This jargon buster sets out some of the key acronyms and buzzwords we expect to be hearing this year
AI Act
A draft EU Regulation which aims to create a new regulatory framework for development and deployment of artificial intelligence (AI) across the EU.
AIF
Alternative Investment Fund.
AIFM
Alternative Investment Fund Manager, being the legal person whose regular business is managing one or more AIFs.
AIFMD
Alternative Investment Fund Managers Directive – an EU directive which governs the activities of AIFMs (a UK version also applies in the UK).
AIMA
The Alternative Investment Management Association.
BEPS
Base erosion and profit shifting.
Collective DC
Under a collective money purchase scheme, also known as collective DC, target defined benefits are communicated but not promised. Investments are pooled (not selected by members) and pensions are paid from the scheme rather than by annuity purchase. Adjustments are made to pensions in payment and to benefit targets, based on the funding position from time to time. These schemes are currently only permitted for single or connected employers. Royal Mail is expected to establish the first such scheme in 2024. In the future, the Government intends to allow collective DC to be operated for unconnected employers, including on a commercial basis.
Consumer Composite Investments
How it is expected PRIIPs will be rebranded in the expected new UK Retail Disclosure Regime.
CS3D
Corporate Sustainability Due Diligence Directive – an EU directive which aims to foster greater transparency and accountability for companies’ supply chain impacts.
CSRD
Corporate Sustainability Reporting Directive – an EU directive which requires companies to report on the impact of corporate activities on the environment and society, and requires the audit (assurance) of reported information.
CTP
Critical Third Party. The UK Government is consulting on proposals to designate certain suppliers of key services to the financial sector as CTPs. This would enable UK financial services supervisory authorities to regulate those businesses directly, even though they are not carrying out financial services activities requiring authorisation. The aim is to ensure that CTPs meet minimum resilience standards, with a view to reducing systemic risk to financial markets.
DB pension scheme
Defined benefit pension scheme.
DC pension scheme
Defined contribution pension scheme.
DEI (or DE&I)
Diversity, equity and inclusion.
D&I
Diversity and inclusion.
DORA
Digital Operational Resilience Act – an EU regulation creating an information and communication technology (ICT) risk management framework for the EU financial sector.
DPDI Bill
Data Protection and Digital Information Bill. Aims to reform UK data protection framework.
ECCT Act
Economic Crime and Corporate Transparency Act 2023.
EEA
European Economic Area.
ELTIF
European Long Term Investment Fund.
ELTIF 2.0
Version of the ELTIF that became available on 10 January 2024.
ESG
Environmental, social and governance.
ESRS
European Sustainability Reporting Standards, the reporting standards required under CSRD.
ESTA
The USA’s Electronic System for Travel Authorization.
ETA
Electronic Travel Authorisation – a new electronic ‘permission to travel’ requirement being introduced in the UK for all non-UK passport holders travelling to the UK for business or leisure without a visa.
ETIAS
European Travel Information and Authorisation System – a new electronic ‘permission to travel’ requirement being introduced in thirty European countries for those travelling for business or leisure without a visa.
EU whistleblowing Directive
An EU directive which requires member states to provide whistleblowers with effective channels to report breaches of EU rules as well as protection against retaliation for doing so.
FCA
Financial Conduct Authority (UK).
Foreign Subsidies Regulation (FSR)
A new set of rules to enable the European Commission to address distortions caused by foreign subsidies, with the aim of ensuring a level playing field for all companies operating in the EU Single Market. These rules introduce, amongst other things, a mandatory notification regime for certain transactions and public procurement contracts.
Generative AI
Deep-learning models that can generate high-quality text, images, and other content based on the data they were trained on.
GloBE Rules
Global Anti-Base Erosion rules that, broadly, establish a global minimum corporate tax rate of 15% for multinational enterprises that meet a €750m revenue threshold.
GP stake deals
The act of buying of passive, minority equity stakes in asset managers that are formed as general partners and receive funding from limited partners.
Green agreement
Broadly, for the purposes of UK competition law, an agreement between competitors aimed at preventing, reducing or mitigating the adverse impact that economic activities have on the environment or assisting with the transition towards environmental sustainability. The EU takes a wider view of so-called ‘sustainability’ agreements, including also objectives addressing human rights, ensuring a living income and fostering resilient infrastructure and innovation.
Greenwashing
The process of conveying a false impression or misleading information about a company’s environmental credibility.
ICT
Information and Communication Technology.
IFRS
International Financial Reporting Standards.
ISSB
International Sustainability Standards Board, produced two international sustainability reporting standards (IFRS S1 and S2) in June 2023.
JPUT
Jersey property unit trust.
LGPS
UK Local Government Pension Scheme.
Loan Originating AIF
An AIF: (i) whose investment strategy is mainly to originate loans; or (ii) where the notional value of the AIF’s originated loans represents at least 50% of its net asset value.
Miscellaneous income
A particular category of taxable receipt for the purposes of UK tax on income.
MNE
Multinational enterprise.
OFR
The UK’s proposed Overseas Funds Regime which would enable overseas retail funds to access the UK market.
PAIs
Principal Adverse Impacts.
Pillar Two
The element of the OECD’s BEPS Project that has given rise to the GloBE Rules.
Predictive AI
The use of machine learning to identify patterns in past events and make predictions about future events.
PRIIPs
Packaged Retail Investment and Insurance-Based Products.
Productive assets/investment
Investment that can contribute to national economic growth, including public and private equity, real estate, farmland and infrastructure.
RIF
Reserved Investor Fund (Contractual Scheme), a proposed new UK fund vehicle.
Run-on
Refers to a pension scheme continuing to be run by the trustees and investing in return-seeking assets, rather than ‘de-risking’ by securing liabilities with an insurer or transferring to a commercial consolidator.
SDR
Sustainability Disclosure Requirements, the UK’s sustainable finance labelling regime, with broadly similar aims to SFDR.
SEC
The Securities and Exchange Commission (of the USA).
SFDR
Sustainable Finance Disclosure Regulation – the EU regulation which sets out sustainability disclosure requirements for certain financial services firms.
Taxonomy Regulation
Establishes the EU Taxonomy by setting out the conditions that an economic activity has to meet in order to qualify as environmentally sustainable.
TCFD
Task Force on Climate-Related Financial Disclosures.
TMPR
The UK’s Temporary Marketing Permissions Regime. Expected to be replaced by the OFR.
Value chain
Key term under CSRD and potentially CS3D (or, “chain of activities”), describing upstream and downstream business relationships and determining the extent of reporting/due diligence obligations under these laws.
Whistleblowing
Refers to a person disclosing information that they reasonably believe is in the public interest and shows some form of wrongdoing.
