News from Europe

European Union


ESMA provides guidelines for supervisory cooperation regarding CSDs. ESMA announced the publication of its guidelines regarding the cooperation between authorities under the Central Securities Depositories Regulation. (7/11/2017)

ESMA publishes updated AIFMD and UCITS Q&A. ESMA announced that it has published updated questions and answers documents on the application of the Alternative Investment Fund Managers Directive (AIFMD) and the Undertakings for the Collective Investment in Transferable Securities Directive (UCITS). (7/11/2017)

ESMA issues final standards for publication of derivatives data. ESMA announced its issuance of the final regulatory technical standards regarding the aggregation and publication of derivatives data by trade repositories. (7/10/2017)

ESMA consults on guidelines regarding internalized settlement reporting. ESMA announced that it has opened a public consultation on future guidelines further detailing the implementation of internalized settlement reporting under the Central Securities Depositories Regulation. (7/10/2017)

ESMA letter to European Commission on third-country regimes. ESMA announced that it has written to the EC setting out its views on recent proposals for improvements in the way the EU deals with third countries on financial services. (7/10/2017)

ESMA updates MiFID II/MIFIR Investor Protection Q&A. ESMA announced that it has added 2 new Q&A to its Questions and Answers document on the implementation of investor protection topics under MiFID II and MiFIR. The new Q&A covers the topics of recording of telephone conversations and electronic communications, and best execution. (7/10/2017)

ESMA updates Q&A on MiFID II implementation. ESMA announced that it has updated its Question and Answers (Q&As) regarding the implementation of the MiFID II and MiFIR. (7/7/2017)

ESMA consults on the evaluation of the short-selling regulation. ESMA announced that it has issued a public consultation regarding its future technical advice to the EC on the Short-Selling Regulation. (7/7/2017)

ESMA proposes simplifications for prospectuses. ESMA announced that it is publishing three consultation papers on the Prospectus Regulation. (7/6/2017)

ESMA updates MAR Q&A. ESMA updated its Questions & Answers (Q&A)document regarding the implementation of the Market Abuse Regulation. (7/6/2017)

ESMA publishes Benchmarks Regulation Q&A on transitional provisions. ESMA announced that it has published its Q&A on practical questions regarding the implementation of the Benchmarks Regulation. (7/5/2017)

European Supervisory Authorities publish Q&A on the Key Information Document. ESMA announced that the European Supervisory Authorities published the first set of Questions and Answers related to the Key Information Document requirements for Packaged Retail and Insurance-based Investment Products. (7/4/2017)

ESMA provides interim transparency calculations for MiFID II. ESMA announced that it has issued an opinion with interim transparency calculations for non-equity instruments in relation to the implementation of the MiFID II. (7/3/2017)

ESMA provides market size calculations for MiFID II ancillary test. ESMA issued an opinion to help market participants assess whether their activities in commodity derivatives can be considered as ancillary to their main business. (6/30/2017)

Statement on preparatory work in relation to CFDs, binary options and other speculative products. ESMA issued a statement updating on its work in relation to the sale of contracts for differences, binary options and other speculative products to retail investors. (6/29/2017)

ESMA updates co-legislators on MiFID II implementation. ESMA announced that it has sent a letter to the European Parliament, Commission and Council updating them on the implementation of ESMA’s IT projects regarding MiFID II. (6/28/2017)

MiFID II: ESMA issues final guidelines on trading halts. ESMA announced that it has issued its final guidelines on trading halts under the Markets in Financial Instruments Directive (MiFID II). (6/27/2017)

ESAs publish AML/CFT guidelines. ESMA announced that the Joint Committee of the three European Supervisory Authorities published its final Guidelines on anti-money laundering and countering the financing of terrorism. (6/26/2017)

European Commission Commission moves to enhance business transparency on social and environmental matters. The EC announced that it has adopted guidelines on the disclosure of environmental and social information in an effort to help companies disclose relevant non-financial information in a consistent and more comparable manner. (6/26/2017)

European Banking Authority EBA publishes final Guidelines on authorization and registration under PSD2. The EBA announced publication of its final Guidelines on the information to be provided by applicants intending to obtain authorization as payment and electronic money institutions as well as to register as account information service providers under the revised Payment Service Directive. (7/11/2017)

EBA enhances transparency on Deposit Guarantee Schemes across the EU. The EBA announced publication of data relating to two key concepts in the Deposit Guarantee Schemes Directive: available financial means, and covered deposits. (7/11/2017)

EBA publishes Final Guidelines on Professional Indemnity Insurance under PSD2. The EBA announced publication of its final Guidelines under the revised Payment Services Directive, on the criteria on how to stipulate the minimum monetary amount of the professional indemnity insurance or other comparable guarantee for payment initiation services (PIS) and account information services. (7/7/2017)

EBA launches supplementary data collection to support the new prudential framework for investment firms. The EBA announced the launch of a supplementary data collection aimed at supporting the response to the EC’s Call for Advice on the new prudential framework for investment firms. (7/6/2017)

