European Securities and Markets Authority

On October 8, 2014, ESMA will hold a hearing concerning the implementation of the Market Abuse Regulation. ESMA Press Release.

ESMA published its opinion on the May 2010 Committee of European Securities Regulators’ (“CESR”) guidelines on a common definition of European money market funds. ESMA is the successor of the CESR. The opinion explains how national competent authorities should apply modifications recommended by the Joint Committee of the European Supervisory Authorities concerning the assessment of credit quality of money market instruments.

ESMA published two reports on the risks it sees in financial markets, “Report on Trends, Risks and Vulnerabilities No. 2, 2014,” and the “Risk Dashboard for 3Q 2014.” The reports find that valuation risks in key market segments are rising and merit investor attention. In the first half of 2014, conditions in the EU’s securities markets, asset management industry and market infrastructures remained favorable. Prevailing optimistic market sentiment, however, was at odds with sluggish underlying economic fundamentals, but in line with the ultra-low interest rate environment. ESMA Press Release.

ESMA added LME Clear Ltd to its list of registered central counterparties (“CCP”) under the European Markets Infrastructure Regulation (“EMIR”). An updated list of registered CCPs may be viewed here.

ESMA published guidelines for the implementation of the CPSS-IOSCO Principles for Financial Market Infrastructure1 by competent authorities as part of the exercise of their duties resulting from EMIR for the authorization and supervision of central counter parties pursuant to Article 22(1) of EMIR. Guidelines are available here.

ESMA published its bi-annual report on risks and vulnerabilities in the EU financial system. The report identifies risks to financial stability in the EU, including prolonged weak economic growth, high indebtedness, and uncertainties in global emerging market economies. ESMA Press Release.

European Banking Authority

The EBA issued the templates to be used for the publication of data in the context of the E.U.-wide stress test in the banking sector. These common templates for all E.U. banks illustrate the type and the format of data that will be disclosed on a bank-by-bank basis. EBA Press Release.

The EBA announced a consultation on Guidelines on payment commitments to deposit guarantee schemes. The Guidelines are part of the EBA’s work to promote a consistent and coherent approach to deposit guarantee schemes across the EU.

EBA Press Release.

European Central Bank

The ECB amended the loan-level reporting requirements for certain asset-backed securities (“ABS”) in auto loans, leasing receivables, consumer finance loans and credit card receivables used as collateral in Eurosystem monetary policy operations. The affected ABS are those which have failed to satisfy the requirements announced in November 2012 concerning compliance and reporting and have neither given an explanation for that non- compliance nor provided an action plan for achieving full compliance. Beginning October 1, 2014, the Eurosystem may temporarily accept non-compliant ABS as eligible collateral, on a case-by-case basis and subject to certain other requirements. ECB Press Release.

The ECB named the 120 credit institutions it will directly supervise beginning November 4, 2014. In its first use of regulatory powers over payment systems, the ECB also identified four payment systems that will be under the new ECB Regulation on oversight requirements for systemically important payment systems. The regulation covers large-value and retail payment systems in the euro area operated by both central banks and private entities. The four systems are: TARGET2, operated by the Eurosystem; EURO1 and STEP2-T, operated by EBA

CLEARING; and CORE(FR), operated by STET, a joint initiative of six French banks. They were identified according to the combination of at least two of four main criteria: the value of payments settled, market share, cross-border relevance and provision of services to other infrastructures. ECB Press Release.

The ECB will modify the loan-level reporting requirements for certain securities that are backed by auto loans, leasing receivables, consumer finance loans and credit card receivables used as collateral in Eurosystem monetary policy operations and are unable to satisfy the timeline announced on 27 November 2012. ECB Press Release.

The ECB has allotted €82.6 billion to 255 counterparties in the first of eight targeted longer-term refinancing operations to be conducted between September 2014 and June 2016. The program is designed to enhance the functioning of the monetary policy transmission mechanism by supporting bank lending to the real economy. ECB Press Release.

International Organization of Securities Commissions

IOSCO issued a proposed Statement on Non-GAAP Financial Measures, setting out expectations for issuers presenting financial measures other than those prescribed by Generally Accepted  Accounting Principles. IOSCO Press Release.

Financial Conduct Authority

The FCA has fined Deutsche Bank £4.7m for failing to correctly report transactions between 2007 and 2013.  The failure, which affected Deutsche’s Equity Swap CFD transaction reports breached FCA rules on transaction reporting. FCA Press Release.