UK regulators sign cooperation agreement. The Financial Conduct Authority and the Bank of England, including the Prudential Regulation Authority, signed a Memorandum of Understanding setting out how they cooperate with one another in relation to the supervision of markets and market infrastructure, which includes financial market infrastructures. (3/17/2014) FCA press release.
Bank of England Annual Report. The Bank of England published its annual report concerning its supervision of financial market infrastructures. The report also summarizes the areas on which it expects to focus over the coming year. (3/17/2014) Bank of England press release.
Bonus concerns. Bloomberg summarized European Parliament members’ concerns over proposed rules regulating the remuneration offered by EU financial firms. Some member countries believe that the proposed rules contain too many loopholes. (3/17/2014) Bonus concerns.
UK proposes tougher executive clawback provisions. The Bank of England opened a consultation on proposals to require all firms authorized by the Prudential Regulation Authority to amend employment contracts to ensure that bonus awards which have been vested can be clawed back from individuals where necessary. The proposed rules would come into force on January 1, 2015, and clawbacks could be applied to awards made before that date but which vest after that date (subject to a six year time limit). Comments should be submitted by May 13, 2014. (3/13/2014) Bank of England press release.
EC adopts single rulebook standards. The European Commission adopted Regulatory Technical Standards (RTS) to implement provisions of the Capital Requirements Regulation and Directive (CRR/CRD). The nine RTS define the ways in which competent authorities and market participants must handle disclosures linked to securitization instruments, measure potential losses from derivative positions and counterparty failure, and specify the types of instruments that can be used for paying bonuses. (3/13/2014) EC press release.
ESAs open consultation on supervisory practices for financial conglomerates.The Joint Committee of the three European Supervisory Authorities (the European Securities and Markets Authority, European Banking Authority and European Insurance and Occupational Pensions Authority) launched a consultation on draft guidelines on the convergence of practices aimed at ensuring consistency of supervisory coordination arrangements for financial conglomerates. Comments should be submitted by June 12, 2014. (3/12/2014) Joint press release.
ESMA reports on securities market conditions. The European Securities and Markets Authority published “Trends, Risks and Vulnerabilities No. 1, 2014,” and its “Risk Dashboard for 4Q 2013.” The reports look at the performance of EU securities markets, assessing both trends and risks in order to develop a comprehensive picture of systemic and macro-prudential risks in the EU. (3/12/2014) ESMA notice.
European Parliament adopts Omnibus II. The European Parliament adopted the “Omnibus II” Directive, which completes the “Solvency II” Directive and finalizes the new framework for insurance regulation and supervision in the EU. (3/7/2014) Omnibus II webpage.
ECB methodology for asset quality review. The European Central Bank published its manual on the methodology for Phase 2 of the asset quality review. (3/11/2014) ECB press release.
UK FCA studies general insurance add-ons. On March 20th, the UK Financial Conduct Authority released the provisional findings of its market study into general insurance add-on products. (3/11/2014) FCA press release.
UK FCA proposes changes to regulatory reporting. The UK Financial Conduct Authority has proposed changes to the data it collects from certain regulated firms through the Retail Mediation Activities Return (RMAR) and annual questionnaire for Authorized Professional Firms (APFs). The proposal seeks comment on the data provided by investment advice firms through Sections K and L of the RMAR; introduces changes to how data is collected; retires Section L of the RMAR, which relates to consultancy charging; and revises the reporting requirement and brings the annual questionnaire completed by APFs into GABRIEL as a new form. Comments on questions 6, 7, 8, 11 and 12 should be submitted by April 7, 2014. Comments on questions 1, 2, 3, 4, 5, 9, 10 and 13 should be submitted by June 6, 2014. (3/7/2014) FCA press release.
EBA consults on data waiver permissions. The European Banking Authority launched a consultation on draft Regulatory Technical Standards on the conditions according to which competent authorities may grant institutions permission to use relevant data covering shorter time series when estimating risk parameters. Comments should be submitted by June 7, 2014. (3/7/2014) EBA press release.
UK crowdfunding rules. The UK’s Financial Conduct Authority published new final rules for crowdfunding firms operating loan-based crowdfunding platforms (including peer-to-peer lending platforms) and updated its rules for firms operating investment-based crowdfunding platforms. The new rules are effective April 1, 2014. (3/6/2014) FCA press release.
UK FCA proposes minor Handbook changes. The UK Financial Conduct Authority proposed minor changes to the Handbook impacting AIFMs, UCITS managers and certain AIF depositaries. Comments on Chapter 5 should be submitted by April 4, 2013. Comments on all other chapters should be submitted by May 6, 2014. (3/6/2014) FCA press release.
EBA report on the leverage ratio. The European Banking Authority published a policy analysis and a quantitative assessment of the impact that would derive from aligning the current Capital Requirements Regulation definitions of the leverage ratio’s exposure measure to the revised standard published by the Basel Committee on Banking Supervision (Basel III). (3/5/2014) EBA press release.