EBA acknowledges the EC adoption of amended supervisory reporting standards due to FINREP IFRS 9. The EBA acknowledged the adoption by the EC of the Implementing Act amending Regulation No 680/2014 (Implementing Technical Standards on Supervisory Reporting) with regard to financial reporting (FINREP) following the changes in the International Accounting Standards (IFRS 9). The amended requirements will apply as of March 1, 2018. (7/5/2017)

Updated Risk Dashboard shows stable capital levels amidst efforts to improve banks asset quality and profitability. The EBA announced publication of a periodical update of its Risk Dashboard, which summarizes the main risks and vulnerabilities in the EU banking sector through a set of Risk Indicators in Q1 2017. (7/4/2017)

EBA consults on the implementation of the methods for calculating contributions to deposit guarantee schemes. The EBA announced the launch of a public consultation on the implementation of the EBA Guidelines on methods for calculating contributions to deposit guarantee schemes. The draft report assesses whether the principles outlined in the EBA Guidelines on these methods are being met in practice. It also evaluates whether there is appropriate and consistent implementation of these Guidelines. The consultation runs until August 28, 2017. (7/3/2017)

EBA consults on central contact points under the revised PSD2. The EBA announced the launch of a public consultation on draft regulatory technical standards that specify the criteria for determining when the appointment of a central contact point under the PSD2 is appropriate and the functions that these contact points should have. The consultation runs until September 29, 2017. (6/29/2017)

EBA publishes its Opinion in response to the EC intention to amend the EBA Technical Standards for open and secure electronic payments under the PSD2. The EBA announced the publication of an Opinion responding to the EC’s intention to amend the EBA’s draft Regulatory Technical Standards on strong customer authentication and common and secure communication. (6/29/2017)

Report on consumer data and identifies a number of applicable requirements under EU law. The EBA announced publication of a Report presenting the conclusions of its assessment on the topic of innovative uses of consumer data by financial institutions. (6/28/2017)

2017 consumer trends report. The EBA announced publication of its annual consumer trends report for 2017. (6/28/2017)

ESAs publish AML/CFT guidelines. The Joint Committee of the three ESAs published its final Guidelines on anti-money laundering and countering the financing of terrorism. (6/26/2017)

ESAs publish central contact point standards in fight against financial crime. The Joint Committee of the three ESAs published draft regulatory technical standards to help Member States determine when payment service providers and electronic money issuers should appoint a Central Contact Point to support the fight against money laundering and terrorist financing. (6/26/2017)

Discussion Paper on the treatment of structural FX. The EBA announced the launch of a Discussion Paper on the application of the structural FX provision. The consultation runs until September 22, 2017. (6/22/2017)

EBA publishes draft amending technical standards on CVA proxy spread. The EBA announced publication of its draft amending Regulatory Technical Standards on credit valuation adjustment proxy spread. (6/21/2017)

EBA launches 2016 CVA risk monitoring exercise. The EBA announced that it has put on hold its draft Guidelines on the treatment of CVA risk under SREP until further notice, due to continued developments in the CVA risk framework at international level. (6/21/2017)

European Central Bank Consolidated Banking Data. The ECB published its Consolidated Banking Data for the end of 2016. (6/28/2017)

ECB recommends amending Article 22 of its Statute. The ECB announced that it has adopted a Recommendation to amend Article 22 of the Statute of the European System of Central Banks and of the ECB so that it would read as follows: “The ECB and national central banks may provide facilities, and the ECB may make regulations, to ensure efficient and sound clearing and payment systems, and clearing systems for financial instruments, within the Union and with other countries.” (6/23/2017)

ECB to develop a service for the settlement of instant payments. The ECB announced its decision to develop a new service for the settlement of instant payments. The new service, TARGET instant payment settlement, will enable citizens and firms to transfer money between each other in real time. (6/22/2017)

United Kingdom

BOE and PRA publish annual reports and final fees policy. The Bank of England and the PRA issued Bank of England Annual Report and Accounts 1 March 2016-28 February 2017PRA Annual Report and Accounts 1 March 2016-1 March 2017 (for which consultation closes on October 6, 2017), PRA Annual Competition Report 2017PS17/17 ‘Regulated fees and levies: rates for 2017/18’, and SS3/16 UPDATE ‘Fees: PRA approach and application’. (7/6/2017)

PRA publishes changes to reporting requirements and guidelines for completing regulatory reports. The PRA published PS18/17 “IFRS 9: Changes to reporting requirements, which sets out final rules intended to update regulatory reporting requirements, and expectations, in light of the introduction of International Financial Reporting Standard 9 (IFRS 9) from 1 January 2018, and Guidelines for completing regulatory reports – SS34/15 UPDATE. (7/6/2017)

PRA issues publications on Solvency II matching adjustment, cyber insurance underwriting risk, and dealing with a market turning event in the general insurance sector. The PRA issued three publications relevant to the insurance sector: Policy Statement (PS) 14/17 and Supervisory Statement (SS) 3/17 on ‘Solvency II: matching adjustment - illiquid unrated assets and equity release mortgages’; PS15/17 and SS4/17 on ‘Cyber insurance underwriting risk’; and PS16/17 and SS5/17 on ‘Dealing with a market turning event in the general insurance sector’. (7/5/2017)

FCA publishes annual report and accounts 2016/17. The FCA published its Annual Report and Accounts, which looks back on the key pieces of work undertaken by the organization throughout 2016/17. (7/5/2017) FCA press release.

