Proprietary trading. Reuters reported that Latvia, which currently holds the European Union presidency, opposes a proposal that would prohibit European banks from engaging in proprietary trading. (3/31/2015) Proprietary trading.
ESMA reports on accounting enforcement. The European Securities and Markets Authority (ESMA) published a report on the enforcement and regulatory activities of accounting enforcers within the European Union (EU) in 2014. (3/31/2015) ESMA notice.
ESMA updates EMIR guidance. ESMA issued updated guidance, in the form of the frequently asked questions and answers, concerning the implementation of the European Markets Infrastructure Regulation. The updated Q&As include further guidance on the authorization of central counterparty services, the clearing obligation and the Regulatory Technical Standards on direct, substantial and foreseeable effect of contracts within the EU. (3/31/2015) ESMA notice.
UK management expenses levy limit. The UK Prudential Regulation Authority (PRA) published a policy statement setting forth the final management expenses levy limit for the Financial Services Compensation Scheme for 2015/16. (3/31/2015) PRA press release.
Treatment of sovereign debt by Solvency II firms. The PRA published a draft supervisory statement on how the PRA expects Solvency II firms to treat sovereign debt in internal models. Comments should be submitted by May 1, 2015. (3/31/2015) PRA press release.
UK stress test scenarios. The Bank of England (BofE) published the scenario for the 2015 stress test, which will be applied to the largest UK banks and building societies. (3/30/2015) BofE press release.
FCA consults on changes to the Knowledge Base. The UK Financial Conduct Authority (FCA) is consulting on changes to the Knowledge Base regarding block listings, investment management agreements and independence of the board, infrastructure funds, closed-ended investment funds with multiple share classes, eligibility of closed-ended investment funds, master-feeder structures, the definition of “investment manager,” related party transactions, sponsors, and circulars. Comments should be submitted by May 11, 2015. (3/30/2015) FCA press release.
ECB and BofE reach agreement regarding CCPs. The European Central Bank (ECB) and the Bank of England announced a series of measures aimed at enhancing financial stability in relation to centrally cleared markets within the EU. The ECB and the BoE have agreed to enhanced arrangements for information exchange and cooperation regarding UK central counterparties (CCPs) with significant euro-denominated business. (3/29/2015) ECB press release.
Solvency II matching adjustment. The PRA provided feedback to Solvency II firms applying for approval to use the matching adjustment to calculate the best estimate of a portfolio of eligible insurance obligations under Solvency II. (3/28/2015) PRA press release.
FCA Solvency II policy statement. The FCA published a policy statement on the transposition of the Solvency II Directive. (3/27/2015) FCA press release.
FCA consults on Non-Directive Firms under Solvency II. The FCA published a consultation paper proposing changes to the Approved Persons Regime for insurers not subject to the Solvency II Directive to address provisions in the Banking Reform Act 2013. Comments should be submitted by May 15, 2015. (3/27/2015) FCA press release.
PRA and FCA consult on Solvency II NEDs. The PRA and FCA published a joint consultation paper concerning the definition and scope of non-executive directors within the Solvency II Directive and the Banking Reform Act of 2013.The proposals seek to support the creation of a structure within Solvency II firms that will increase the likelihood of matching individuals and roles appropriately to ensure the observation of high standards of conduct. Comments should be submitted by May 15, 2015. (3/27/2015) PRA press release.
PRA consults on streamlined SIMR for non-Solvency II firms. The PRA published a consultation paper seeking comment on draft rules that set out how it will apply the Senior Insurance Managers Regime (SIMR) in a streamlined manner to firms outside of the scope of Solvency II. The streamlined rules would also apply on a transitional basis to run-off firms, so long as these firms are not subject to the Solvency II rules in accordance with Transitional Measures 2 in the Solvency II Firms section of the PRA Rulebook. Comments should be submitted by May 15, 2015. (3/27/2015) PRA press release.
ESMA guidance on UCITS KIID. ESMA published updated guidance in the form of questions and answers on the application of the Key Investor Information Document (KIID) for the Undertakings for Collective Investments in Transferable Securities (UCITS). The guidance includes a new question on the treatment of past performance information in case of fund mergers. (3/26/2015) ESMA notice.
