Category: Asset Management

On 21 October 2025, the European Securities and Markets Authority (ESMA) released its final report on the draft Regulatory Technical Standards (RTS) for open-ended, loan-originating Alternative Investment Funds under the revised AIFMD. The RTS set out clear conditions that such funds must meet in order to retain an open-ended structure.

The standards place particular emphasis on robust liquidity management, the maintenance of adequate liquid assets, and the regular use of stress-testing frameworks. They also define expectations for redemption arrangements that appropriately reflect the liquidity characteristics of loan-originating portfolios. In developing the final text, ESMA considered the structure of underlying loan exposures, repayment horizons, and the granularity and composition of loan books.

The report reflects feedback gathered during the public consultation, which concluded in March 2025, including input provided by ALFI and other industry stakeholders. ESMA has now submitted the finalised RTS to the European Commission. The Commission is expected to decide on their adoption within three months, with the possibility of a one-month extension.

The European Supervisory Authorities (EBA, EIOPA and ESMA – jointly referred to as the “ESAs”) have published their fourth annual report on the voluntary disclosure of Principal Adverse Impacts (PAIs) under the Sustainable Finance Disclosure Regulation (SFDR). The report highlights a notable increase in both the quality and completeness of information disclosed. An ever greater number of financial market participants now provide more comprehensive statements, thereby achieving a higher level of compliance with SFDR requirements – both at entity level and with regard to specific financial products.

However, the extent of disclosure varies considerably depending on the size of the market participant. Large, internationally active financial institutions tend to deliver structured and detailed reports, while smaller entities often fall short. In many cases, these firms blend general ESG or marketing-related information with SFDR-relevant statements, without clearly explaining how they address the most significant adverse impacts of their investments.

On a positive note, the report acknowledges that several market participants have taken on board recommendations and good practices outlined in previous years’ reports and improved their disclosure practices accordingly. At product level, the number of PAI statements has also increased, particularly for funds with environmental or social characteristics or sustainable investment objectives. Nevertheless, the quality of these disclosures remains uneven, and supervisory authorities continue to face challenges in monitoring them effectively.

Looking ahead, the ESAs recommend that national competent authorities apply stricter standards when reviewing PAI disclosures and communicate their expectations more clearly to the market. In addition, the findings of the report are expected to inform the upcoming review of the SFDR by the European Commission. Potential adjustments could include lowering the current employee threshold of 500 staff members or amending the frequency and depth of reporting obligations.

The Prudential Regulation Authority (PRA) has published its final Policy Statement, summarising the outcome of Consultation Papers CP8/24 and parts of CP13/24. Its central focus is the restatement of Capital Requirements Regulation (CRR) provisions in the PRA Rulebook, particularly on capital definitions, external credit rating mappings (ECAI mapping), and supervisory expectations for securitisation.

Key Provisions:

• Capital Definition: Most CRR provisions governing own funds are restated without substantive change. Crucially, the PRA introduces clarifications concerning interim profits, the treatment of capital instruments, and permission processes for capital adjustments.
• ECAI Mapping: A new section covering the Credit Risk Standardised Approach will be deployed for CRR firms, accompanied by amendments affecting Solvency II entities.
• Securitisation: Updates are made to supervisory statements related to significant risk transfer and the securitisation capital framework.
• Effective Date: All final rules are scheduled to take effect from 1 January 2026.

Regulatory Context and Rationale
This policy statement reflects the PRA’s ongoing effort to translate EU-derived CRR requirements into UK domestic law, with a focus on transparency and proportionality. The consultation phase saw general industry support. Feedback has been incorporated through targeted clarifications and expanded guidance, rather than policy shifts.

Relevance for Asset Managers & Compliance Software
For asset managers and providers of regulatory compliance software, this clarified and consistent regulatory framework offers a strategic advantage. Alignment with the restated CRR definitions supports seamless system integration, more efficient automation of reporting, and strengthened compliance processes.

Original source: “Restatement of CRR and Solvency II requirements in PRA Rulebook – Policy Statement”, published by the Bank of England’s Prudential Regulation Authority, July 2025.

The European Securities and Markets Authority (ESMA) has published its newest quarterly assessment of bond liquidity across EU trading venues. This report helps investors and market participants understand the current state of bond market liquidity.

For this period, ESMA identified 1,346 bonds as liquid under the MiFID II transparency rules. The assessment is based on key data such as the average daily trading volume and the number of trading days in the quarter.

The updated bond liquidity data is available now through ESMA’s Financial Instruments Transparency System (FITRS) and the ESMA Register online. ESMA also provides indicators that show the completeness of the liquidity data submitted.

The transparency rules for bonds classified as liquid will be effective from 18 August to 16 November 2025. These updates ensure better market transparency and support informed trading decisions.

ESMA continues to publish this report quarterly, maintaining clear and accessible information for all market stakeholders.

Disclaimer

This article contains a summarised and editorially processed version of the official release by the European Securities and Markets Authority (ESMA) dated 1st August 2025. This publication by LPA Lucht Probst Associates is intended solely for informational purposes, with due regard to intellectual property rights and publication conditions. All rights to the original content remain with ESMA.

