EU approves market abuse directive. The European Parliament approved the European Commission’s proposed market abuse legislation, including a directive on criminal sanctions. (2/4/2014) EC press release.
The big bang for swaps. Bloomberg discussed the issues facing the European swaps market as February 12, 2014 approaches. That is the date on which purchasers and sellers of swaps in all asset classes must begin reporting their derivatives trading. (2/3/2014) Big bang.
EU publishes first anti-corruption report. The European Union published its first Anti-Corruption Report, which describes the nature and level of corruption, and the effectiveness of measures taken to fight it, in each member country. (2/3/2014) EC press release.
ECB update on comprehensive assessment. The European Central Bank summarized the progress made in its on-going comprehensive assessment. It also confirmed that it will apply the parameters for the stress test released by the European Banking Authority. Together with the asset quality review, the stress test forms part of the comprehensive assessment. The assessment aims to enhance the transparency of the balance sheets of significant banks and to rebuild investor confidence. (2/3/2014) ECB press release.
UK mortgage market review. The UK Financial Conduct Authority has made available a webcast of its mortgage market review and collated the most frequently asked questions from the workshops. (2/3/2014) FCA notice.
EBA stress test components. The European Banking Authority announced the key components of the forthcoming 2014 EU-wide stress test that will be conducted on a 124 EU banks. (1/31/2014) EBA press release.
FCA rules on payments by discretionary investment managers. The UK Financial Conduct Authority issued new final rules as part of the Retail Distribution Review. The rules ban new referral payments by a discretionary investment manager (DIM) to an adviser when the adviser recommends that a client place additional money with the same DIM from whom they receive payments following a pre-RDR referral. They also ban referral payments where an adviser firm does not provide personal recommendations to particular clients, but provides other services to them. The new rules are effective December 31, 2014. (1/31/2014) FCA press release.
FCA rules on primary information providers. The UK Financial Conduct Authority issued new final rules on primary information providers, formerly known as regulated information services. The new rules are based largely on the existing framework for regulated information services. (1/31/2014) FCA press release.
FCA guidance on alternative investment fund manager remuneration. The UK Financial Conduct Authority provided general guidance on the AIFM Remuneration. The guidance explains how an alternative investment fund manager (AIFM) should take into account proportionality, consider payments made to partners if the AIFM is structured as a partnership and pay its relevant staff in units, shares or other instruments. (1/31/2014) FCA notice.
FCA consults on listing rules and prospectus rules. The UK’s Financial Conduct Authority published a consultation paper proposing amendments to the Listing Rules and Guidance on sponsor competence and seeking market views on joint sponsor arrangements. The consultation also includes two other proposals, a proposal to remove a Listing Rule requirement for a premium listed issuer to prepare a 28-day circular and a proposal to create new Prospectus Rules that would make an applicant responsible for submitting a compliant and factually accurate prospectus. Comments should be submitted by April 30, 2014. (1/30/2014) FCA announcement.
ESMA proposes conditional equivalence for Japanese regulatory regime. The European Securities and Market Authority has published a supplement to its advice to the European Commission on the equivalence of the Japanese regulatory regime for central counterparties (CCPs) with the European Markets Infrastructure Regulation (EMIR). This supplement concerns the equivalence between the Japanese regulatory regime for commodity CCPs and the regulatory regime for CCPs under EMIR. ESMA considers that the Japanese regulatory regime for commodity CCPs contains legal provisions and involves supervision and enforcement similar to that of EMIR. (1/30/2014) ESMA notice.
PRA responds to comments. The UK’s Prudential Regulation Authority published its response to comments received concerning its consultation on miscellaneous and minor changes to the PRA rules, including further rule amendments related to CRD IV, and material on the PRA’s proposals to create a Rulebook. (1/30/2014) PRA press release.
EC proposes proprietary trading ban. The European Commission published proposed rules intended to stop the biggest and most complex banks from engaging in proprietary trading. The new rules would also give supervisors the power to require those banks to separate certain potentially risky trading activities from their deposit-taking business. The Commission has also adopted accompanying measures aimed at increasing transparency of certain transactions in the shadow banking sector. (1/29/2014) EC press release.
EBA draft standards for investment firms. The European Banking Authority published final draft Regulatory Technical Standards (RTS) on own funds requirements for investment firms based on fixed overheads. The RTS harmonize the calculation of capital requirements for those investment firms that have limited authorization to provide investment services, as well as the conditions under which competent authorities can make adjustments to such requirements. The final draft RTS will be part of the Single Rulebook aimed at enhancing regulatory harmonization in the banking sector in Europe. Comments should be submitted by September 30, 2014. (1/29/2014) EBA press release.
EBA recommendations on the use of LEIs. The European Banking Authority published a recommendation on the use of unique identification codes for supervisory purposes for every credit and financial institution in the European Union. (1/29/2014) EBA press release.
ECB credit terms results. The European Central Bank published the results of the December 2013 survey on credit terms and conditions in euro-denominated securities financing and OTC derivatives markets. Among other things, the survey found that price terms tightened, especially for banks, dealers and insurance companies; terms offered to hedge funds and non-financial corporations eased overall; demand by counterparties for funding of all types of collateral increased; and, taken in isolation, implementation of leverage, liquidity coverage and net stable funding ratio regulatory initiatives is expected to lead to no more than a 25 percent decrease of securities financing books. (1/28/2014) ECB press release.
Regulators voice concern for proposed accounting reforms. The three European Supervisory Authorities sent a joint letter to the European Commissioner for the Internal Market, Michael Barnier, on the Philippe Maystadt report “Should IFRS standards be more European?” in order to share their concerns on the potential implications of that report. (1/24/2014) ESMA notice.
European Court of Justice dismisses UK Challenge to Short Selling Regulation. The European Court of Justice dismissed the UK’s challenge to the Short-Selling Regulation (SSR). The UK was challenging the power of ESMA to adopt emergency measures under the SSR, which in their view went against general EU principles. The ECJ rejected the challenge, finding that the SSR and the powers given to ESMA are compatible with EU law. (1/22/2014) ECJ press release; ESMA notice.