ESMA ESMA opinion on asset segregation and applying depositary delegation rules to CSDs. The European Securities and Markets Authority published an opinion to the European Commission that makes recommendations for clarifying the legislative provisions under both the Alternative Investment Fund Managers Directive and the Undertakings for the Collective Investment of Transferable Securities Directive relating to the asset segregation requirements in case of delegation of safe-keeping duties by the appointed depositary of a fund, as well as the application of depositary delegation rules to central securities depositaries. (7/20/2017) ESMA press release.
ESMA establishes MOU with Indian regulators regarding CCPs. ESMA announced that it has entered into a Memorandum of Understanding with the Securities and Exchange Board of India to establish cooperation arrangements regarding Central Counterparties authorized or recognized in India that have applied for EU recognition under the European Markets Infrastructure Regulation. (7/20/2017) ESMA press release.
ESMA peer review of financial information enforcement. ESMA released the results of a peer review that assesses how national competent authorities supervise financial information according to the Guidelines on Enforcement of Financial Information. The review recommended that authorities improve their enforcement with respect to how issuers are selected to examine their financial information; the depth of inquiries into financial statements; and the financial and human resources allocated by authorities to the enforcement of financial information. (7/18/2017) ESMA press release.
ESMA consults on certain aspects of the MiFID II suitability requirements. ESMA announced its publication of a Consultation Paper on draft guidelines on certain aspects of the suitability requirements under the Markets in Financial Instruments Directive. (7/13/2017)
ESMA issues sector-specific principles on relocations from the UK to the EU27. ESMA announced that it has published three Opinions setting out sector-specific principles in the areas of investment firms, investment management and secondary markets, aimed at fostering consistency in authorization, supervision and enforcement related to the relocation of entities, activities and functions from the UK. (7/13/2017)
ESMA reviews the application of IFRS 13 – Fair value measurement requirements. ESMA announced the publication of its report providing an overview of the implementation of IFRS 13 Fair Value Measurement by European issuers. The report assesses the level of compliance of IFRS financial statements with the requirements in IFRS 13 and the comparability amongst entities. (7/12/2017)
ESMA publishes new Q&A on alternative performance measures guidelines. ESMA announced that it has published four new questions in its Questions and Answers (Q&A) document, on the implementation of its Guidelines on the Alternative Performance Measures for listed issuers. (7/12/2017)
European Commission High-Level Expert Group on Sustainable Finance delivers early recommendations. The European Commission announced that its High-Level Expert Group on Sustainable Finance has published its first report setting out concrete steps to create a financial system that supports sustainable investments. (7/13/2017)
European Banking Authority EBA seeks comments on EBA register under the Payment Services Directive. The European Banking Authority requested comments on draft regulatory technical standards and implementing technical standards on the EBA electronic central register under the Payment Services Directive. The proposal establishes requirements on the development, operation and maintenance of the register as well as the information that will be included in the register. Comments are due on or before September 4, 2017. (7/24/2017) EBA press release.
EBA revises Decision on the use of unsolicited credit assessments by certain ECAIs. The EBA amended its Decision on the quality of unsolicited credit assessments assigned by certain External Credit Assessment Institutions for calculating institutions' capital requirements, to reflect the recognition of five additional ECAIs and the de-registering of one ECAI. (7/18/2017) EBA press release.
EBA announces plans for enhancing the monitoring of ECAIs. The EBA released its future work plan on credit assessments issued by ECAIs, which will focus on mapping and decision on unsolicited ratings for newly registered or certified ECAIs; monitoring the ECAIs’ mappings; and monitoring unsolicited credit assessments of ECAIs covered in the EBA Decision on unsolicited credit assessments. (7/18/2017) EBA press release.
