ESMA Director delivers keynote speech at IDX 2015. Verena Ross, Executive Director of the European Securities and Markets Authority (ESMA), in the keynote speech at the Future Industry Association’s IDX 2015, spoke about the key work streams and topical issues in rule-making under the Markets in Financial Instruments Directive (MiFID) and the implementation of the European Market Infrastructure Regulation (EMIR). (6/9/2015) ESMA press release.
Solvency II Quarterly Bulletin pre-release articles. The Bank of England pre-released articles from its Q2 Quarterly Bulletin 2015: “The prudential regulation of insurers under Solvency II” and “Banking sector interconnectedness: what is it, how can we measure it and why does it matter?” (6/8/2015) Bank of England press release.
ESMA seeks impact of best practices for proxy voting. ESMA published a Call for Evidence on the impact of the best practices of shareholder voting research and analysis. Comments are due by July 27, 2015. (6/8/2015) ESMA press release.
European Commission adopted third country equivalence decisions under Solvency II. The European Commission adopted its first third country equivalence decisions under Solvency II, which sets out rules to develop a single market for the insurance sector. After receiving equivalence, EU insurers can use local rules to report on their operations in third countries, while third country insurers are able to operate in the EU without complying with all EU rules. (6/5/2015) EC press release.
ESMA issues risk dashboard for first quarter. ESMA issued its Risk Dashboard 2015. In the first quarter 2015, systemic stress remained at previous levels; contagion, liquidity, and credit risk remained high but stable; and market risk increased. (6/5/2015) ESMA press release.
G7 summit 2015 on European Union’s role and actions. The Group of Seven Nations (G7) summit took place in Germany on June 7-8, 2015. The main topics included the global economy and trade, as well as foreign affairs, security, health, and development issues. Participants agreed to support the upcoming United Nations (UN) negotiations to develop a new international climate change agreement and the UN’s post-2015 sustainable development agenda. (6/5/2015)EC press release. See also Reuters.
European Commission extends CCP transitional phase. The European Commission extended the transitional period for capital requirements for EU banking groups’ exposures to central counterparties (CCPs) under the Capital Requirements Regulation (CRR) from June 15, 2015, to December 15, 2015. The CRR introduced a capital requirement for the exposures of EU banks and their subsidiaries to a CCP. (6/4/2015). EC press release.
FCA publishes paper on regulated benchmarks. The Financial Conduct Authority (FCA) published a consultation paper, “CP15/18: Fair, reasonable, and non-discriminatory access to regulated benchmarks,” in response to concerns regarding the unconstrained ability of administrators to set the prices of benchmarks. Comments are due by August 3, 2015. (6/3/2015) FCA press release.
EBA publishes final draft RTS. The European Banking Authority (EBA) published its final draft Regulatory Technical Standards (RTS), which outline the criteria that Competent Authorities need to use before granting institutions permission to use advanced measurement approaches for calculating their capital requirements for operational risk. (6/5/2015) EBA press release.
EBA to assess regulatory equivalence of non-EU countries. The EBA published a questionnaire to guide its assessment of non-EU countries’ equivalence with the EU prudential supervision and regulatory requirements specified in the CRR and Capital Requirements Directive (CRD). The questionnaire will be sent to selected non-EU countries. (6/2/2015) EBA press release.
ECB releases survey results on access to finance. The European Central Bank’s (ECB) latest “Survey on the access to finance of enterprises” noted an improvement in the availability of external sources of finance. (6/2/2015) ECB press release.
FCA report on delegated authority arrangements in the general insurance market. An FCA study reviewed 12 insurers’ outsourced underwriting and claims handling and found that some insurers did not conduct due diligence when selecting third parties nor provided sufficient oversight of the services. (6/2/2015)FCA press release.
EBA published final guidelines on mortgage creditworthiness assessment. The guidelines ensure that national authorities implement the Mortgage Credit Directive (MCD) consistently across the EU. (6/1/2015) EBA press release.
UK PRA seeks comments on Solvency II statements. The UK Prudential Regulation Authority (PRA) seeks comments on their consultation paper, “Solvency II: internal model reporting codes and components and life product codes — CP20/15,” which contains two draft Supervisory Statements. Comments are due by July 10, 2015. The PRA also published a supervisory statement, “Solvency II: supervisory approval for the volatility adjustment — SS23/15.” (6/1/2015)
EBA final report on Additional Tier 1 of EU institutions. The EBA published the final report of its review of the issuances of Additional Tier 1 capital instruments by EU institutions. (5/29/2015) EBA press release.
EFSI negotiations successfully concluded. EU legislators successfully concluded negotiations on the Regulation for a European Fund for Strategic Investments (EFSI), which means the Fund should become operational by September pending final approval by the European Parliament and the ECOFIN Council in June. (5/28/2015) EC press release.
ECB publishes financial stability review. In its latest Financial Stability Review, the ECB wrote that the current financial situation in Europe is one of growing financial risk appetite within a gradual economic recovery. (5/28/2015) ECB press release.
UK PRA amends ring-fencing rules. PRA published a policy statement, “The implementation of ring-fencing: legal structure, governance and the continuity of services and facilities — PS10/15,” which provides feedback on responses received to Consultation Paper 19/14 published in October 2014. (5/27/2105) PRA press release.
EBA publishes triggers for resolution guidelines. EBA published its final guidelines to determine when an institution is considered “failing or likely to fail.” The guidelines will apply from January 1, 2016. (5/26/2015) EBA press release.
EBA publishes guidance on management of interest rate risk. The EBA updated its Committee of European Banking Supervisors (CEBS) guidelines, which provide enhanced high-level guidance on interest rate risk arising from non-trading activities (IRRBB) as well as guidance on technical aspects of IRRBB. The guidelines will apply from January 1, 2016. (5/22/2015) EBA press release.
UK PRA proposes new rule on contractual stays. PRA published a consultation paper, “Contractual Stays in Financial Contracts Governed by Third-Country Law — CP 19/15,” aimed at improving cross-border recognition of resolution stays where statutory recognition regimes are lacking. Comments are due by August 26, 2015. (5/26/2015) PRA press release.
ESMA calls for modification of UCITS Directive. ESMA has called for a modification of the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive to take into account the clearing obligations for certain types of OTC financial derivative transactions under EMIR. ESMA believes that the UCITS Directive should no longer distinguish between OTC financial derivative transactions and exchange-traded derivatives (ETDs). (5/22/2015) ESMA notice.
ESMA publishes response to Capital Markets Union Green Paper. ESMA indicated it is fully supportive of the aims of the Capital Markets Union (CMU) and stated that increasing the role of the non-banking sector will help shift from debt to more equity funding. ESMA set out its main objectives of enhancing investor protection and promoting stable and orderly financial markets that can contribute to CMU. (5/21/2015) ESMA notice.
European Commission announced review of implementation of EMIR. The European Commission is seeking input from market participants regarding their experience in implementing EMIR, which requires standard derivative contracts to be cleared through CCPs and introduces an obligation to report derivative contracts to trade repositories. Comments should be submitted by August 13, 2015. (5/21/2015) EC press release.
European Parliament agrees to negotiating mandate for regulation of financial benchmarks. Proposed EU rules to make benchmarks more reliable moved forward after the European Parliament cleared the way for negotiations with the Council and the Commission to start next month. The standards proposed in September 2013, in the wake of alleged manipulation of LIBOR rates, aim to improve the functioning and governance of benchmarks that are produced and used in the EU in financial instruments such as bonds, shares, futures or swaps, as well as in financial contracts. (5/19/2015) EC statement.