ESMA offers guidance on Market Abuse Regulation. The European Securities and Markets Authority (ESMA) issued a document containing questions and answers regarding the implementation of the Market Abuse Regulation. (11/9/2015) ESMA press release.

BOE responds to EC consultation on CRR and CRD IV. The Bank of England (BOE) published its response to the European Commission consultation on the potential impact of the Capital Requirements Regulation and Capital Requirements Directive on bank financing of the economy. (11/9/2015) BOE response.

ECB revises PSPP to reflect increase in issue share limit. The European Central Bank (ECB) published an amended legal act on a secondary markets public sector asset purchase program (PSPP), which increases the PSPP issue share limit from 25 percent to 33 percent per international securities identification number (ISIN). (11/9/2015) ECB press release. 

FCA policy statement on implementation of the Transparency Directive Amending Directive. The UK Financial Conduct Authority (FCA) published a policy statement containing the final rules regarding the implementation of the Transparency Directive Amending Directive and other Disclosure Rule and Transparency Rule changes. The final rules largely follow the proposal distributed for consultation in March 2015 with a few modifications, including adjusting the requirement that annual and half yearly reports remain publicly available for 10 years and revising the proposed stock-lending transaction notification thresholds to align with notification requirements for all other holdings. The new rules will become effective on November 26, 2015. (11/6/2015) FCA press release.

EBA seeks comment on proposal for deposit guarantee stress tests. The European Banking Authority (EBA) published a consultation paper that outlines proposed guidelines on stress tests from Deposit Guarantee Schemes (DGSs). The draft guidelines set out the methodology to assess whether DGSs have the operational and funding capabilities to ensure deposit protection in the event of a bank failure and would require DGSs to conduct a battery of tests over a period of two to five years, among other things. Comments are due on or before February 8, 2016. (11/6/2015) EBA press release.

ESMA consults on draft rules covering indirect clearing arrangements. ESMA released a consultation paper that proposes requirements regarding indirect clearing arrangements for over-the-counter derivatives under the European Market Infrastructure Regulation (EMIR) and exchange-traded derivatives under the Markets in Financial Instruments Regulation (MiFIR). Comments are due on or before December 17, 2015. (11/5/2015) ESMA press release.

FCA consults on policy proposals and Handbook changes related to EU Market Abuse Regulation. The FCA published for comment a consultation paper that outlines proposed policy and Handbook changes to facilitate the implementation of the European Market Abuse Regulation. The FCA seeks public input on the proposed changes as well as options for implementing requirements to provide an explanation of the delay to the disclosure of inside information and the threshold for disclosure of managers’ transactions. Comments are due on or before February 4, 2016. (11/5/2015) FCA press release.

2016 EU-wide stress test. The EBA published the draft methodology for its 2016 EU-wide stress test, which will assess the ability of EU banks to meet relevant supervisory capital ratios during an adverse economic shock. The stress test will begin in February 2016 and cover approximately 70 percent of the EU banking sector. (11/5/2015) EBA press release.

Responses to Draft implementing technical standards under MiFID II. ESMA released the responses it received to the Consultation on Draft implementing technical standards under MiFID II. (11/4/2015) ESMA press release.

ESMA issues updates to list of authorized CCPs. ESMA published an updated list of authorized central clearinghouses, which includes information regarding the authorization granted to CME Clearing Europe to clear futures on EU allowances. (11/4/2015) ESMA press release.

EBA risk dashboard shows increase in EU banks capital ratios and profits. The EBA published its risk dashboard for the third quarter of 2015, which provides an overview of the health of the EU banking sector. According to the report, capital ratios have increased, the quality of loan portfolios remains weak, but the profits of EU banks have increased in comparison to 2014. (11/4/2015) EBA press release.

PRA releases two supervisory statements concerning Solvency II. The PRA issued two supervisory statements relating to Solvency II. The first statement, SS40/15, establishes the PRA’s expectations for firms in complying with the Solvency II supervisory reporting and public disclosure Implementing Technical Standards (ITS) in cases where the ITS provide supervisory authorities with the option to specify different approaches aside from the default set out in the standards. The second statement, SS41/15, explains the PRA’s expectation that all firms comply with certain European Insurance and Occupational Pensions Authority’s (EIOPA) Guidelines, including the Set 2 of the Solvency II Guidelines, the System of Governance, and the Own Risk and Solvency Assessment. 

(10/30/2015)

BOE publishes study of financial market liquidity. The BOE published Financial Stability Paper 34: The resilience of financial market liquidity, which compares the resiliency of market liquidity in markets that rely more on core intermediaries with markets that rely less on core intermediaries to examine whether market liquidity in general is more fragile. (10/30/2015) BOE Financial Stability Paper 34.