ESMA AIFMD guidance. ESMA published updated guidance in the form of questions and answers on the application of the Alternative Investment Fund Managers Directive (AIFMD). The guidance includes updated or new questions and answers on reporting, notification, additional own funds and scope. (3/26/2015) ESMA notice.
FCA policy statement. The FCA published a policy statement on joint sponsors. The policy statement includes final rules and a Technical Note. The Technical Note and listing rules were effective April 1, 2015. (3/26/2015) FCA press release.
FCA MiFID II discussion paper. The FCA published a discussion paper on aspects of the revised Markets in Financial Instruments Directive (MiFID II) concerning conduct of business and organizational requirements. Comments should be submitted by May 26, 2015. (3/26/2015) FCA press release.
FCA retirement income market study. The FCA published the findings from its retirement income market study and its proposed remedies. The market study confirmed that the market is not working well for consumers. In an effort to improve consumer choice, the FCA will require firms to provide an annuity quotation ranking, redesign and test the information that consumers receive from their providers and create a pensions dashboard. (3/26/2015) FCA press release.
FCA regulation roundup. The FCA published the March 2015 regulation roundup. (3/26/2015)
Bank of England Risk Assessment. The Bank of England published the results of the Financial Policy Committee’s (FPC) March 24, 2015 assessment of risks to financial stability. The FPC found that credit growth in the United Kingdom remains moderate and UK banks continue to build their resilience. Nonetheless, the Committee has identified a number of risks to financial stability and has commissioned work in relation to them. (3/26/2015) Bank of England press release.
FCA revised guidance consultation on remuneration practices. The FCA published a revised guidance consultation that would clarify the FCA’s expectations on how relevant firms meet the Remuneration Code requirements on ex-post risk adjustment. Comments should be submitted by May 7, 2015. (3/26/2015) FCA press release.
Proposed FCA Pension Wise Policy. The FCA requested comment on a proposed policy for making recommendation to the designated guidance providers and the Treasury in accordance with the “Guidance Guarantee,” the reforms which provide consumers with defined contribution pensions with access to free impartial guidance about their retirement options. Comments should be submitted by May 8, 2015. (3/25/105) FCA press release.
FCA proposed fees and levies. The FCA requested comment on its proposed 2015/16 fees and levies. Comments should be submitted by May 18, 2015. (3/25/2015) FCA press release.
ESMA revised 2015 Regulatory Work Program. ESMA published its revised Regulatory Work Program for 2015, which provides more detail on ESMA’s single rulebook work as set out in ESMA’s Annual Work Program for 2015. (3/25/2015) ESMA notice.
ESMA consults on complex debt instruments and structured deposits. ESMA opened a consultation on draft guidelines on complex debt instruments and structured deposits. Comments should be submitted by June 15, 2015. (3/24/2015) ESMA notice.
FCA business plan. The FCA published its Business Plan for 2015/16, which sets out its priorities for the upcoming financial year. It also confirmed the creation of two new Divisions that would be responsible for the FCA’s supervisory and authorizations work. Supervision Investment, Wholesale and Specialists will be led by Tracey McDermott while Linda Woodall will head up the Retail and Authorizations division as acting Director. (3/24/2015) FCA press release.
PRA Senior Managers Regime and Senior Insurance Manager Regime policy statement. The PRA published a policy statement on CP14/14, “Strengthening accountability in banking: a new regulatory framework for individuals,” and CP26/14, “Senior insurance managers regime: a new regulatory framework for individuals,” and issued the first set of final rules to implement the Senior Managers Regime (SMR) and Certification Regime for UK banks, building societies, credit unions and PRA-designated investment firms, and the Senior Insurance Managers Regime (SIMR) for Solvency II insurers. The SMR and SIMR rules are effective March 7, 2016. This policy statement does not provide feedback on all the elements of CP14/14 and CP26/14, or all the final rules needed to implement the new regimes. There are some elements of the PRA’s new regimes that need to be finalized in conjunction with the FCA. The PRA will issue a further policy statement and further final rules and supervisory statements on the outstanding elements of the regimes later in the year. (3/23/2015) PRA press release.