FCA publishes proposals on staff incentives and performance management in consumer credit firms. The FCA published proposals on how consumer credit firms should manage risks related to how they pay and manage the performance of their staff. (7/4/2017) FCA press release.

FCA releases findings of its asset management market study. The FCA published the findings of its asset management market study, which found, among other things, that price competition is weak in a number of areas of the industry; investors are not always clear what the objectives of funds are; and fund performance is not always reported against an appropriate benchmark. (6/28/2017) FCA press release.

FCA finalizes rules prohibiting use of restrictive contractual clauses by primary market providers. The FCA published a policy statement that establishes final rules to ban the use of contractual clauses by banks that restrict competition with respect to future primary market services without being clearly beneficial to clients. Firms will need to comply with the final rules by January 3, 2018. (6/27/2017) FCA press release.

BOE releases Financial Stability Report. The Bank of England’s Financial Policy Committee published its Financial Stability Report, a biannual report that assesses the outlook for financial stability in the UK by identifying the risks faced by the UK financial system and weighing them against the resilience of the system. (6/27/2017) See also the BOE’s infographic explaining the report.

PRA, FPC consult on changes to UK leverage ratio framework. The PRA and the FPC requested comments on two consultations that propose changes to the UK leverage ratio framework relating to the treatment of claims on central bank. The first consultation sets out the FPC’s proposed recommendation to the PRA to exclude claims on central banks from the leverage exposure measure in the UK leverage ratio framework and to compensate for the resulting reduction in capital required by the leverage ratio framework by increasing the minimum requirement from 3% to 3.25%. The second consultation sets out the PRA’s proposals for implementing the FPC’s proposed recommendation. Comments are due on or before September 12, 2017. (6/27/2017) PRA press release.

PRA updates supervisory statement on regulatory reports to include new MLAR completion notes. The PRA revised its supervisory statement on guidelines for completing regulatory reports to include updated notes for completing the Mortgage Lenders and Administrators Return (MLAR). The notes became effective on July 1, 2017. (6/23/2017) PRA press release.

FCA issues summary of approved Handbook changes. The FCA published Handbook Notice 45, which contains a summary of Handbook changes approved by the FCA Board on June 22, 2017. The changes include revisions to the Periodic Fees (2017/2018) and Other Fees Instrument 2017; the Future Service Restrictions Instrument 2017; the Market Conduct Sourcebook (Commodity Derivatives Inside Information) Instrument 2017; and the Supervision Manual (Reporting No 5) Instrument 2017. (6/23/2017)

Regulation round-up. The FCA published the June 2017 edition of its Regulation round-up. (6/22/2017)

FCA consults on proposals related to the application of the EU Benchmarks Regulation. The FCA requested comments on a consultation paper that proposes to remove and revise some of the FCA’s Handbook rules to comply with the EU Benchmarks Regulation and to adopt some domestic rules on benchmark administrators in areas not covered by the EU Benchmarks Regulation. Comments are due on or before August 22, 2017. (6/22/2017) FCA press release.

FCA seeks comments on proposals relating to advice on pension transfers. The FCA published for comment a consultation paper that proposes new rules on advice relating to pension transfers where consumers have safeguarded benefits. Among other things, the consultation paper proposes to require transfer advice to be provided as a personal recommendation and to replace the current transfer value analysis with a comparison to show the value of the benefits being given up. Comments are due on or before September 21, 2017. (6/21/2017) FCA press release.

PRA proposes changes to its approach to recovery planning. The PRA requested comments on a consultation paper that proposes a new supervisory statement on recovery planning containing additional expectations of firms, as well as revisions to the supervisory statement on ring-fenced bodies to clarify the PRA’s expectations on the approach to recovery planning for groups containing a ring-fenced body. Comments are due on or before September 21, 2017. (6/21/2017) PRA press release.

PRA consults on criteria for disclosing composition of collateral for exposures to counterparty credit risk. The PRA published a consultation that proposes a threshold for and objective criteria to waive the requirement to disclose the template for composition of collateral for exposures to counterparty credit risk under the EBA’s Guidelines on disclosure requirements under Part Eight of Regulation (EU) No 575/2013. Comments are due on or before August 21, 2017. (6/21/2017) PRA press release.