FCA releases 2016/17 Business Plan. The UK Financial Conduct Authority published its Business Plan for 2016/17, which sets out the priorities for the agency’s core activities and flexible resources during the year. The Business Plan identifies several key tasks for the FCA, including the launch of a market study on retirement outcomes, the implementation of the Financial Advice Market Review recommendations, the development of a policy to extend the Senior Managers and Certification Regime to all Financial Services and Markets Act firms, the supervision of major UK FICC benchmarks, and the launch of the “Regulatory Sandbox.” (4/5/2016) FCA press release.
FCA consultation on proposed 2016/17 fees and levies rates. The FCA requested comments on its proposed fees and levies rates for the FCA periodic fees, consumer credit fees, ring-fencing implementation fee, pensions guidance levies, and the Financial Ombudsman Service and Money Advice Service levies for 2016/17. Comments are due on or before May 27, 2016. (4/5/2016) FCA press release.
ESMA amends EMIR RTS to propose one-day margin period of risk for CCP client accounts. The European Securities and Markets Authority issued amended regulatory technical standards under the European Market Infrastructure Regulation. The amended RTS reduces the margin period of risk for EU-based central counterparties from two days to one day in an effort to level the playing field between European and US CCPs. (4/5/2016) ESMA press release.
ESMA amends RTS on access, aggregation and comparison of trade repository data. ESMA published amended RTS that address access, aggregation and comparison of data across trade repositories under EMIR. Among other things, the amended RTS proposes a standardized output format of trade repository data; standardized and secure data exchange; standardized frequencies to provide direct and immediate access to trade repository data; and the use of secure machine-to-machine connection and data encryption protocols. (4/5/2016) ESMA press release.
ESMA Q&A on UCITS. ESMA updated its questions and answers on the Undertakings for the Collective Investment in Transferable Securities Directive to include additional information regarding UCITS investment in UCITS feeder funds. (4/5/2016) ESMA press release.
ESMA Q&A on AIFMD. ESMA published an updated version of its questions and answers document on the Alternative Investment Fund Managers Directive to include new information on notification requirements relating to additional investment in existing Alternative Investment Funds. (4/5/2016) ESMA press release.
FCA proposes approach to the interaction between its capital planning buffer and the CRD IV buffers. The FCA published its proposed approach to the interaction between the FCA’s capital planning buffer and the combined buffer under the Capital Requirement Directive IV, which includes the countercyclical buffer rate set by the Bank of England’s Financial Policy Committee among other components. The FCA indicated that a firm can offset the amount of the FCA’s capital planning buffer by the amount of the combined buffer so that the firm holds the higher of the capital planning buffer or the combined buffer. Comments on the proposal are due on or before April 29, 2016. (4/4/2016) FCA press release.
PRA consults on changes to supervision of building societies’ treasury and lending activities. The Prudential Regulation Authority requested comments on a consultation paper that proposes changes to its supervisory statement on the PRA’s approach to the supervision of building societies’ treasury and lending activities. Comments are due on or before July 4, 2016. (4/4/2016) PRA press release.
ESMA revises Q&A on EMIR. ESMA published an updated version of its questions and answers regarding the implementation of EMIR. The updated Q&A includes new information regarding how to interpret and populate the “clearing obligation” field in trade reports. (4/4/2016) ESMA press release.
ESMA sees no need for temporary exclusion of ETDs from open access to trading venues and CCPs. ESMA released its final report on the need to temporarily exclude exchange-traded derivatives from non-discriminatory access to CCPs and trading venues under the Markets in Financial Instruments Directive and Regulation. ESMA concluded that potential risks to open access have been addressed by the legislative frameworks of MiFID II, MiFIR and EMIR and that a 30-month phase-in period for exchange-traded derivatives is unnecessary. (4/4/2016)ESMA press release.
ESMA releases revised Q&A on the Market Abuse Directive. ESMA updated its questions and answers regarding the Market Abuse Directive, adding new guidance on whether materials for public distribution indicating that certain financial instruments are “undervalued,” “fairly valued” or “overvalued” would be considered a “recommendation” as defined under the Directive. (4/1/2016) ESMA press release.
