FCA prohibits promotion of UCIS to retail investors. The UK’s Financial Conduct Authority published final rules banning the promotion of Unregulated Collective Investment Schemes and certain close substitutes to the vast majority of retail investors in the UK. Promotion of these riskier and often complex fund structures will generally be restricted to sophisticated investors and high net worth individuals. (6/4/2013) FCA press release.

FCA publishes amendments to Financial Conglomerates Directive. The UK’s Financial Conduct Authority issued a policy statement publishing the final rules implementing Directive 2011/89/EU (FICOD 1), which amends Directive 2002/87/EC (the Financial Conglomerates Directive - FICOD) and certain other directives in so far as they apply to financial conglomerates. The new rules will allow consumers to obtain information about financial conglomerates and improve how the markets used by financial conglomerates and financial groups function. FCA press release.

ESMA advice on the short selling regulation. The European Securities and Markets Authority has published its technical advice on the evaluation of the EU’s regulation on short selling and certain aspects of credit default swaps. (6/3/2013) ESMA notice.

ESMA advice on credit rating regulation. The European Securities and Markets Authority provided advice to the European Commission regarding the equivalence between the EU regulatory regime for credit rating agencies and the respective legal and supervisory frameworks of Argentina, Brazil, Mexico, Hong Kong and Singapore. (5/31/2013) ESMA notice.

Regulators reconsider financial transaction tax. International Financing Review reported that European regulators may revise the proposed financial transaction tax. Provisions under review include the amount of the tax and the timeline for its imposition. (5/31/2013) Second thoughts.

ESMA approves alternative investment fund cooperation agreements. The European Securities and Markets Authority approved cooperation arrangements between EU securities regulators responsible for the supervision of alternative investment funds and 34 of their global counterparts. ESMA has negotiated the agreements on behalf of all 27 EU Member State securities regulators as well as the authorities from Croatia, Iceland, Liechtenstein and Norway. (5/30/2013) ESMA notice.

Credit rating agency registration approved. The European Securities and Markets Authority has formally approved the registration of the Economist Intelligence Unit as a credit rating agency. The registration takes effect from June 3, 2013. (5/30/2013) ESMA notice.

ESMA prospective directive guidance. The European Securities and Markets Authority published guidance in the form of questions and answers regarding the application of the prospectus directive (PD). The content is aimed at competent authorities under the PD to ensure that in their supervisory activities their actions are converging along the lines of the responses adopted by ESMA. The responses are also meant to provide market participants with an indication of what constitutes proper implementation of the PD rules. The answers are intended to help issuers of securities by providing clarity as to the content of the PD requirements without necessarily imposing an extra layer of requirements. (5/27/2013) ESMA notice.

ESMA AIFMD guidance. The European Securities and Markets Authority published final guidance on the key concepts of the Alternative Investment Fund Managers Directive. (5/24/2013) ESMA notice.

ESMA AIFMD consultation paper. The European Securities and Markets Authority published a consultation paper on guidelines on reporting obligations under Articles 3 and 24 of the Alternative Investment Fund Managers Directive. ESMA also requests comments on the reporting scheme to be used by institutions when reporting to their national competent authorities under Articles 3 and 24. (5/24/2013) ESMA notice.

EBA consultations. The European Banking Authority has begun consultations on:

  • Draft Guidelines on capital measures for foreign currency lending (FX lending) aimed at providing guidance to national competent authorities on how to deal with the specific risk of FX lending to unhedged borrowers. Comments should be submitted on or before August 23, 2013. (5/23/2013)
  • Draft Implementing Technical Standards related to supervisory reporting of additional monitoring metrics for liquidity and Draft Regulatory Technical Standards on additional collateral outflows. Comments on either consultation should be submitted on or before August 14, 2013. (5/23/2013)
  • Draft Regulatory Technical Standards on own funds (Part III) related to criteria to define broad market indices, the calculation of minority interest and the deduction of indirect and synthetic holdings. Comments should be submitted on or before July 18, 2013. (5/23/2013)
  • Draft Regulatory Technical Standards to define (i) the term market for the purpose of calculating the “general” component of market risk for equities under the standardized rules; and (ii) a range of methods to reflect in the own funds requirements non-delta risks for options and warrants. Comments on either of the consultations should be submitted on or before August 31, 2013. (5/22/2013)
  • Draft Regulatory Technical Standards to specify the securitization retention rules and related requirements and Draft Implementing Technical Standards to clarify the measures to be taken in the case of non-compliance with such obligations. Comments should be submitted on or before August 22, 2013. (5/22/2013)