FCA to hold Prudential Supervision Forum. The FCA will hold a Prudential Supervision Forum on May 13, 2015, at which it will share its strategy on prudential supervision; share risk management practices to identify prudential risks within firms; gather views from industry participants; and discuss recently issued regulation with industry participants. (3/23/2015) FCA press release.
ESMA guidelines on CRA reporting. ESMA published guidelines regarding the information that is periodically submitted to it by credit rating agencies (CRAs). The guidelines detail the information CRAs should regularly submit to ESMA as part of its on-going supervision; and the information CRAs should submit for the calculation of the supervisory fees and market share calculation. (3/23/2015) ESMA notice.
ESMA consults on private and bilateral structured finance instruments. ESMA requested information from market participants about how disclosure for Structured Finance Instruments originated and/or traded on a private and/or bilateral basis should be approached. Comments should be submitted by May 20, 2015. (3/20/2015) ESMA notice.
UK regulators consult on implementing the EU transparency directive. The FCA and UK Treasury are consulting on proposals that would implement the Transparency Directive Amending Directive 2013/50/EU, which amends the Transparency Directive, the Transparency Directive Implementing Directive and the Prospectus Directive. Comments should be submitted by May 20, 2015. (3/20/2015) FCA press release.
PRA Solvency II supervisory statement. The PRA published a supervisory statement is addressed to all firms and to Lloyd’s. The statement should be read alongside the Insurance General Application Part of the PRA Rulebook. It explains the scope of application of the PRA Rulebook Parts on Solvency II to UK Solvency II firms and to Lloyd’s. (3/20/2015) PRA notice.
PRA policy statement on Solvency II. The PRA published the rules and accompanying supervisory statements required for the PRA’s implementation of the Solvency II Directive. Beginning April 1, 2015, firms will be able to submit applications for Solvency II approvals via the Bank of England webpage “Approvals and waivers under the Solvency II Directive.” (3/20/2015) PRA press release.
PRA requests comment on proposed supervisory approval for the volatility adjustment. The PRA requested comment on a draft supervisory statement that sets out the PRA’s expectation of firms in relation to supervisory approval for the volatility adjustment (VA). The draft supervisory statement clarifies the items that should be included in an application to use the VA; how the PRA will use the content of applications to assess whether the statutory conditions for approval to use the VA have been satisfied; and how the VA approval process will work, and its interaction with other Solvency II approval processes. Comments should be submitted by April 20, 2015. (3/20/2015) PRA press release.
PRA proposes 2015-2016 fee rates. The PRA proposed the fee rates to meet its 2015/16 Annual Funding Requirement and the 2015/16 rates for Special Project Fees for the period beginning March 1, 2015, and ending February 28, 2016, for dually regulated FCA/PRA firms. Comments should be submitted by May 19, 2015. (3/19/2015) PRA press release.
EBA consults on shadow banking guidelines. The EBA launched a public consultation on proposed guidelines that would set limits on EU institutions’ exposures to shadow banking entities. The document lays out a qualitative approach for institutions to develop their internal policies for monitoring and setting appropriate limits, both at individual and aggregate levels. The guidelines will also help inform the EC’s work on the appropriateness and impact of imposing limits on exposures to shadow banking entities under Article 395(2) of the Capital Requirements Regulation. Comments should be submitted by June 19, 2015. (3/19/2015) EBA press release.
ESMA studies supervision of automated trading. A recent review conducted by ESMA found that the supervision of automated trading has become more convergent across the EU. (3/18/2015) ESMA notice.
EBA standardized fee terminology. The EBA published Final Guidelines on standardized fee terminology for EU payment accounts in the EU. (3/18/2015) EBA press release.
EBA issues amended technical standards on supervisory reporting for institutions. The EBA published final draft Implementing Technical Standards (ITS) amending the EC’s Implementing Regulation (EU) No 680/2014 on supervisory reporting. The final draft ITS include minor changes to templates and instructions as well as corrections to legal references and other clerical errors. The amendments are expected to be applicable beginning in June 2015. (3/18/2015) EBA press release.