider the current level of demandinvestors have for research,factors drivingthis demand,and evidence of whether theamount,quality and type of investmentresearch is sufficient to meet suchdemand

91、s.The Review may recommend legislativeand non-legislative measures for regulatorsand industry.The Review will consider the impact ofMiFID II unbundling rules on the levels andquality of investment research and evaluatethe likely impact of any proposed changeson investment and fees.Treasury has annou

92、nced that Rachel Kent,senior financial services partner at law firmHogan Lovells,has been appointed to lead anindependent review of financial servicesinvestment research and its contribution to UKcapital markets competitiveness.This followsthe announcement of this review as part ofthe Edinburgh Refo

93、rms in December.The review will focus on two key objectives:To assess the link between levels ofresearch and the attractiveness of the UK asa destination to list,the Review will:Provide evidence on how investmentresearch provisions in the UK compare withother international financial servicescentres,

94、in both public and private markets.Consider the amount,quality and type ofinvestment research currently provided onfirms listed or quoted,or seeking to belisted or quoted,on UK public markets,andwhether this has an effect on theattractiveness of UK markets for issuers.Inparticular they will be looki

95、ng at specificissues in the tech and life science sectors.FURTHER INFORMATION:Hugo GordonSenior Policy Adviserhugo.gordontheia.orgFrancesca BluckPolicy Leadfrancesca.blucktheia.orgIA website hub page can be found here.Trialogues are ongoing and the Swedishpresidency is seeking to discuss acompromise

96、 text at the next meeting ofMember States,envisaged for early May.Aswith the UKs Investment Research review,theIA is gathering views from members on theseapproaches and will continue to feedcomments into this process via EFAMA.C.Expiry of SEC No Action ReliefLast year,the SEC announced that its lett

97、er ofNo Action relief for MiFID II-regulated firmspaying for research hard dollar from USbrokers(while required under MiFID II,it is incontravention of US regulation which barsFull re-bundling of researchAn exemption for broker sales andinvestment research that do not causeconflicts of interestAn ex

98、emption for EU firms to makepayments for research offered by providersbased in a jurisdiction that does not allowunbundling(a direct response to the SECswithdrawal of its No Action relief).The wider review,which will run until June2023,is part of the Governments broaderwork to increase the attractiv

99、eness of the UKas a location for large and small companies toraise capital.While the Chair will determinethe exact course the Review will take,theGovernment expects it will involveconsultation with a wide ranger ofstakeholders,including the FCA,buy-side andsell-side firms,investors,independentresear

100、ch firms,trading venues,listed andquoted companies,and legal and academicexperts.The IA will be engaging closely with thisReview,and has already held initialconversations with Rachel Kent.TheInvestments&Capital Markets team will beworking closely with the Stewardship,Risk&Tax team to include any VAT

101、-related points.B.Review of MiFID II Research ProvisionsAs well as within the UK,discussions continuewithin the EU as to potential amendments tothe MiFID II research provisions.Possibleamendments include:FURTHER INFORMATION:Hugo GordonSenior Policy Adviserhugo.gordontheia.orgFrancesca BluckPolicy Le

102、adfrancesca.blucktheia.orgIA website hub page can be found here.such payments)would be allowed to expire inJuly 2023.Industry bodies on both the buy-and sell-side(with whom the IA is in regular contact)continue to look to find a solution.In themeantime,SIFMA,the IA and otherstakeholders in the US ar

103、e lobbying for atleast a short-term extension to the No Actionrelief to allow time for solutions to be foundand implemented.We have heard informallythat the European Commission believes theSEC will look favourably on European housesacquiring US research through Europeanaffiliates.However,no statemen

104、t to this effect has beenmade and this cannot be relied upon.Wehave urged members to put in place plans forthe July 2023 deadline.EMIR 3.0On 8 February 2022,the EuropeanCommission launched a targeted consultationto collect evidence on ways to improve theattractiveness of EU CCPs and enhance theirsup

105、ervision.The aim of the targetedconsultation is for the Commission tounderstand:Within our response,the IA outlines supportfor a number of the Commissions proposals tostrengthen European derivatives market.Forsome proposals,we urge the Commission togo further,such as:The costs,benefits and effective

106、ness ofdifferent ways to improve the attractivenessof EU CCPs;andHow to manage different financial stabilityrisks for the EU as part of a legislativereview of EMIR and potentially of otherrelated regulations and directives.The expansion of Money Market Fundcollateral eligibility by including third-c

107、ountry MMFs with a similar risk framework,as well as MMFs not being subject tocounterparty limits for clearing trades.The exemption from margin requirementsfor single stock equity options and indexoptions being extended or madepermanent.However,our response does state our strongconcerns regarding a

108、number of aspects ofthe proposals,particularly those relating toArticle 7.In particular we note the ActiveAccounts proposal,and related reportingrequirements,are overly wide in scope,onerous,and costly,and could substantivelyincrease costs for investors while impactingthe competitiveness of the EU.T