EBA publishes final standards specifying information requirements for the authorization of credit institutions. The EBA announced that it has published its final draft regulatory technical standards on the information that applicants must provide to competent authorities when applying for authorization as credit institutions, and its final draft implementing technical standards related to the templates to be used for the provision of such information. (7/14/2017)
EBA consults on guidelines on uniform disclosure of IFRS 9 transitional arrangements. The EBA announced that it has launched a consultation on a set of Guidelines specifying a uniform format for the institutions' disclosure requirements of IFRS 9 and analogous expected credit losses transitional arrangements. The Guidelines aim at increasing consistency and comparability of the information disclosed by institutions during the transition to the full implementation of the new accounting standard, and at ensuring market discipline. The consultation runs until September 13, 2017. (7/13/2017)
EBA updates on the impact of IFRS 9 on banks across the EU and highlights current implementation issues. The EBA announced its publication of a Reportincluding some qualitative and quantitative observations of its second impact assessment of IFRS 9. (7/13/2017)
European Supervisory Authorities
ESAs propose amendments to technical standards on the mapping of ECAIs. The Joint Committee of the three European Supervisory Authorities, which includes the EBA, ESMA, and the European Insurance and Occupation Pensions Authority, requested comments on proposed amendments to the Implementing Regulations on the mapping of credit assessments of External Credit Assessment Institutions for credit risk, to reflect the recognition of five new credit rating agencies and the deregistration of one CRA. Comments are due on or before September 18, 2017. (7/18/2017) ESMA press release.
FCA proposes new disclosure rules for providers of personal and business current accounts. The UK Financial Conduct Authority published for comment a consultation paper that proposes to require firms who offer personal current accounts and business current accounts to publish certain service and performance information for consumers to easily access and compare to other providers. Comments are due on or before September 25, 2017. (7/25/2017) FCA press release.
FCA finalizes changes to client money distribution rules under investment firm insolvency regime. The FCA published a policy statement that finalizes its proposed changes to the client money distribution rules under the Special Administration Regime for investment firms in insolvency, which will accelerate the distribution of client assets and reduce the market impact in the event of an investment firm failure. The final rules became effective on July 26, 2017. (7/25/2017) FCA policy statement.
FCA consults on proposed guidance for professional body supervisors on AML supervision. The FCA requested comments on a consultation papercontaining proposed guidance for a specialist sourcebook for professional body supervisors that sets out expectations in relation to anti-money laundering supervision. Comments are due on or before October 23, 2017. (7/24/2017) FCA press release.
FCA proposes additional rule changes related to IDD implementation. The FCA published a consultation paper that presents additional proposals on the implementation of the Insurance Distribution Directive, including proposals concerning the IDD requirements for life insurance business and additional requirements related to the distribution of insurance-based investment products. Comments are due on or before October 20, 2017. (7/24/2017) FCA press release.
FCA finalizes rules to collect additional retirement income data. The FCA issued a policy statement that contains the final rules requiring regulated firms to submit two new regulatory returns to report data on retirement income. The final rules will become effective on September 30, 2018. (7/21/2017) FCA policy statement.
FCA releases findings of review of property funds and liquidity risks. The FCA published the findings of its review of fund suspensions and pricing adjustments following the UK’s vote to leave the European Union, which concluded that property funds need to take additional steps to deal with potential liquidity risks that may result from external events and improve their communications with customers following significant market events. (7/20/2017) FCA review.
FCA announces general insurance events for Live & Local regional program. The FCA announced the details of the general insurance events for its Live & Local regional program. The general insurance events, which will take place from September to December 2017, will include interactive workshops with a focus on working to prevent harm and question-and-answer roundtables with a panel of FCA and industry representatives. (7/20/2017) FCA press release.
Regulation round-up. The FCA published the July 2017 issue of its Regulation round-up. (7/20/2017)
PRA offers update on proposal on supervisory approach to insurance special purpose vehicles. The Prudential Regulation Authority issued a statement to clarify the pre-transaction notification requirement for multi-arrangement insurance special purpose vehicles (MISPVs) under its proposed approach to the authorization and supervision of insurance special purpose vehicles, which has changed following the publication of HM Treasury’s updated Risk Transformation Regulations 2017. The PRA explained that it would adopt a post-transaction notification process for additional cells created by MISPVs, provided the activities of the new cells are in line with the MISPV’s authorized scope of activities. (7/20/2017) PRA statement.
