Laws and Regulations

Investors in European ESG funds could be in for a rude awakening as new guidelines from the European Securities and Markets Authority (Esma) threaten to upend the industry, according to Morningstar.

Transcript of the interview with Esma Chair Verena Ross.

Unlike in the United States and Australia, greenwashing in Europe’s financial sector remains largely unpunished, even though existing legislation allows national regulators to take action against firms that mislead investors.

The European Securities and Markets Authority (Esma) issued a warning on Thursday, advising the financial sector to exercise caution in the use of artificial intelligence (AI) in investment services.

While AI promises to revolutionise the retail investment sector with enhanced efficiency and innovation, Esma highlights the significant risks associated with its adoption, urging for responsible innovation and investor protection.

Artificial intelligence (AI) is reshaping the financial landscape with promises of efficiency, innovation, and superior decision-making capabilities. However, as the European Securities and Markets Authority (Esma) warned this week, the integration of AI in investment services comes with significant risks. Like a double-edged sword, AI’s greatest strengths can become its most dangerous liabilities if not handled with care.

Banks and asset managers continue to make misleading sustainability claims, according to the European Securities and Markets Authority, Esma. Following an investigation into the compliance of marketing communications with MiFID II rules, Esma found that financial products and services are often presented as green without substantiating the sustainability claims.

ING Luxembourg has decided to eject thousands of mass retail clients in the grand duchy as part of a strategic transformation in which it plans to boost its focus on more profitable private banking services.

The European Securities and Markets Authority (Esma) unveiled a new initiative this week aimed at making investment opportunities more accessible across the EU. At the heart of this plan is a new “basic and simple” EU investment product label, intended to simplify and streamline choices for retail investors.

Jersey-headquartered Aztec Group has announced the launch of its Alternative Investment Fund Manager (AIFM) service in Luxembourg. This new service offers a range of support functions required by alternative investment managers establishing and managing European alternative investment funds. The services include marketing, compliance, risk management, regulatory reporting, and portfolio management.

Speaking at an ALFI event in New York, the U.S. Securities and Exchanges Commission, SEC, and Luxembourg financial supervisor CSSF have jointly voiced significant concerns about “increasingly complicated fee structures” in the fund industry, warning that these practices may be obscuring the true costs for investors.