Investment management update - May 2022

26 May 2022

Welcome to the May 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 long-awaited SFDR detailed rules have been published, and there is a new consultation on ESG scores and ratings.
  • The UK is attempting to become a world-leading hub for crypto-assets and related technology.
  • Two initiatives that bear a closer look: the UK Parliament is undertaking a review of venture capital and the FCA has published its Business Plan for 2022/23.


  • The parliamentary Treasury Committee has launched a review of the venture capital market with the publication of a call for evidence. The consultation considers the effectiveness of fundraising, cooperation between start-ups and established companies, tax incentives and interventions by the public sector. The call for evidence will close on 7 June 2022.
  • The FCA has published a consultation about the use of side pockets by funds that have investments in Russian, Belarussian, and Ukrainian assets. The FCA announced last month that it would consult on measures to protect investors in funds that have been affected by the war. The short consultation period closed on 16 May 2022.
  • The FCA has published final rules on diversity and inclusion in respect of company boards and executive management. Listed companies will be required to disclose information about diversity, including progress against specified targets in respect of the representation of women and ethnic minorities within the senior levels of the company. The Policy Statement applies from the accounting period beginning 1 April 2022.
  • HM Treasury announced that stablecoins, a form of crypto currency pegged to the value of fiat currency or commodities, will be brought into the regulatory system. In addition, HM Treasury published its response to its 2021 consultation on cryptoassets, stablecoins and distributed ledger technology. The Government’s aim is to make the UK a global hub for cryptoassets and their underlying technology. The Government and the FCA made a series of announcements in respect of their policy plans for cryptoassets.
  • The FCA published its Business Plan for 2022/23, comprising a work-plan for delivering its priorities over a three-year period. The FCA’s priorities are to reduce harm, raise standards, and promote competition and positive change.


  • The European Commission has adopted a delegated regulation relating to the Investment Firms Regulation. The rules define how investment firms should calculate the fixed overheads requirement.
  • The European Commission is consulting on ESG scores and the use of ESG factors by credit scores. We have previously described how ESG scores and ratings are the remaining major area of regulatory focus, particularly for ESMA, amid concerns about the availability and quality of ESG data. This consultation seeks to gather information about the current state of the market. The comment period closes on 6 June.
  • The European Commission has issued a targeted consultation on the Money Market Funds (MMF) Regulation. The paper asks MMF issuers and investors about the functioning of the regime and potential options for reform. The consultation closed on 28 April 2022.
  • After several delays, the European Commission has adopted the Sustainable Finance Disclosure Regulation (SFDR) regulatory technical standards (RTS). The Level 2 rules set detailed requirements for ESG disclosures. The adopted RTS largely reflect the previous draft version. The EU’s co-legislators have three months to object to the contents (by 7 July 2022) before the RTS become law.


  • IOSCO is consulting on Good Practices for ETFs. The report endorses IOSCO’s Principles for the regulation of ETFs but identifies cross-border differences in regulations. Consequently, the report recommends that regulators adopt its proposed good practices, spanning product structures, disclosures, liquidity management, and volatility control. Comments are requested by 6 July 2022.