DOMESTIC:

Department of Finance publishes feedback to the Consultation on national discretions under Markets in Financial Instruments Directive II

The Department of Finance (DOF) published a Feedback Statement to their consultation on national discretions under the Markets in Financial Instruments Directive II (MiFID II) which has indicated their position on a number of key areas. In particular the feedback statement confirmed that the current "safe-harbour" exemption, which allows non-EU entities to provide investment services in Ireland to corporates without being authorised under Markets in Financial Instruments Directive (MiFID), will continue to be available under MiFID II but it will be narrower in scope.

The DOF confirmed the transposing legislation will be published “in the coming weeks”. The DOF also indicated that the Consumer Protection Code (CPC) will be the subject of certain MiFID II related amendments, further regulations are expected to deal with amendments to the Irish Client Asset Regulations (CAR) and primary legislation will be required to amend the Investment Intermediaries Act 1995 and the existing sanctions regime.

Central Bank consults on the Second Edition of the Central Bank Investment Firms Regulations including changes related to MiFID II

The consultation launched by the Central Bank addresses proposed changes to the CAR arising from MiFID II and the proposed integration of CAR into the Central Bank Investment Firm Regulations (S.I. No 60 of 2017).

The proposed amendments to the Investment Firm Regulations are:

i. limited amendments to Parts 1 -5 of the current Investment Firm Regulations as set out in the consultation;

ii. the addition of the amended CAR as Part 6 of the Regulations;

iii. the addition of the Investor Money Regulations (S.I. No 105 of 2015) as Part 7; and

iv. the addition of the Central Bank's policy position on capital requirements to market operators as Part 8.

The consultation will run until 27 September 2017.

Central Bank publishes Industry Letter in relation to Markets in Financial Instruments Regulation Transaction Reporting Testing Arrangements

The industry letter invited executing and submitting entities to participate in the Online Reporting System (ONR) channel testing for Markets in Financial Instruments Regulation (MiFIR) transaction reporting from 11 September to 6 October and it provides further detail on the status of MiFIR transaction reporting projects, the testing details, the Central banks integration testing with European Securities and Markets Authority (ESMA), operational and technical arrangements and key dates for the testing period.

Central Bank publishes the authorisation framework for Central Securities Depositories

Following the Central Bank being designated as the competent authority, pursuant to the European Union (Central Securities Depository) Regulation 2016 (CSD Regulation), they published the authorisation framework applicable to a Central Securities Depository (CSD). The framework divides the authorisation framework into two parts; the pre-application stage (submission of a key facts document and engagement with the Central Bank) and the application process (submission of a full application). The requirements for the key facts document are set out in detail by the framework.

EUROPEAN:

European Securities and Markets Authority issues sector-specific principles on relocations from the UK to the EU27

ESMA has published three opinions setting out sector-specific principles in the areas of investment firms, investment management and secondary markets to National Competent Authorities (NCAs) in order to ensure consistency in the authorisation, supervision and enforcement of entities as relocate due to Brexit. The opinions are also relevant for entities considering relocating. The opinions build on the general principles issued by ESMA in May.

The Prospectus Regulation (EU 2017/1129) is published in the Official Journal

The Prospectus Regulation was published in the Official Journal on 30 June 2017; however, it will not be applicable until 21 July 2019 with certain exceptions which include:

i. the exemption on the requirement to produce a Prospectus for further issuances of securities of less than 10% of the number of securities already admitted to trading, over a period of 12 months, will be increased to 20%, with the scope of the exemption also changing from "shares" to "securities"; and

ii. the exemption relating the publication of a Prospectus for convertible securities is also increased to 20% but will be calculated in respect of the number of shares of the same class already admitted to trading.

European Securities and Markets Authority launches three consultations on the Prospectus Regulation

The consultations published by ESMA pursuant to the Prospectus Regulation are on the following topics:

  • Draft requirements on the format and content of the prospectus;
  • Draft technical advice dealing with the format and content of the small and medium enterprise (SME) focused EU Growth prospectus; and
  • Draft technical advice setting out criteria for scrutiny and procedures for approval and filing of the prospectus.

The consultations close on 28 September 2017 and ESMA will deliver the technical advice to the Commission by 31 March 2018.

European Securities and Markets Authority consult on certain aspects of the MiFID II suitability requirements

Investment firms providing investment advice or portfolio management are required by MiFID II are required to carry out suitability assessments when carrying out investment services for their clients. Previous suitability guidelines were published in 2012, however, in light of new requirements under MiFID II ESMA has launched a consultation on their updated draft suitability guidelines. The consultation will run until 13 October 2017.

