• Capital Requirements Directive IV and Regulation (CRD IV / CRR): the text of CRD IV and CRR is still subject to heavy negotiation in 'trialogue' discussions between the European Council, Commission and Parliament.  Key outstanding issues include the composition of the Liquidity Coverage Ratio (and whether certain mortgage and other asset backed securities will be eligible for inclusion in the definition of 'liquid assets' under the LCR), the additional capital buffers for Systemically Important Financial Institutions (SIFIs) and the exact scope of the national flexibility package that allows Member States some discretion in local implementation.  A political decision will be sought at a meeting of Finance Ministers in early December, with a view to the vote on the final text being taken on 13 December 2012.  In order to meet the Basel III implementation date of 1 January 2013, the text must be agreed as soon as possible, not least so that national supervisors can begin consulting on local implementing measures.
  • Credit Rating Agencies III (CRA III): this legislation makes a series of further, detailed changes to the EU Regulation on Credit Rating Agencies (as amended) and has been heavily negotiated at European level.  The final text has now been agreed and will be voted on in early January 2013.  Among the key issues for structured finance transactions are the requirement for issuers to rotate the CRAs they use to rate their deals every few years (although this now appears only to apply to 're-securitisations'), the introduction of new and detailed disclosure requirements for issuers that requires them to make more information on their products available to the public, and the establishment of a new, EU-wide civil liability regime for CRAs that would reverse the burden of proof and require CRAs to disprove any infringement of the legislation or its impact.
  • Markets in Financial Instruments Directive II and Regulation (MiFID II / MiFIR): these amendments to the original Markets in Financial Instruments Directive seek to impose a stricter regime on the provision of investment services in financial instruments (covering brokerage, advice, dealing, portfolio management, underwriting etc.) by banks and investment firms, to more heavily regulate the operation of stock exchanges and alternative trading venues (so-called Multilateral Trading Facilities) within the EU, and introduce greater transparency in the over-the-counter derivatives market.  This legislation has now been postponed and will not progress further until January 2013 when negotiations will be resumed at European level