Stephen Evans

Financial advisors need to gauge client preferences around green and social investing, and the investment products they recommend must keep their ESG promises

The cost of implementing banking sector regulations has risen by an annual average of 16% since 2015 says a recent study by the the Luxembourg Bankers Association (ABBL) and major accounting firm EY.

About 31% of fund assets in Europe have been classified under SFDR as article 8 or 9, with 28% as 8 and 3% as 9. Yet there are still some question marks about the effects of this regulation.

Leading European digital banks now have nearly 100m customers. This is according to research by Accenture presented at a ABBL online roundtable on 10 June entitled “Neobanks: An opportunity behind each threat”. Even if one-in-six of the continent’s population have an account, the concept of pure online banking has yet to go mainstream. But this could be about to change.

Could regulatory moves be underway that will help unlock the promise around blockchain and distributed ledger technology (DLT)? Too often great new ideas and tools run into a wall of financial sector regulation before they can show their full promise.

VAT rules are a mess in the EU financial services sector. The current regime dates from 1977, well before the development of the cross-border business we know today.

The acronym ELTIF has been popping up on news sites with increasing regularity in recent months. This vehicle has failed to excite the industry since it was launched in 2015, but maybe this is changing.

Yesterday we saw how Luxembourg is playing a significant role helping international investors gain exposure to the Chinese market. Yet what about the movement in the other direction, as Chinese investors seek to diversify into other markets? This question was explored by a panel of locally-based experts at Luxembourg For Finance’s China Finance Forum 2021.

Quietly, Luxembourg has built substantial fund investment access to the Chinese market. This was highlighted at the “Access Channels” roundtable at Luxembourg for Finance’s China Finance Forum 2021. With Chinese markets being some of the fastest growing in the world, little wonder the appeal to global asset managers of this market via the Luxembourg route is strong.

Be under no illusion. Discussions around the EU green investing taxonomy are likely to go to the wire. Although April saw publication of a likely draft text, complex political discussions are set to continue. This will have implications for suitability assessments and product governance, which will impact the operation of Mifid companies, thus affecting UCITS Mancos, AIFMs and insurance companies.