The European Securities and Markets Authority (ESMA) has launched a call for evidence to identify opportunities to simplify, better integrate, and streamline supervisory reporting. The initiative aims to reduce complexity and costs for market participants while maintaining transparency and oversight.

ESMA is exploring two options: eliminating overlaps within current reporting channels or introducing a unified “report once” template to replace multiple frameworks. These proposals address recurring industry concerns such as overlapping obligations, duplicative reporting channels and frequent regulatory changes.

Stakeholders can submit their feedback by 19 September 2025. A final report, outlining key cost drivers and next steps, will be published in early 2026.

Disclaimer

This article contains a summarised and editorially processed version of the official release by the European Securities and Markets Authority (ESMA) dated 23 June 2025. This publication by LPA Lucht Probst Associates is intended solely for informational purposes, with due regard to intellectual property rights and publication conditions. All rights to the original content remain with ESMA.

Frankfurt, 17 July 2025 – The European Securities and Markets Authority (ESMA) published its first Climate Transition Plan on 8 July 2025. This marks a pivotal step in aligning its internal operations with the European Union’s climate objectives under the European Green Deal and the EU Strategy for a Green Economy.

Through this plan, ESMA commits to reducing its greenhouse gas (GHG) emissions – based on the 2023 reference year – by 15.4% by 2027 and 31.4% by 2030. The primary sources of emissions have been identified as business travel, energy consumption, and food services. The ultimate goal is for the supervisory authority to reach climate neutrality by 2050, in line with the Paris Agreement.

Specifically, ESMA is implementing the following measures:

• Introduction of an annual GHG budget to manage air travel emissions,
• Optimisation of office space usage to reduce energy demands,
• Incentives for climate-friendly procurement of goods and services.

The publication of this Climate Transition Plan clearly demonstrates that supervisory authorities are increasingly holding themselves to the same ESG standards they require of market participants. At the same time, ESMA underlines that sustainable transformation and effective supervision are not conflicting objectives, but mutually reinforcing imperatives.

Practical relevance: LPA Capmatix as a strategic enabler

For asset managers, management companies (ManCos), banks, and insurance undertakings seeking to meet their ESG and climate-related reporting obligations, LPA Lucht Probst Associates offers a powerful and modular solution through its Capmatix platform. Our software supports not only the mapping of regulatory requirements, but also enables the integration of sustainability targets into investment processes and ensures transparent reporting in line with SFDR, MiFID II, CSRD, and upcoming climate regulations.

With ESMA’s initiative, it becomes evident: the shift towards a Green Economy is not merely a political ambition, but an operational reality – for supervisors and market participants alike.

Disclaimer

This article contains a summarised and editorially processed version of the official release by the European Securities and Markets Authority (ESMA) dated 8 July 2025. This publication by LPA Lucht Probst Associates is intended solely for informational purposes, with due regard to intellectual property rights and publication conditions. All rights to the original content remain with ESMA.

Original source: https://www.esma.europa.eu

Frankfurt, 17 July 2025 – The European Securities and Markets Authority (ESMA) has issued final guidelines outlining the knowledge and competence criteria for staff at crypto-asset service providers (CASPs) who provide advice or information under the Markets in Crypto-Assets Regulation (MiCA). The guidelines specify minimum standards through examples of required qualifications and experience. They also address key risks in the crypto-asset sector, such as volatility and cybersecurity threats. These measures are intended to ensure that CASPs act in the best interest of clients and support investor confidence in digital finance markets. Following public consultation, including input from the Securities and Markets Stakeholder Group (SMSG), ESMA incorporated stakeholder feedback into the final version.

The guidelines will become effective six months after their publication in all EU official languages. Competent authorities must notify ESMA within two months of that date regarding their compliance status.

Disclaimer

This article is a summarized version of a public release issued by the European Securities and Markets Authority (ESMA) on 11 July 2025. The summary is intended solely to inform about current developments under the MiCA regulation. All rights to the original content remain with ESMA. LPA Lucht Probst Associates does not claim ownership of the source material and has published this information solely for informational and educational purposes, in compliance with applicable intellectual property and publication guidelines. For the original publication, visit: https://www.esma.europa.eu

Published by LPA Lucht Probst Associates – Source: FCA, 6 June 2025

In a continued effort to streamline regulatory obligations, the UK Financial Conduct Authority (FCA) has announced plans to eliminate additional reporting requirements that are deemed non-essential. This move aims to reduce the compliance burden for firms and support economic efficiency.

The FCA proposes to:

• Decommission REP022, which relates to General Insurance Pricing Attestation, as it is no longer critical for monitoring compliance.
• Eliminate RIA Complaints reporting, avoiding data duplication for retail investment advisers.
• Reduce REP009 (Buy-to-Let Mortgage Data) reporting frequency to once per year.
• Remove the requirement for nil returns on REP008, related to conduct rule breaches outside senior manager functions.

These changes align with the FCA’s five-year strategy to be a more proportionate, data-smart regulator. Additionally, the regulator has launched the My FCA portal, consolidating regulatory tasks under a single sign-in platform.

Source: Financial Conduct Authority (FCA), News Release dated 6 June 2025