ESMA publishes shareholder voting rights comments. The European Securities and Markets Authority (ESMA) published the comments it received in response to its call for evidence on shareholder voting rights. (8/4/2015) ESMA notice.
PRA publications. The UK Prudential Regulation Authority (PRA) issued Policy statement 19/15: The PRA Rulebook-Part 3, which publishes final rules, supervisory statements and a statement of policy following on from CP17/15 - The PRA Rulebook: Part 3. It is the third in a series of publications that will redraft the Handbook inherited from the Financial Services Authority to create the PRA Rulebook. In addition, the PRA published three supervisory statements. Supervisory Statement 33/15 explains how one person’s holding of shares or voting power should be aggregated with that of another for the purpose of determining whether those persons have decided to acquire or increase control over a UK-authorized person; Supervisory Statement 34/15 explains how firms should complete the data items required under chapter 18 of the Regulatory Reporting part of the Rulebook; and Supervisory Statement 21/15 updates the guidance to include a section on “Risk control and governance” relating to the expectations of the Chief Risk Officer and risk committee following consultation proposals in CP17/15. (8/3/2015)
FCA launches Financial Advice Market Review. The UK Financial Conduct Authority (FCA) and HM Treasury announced the launch of the Financial Advice Market Review (FAMR), which will examine how financial advice could work better for consumers. (8/3/2015) FCA press release.
ESMA opens consultation on ELTIF. ESMA opened the first phase of its consultation concerning European long-term investment funds (ELTIF). The consultation paper represents the first stage in the development of the draft regulatory technical standards and sets out proposals for their content. Comments should be submitted by October 14, 2015. (7/31/2015) ESMA consultation paper.
PRA announces rules to protect depositors affected by change in FSCS deposit limit. The PRA announced new rules to ensure depositors who may experience a decrease in the level of protection following the change to the Financial Services Compensation Scheme (FSCS) deposit protection limit are given the opportunity to adjust to the new limit without incurring any penalty or loss of interest. (7/31/2015) PRA press release.
UK credit union annual statistics. The Bank of England published the credit union annual statistics. The statistics provide a breakdown of the balance sheet, income statement, membership and loans of UK credit unions. (7/31/2015) Bank of England press release.
Bank of England working paper studies “credit traps.” The Bank of England published a working paper which studies “credit traps,” prolonged periods of stagnant real activity accompanied by low productivity, financial sector undercapitalization, and the misallocation of credit. (7/31/2015) Bank of England press release.
EBA calls for evidence on SME lending and the SME supporting factor. The EBA requested evidence on small and medium enterprises (SME) and the SME supporting factor (SF). The EBA is conducting an analysis of bank lending to SMEs and the impact of the SME SF. The analysis will inform the European Commission’s report on the impact of own funds requirements on lending to SMEs. Comments should be submitted by October 1, 2015. (7/31/2015) EBA press release.
Bank of England consults on sterling money market data collection. The Bank of England published the consultation document for its proposed sterling money market data collection. The consultation also explains how the Bank plans to use the data to reform the Sterling Overnight Index Average benchmark interest rate. The Bank intends to collect transaction-level data from banks, building societies and major investment firms on their secured and unsecured sterling money market borrowing activity. Comments should be submitted by October 1, 2015. (7/30/2015) Bank of England press release.
ESMA advises on the extension of the AIFMD passport. ESMA published its Advice in relation to the application of the Alternative Investment Fund Managers Directive passport to non-EU Alternative Investment Fund Managers (AIFM) and Alternative Investment Funds and its Opinion on the functioning of the passport for EU AIFMs and the national private placement regimes. The Advice and Opinion will now be considered by the European Commission, Parliament and Council. The advice addresses the extension of the passport to Guernsey, Hong Kong, Jersey, Singapore, Switzerland and the US. (7/30/2015) ESMA notice.
Virtual currency responses. ESMA published the responses it received to its consultation on virtual currencies and distributed ledger technology. (7/30/2015) ESMA notice.
ESMA Consultative Working Group members named. ESMA announced the members of the Consultative Working Group for the Investor Protection and Intermediaries Standing Committee. (7/30/2015) ESMA notice.
UK Pillar 2 approach. The PRA published the feedback statement, supervisory statements, statement of policy and reporting instrument for the revised Pillar 2 capital framework. The revised approach includes changes that have been made in response to feedback and seeks to enhance proportionality and to clarify the role of supervisory judgment, own capital assessments and the published supervisory methodologies in dealing with specific business models. (7/29/2015) PRA press release. See also updated Supervisory Statement 31/15, adding a new chapter on reverse stress testing (8/3/2015); updated Policy Statement 17/15, aligning references to the updates made in Supervisory Statement 31/15 (8/3/2015).
FCA thematic review of financial benchmarks oversight. The FCA published Thematic Review 15/11, “Financial Benchmarks: Thematic Review of Oversight and Controls.” The thematic review found that firms are failing to identify a wide enough scope of benchmark activities and some firms had not made sufficient effort to properly identify the conflicts of interest that could arise from their businesses and benchmark activities. Firms need to strengthen governance and oversight of benchmark activity; identify and manage conflicts of interest; fully identify their benchmark activities across all business areas; establish oversight and controls for any in-house benchmarks where they have not done so; and implement appropriate training programs. (7/29/2015) FCA press release.