Capital Markets Union changes to Solvency II for infrastructure investments now in effect. The European Commission’s amendment to Solvency II to encourage insurance companies to invest in infrastructure under the Capital Markets Union Action Plan became effective on April 2, 2016. The amendment lowers the risk charges for insurer’s equity and debt investments in qualifying infrastructure projects. (4/1/2016) EC press release.
PRA policy and supervisory statements on board responsibilities. The PRA published a policy statement that responds to feedback regarding its consultation on corporate governance and board responsibilities. The PRA also released asupervisory statement that identifies the aspects of corporate governance that the PRA may emphasize in the course of its supervision of regulated firms and reiterates the PRA’s expectations that the boards and management of regulated firms will operate the business in a prudent manner, consistent with the firm’s own safety and soundness and the continuing stability of the financial system. (3/31/2016) PRA press release.
ESMA finalizes UCITS remuneration guidelines. ESMA published the final guidelines on sound remuneration policies under the UCITS Directive and the AIFMD. The guidelines, which clarify the requirements under the UCITS Directive for management companies when developing and implementing a remuneration policy for key staff, will apply to UCITS management companies and national competent authorities beginning on January 1, 2017. (3/31/2016) ESMA press release.
PRA initiates discussion of equity release mortgages. The PRA issued a discussion paper that seeks comments on the valuation, capital treatment, and risk management of equity release mortgages as well as good practices for managing risks associated with investing in these assets. Comments are due on or before May 27, 2016. (3/31/2016) PRA press release.
British regulators finalize changes to the Complaints Scheme. The FCA released a policy statement containing the final amendments to the Complaints Scheme, which investigates complaints against the FCA and the PRA. The amendments implement more detailed requirements for the annual report prepared by the Complaints Commissioner regarding investigations under the Scheme. (3/31/2016) FCA press release. The PRA published its own policy statementalongside the FCA’s document. (3/31/2016)
Peer-to-peer platforms must await FCA authorization before offering Innovative Finance ISA investments. The FCA released a statement regarding the status of applications for peer-to-peer platforms for authorization to offer investments for the Innovative Finance Individual Savings Account, which launched on April 6, 2016. The statement notes that while 86 firms are still awaiting a decision on their applications and 44 firms have interim permission, only fully authorized firms will be eligible to participate in the Innovative Finance ISA. (3/31/2016) FCA statement.
FCA offers its views on the European retail financial services market. The FCA published its response to the European Commission’s Green Paper on Retail Financial Services, which seeks input on improving choice, transparency and competition for consumers in the European retail financial services market. The FCA’s response identifies the overarching issues the regulator believes require additional research and understanding to facilitate greater cross-border trade in retail financial services. (3/31/2016) FCA press release.
FCA finalizes guidance on voluntary redress schemes. The FCA published finalized guidance on voluntary redress schemes under the Competition Act 1998. The guidance addresses the FCA’s approach to applications for approval of redress schemes, the approval process for redress schemes, and the criteria the FCA will use to determine whether to enforce approved redress schemes. (3/30/2016) FCA press release.
FCA publishes data regarding complaints against financial services firms. The FCA released data regarding the number of complaints against financial services firms between July and December 2015, which indicated that the overall number of complaints decreased by 1.4 percent compared to the previous six-month period. Payment protection insurance received the most complaints; complaints about the product increased by six percent. (3/30/2016) FCA press release.
PRA statement on the interaction between the PRA buffer and the CRD IV combined buffer. The PRA clarified its approach to adjustments to firms’ PRA buffers in light of the Financial Policy Committee’s announcement that it will increase the countercyclical buffer rate to 0.5 percent, indicating that in cases where PRA buffers already reflect risks captured by the 0.5 percent UK countercyclical buffer rate, the PRA will implement buffer reductions to offset the UK countercyclical buffer rate as it comes into effect. The PRA will continue to assess its supervisory buffers to ensure there is no duplication in capital buffers to cover the same risks. (3/30/2016) PRA statement.
