On 5 August 2014, The European Banking Authority (EBA) published a consultation paper laying out criteria for its task of exercising intervention powers on structured deposits. The work is carried out in accordance with the Markets in Financial Instruments Regulation (MiFIR) which requires the EBA to monitor the market for structured deposits marketed, distributed or sold in the European Union.
Under certain specific circumstances, either specified by the regulation or by the EBA itself, the EBA can temporarily prohibit or restrict the marketing, distribution or sale of certain structured deposits. The European Commission recently requested the EBA to provide technical advice on the criteria and factors to be taken into account when exercising these powers.
As the MiFIR establishes an identical framework for the intervention powers of the European Securities and Markets Authority (ESMA) on financial instruments, the EBA based its own work on the criteria identified by ESMA.
In its paper, the EBA proposes a set of criteria and factors and includes explanatory notes to provide the rationale for each deviation from the criteria published by ESMA. The EBA considered that some of those criteria were not applicable to structured deposits, while others needed to be adapted and in some cases, new criteria had to be introduced, so as to take into account characteristics that are specific to structured deposits.
The consultation runs until 5 October 2014.