ESMA updates list of approved CCPs. ESMA updated its list of central clearinghouses (CCP) authorized under the European Markets Infrastructure Regulation (EMIR) and its Public Register for the Clearing Obligation. The update concerns BME Clearing, which was authorized on July 21, 2015, to extend its activities and services to clear over-the-counter interest rate derivatives and some cash equities (OTC and Regulated Market). (7/29/2015) ESMA notice.
EBA draft guidelines under the Deposit Guarantee Schemes Directive. The EBA launched a consultation on draft guidelines on cooperation agreements between deposit guarantee schemes (DGS). The cross-border nature of many of the EU’s credit institutions calls for effective cooperation between the DGSs and relevant authorities to ensure financial stability in the EU, including when a credit institution fails and there is a need for the DGSs to pay out depositors. Comments should be submitted by October 29, 2015. (7/29/2015) EBA press release.
EBA publishes systemically important institution metrics. The EBA published the metrics used to identify global systemically important institutions (G-SIIs) in the EU, with information on size, interconnectedness, substitutability, complexity and cross-jurisdictional activity. (7/28/2015) EBA press release.
Sterling money market survey results. The Bank of England published the results of its latest Sterling Money Market Survey, which gathers quantitative and qualitative information on developments in the market. (7/28/2015) Bank of England press release.
FCA thematic review of firm handling of unauthorized transactions. The UK Financial Conduct Authority published its thematic review on how firms handle customer claims for unauthorized transactions. The review found that firms are making good efforts to deliver fair outcomes for consumers, tending to err on the side of the customer, and handling complex claims on a case-by-case basis. (7/28/2015) FCA press release.
FCA finalized guidance on risks to customers from performance management.The FCA issued FG 15/10, “Risks to customers from performance management at firms - Thematic review and guidance for firms.” The final guidance is intended to assist firms to satisfy themselves that the risk of mis-selling from performance management can be, and is being, managed; and to monitor performance management in practice and look for indicators of undue pressure to identify poor practices. (7/27/2015) FCA press release.
Bank of England issues staff working paper on liquidity regulation and banks.The Bank of England published a staff working paper which presents the first study to estimate the causal effect of liquidity regulation on bank balance sheets. The study found that banks adjusted the composition of both assets and liabilities, increasing the share of high-quality liquid assets and non-financial deposits while reducing intra-financial loans and short-term wholesale funding. The study found no evidence that the tightening of liquidity regulation caused banks to shrink their balance sheets, nor reduce the amount of lending to the non-financial sector. (7/24/2015) Bank of England press release.
Longer settlement day for CHAPS and CREST announced. The Bank of England announced that the settlement day for CHAPS, the UK’s high-value payment system, and CREST, the UK’s securities settlement system, will be extended by one hour and forty minutes beginning in the summer of 2016. At that time, these systems will close at 6:00 PM (BST) for direct participants, such as the major banks. (7/23/2015) Bank of England press release.
PRA Supervisory Statement concerning Solvency II. The UK Prudential Regulation Authority (PRA) issued Supervisory Statement 30/15, “Solvency II: treatment of sovereign risk in the internal model.” The statement expands on the PRA’s general approach, as presented in its insurance approach document, by explaining how it expects firms to treat sovereign debt in their internal models. (7/23/2015) PRA press release.
PRA updates Solvency II supervisory statement. The PRA updated Supervisory Statement 22/15, “Solvency II: applying EIOPA’s set 1 guidelines to PRA-authorized firms” to explicitly provide that it applies to Lloyd’s, including Lloyd’s managing agents, rather than just the Society of Lloyd’s. (7/23/2015) PRA press release.
FCA consultation on the cash savings market. The FCA published a consultation paper on proposed remedies for the cash savings market. Among other things, the FCA is consulting on rule changes aimed at improving firm disclosure and making switching easier. Comments should be submitted by October 12, 2015. (7/23/3015) FCA press release.
FCA policy statement on complaints handling. The FCA issued Policy Statement 15/19, “Improving complaints handling.” The policy statement presents the FCA’s new rules on complaints handling for financial services firms, as well as rules limiting the cost of telephone calls which consumers make to firms. (7/23/2015) FCA press release.
ESMA consults on UCITS remuneration guidelines. ESMA is consulting on proposed guidelines on sound remuneration policies under the Undertakings for the Collective Investment of Transferable Securities V Directive and the Alternative Investment Fund Managers Directive. The proposal provides guidance on issues such as proportionality, governance of remuneration, requirements on risk alignment and disclosure. Comments should be submitted by October 23, 2015. (7/23/2015) ESMA notice.
Comments on proposed knowledge and competence assessment guidelines.ESMA published the responses it received to its draft guidelines for the assessment of knowledge and competence. (7/22/2015) ESMA comments webpage.
ESMA publishes prospectus activity data. ESMA published the statistical data for prospectus activity within the European Economic Area in 2014. The report has been expanded to include more detailed information on the structure and content of prospectuses approved during 2014. (7/23/2015) ESMA notice.
EBA reports on risk-weighted asset assessments. The EBA published two reports on the consistency of risk-weighted assets (RWA) across large EU institutions for large corporate, sovereign and institutions’ internal ratings-based portfolios, as well as for the calculation of counterparty credit risk exposures under the Internal Model Method and the credit value adjustments according to the advanced approach. The reports summarize the findings obtained from two benchmarking exercises conducted in line with the mandate laid down in the Capital Requirements Directive and related draft technical standards. The benchmarking exercises aim at improving the comparability of EU banks’ RWAs. (7/22/2015) EBA press release.