DOMESTIC:

Director of Asset Management Supervision, Michael Hodson, addresses Bloomberg Conference on Markets in Financial Instruments Directive II and the challenges ahead

Mr. Hodson addressed several areas where Markets in Financial Instruments Directive II (MiFID II) will create new obligations for the Central Bank such as through changes to the authorisation process for investment firms and data reporting service providers, the new product intervention powers and waiver applications. He also outlined the Central Banks willingness to engage with industry working groups and associations to address areas of common concern and their approach to Brexit related supervisory queries.

Mr. Hodson also noted that there is eight months to the ‘go live’ date for implementation and there will be no further extensions to the implementation deadline.

EUROPEAN:

European Securities and Markets Authority publishes final technical advice regarding supervisory fees for Trade Repositories (TRs) under the Securities Financing Transactions Regulation (SFTR)

European Securities and Markets Authority (ESMA) proposed:

  • changes to the way ESMA’s fees for TRs are calculated under the European Market Infrastructure Regulation (EMIR);
  • simplification of the determination of the turnover of TRs for the purposes of calculating the annual supervisory fees by including revenues only and excluding activity figures;
  • lower fees in the case of extension of registration under SFTR, or in the case of concurrent application under both regimes;
  • the calculation of fees for recognition of third country TRs; and
  • the reimbursement of the cost to NCAs in the case of delegation of tasks.

European Securities and Markets Authority publishes update to Questions and Answers on MiFID II and Markets in Financial Instruments Regulation on the implementation of investor protection topics

The questions and answers, published on 4 April 2017, added ten new questions and answers to its questions and answers document on the implementation of investor protection topics under the MiFID II and Markets in Financial Instruments Regulation (MiFIR). The questions and answers provide clarifications on the areas of best execution, suitability, post-sale reporting, inducements (research), information on charges and costs and underwriting and placement.

European Securities and Markets Authority to cooperate with New Zealand's regulators on Central Counterparties

ESMA have established a Memorandum of Understanding with Reserve Bank of New Zealand and Financial Markets Authority of New Zealand which establishes cooperation arrangements regarding Central Counterparties (CCPs) which are established and authorised or recognised in New Zealand, and which have applied for EU recognition under EMIR.

European Securities and Markets Authority issues opinion regarding the implementation on Portfolio Margining Requirements for Central Counterparties

The opinion provides guidance on the application of portfolio margining under EMIR. ESMA's opinion aims to help build a common Union supervisory culture and consistent supervisory practices, as well as ensuring uniform procedures and consistent approaches throughout the Union.

European Securities and Markets Authority publishes its final report and guidelines on the Calibration of Circuit Breakers and publication of Trading Halts under MiFID II

The Guidelines provide further detail on the parameters that trading venues should consider for the calibration of their circuit breakers, considering as such not only trading halts but also order price collars. The Guidelines are addressed to trading venues that allow or enable algorithmic trading on their systems and to national competent authorities with the aim to ensure consistent application of MiFID II.

European Securities and Markets Authority publishes update to Questions and Answers regarding the European Markets Infrastructure Regulation and validation rules

ESMA published an update of its questions and answers regarding EMIR following the revised RTS on reporting under Article 9 of EMIR. The questions and answers include an updated question regarding the obligation to report outstanding trades following the entry into force of EMIR. ESMA has also published the updated validation rules for the reports submitted under the revised technical standards.

European Securities and Markets Authority publishes Questions and Answers on the Markets in Financial Instruments Regulation data reporting

The questions and answers on data reporting under MiFID II and MiFIR concerns field 23 (Seniority of the Bond), business case (inflation indexed bond) and transaction reporting.

European Securities and Markets Authority publishes final report on draft Regulatory Technical Standards specifying the scope of the consolidated tape for non-equity financial instruments

ESMA has issued RTS specifying the scope of the consolidated tape (CT) for bonds, structured finance products, emission allowances and derivatives as required under MiFID II. They specify the possibility for CT providers to specialise in one or some asset classes and the Approved Publication Arrangements (APAs) and trading venues that have to be included in the CT based on a coverage ratio of 80% of all transactions published in an asset class in the EU that the CT providers has to meet.

European Securities and Markets Authority has issued a final report on Technical standards under Securities Financing Transaction Regulation and certain amendments to EMIR

ESMA has issued a final report on standards implementing the Securities Financing Transaction Regulation (SFTR), which aims to increase the transparency of Securities Financing Transactions (SFT). The final standards provide detailed provisions on:

  • SFT reporting – including the use of ISO 20022 methodology for reporting, validation and access to data;
  • improvement of data collection and availability across trade repsoitories;
  • defined access levels for different public authorities;
  • registration and extension of registration of trade repositories; and
  • exchange of data on sanctions between authorities.

Amendments to the existing standards implementing EMIR have also been proposed to provide parity with regards to registration and access rules.

European Systemic Risk Board publishes report on the Revision of the European Market Infrastructure Regulation

The report sets out proposals to further enhance the effectiveness and transparency of the current EMIR framework. It includes proposals concerning the clearing obligation and trade reporting, the enhancement of existing procyclicality-limiting tools in EMIR and for improving EMIR. The report shared the Commission’s assessment that no fundamental change to the EMIR core requirements is needed at this time, while seeing an opportunity to improve on some aspects of the Regulation.

For further information please contact a member of the Financial Regulation team.