European Securities and Markets Authority updates the MiFID II/ MIFIR Investor Protection Questions and Answers

ESMA added two Questions and Answers to its MiFID II/ MIFIR Investor Protection Questions and Answers. The updates cover the topics of recording of telephone conversations and electronic communications and best execution. Further questions and answers will be added prior to the implementation of MiFID II.

European Securities and Markets Authority publishes further updates to Questions and Answers on MiFID II/ MIFIR topics

ESMA has published updated Questions and Answers on the following topics:

  • MiFID II implementation;
  • MiFIR data reporting;
  • MiFID II and MiFIR market structures topics;
  • MiFID II and MiFIR commodity derivatives topics; and
  • MiFID II interim transparency calculations.

European Securities and Markets Authority provides market size calculations for the MiFID II ancillary test

ESMA published an opinion in order to assist market participants in carrying out an analysis as to whether their activities in commodity derivatives can be considered as ancillary to their main business. Where participants exceed a certain market share they will be required to apply for an authorisation under MiFID II. The opinion sets out in detail how the data collected can be used to carry out the market share calculations.

European Securities and Markets Authority publishes opinion on Interim Transparency Calculations

Under MiFID II, National Competent Authorities (NCAs) are allowed to waive of defer transparency obligations for non-equity instruments (except for bonds) if instruments do not have a liquid market or if an order or transaction exceeds a certain size. In order to make such determinations ESMA has published an opinion on interim transparency calculations setting out liquidity classification of financial instruments and the sizes large in scale (LIS) compared to normal market size and the size specific to the instrument (SSTI). ESMA has also updated their FAQs on interim transparency calculations.

European Securities and Markets Authority publishes updated Technical Reporting Instructions on MiFIR Transaction Reporting

ESMA have published updated technical reporting instructions for MiFIR transaction reporting. The technical reporting instructions describe the elements of the interface that will be built between competent authorities and submitting entities in their Member States.

European Securities and Markets Authority publishes Benchmarks Regulation (EU) 2016/1011 Questions and Answers

ESMA has published Questions and Answers on practical issues arising during the implantation process of the Benchmarks Regulation. The Questions and Answers included relate to transitional provisions setting out the benchmarks supervised entities will be able to use after 1 January 2018. The Questions and Answers will be reviewed and updated as necessary.

European Securities and Markets Authority publishes final report on draft technical standards on data to be made publicly available by Trade Repositories pursuant to European Market Infrastructure Regulation

Under Article 81 of the European Market Infrastructure Regulation (EMIR) Trade Repositories (TRs) are required to make information publically available and the draft technical standards introduces requirements to better specify and enhance the data being made available by TRs. The draft technical standards also aim to resolve the issues with the aggregate data which is being used to assess risk in the markets for TRs and they also address general technical aspects relating to the publication of aggregate data. The Commission now has three months to decide whether to endorse the draft technical standards.

European Securities and Markets Authority publishes peer review on Guidelines on Enforcement of Financial Information

The review was in relation to how the guidelines, which apply in relation to the enforcement of financial information (IFRS) provided pursuant to the Transparency Directive by issuers whose securities are admitted to trading on a regulated market, have been applied by NCAs. The report has identified several areas where enforcement can be improved and identifies recommendations that can support the improvement. ESMA will now work with NCAs to see how best to implement the amendments.

European Securities and Markets Authority publishes guidelines for supervisory cooperation under the Central Securities Depositories Regulation

EMSA published guidelines on the cooperation requirements applicable to NCAs when involved in the authorisation procedure for applicant CSDs pursuant Article 17 of Central Securities Depositories Regulation (CSDR) and the procedure relating to the provision of services in another Member State referred to in Article 23 of the CSDR. NCAs must notify ESMA whether or not they plan to comply with the guidelines, with reasons for non-compliance, within two months of the date of their publication on ESMA’s website in all EU official languages.

European Securities and Markets Authority consults on the Guidelines for Internalised Settlement Reporting under Article 9 of CSDR

The consultation relates to the reporting architecture and exchange of information between ESMA and the NCAs regarding internalised settlement pursuant to Article 9 of the CSDR. The reporting obligations under Article 9 are important as they allow ESMA to monitor the volume and value of all securities transactions that they settle outside securities settlement systems and evaluate risk arising from this settlement activity. The consultation will close on 14 September 2017.