DORA Consultation and AIFMD and UCITS Review

Strengthening financial sector resilience with DORA, AIFMD, and UCITS regulations. Significant developments shaping Europe's finance landscape.

ESMA: DORA Consultation and AIFMD and UCITS Review
EU Digitalisation and Resilience in the Financial Sector

(ESMA) open consultation Digital Operational Resilience Act (DORA) and AIFMD and UCITS

Svenska Bankföreningen keywords DORA AIFMD and UCITS

The European Supervisory Authorities (ESA) comprising of the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA) and European Securities and Markets Authority (ESMA) have issued an open consultation on the second set of rules under the Digital Operational Resilience Act (DORA). These rules aim to strengthen the resilience of the financial sector to digital threats. The consultation is open until March 4, 2024, with a public hearing scheduled for January 23, 2024.


In another development, ESMA has postponed its proposed guidelines on sustainability-related terms in fund names to ensure the results of the AIFMD and UCITS review are fully considered. The guidelines, expected to be approved and published in the second quarter of 2024, will be applied three months after publication. Funds are expected to adhere to these guidelines from the day they are applied.


Finally, ESMA has issued a discussion paper on the digitalization of investment services for non-professional investors and other investor protection issues. The paper examines the use of digital tools and social media by companies and non-professional investors in the aftermath of the Covid-19 pandemic.

DORA, AIFMD, and UCITS in European Financial Regulation


The European Supervisory Authorities, comprising the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Securities and Markets Authority (ESMA), have embarked on an important open consultation. This consultation, integral to the Digital Operational Resilience Act (DORA), represents a significant regulatory initiative aimed at bolstering the financial sector's defenses against an array of digital threats.


This open dialogue invites stakeholders to share their perspectives until March 4, 2024, with a key public hearing set for January 23, 2024. The DORA consultation is a critical step in enhancing the operational resilience of financial institutions across Europe, ensuring they are better equipped to handle the challenges of the digital age.




Approach to Sustainability in Fund Names: Integrating AIFMD and UCITS Review Insights


In a thoughtful and strategic decision, ESMA has delayed the introduction of its new guidelines on the use of sustainability-related terms in fund names. This postponement is to ensure that the insights from the reviews of two crucial regulatory frameworks, the Alternative Investment Fund Managers Directive (AIFMD) and the Undertakings for Collective Investment in Transferable Securities (UCITS), are fully incorporated.


These guidelines, anticipated to be approved and published in the second quarter of 2024, represent a significant advancement in aligning fund naming practices with broader sustainability principles. Once implemented, three months after publication, these guidelines will require EU funds to adhere to these new standards, reflecting the increasing emphasis on sustainability in investment practices.




Digitalisation of Investment Services: Insights from ESMA's Discussion Paper


Further contributing to the discourse on digital finance, ESMA has released a comprehensive discussion paper. This paper focuses on the digitalization of investment services for non-professional investors, addressing a range of investor protection issues.


It offers an in-depth exploration of how digital tools and social media have been embraced by companies and non-professional investors, especially in the context of the post-Covid-19 landscape. The insights from this discussion are vital for understanding the dynamic nature of digital finance and its implications for investor protection, regulatory compliance, and the overall stability of the financial market.


Shaping a Resilient, Sustainable, and Inclusive Financial Future in Europe


These regulatory developments, encompassing the Digital Operational Resilience Act (DORA), the Alternative Investment Fund Managers Directive (AIFMD), and the Undertakings for Collective Investment in Transferable Securities (UCITS), underscore the ongoing efforts by European regulatory bodies to adapt and enhance the financial sector's regulatory framework. With a focus on digital resilience, sustainable investment, and investor protection, these initiatives are pivotal in shaping a financial landscape in Europe that is resilient, sustainable, and accessible to all market participants.




Key Takeaways for Enhanced Understanding:


  • DORA Consultation: Open until March 4, 2024, this consultation is a key opportunity for stakeholders to influence how the financial sector adapts to digital challenges.

  • AIFMD and UCITS Review: ESMA's upcoming guidelines on sustainable fund naming practices, expected in Q2 2024, are a response to the evolving AIFMD and UCITS regulatory landscape.

  • Digitalization in Investment Services: ESMA's discussion paper offers critical insights into the adoption of digital tools in the investment sector, highlighting the importance of investor protection in the digital era.



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