• On 4 February 2016, the European Securities and Markets Authority (ESMA) published its updated Q&A with regard to the implementation of the European Markets Infrastructure Regulation (EMIR). The updated Q&A includes answers in relation to: CCP’s default management, competent authorities’ access to trade repository data and reporting of notional in position reports.
  • ESMA has also published the responses it received to its consultation of 14 December 2015, on the review of Article 26 of RTS No 153/2013 regarding EMIR. ESMA sought feedback on the length of the margin period of risk (MPOR) for CCPs’ client accounts. The MPOR determines the amount of initial margins collected by a CCP. The ESMA proposal is to reduce from 2-day to 1-day the MPOR for gross omnibus accounts and individual segregated accounts for exchange traded derivatives and securities.


  • On 4 February 2016, ESMA published Guidelines applicable to Article 25(4) of Directive 2014/65/EU (MiFID II) in relation to complex debt instruments and structured deposits. The Guidelines come into force from 3 January 2017 and are intended to strengthen investor protection and to promote greater convergence in the classification of “complex” or “non-complex” financial instruments or structured deposits for the purposes of the appropriateness test/execution-only business in accordance with Article 25(3) and 25(4) of MiFID II.

Central Securities Depository Regulation

On 1 February 2016, ESMA published its draft regulatory technical standards (RTS) on settlement discipline. ESMA was required to provide these RTS for the implementation of the Central Securities Depository Regulation (CSDR). The RTS include:

  • Measures for preventing settlement fails, including; automated matching.
  • Measures to monitor and address settlement fails, including; cash penalties mechanism.

Closet Indexing

On 2 February 2016, ESMA published the results of a research study it conducted between 2012 and 2014 to determine whether closet indexing was being carried out at an EU-wide level. The results indicated that from a sample size of 2,600 funds, between 5-15% of UCITS equity funds could potentially be closet indexers. ESMA will take an active role in coordinating further analyses at national level and will undertake an assessment of the need for further actions to ensure full compliance with disclosure requirements.

2016 Supervisory Priorities for CRAs and TRs

On 5 February 2016, ESMA outlined its supervisory priorities for 2016 in respect of credit rating agencies (CRAs) and trade repositories (TRs). These include: governance and strategy and the quality of credit ratings for CRAs; and data quality and data access in respect of TRs.

MoU Between ESMA and ECB on Information Exchange

ESMA and the European Central Bank (ECB) have signed a Memorandum of Understanding (MoU) that will allow for the exchange of information. The proposed framework includes cooperation in the areas of statistics, risk management, supervision, market infrastructures and regulation.‎