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Topic: Regulation and Compliance

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Commission communication on readiness at the end of the transition period between the EU and the UK

On 9 July 2020, the European Commission issued a communication on readiness at the end of the transition period between the EU and the UK. The communication includes a section on financial services (section B1, pages 12 to 15) and the key points include: In most areas, such as insurance, commercial bank lending or deposit-taking, … Continue Reading

Last chance to take part – Global operational resilience survey

Operational resilience, which has risen to increased prominence over recent years, has been brought into even sharper focus following the outbreak of COVID-19. Our risk consulting team is carrying out a survey to explore how financial institutions are managing their crisis response planning and preparedness in the event of severe operational disruption, particularly leading up … Continue Reading

IFSB statements on the implications of COVID-19 on aspects of Islamic banking and Islamic capital markets

On 8 July 2020, the Islamic Financial Services Board (IFSB) issued two statements addressing the implications of the COVID-19 pandemic on certain elements of Islamic banking and Islamic capital markets. The statement on Islamic banking aims to clarify the treatment of payment moratoriums, the expected credit loss approach and profit sharing investment accounts in-line with … Continue Reading

ESMA updates Q&As on MiFIR data reporting

On 8 July 2020, the European Securities and Markets Authority updated its Q&As on MiFIR data reporting. A new Q&A in the transaction reporting section has been added dealing with algorithmic trading. The new Q&A answers the following question: Consider a scenario where an Investment Firm A executes a reportable transaction through an execution algorithm … Continue Reading

Anne IX (Financial Services) to the EEA Agreement amended

On 2 July 2020, there was published in the Official Journal of the EU (OJ) the following Decisions of the EEA Joint Committee amending Annex IX (Financial Services) to the EEA Agreement: Decision 80/2019 of 29 March 2019 amending Annex IX (Financial Services) to the EEA Agreement [2020/830], which incorporates Delegated Regulations and Implementing Regulations … Continue Reading

IOSCO report – Good practices on processes for deference

On 26 June 2020, the International Organization of Securities Commissions (IOSCO) published a report, Good practices on processes for deference. The G20 has previously stated that jurisdictions and regulatory authorities should be able to defer to one another when it is justified by the quality of their respective regulatory and enforcement regimes, based on similar … Continue Reading

Final draft amending RTS and ITS on Passport Notifications under Articles 35, 36 and 39 of CRD IV

On 18 June 2020, the European Banking Authority (EBA) published its final draft amending Regulatory Technical Standards and Implementing Technical Standards on passport notification. The two sets of amending technical standards increase the quality and consistency of information to be provided by a credit institution notifying its home competent authorities when it intends to open … Continue Reading

EBA expands the content of its Q&A tool

On 17 June 2020, the European Banking Authority (EBA) announced that it had expanded the scope of its Questions and Answers (Q&A) process and tool to enable the submission of questions on both anti-money-laundering and consumer protection legislation under the EBA’s scope. Going forward, submitted questions, subject to meeting the prescribed criteria, will be published … Continue Reading

EBA letter regarding delay in delivering technical standards under CRD V, CRR II, BRRD II

On 15 June 2020, the European Banking Authority (EBA) published a letter it had sent to the European Commission regarding delaying certain technical standards for the risk reduction measures package set out in the CRD V, CRR II, BRRD II and EMIR. The letter notes that the EU’s risk reduction package gives rise to around … Continue Reading

Doing business in the EU after the transition period

We have updated our popular client briefing note ‘Doing business in the EU’ covering the temporary transitional relief measures EU27 Member States are implementing, if any, for the period after the transition period should the UK/EU not enter into a free trade agreement. For a copy of the updated briefing note please contact Simon Lovegrove.… Continue Reading

ESMA provides guidance on the compliance function under MiFID II

On 5 June 2020, the European Securities and Markets Authority (ESMA) published final guidelines on the MiFID II compliance function. The final guidelines replace the ESMA guidelines on the same topic issued in 2012 and include updates designed to enhance clarity and foster greater convergence in the implementation, and supervision, of the new MiFID II … Continue Reading

ESMA supervisory briefing on the supervision of costs in UCITS and AIFs

On 4 June 2020, the European Securities and Markets Authority (ESMA) issued a supervisory briefing on the supervision by Member State national competent authorities (NCAs) of costs applicable to Undertakings for the Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs). The supervisory briefing comes in response to the need to improve convergence … Continue Reading

