ESMA updates on IRS clearing: ESMA has updated its RTS on Interest Rate Swaps (IRS) under the European Market Infrastructure Regulation (EMIR). It has issued the opinion because the Commission had amended the draft RTS ESMA had originally submitted. ESMA agrees with the aim of the Commission's amendments but thinks the tool the Commission proposed to address non-EU intra-group transactions is not appropriate. It has adopted what it considers to be reasonable changes and has published its amended version of the RTS. (Source: ESMA Updates on IRS Clearing)

ESMA and MAS conclude MoU on CCPs: ESMA and the Monetary Authority of Singapore (MAS) have concluded a Memorandum of Understanding (MoU). It establishes cooperation arrangements between the signatory authorities regarding Central Counterparties (CCPs) that:

  • are established in Singapore;
  • are authorised by MAS; and
  • have applied for recognition under EMIR.

The MoU took effect on 10 February. (Source: ESMA and MAS Conclude MoU on CCPs)

ESMA publishes MiFID 2 responses: ESMA has published the responses to its consultation on the revised Markets in Finanical Instruments Directive and Regulation package (MiFID 2). There were many responses from all affected parts of the financial sector. (Source: MiFID 2 Responses)

ESMA publishes 2015 risk report: ESMA has published its 2015 report on trends, risks and vulnerabilities in EU securities markets, covering market developments from July to December 2014. The report finds that market conditions in the EU have remained tense, with high asset valuations, stable asset prices over time but rising short-term price volatility across key markets. There were strong price movements in foreign exchange and commodity markets and overall capital market issuance for corporate funding continued to increase. Sources of market uncertainty included the low-interest-rate environment, public debt policies in EU Member States, strong swings in exchange rates and commodity markets, and political and geopolitical risks in the EU’s vicinity – all of which resulted in increased levels of liquidity and market risk, whilst contagion and credit risk remained at high levels. ESMA also identified the following potential future issues:

  • fund investments in loans;
  • smart beta strategies; and
  • monitoring systemic risk in the hedge funds industry.

As part of its ongoing market surveillance, ESMA will update its report semi-annually, complemented by its quarterly Risk Dashboard. (Source: ESMA Sees Continued Tense Securities Market Conditions)