Laws and Regulations

Antwerp-based asset manager Merit Capital will lose its Belgian brokerage licence, according to a judgement by Belgium’s Council of State published on 26 April. Merit Capital has been struggling for years with its governance model and profitability. Having its license revoked casts a cloud over its arrangement with Frankfurt-based Renell Bank, which announced in October it had agreed to acquire Merit subject to conditions.

Funds exposed to the Ukraine war have new liquidity management options following the recent publication of the CSSF’s guidance. To understand more about how the market is adapting , particularly during the current annual reporting season, we spoke to Nicolas Hennebert, partner and investment management leader audit & assurance at Deloitte Luxembourg.

With its DLT white paper released in January, supervisor CSSF has triggered a broad industry debate on the use blockchain technology to adopt virtual assets, and about public versus private blockchains. The discussion is seen as positive, and, according to one industry expert, could pave the way “for mass adoption of asset tokenisation”.

“It is not five minutes to twelve, but one minute to twelve,” said Detlef van Vuuren, one of the Dutch scientists who collaborated on the latest report by the UN climate agency, the IPCC. 

According to the report, presented on Monday, countries have to invest three to six times more than currently agreed in measures to reduce greenhouse gases. If that does not happen, the climate goals will be far out of reach. That is this week’s alarming message from the United Nations. 

Luxembourg’s financial supervisor, releasing its eagerly anticipated guidance for investment funds exposed to Russia, has outlined a range of segregation options to handle stranded assets in Russia. Funds also were reminded to assess if they are potentially in breach of sanctions against Russia and Belarus. 

New options for trading securitised debt products are available in Luxembourg after its parliament approved long-awaited amendments to its securitisation law. In an interview with Investment Officer, Harneys’ counsel and securitisation lawyer Massimiliano della Zonca sees it as a game changer for the Grand Duchy. 

Sanctions imposed on companies and individuals in Russia and Belarus have triggered concerns that crypto-currencies offer an escape route to circumvent them. Insiders argued that these concerns are unjustified, although crypto sceptics argue that “we should not be naive”.

Tech advisory and investment firm GP Bullhound on Monday said it is opening an Luxembourg office after the national supervisor gave a green light to application for a licence as Alternative Investment Fund Manager, or AIFM. In parallel to the Luxembourg launch, the company is opening a new office in Zurich.

The popularity of digital assets will lead to significant changes for the financial industry, including within the area of asset custody. Today’s global custody industry goes back to regulatory changes in the 1970s. Digital assets, the most well-known being Bitcoin, differ in several ways from traditional assets, including the role of information technology, specifically of private key management, which will be accompanied by potential regulatory differences.

Although there is some room for improvement, liquidity risks in corporate debt and real estate investment funds do not pose any substantial risk for financial stability, the EU’s top financial securities markets regulator said on Wednesday.