EU adopts new transparency rules affecting the shadow banking sector. The European Parliament adopted new rules proposed by the European Commission (EC) that establish requirements to increase the transparency of securities financing transactions (SFTs) in the shadow banking sector. The new rules will require the reporting of nearly all SFTs to trade repositories, the disclosure by investment funds of information related to their use of SFTs, and the disclosures surrounding the reuse of collateral. (10/29/2015) EC press release.

ECB report studies structural changes to euro financial sector. The ECB released the Report on Financial Structures 2015, which examines the structural features of and changes to the euro area financial sector. In addition to the banking sector, the report also covers other financial intermediaries, including insurance corporations, pension funds, and the shadow banking sector. 

(10/29/2015) ECB press release.

Responses to Guidelines on sound remuneration policies under the UCITS Directive and AIFMD. ESMA published the responses it received to the Consultation on Guidelines on sound remuneration policies under the Undertakings for Collective Investments in Transferable Securities (UCITS) Directive and Alternative Investment Fund Managers Directive (AIFMD).

(10/29/2015) ESMA press release.

EBA seeks comments on guidelines on disclosure of confidential information under the BRRD. The EBA published a consultation paper that contains proposed guidelines on how confidential information collected under the Bank Recovery and Resolution Directive should be disclosed in summary or collective form without identifying individual institutions or relevant entities. Comments are due on or before January 27, 2016. (10/27/2015) EBA press release.

FCA issues final policy on the collection of 2015-16 PSR regulatory fees. The FCA released a policy statement that explains how Payment Systems Regulator (PSR) regulatory fees will be calculated and collected in 2015-2016. The regulatory fees will be collected by the operators of regulated payment systems, who will serve as PSR collection agents. Operators will issue invoices directly to fee-paying payment service providers members, with payment due by December 10, 2015. (10/27/2015) FCA press release.

EBA makes available final templates and instructions for the Quantitative Impact Study on the definition of default. The EBA distributed the final templates and instructions for use by institutions participating in the Quantitative Impact Study (QIS) on the definition of default, which should be submitted to the appropriate Competent Authorities by December 10, 2015. The information collected will be used by the EBA to estimate the impact of the requirements proposed in its draft Regulatory Technical Standards and Guidelines that seek to align the definition of default across the EU prudential framework. 

(10/26/2015) EBA press release.

European Commission refers six Member States to Court of Justice for failing to implement BRRD rules. The European Commission announced that it has referred six Member States to the EU Court of Justice for failing to implement rules established by the Bank Recovery and Resolution Directive to assist national authorities managing the failure of large banks and investment firms without requiring taxpayers to shoulder the burden. (10/22/2015) EC press release.

ESMA releases documents in advance of amended Transparency Directive implementation. ESMA published four documents related to the implementation of the amended Transparency Directive, which will become effective on November 26, 2015. The documents include an updated Q&A document on the amended Transparency Directive, a new standard form for the disclosure of an issuer’s home Member State, a new standard form for the notification of major holdings, and a re-published indicative list of the financial instruments subject to notification requirements. (10/22/2015) ESMA press release.

BOE outlines its approach to stress testing. The BOE published an approach document that details the primary features of its stress-testing framework through 2018. The BOE’s objectives include developing an approach to stress-testing that is counter-cyclical, improving the consistency between the concurrent stress test and overall capital framework, and improving its modelling capabilities. 

(10/21/2015) BOE approach document.

ESMA provides translations of Guidelines on the application of definitions of C6 and C7 under MiFID I. ESMA published translations of its Guidelines on the definition of commodity derivatives and their classification under C6 and C7 under MiFID I. (10/21/2015) ESMA press release.

EBA, EIOPA and ESMA propose new anti-money laundering and countering the financing of terrorism guidelines. The EBA, ESMA and EIOPA initiated a joint consultation on two anti-money laundering and countering the financing of terrorism (AML/CFT) guidelines. Comments are due on or before January 22, 2016. (10/21/2015) EBA press release.

EBA updates list of CET1 capital instruments. The EBA issued an updated list of capital instruments that have been classified as Common Equity Tier 1 (CET1) by European supervisory authorities. The list includes two new capital instruments that have been evaluated as compliant with the Capital Requirements Regulation. (10/21/2015) EBA press release.

EBA seeks comments of draft guidelines regarding communication between credit institution supervisors and auditors. The EBA introduced a consultation on draft guidelines regarding communications between competent authorities supervising credit institutions and statutory auditors of those institutions. Among other things, the draft guidelines establish the primary elements of effective communication, including the scope of shared information; the form, frequency, and timing of communication; and the participants in the exchange of information. Comments are due on or before January 21, 2016. (10/21/2015) EBA press release.