Investment management update - January 2022

12 January 2022

Welcome to the January 2022 edition of our investment management update. This publication has been tailored to highlight topical news, cases and changes in the law impacting the investment management sector.

This month’s edition includes the following updates:

  • the FCA’s reviews of the financial promotions, Appointed Representatives, and Financial Services Compensation Scheme regimes;
  • confirmation of the EU’s changes to the PRIIPs Regulation and the exemption for UCITS; and
  • developments in stewardship and in corporate ESG reporting.

Asset management and financial services


  • The UK’s new national security screening regime went live on 4 January 2022. The Government has consolidated its published guidance on the regime. Please contact us if you require more information.
  • HMT is consulting on amending the financial promotions regime’s exemptions for high net worth and sophisticated investors.
  • The FCA and HMT have issued parallel consultations on the Appointed Representatives Regime. HMT’s call for evidence seeks to determine whether the overall framework should be updated, including the scope of the regime. The FCA’s consultation considers specific policy changes, such as the responsibilities of principals. The consultations close on 7 March 2022.
  • The FCA has published a discussion paper on potential changes to the Financial Services Compensation Scheme (FSCS). The paper considers the purpose of the FSCS, the scope of activities that should be subject to compensation, and how the FSCS should be funded (including the application of the FSCS levy on the industry). The consultation closes on 4 March 2022.
  • The FCA has published a policy statement on reforms to the UK’s MiFID organisational and conduct rules, including an exemption from best execution reporting, and exemptions from the research rules for certain SME and FICC third-party research.
  • The regulator has published its response to Lord Hill’s post-Brexit review of the UK’s listing regime (the Primary Markets Effectiveness Review) and has detailed the changes that the FCA will make. The changes took effect on 3 December 2021.


  • Revisions to the PRIIPs Regulation, the extension of the exemption for UCITS, and revisions to the PRIIPs RTS have been published in the EU’s Official Journal. UCITS will adopt the Key Information Document by 2023, and the revisions will also apply from then.
  • ESMA updated its UCITS Q&As. The update confirms that ManCos that rebate investors from their own resources are subject to the inducement rules.

Derivatives and trading


  • The FCA has announced that it is extending the supervisory approach to commodity derivatives position limits set out in its supervisory statement on the operation of the MiFID markets regime after the end of the EU withdrawal transition period, published in December 2020. In the meantime, HMT is reviewing the scope of the regime as part of its Wholesale Market Review.
  • HMRC is consulting on draft Disregard and Bringing into Account of Profit and Losses on Derivative Contracts Hedging Acquisitions and Disposals of Shares Regulations 2022. The draft Regulations will apply to derivative contracts entered into on or after 1 April 2022 to hedge foreign exchange risks on a forecast transaction relating to an anticipated future acquisition or disposal of a substantial shareholding. The consultation runs until 24 January 2022.


  • ESMA has issued a statement to clarify the practical implementation of the CSDR settlement discipline regime, which is scheduled to start applying on 1 February 2022. An expected amendment to CSDR should allow ESMA to propose a later start date for the CSDR buy-in regime. 
  • ESMA has issued a public statement on the implementation of the changes to the clearing obligation and derivative trading obligation (DTO) in light of benchmark transition. The statement clarifies the situation if ESMA’s proposed draft RTSs on the clearing obligation and DTO do not enter into force in time for the transition to alternative benchmarks of EONIA or LIBOR-based OTC derivative contracts by the end of 2021.



  • The Financial Reporting Council (FRC) has published a report examining reports from the first signatories to its revised Stewardship Code that was published in September 2021. The FRC notes continued high-quality disclosure concerning governance, resourcing, and integrating stewardship and ESG factors with investment, but there is room for improvement in explaining stewardship-related conflicts of interest and on review and assurance of stewardship activities.
  • The FRC has also published a factsheet for companies explaining proposals by the IFRS Foundation to develop new International Sustainability Standards.
  • The FCA published a policy statement on the Taskforce for Climate-related Financial Disclosures (TCFD)-aligned reporting requirements for asset managers, insurers, and pension schemes.
  • The FCA published a further policy statement on TCFD-aligned disclosure requirement for standard listed companies.


  • The Taxonomy Regulation’s climate-related technical screening criteria were published in the EU’s Official Journal in the Climate Delegated Act.