ESMA updates transparency and position limit opinions for 3rd country venues

On 3 June 2020, the European Securities and Markets Authority (ESMA) published updated opinions on post-trade transparency and position limits under MiFID II and MiFIR following its assessment of over 200 third-country trading venues against criteria published in its 2017 opinions. The updated opinion related to post-trade transparency contains an annex that includes a list … Continue Reading

ESMA draft guidelines on outsourcing to cloud service providers

On 3 June 2020, the European Securities and Markets Authority (ESMA) issued a consultation paper on guidelines on outsourcing to cloud service providers. The purpose of the draft guidelines is to provide guidance on the outsourcing requirements applicable to firms where they outsource to cloud service providers. The draft guidelines are intended to help firms … Continue Reading

IOSCO consults on outsourcing principles to ensure operational resilience

On 28 May 2020, the International Organization of Securities Commissions (IOSCO) issued a consultation report concerning its ‘Principles for Outsourcing’. IOSCO prepared this consultation report before the COVID-19 outbreak. On 8 April 2020, the IOSCO board agreed to delay the publication of its reports to allow firms and financial institutions to redirect their resources to … Continue Reading

ESMA updates MiFID II / MiFIR Q&As on transparency and market structures topics

On 29 May 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on market structures and transparency issues under MiFID II / MiFIR. The updated Q&As provide clarification on the following topics: the default liquidity status, SSTI and LIS thresholds of non-equity instruments; the publication of transactions in an aggregated form; the conversion … Continue Reading

ESMA updates MiFID II Q&As on investor protection and intermediaries

On 28 May 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on the implementation of investor protection topics under MiFID II / MiFIR. ESMA has added a new Q&A (see section 12, question 7) that provides clarification on the application of the MiFID definition of “acceptable minor non-monetary benefits”.… Continue Reading

European Commission 2020 adjusted work programme: financial services aspects

On 27 May 2020, the European Commission adjusted its 2020 work programme in light of the COVID-19 pandemic. The adjustments include a non-legislative proposal relating to a renewed sustainable finance strategy being issued in Q4 2020 rather than Q3 2020. A due date for a report on the application of the Electronic Identification and Signature … Continue Reading

ESMA calls for transparency on COVID-19 effects in half-yearly financial reports

On 20 May 2020, the European Securities and Markets Authority (ESMA) issued a public statement that addresses the preparation of interim financial statements according to IFRS and the interim management reports for the 2020 half-yearly reporting periods. The statement highlights the need for issuers to provide updated information that is useful to investors to adequately … Continue Reading

Regulators’ approach to reporting obligations during the COVID-19 outbreak

Regulatory authorities in the EU and the UK have delayed certain regulatory reporting requirements so that firms can concentrate on supporting their customers during this difficult period. The announcements regarding reporting requirements have come at different times and the purpose of this new briefing note is to consolidate the PRA, FCA and EU announcements in … Continue Reading

ESMA – non-renewal and termination of short selling bans by Austrian FMA, Belgian FSMA, French AMF, Greek HCMC, Italian CONSOB and Spanish CNMV

On 18 May 2020, the European Securities and Markets Authority (ESMA), noted the non-renewal of the emergency restrictions on short selling and similar transactions by the following national competent authorities: Finanzmarktaufsicht (FMA) of Austria; Financial Securities and Markets Authority (FSMA) of Belgium; Autorité des Marchés Financiers (AMF) of France; Hellenic Capital Market Commission (HCMC) of … Continue Reading

ESMA highlights challenges for rating collateralised loan obligations

On 13 May 2020, the European Securities and Markets Authority (ESMA) published a thematic report on collateralised loan obligations (CLOs) credit ratings in the EU. The report provides an overview of CLO rating practices and identifies the main supervisory concerns, and medium-term risks, in this asset class which include credit rating agencies’ (CRAs) internal organisation, … Continue Reading

FSB compensation workshop 2019: Key takeaways

On 8 May 2020, the Financial Stability Board (FSB) published the key takeaways from the workshop it hosted on 13 November 2019 for banks, insurance and asset management firms to discuss their experiences in implementing the FSB Principles for Sound Compensation Practices and their Implementation Standards. The workshop focused on: Assessing the effectiveness of compensation … Continue Reading

FMSB publishes spotlight review on data management in the financial system

On 11 May 2020, the FICC Markets Standards Board (FMSB) published its second spotlight review examining the role of data management in the stability and resilience of wholesale FICC markets and financial systems. The review considers: seven sources of critical data risk covering business continuity, data confidentiality, trading, aggregate exposure, regulatory enforcement, ownership rights and … Continue Reading
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