PRA issues final Rulebook changes arising from Occasional Consultation Paper. The PRA published a policy statement that sets out the final rule amendments resulting from its Occasional Consultation Paper, which included amendments to Rulebook provisions relating to fitness and propriety insurance; insurance company reporting; remuneration; securitizations; and regulatory reporting for ring-fenced bodies. The policy statement includes updates to certain reporting templates, its supervisory statement on securitization, and its supervisory statement on completing regulatory reports. (7/20/2017) PRA policy statement.
PRA publishes policy statement on regulatory reporting. The PRA released a policy statement containing final rules from its consultation on changes related to regulatory reporting. The PRA also issued updated templates and instructions for certain Capital+ data items as well as an updated supervisory statement on guidelines for completing regulatory reports. (7/20/2017)
New BOE policy permits non-bank payment service providers to apply for settlement accounts. The Bank of England published a revised Settlement Account Policy that will allow non-bank payment service providers to apply for a settlement account in the Bank’s RTGS system. The policy will require these providers to demonstrate compliance with a new risk management framework developed by the BOE, the FCA, HM Treasury, HM Revenue & Customs, and the Payment Systems Regulatory. The BOE, the FCA, and major payment systems operators published a guide that explains the requirements and application process. (7/19/2017) BOE press release.
FCA raises concerns about the use of the interbank rate in online currency converter tools. The FCA issued a statement on the use of online tools that convert currency at the interbank rate by payment institutions and e-money institutions, which reiterated the FCA’s concerns about the potential of these tools to mislead consumers about the actual, inferior rate that they are likely to achieve. The FCA indicated that it is considering further investigations of and enforcement actions against firms that continue to use the interbank rate in potentially misleading ways and will consult on prioritizing its new rulemaking powers in relation to payment services. (7/19/2017) FCA statement.
FCA seeks comments on scope of Investment Platforms Market Study. The FCA published the Terms of Reference for its Investment Platforms Market Study, which will examine the competition practices of both investment platforms and firms that provide similar services by allowing investors or their advisers to access retail investment products through an online portal. Comments on the scope of the study are due on or before September 8, 2017. (7/17/2017) FCA press release.
FCA publishes review of how firms assess customer understanding. The FCA released the findings of its thematic review of how retail banks and building societies assess whether their customers understand the financial products they purchase. The review found that the most developed systems and practices for assessing customer understanding occur post-sale and that practices are the least developed with respect to online sales. (7/17/2017) FCA press release.
FCA consults on new listing category for sovereign-controlled companies. The FCA requested comments on a consultation paper that proposes to create a new category within its premium listing regime for companies controlled by a shareholder that is a sovereign country. Comments are due on or before October 13, 2017. (7/13/2017) FCA press release.
FCA seeks comments on authorization and reporting forms under PSD2. The FCA published a follow-up consultation that introduces some additional reporting and record keeping requirements for payment service providers, as well as some registration and authorization forms to be used by payment institutions and e-money institutions, to reflect new authorization and registration requirements under the revised Payment Services Directive. Comments are due on or before August 18, 2017. (7/13/2017) FCA press release.
PRA consults on methodologies for assessing liquidity risk under Pillar 2. The PRA requested comments on a consultation paper that sets out its proposals on a cash flow mismatch risk framework and other PRA methodologies for assessing firms’ liquidity risk under the Pillar 2 liquidity framework. Comments are due on or before October 13, 2017. (7/13/2017) PRA press release.
PRA proposes revisions to Pillar 2A capital requirements and disclosure. The PRA published a consultation paper that proposes to adjust the Pillar 2A capital framework by setting Pillar 2A capital as a firm-specific capital requirement under section 55M of the Financial Services and Markets Act 2000, rather than as individual guidance. The PRA also proposes to require firms to disclose their Total Capital Requirements, which refers to the amount and quality of capital a firm must maintain to comply with the Capital Requirements Regulation and the Pillar 2A capital requirement. Comments are due on or before October 12, 2017. (7/12/2017) PRA press release.
FCA announces interim findings of retirement income market study. The FCA released the interim findings of its Retirement Outcomes Review, which studies how the retirement income market is changing since the pension freedoms. The review found that nearly three quarters of pensions have been accessed early by consumers, pension funds are often moved to other savings or investments, and consumers are moving funds into drawdown rather than annuities. (7/12/2017) FCA press release.