109、he IA will continue to monitor fordevelopments and update members as wehear more.A confirmation that the RTS on Initial MarginModel Validation will not be finalised.Click here or press enter for the accessibility optimised versionINVESTMENTOPERATIONSINVESTMENTOPERATIONST+1 SETTLEMENTT+1 Settlement r

110、efers to recent marketinitiatives aimed at amending the currentcapital markets settlement cycle.The cycle iscurrently T+2(e.g.if you trade today,it willsettle in two days time)in most major markets,with policymakers looking to accelerate this toT+1.The US has announced a go-live date of the28 May 20

111、24 with the 29 being the last dayof settlement for trades using a default T+2cycle.The 28 is one day after a publicholiday(Memorial Day).Canada has announced that it will matchthe US in adopting a T+1 settlement cyclebut go-live one day earlier on the 27 May,asthey do not share the Memorial Dayholid

112、ay.The IA has been working with members onthe implication of a move to a T+1 settlementcycle,with a particular lens on the US move,given the size of the market and the proximityof the move.Particular implications include FXand FX funding,the lifecycle mismatch withfund subscriptions and redemptions(

113、whichoften sit at T+3 cycles nowadays),ETFs andsecurities lending.We have a live overviewdocument hosted on our website which wellcontinue to update up to go-liveThe UK has set-up an“AcceleratedSettlement Taskforce”chaired by CharlieGeffen and which the IA is participating in.Whilst the aim had orig

114、inally been topublish a report by the end of 2024 toadvise policymakers on the way forward,the Chair has indicated that he aims toexpedite publishing to the end of 2023instead.Europe,in discussing CSDR Refit,haveincluded clauses mandating that ESMAinclude a report on the feasibility of anaccelerated

115、 settlement cycle to theEuropean Commission.FURTHER INFORMATION:Alex ChowInvestment Operations Policy Leadalex.chowtheia.orgIA Website Hub Page:CSDR,RegulatoryTrade and Transaction Reportingin collaboration with members.Well also lookto use this to advise our advocacy position inthose jurisdictions

116、still considering whetherand when to move.CSDR-CENTRAL SECURITIESDEPOSITARY REGULATIONMandatory Buy-ins(MBI)The mandatory buy-in provision for CSDRremains a contentious issue.Whilst due to go-live with cash penalties in February 2022,thiswas delayed by an ESMA no action letterfollowed by a legislate

117、d delay until 2025.Under CSDR Refit,the European Commission,Parliament and Council have formed theirinitial negotiating positions and are now intrilogue discussions on the file.Its understoodthat the Commission have the most openstances to MBIs,with a two-step approach inwhich they consider cash pen

118、altyeffectiveness as it comes to settlement ratesin the first instance,before consideringbringing MBIs into scope should a set of 3general criterion be met.The Council andParliament negotiating positions set a higherthreshold for MBI entry,with a cost-benefitanalysis mandated first and a re-calibrat

119、edcash penalty regime considered in the firstinstance.The IA will be working with EFAMA andmembers to review trilogue discussions andassess where advocacy efforts areappropriate.Cash penaltiesGiven cash penalties have been live fromFebruary 2022 they have become increasinglyseen as BAU processes by

120、firms.Thereremains a lot of fragmentation across theindustry,with intermediaries processing cashpenalties to different timelines and assetmanagers and their clients agreeing differentprocesses across the board.The IA has been working with members on anapproach for a de-minimis as it comes to cashpen

121、alties.Through EFAMA we initiallyattempted to have the European bodiesinclude an element of proportionality to cashpenalties given the operational cost ofprocessing the cash penalties outweighed thevalue of the penalties,though we were unableto get traction.Well now look to see if we canform an indu

122、stry best practice guide on a de-minimis,as consultation with memberssuggest theres appetite to do so.EMIR REFIT REPORTINGThe EU published EMIR reporting updateswith a go-live date of the 29 April 2024.Theupdate brings about an update to the amountof fields up from 129 to 203 and includesseveral new

123、 identifiers and reportingrequirements,including the uniquetransaction identifier,unique product identifier,action and event type combinations andmore.The UK has published their own version ofEMIR,with a go-live date of the 20 September2024,with differences between the UK and EUversions of EMIR mini

124、mal.The FCA have alsopublished draft validation rules and haveindicated that they intend to set-up industryroundtables in the coming weeks to furtherdiscuss level 3 guidelinesand documentation.The IA will be monitoringthis for opportunity and feeding back tomembers.The IA has a Working Group with me

125、mbers toreview the changes necessary ahead of go-live.Well also be working with other tradebodies such as ISDA to assist in best practiceat an industry level.Click here or press enter for the accessibility optimised versionThank you for readingInvestment&Capital MarketsQ1 2023 ReportInvestment&Capital markets webpage:www.theia.org/campaigns/investment-capital-marketsTo access the Members section of the InvestmentAssociation website,register here:www.theia.org/joining-the-investment-association/registerCookies 1 2 Terms 1 2 Privacy 1 2 P O W E R E D B Y