In Quarterly Consultation No 15 (CP 16/39), the FCA is consulting on, amongst other things, proposed changes to its Disclosure Guidance and Transparency Rules sourcebook (DTR). The changes are to enable the FCA to comply with its obligations under regulatory technical standards made in connection with the Transparency Directive (2004/109/ EC) (TD). The obligations relate to the European electronic access point (EEAP). To see the consultation, click here.

Background

Article 21a of the TD requires the European Securities and Markets Authority (ESMA) to develop and operate a European electronic access point (EEAP) to provide access to all regulated information filed by issuers under the TD. The EEAP will be accessible through ESMA’s website and will allow users to search by legal entity identifier (LEI), home Member State, or type of regulated information. The EEAP must be established by 1 January 2018 and Member States must ensure access to their national central storage mechanisms - known as an officially appointed mechanism (or OAM) - through the EEAP, so that the EEAP can provide access to the regulated information which is stored by those mechanisms. The OAM for the UK is the FCA.

In September 2015, ESMA published draft Regulatory Technical Standards (RTS) setting out various elements required to implement the EEAP. The intention of the RTS is that regulated information which has been filed in the year prior to the EEAP becoming operational will be fully searchable once the EEAP goes live on 1 January 2018. For this reason, certain requirements come into force on 1 January 2017.

The need for an LEI

Article 7 of the RTS introduces the requirement for OAMs to use LEIs. An LEI is a unique 20-character reference code that identifies distinct legal entities. While there is an obligation under the RTS for each OAM to use LEIs to identify issuers, there is no corresponding obligation on an issuer to have an LEI. This raises a potential problem for OAMs in meeting their obligations under the RTS.

Classification of regulated information

Article 9 of the RTS requires OAMs to classify all regulated information in accordance with categories set out in section B of the annex to the RTS. However, the OAM will not necessarily know what type of regulated information the issuer is filing unless the issuer provides classification details to the OAM. This presents another potential problem for OAMs in satisfying their obligations.

The proposals

The FCA is therefore proposing to add new rules in DTR 6.2 to require issuers to

  • supply an LEI, and
  • classify regulated information according to the RTS annex (which will become a new annex to DTR 6),

when they file regulated information with the FCA. This will enable the FCA to fulfil its obligations as the OAM under Articles 7 and 9 of the RTS.

Next steps

As both Articles 7 and 9 of the RTS apply to OAMs from 1 January 2017, the FCA proposes to enable issuers to provide LEIs and classify information when they file it from that date. Even though the regulatory obligation on issuers to send LEIs or classify information will not apply until the proposed rules come into effect, the FCA is encouraging issuers to do so from 1 January 2017 as that will ensure that regulated information which they file from that date will be searchable through the EEAP when it becomes operational.

Issuers should consider the arrangements they would need to have in place in order to comply with the proposed new rules.

To enable the FCA to meet its obligations under the RTS from early 2017, it has reduced the consultation period from the normal two months to one month – responses therefore need to be received by 2 January 2017. To see the consultation and access the online response form, click here.