ESMA consultations. The European Securities and Markets Authority opened consultations on:

  • The definition of “derivatives” as financial instruments under the current Markets in Financial Instruments Directive. Comments should be submitted by January 5, 2015. (9/29/2014)
  • The definition of “main indices” and “recognized exchanges” as used by the Capital Requirements Regulation (CRR) regarding the specification of “eligible collateral.” The consultation paper sets out a proposed rationale for each definition and includes draft Implementing Technical Standards. Comments should be submitted by November 1, 2014. (9/29/2014) 
  • Draft Regulatory Technical Standards (RTS) on prospectus related issues under the Omnibus II Directive. The proposed draft RTS addresses the procedures for approval of prospectuses; information that may be incorporated into prospectuses by reference; the publication of prospectuses; and the dissemination of information relating to offers to the public and admissions to trading on a regulated market outside the prospectus, including advertisements. Comments should be submitted by December 19, 2014. (9/26/2014)
  • Future technical advice to the European Commission on the implementing measures of the Regulations 346/2013 on “European Social Entrepreneurship Funds” and 345/2013 on “European Venture Capital Funds.” Comments should be submitted by December 10, 2014. (9/26/2014)
  • Draft technical advice to the European Commission under the revised Undertakings for Collective Investments in Transferable Securities Directive. The consultation proposes draft implementing measures regarding the depositary role of UCITS funds. Comments should be submitted by October 24, 2014. (9/26/2014)

EBA consultations. The European Banking Authority launched consultations on:

  • Guidelines identifying the minimum qualitative and quantitative indicators that institutions should include in their recovery plans. Comments should be submitted by January 2, 2015. (9/26/2014) 
  • Guidelines and Implementing Technical Standards related to recovery planning, resolution planning and resolvability assessments under the Bank Recovery and Resolution Directive (BRRD). The Guidelines define how EU authorities should assess whether an institution is eligible for simplified obligations. Comments should be submitted by January 3, 2015. (9/25/2014) 
  • BRRD guidelines for the implementation of resolution tools in the EU banking sector regarding the sale of a business, asset separation, and the transfer of an institution or its assets. Comments should be submitted by December 22, 2014. (9/24/2014)
  • Two draft Guidelines regarding the triggers for using early intervention measures and the circumstances under which an institution shall be considered “failing or likely to fail.” Comments should be submitted by December 22, 2014. (9/22/2014)

ESMA updates AIFMD guidance. The European Securities and Markets Authority published an update of its Questions & Answers document on the application of the Alternative Investment Managers Directive. The updated Q&A clarifies the reporting obligations to national competent authorities as well as the delegation of portfolio and/or risk management. (9/30/2014) ESMA notice.

ECB to establish whistleblower program. The European Central Bank’s Danièle Nouy, Chair of the Supervisory Board of the Single Supervisory Mechanism, published an article summarizing her plans as the ECB assumes direct supervision of the 120 biggest banks in the EU. Among other things, the ECB will establish a reporting mechanism to encourage and enable persons with knowledge of potential breaches of relevant EU law by banks to report such breaches to the ECB. (9/30/2014) Nouy statement.

European Council adopts directive on the disclosure of non-financial information. The European Council adopted a directive on the disclosure of non-financial and diversity information by large companies and groups. Affected companies will be required to disclose information on policies, risks and outcomes regarding environmental matters, social and employee-related issues, respect for human rights, anti-corruption and bribery issues, and corporate board diversity. (9/29/2014) EC press release.

ESMA issues draft Transparency Directive RTS. The European Securities and Markets Authority published draft Regulatory Technical Standards (RTS) under the revised Transparency Directive relating to the notification of major shareholdings. The draft RTS addresses, among other things, the calculation of the threshold exemption for market makers; the calculation method for shares of an index; determining the “delta” for calculating voting rights; and financial intermediaries’ notification regime of financial instruments. (9/29/2014) ESMA notice.

UK FCA policy statement on regulatory reporting by advisers. The UK Financial Conduct Authority published a Policy Statement on the issues arising from Consultation Paper 14/5, “Changes to regulatory reporting: Adviser and consultancy charging, Authorized Professional Firms (APFs) and Product Sales Data (PSD).” The policy statement summarizes the feedback the FCA received on proposed changes to Section K of the RMAR and PSD reporting requirements. (9/29/2014) FCA press release.

UK FCA consults on joint sponsors. The UK Financial Conduct Authority published a consultation paper regarding joint sponsors. The paper seeks comments on whether the current rules and guidance on sponsor conflicts are appropriate and effective. Comments should be submitted by December 30, 2014. (9/26/2014) FCA press release.

Bank of England working paper. The Bank of England published a working paper which examines how macroeconomic policy uncertainty in advanced countries affects emerging market economies (EMEs). The paper finds that the impact of policy uncertainty on portfolio equity flows differs depending on whether changes in policy uncertainty originate from the United States or the European Union. Increases in US policy uncertainty reduce both bond and equity inflows into EMEs. Conversely, increases in EU policy uncertainty decrease bond inflows, but increase equity inflows. (9/26/2014)

UK FCA statement on specialist advisers. The UK Financial Conduct Authority updated its guidance regarding the use of specialist advisers within firms. Firms can use internal specialists if they have appropriate systems and controls in place to ensure that personal recommendations provided by the advisers meet the required FCA standard. (9/25/2014) FCA statement.

Bank of England consults on EBA asset disclosure guidelines. The Bank of England published a consultation paper on the Prudential Regulation Authority’s draft supervisory statement on the European Banking Authority’s Guidelines on disclosure of encumbered and unencumbered assets. Comments should be submitted by November 24, 2014. (9/24/2014) Bank of England press release.

ESAs publish bi-annual risk report. The Joint Committee of the European Supervisory Authorities published its bi-annual report on risks and vulnerabilities in the European Union’s financial system. The report identifies a number of risks to financial stability in the EU, including prolonged weak economic growth in an environment characterized by high indebtedness, intensified search for yield in a protracted low interest rate environment, and uncertainties in global emerging market economies. The report also highlights risks related to conduct of business and Information Technologies. (9/22/2014) EBA press release.

EBA recovery and resolution guidelines. The European Banking Authority published its final Guidelines specifying the type of tests, reviews or exercises that may lead to extraordinary public support measures for institutions in the banking sector. (9/22/2014) EBA press release.

UK regulators consult on remuneration reporting. The UK Prudential Regulatory Authority and Financial Conduct Authority jointly published a consultation paper proposing changes to their respective requirements for the reporting of remuneration data by banks, building societies, PRA-designated investment firms and investment firms. The new rules would require affected firms to submit data on all the employees with total remuneration of €1 million or more in a financial year for all subsidiaries and branches within a group based in the European Economic Area (EEA) or an EEA branch of a firm with its head office outside of the EEA. The High Earners Report template would be revised to introduce the collection of more detailed data with additional business areas added. Additional information about the amount of total variable remuneration and the form in which it is paid is also required. Comments should be submitted by October 17, 2014. (9/22/2014) Bank of England press release.

ESMA adds CCP. The European Securities and Markets Authority added BME Clearing to its list of authorized central counterparties under the European Markets Infrastructure Regulation. (9/17/2014) ESMA notice.