ESMA consults on guidelines for list of information on commodity and spot markets under MAR. ESMA requested comments on draft guidelines under the Market Abuse Regulation that would establish a required list of information regarding commodity derivatives markets or spot markets to assist in determining inside information regarding commodity derivatives and triggering the prohibitions for insider dealing. Comments are due on or before May 20, 2016. (3/30/2016)ESMA press release.
EBA report studies remuneration practices and the effect of the bonus cap.The European Banking Authority released a report that examines remuneration practices at EU banks, including the application of deferral arrangements, the pay-out in instruments and the impact of the bonus cap on institutions’ financial stability and cost flexibility. The report found that the number of high earners in the EU increased significantly, the introduction of the bonus cap resulted in a drop in the average ratio between the variable and fixed salary paid to high earners and all other identified staff, and the bonus cap did not appear to significantly affect institutions’ financial stability and cost flexibility. (3/30/2016) EBA press release.
FCA seeks comments on proposed changes to Knowledge Base. The FCA published Primary Market Bulletin No. 13, which contains information for primary market participants regarding finalized and proposed changes to the Knowledge Base. The Bulletin contains the finalized guidance and feedback it received to the changes the FCA proposed to the Knowledge Base in its November 2015 consultation. The Bulletin also contains a guidance consultation on additional proposed changes to the Knowledge Base, including amendments to six procedural notes, the addition of five new technical notes, amendments to three existing technical notes, and the re-consultation on a previously proposed technical note. Comments are due on or before May 10, 2016. (3/29/2016) FCA press release.
BOE’s Financial Policy Committee policy meeting statement. The BOE’s Financial Policy Committee released a statement from its March 23, 2016, policy meeting. The statement provides an overview of the Committee’s discussion of global and market risks, domestic risks, banking system resiliency, and market liquidity and resilience of market-based finance. The Committee concluded that the outlook for financial stability in the UK has deteriorated since its November 2015 meeting; as a result, the Committee decided to increase the UK countercyclical buffer rate to 0.5 percent of risk-weighted assets. (3/29/2016) BOE press release.
ESMA publishes 2015 EU accounting enforcement report. ESMA released its annual report on the enforcement and regulatory activities of accounting enforcers, which provides an overview of ESMA’s and European Economic Area accounting enforcers’ activities in examining issuers’ compliance with the financial reporting framework, quantitative information on enforcement activities, and ESMA’s activities for 2016 in the area of corporate reporting. (3/29/2016) ESMA press release.
FCA issues near-final rules on disclosure requirements for non-ring-fenced bodies. The FCA published a policy statement containing the near-final rules regarding the required disclosures that non-ring-fenced bodies, including deposit-takers that are exempt from ring-fencing, must make to consumers. The FCA indicated that the final rules will become effective later this year. (3/24/2016) FCA press release.
PRA consults on proposals for the implementation of MiFID II. The PRA requested comments on a consultation paper that proposes rules regarding the implementation of MiFID II, including proposals for the extension of scope and harmonization of the passporting regime as well as systems and controls for firms that undertake algorithmic trading and provide direct electronic access to trading venues. Comments are due on or before May 27, 2016. (3/24/2016) PRA press release.
PRA seeks comments on proposals for 2016-17 fees and levies. The PRA published a consultation paper that proposes changes to the PRA’s fees and levies for 2016-2017, including revised fee rates to meet the PRA’s Annual Funding Requirement; a new ring-fencing implementation fee; a proposal for how the PRA will distribute a refund from last year’s AFR and retained penalties; and an amendment to the fee rules resulting from recent policy changes for credit unions. Comments are due on or before May 24, 2016. (3/24/2016) PRA press release.
EBA launches decentralized consultation on FINREP and GAAP. The EBA initiated a public consultation through National Competent Authorities across the EU regarding proposals for updated templates for reporting financial information using Generally Accepted Accounting Practices. Comments are due on or before April 15, 2016. (3/23/2016) EBA press release.
EBA draft Guidelines on corrections to modified duration for debt instruments.The EBA requested comments on draft Guidelines that propose two approaches to correct the modified duration calculation of general risk for debt instruments to appropriately reflect the effect of the prepayment risk. Comments are due on or before June 22, 2016. (3/22/2016) EBA press release.