Germany

Topic: Regulation and Compliance

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FCA Dear CEO letter to financial advisers on areas of concern

On 21 January 2020, the FCA published a Dear CEO letter to financial advisers setting out its approach to tackling key areas of concern and summarising the actions expected of financial advice firms to undertake: assessing suitability of advice and disclosure review. The FCA will be conducting a second assessing suitability review focusing on initial … Continue Reading

FSB Global Monitoring Report on Non-Bank Financial Intermediation 2019

On 19 January 2020, the Financial Stability Board (FSB) published its Global Monitoring Report in Non-Bank Financial Intermediation 2019. The report sets out the results of the FSB’s most recent annual monitoring exercise that assesses global trends and risks from non-bank financial intermediation (NBFI). It covers data up to end-2018 from 29 jurisdictions, which together … Continue Reading

Crypto Assets: Germany introduces new regulatory regime

Germany has adopted a new regulatory regime for crypto assets in connection with the implementation of the Fifth Anti-Money Laundering Directive (AMLD5). On 29 November 2019, the second chamber of the German parliament (Bundesrat) approved the “Act on the Implementation of the Amendment Directive to the Fourth EU Money Laundering Directive” (Gesetz zur Umsetzung der Änderungs­richt­linie … Continue Reading

ESG: German regulator publishes guidance notice on sustainability

The German Federal Financial Supervisory Authority (BaFin) has issued a guidance notice on dealing with sustainability risks (ESG Guidance Notice). The binding German version was published on 20 December 2019 and later editorially modified on 13 January 2020. Further, BaFin has now also made available an English convenience translation. The German regulator had launched a consultation based on … Continue Reading

IOSCO recommends synchronising clocks used for timestamping with UTC

On 16 January 2020, the International Organization of Securities Commissions (IOSCO) published a report recommending that trading venues and their participants synchronise the clocks they use for timestamping a reportable event with coordinated universal time (UTC). UTC is computed by taking the weighted average of more than 300 atomic clocks located in more than 80 … Continue Reading

ESMA starts publishing questions received through its Q&A process

On 10 January 2020, the European Securities and Markets Authority (ESMA) published a list of questions currently under development through its Q&A process. The publication of the list comes in the context of the entry into force of the revised ESMA Regulation including its new provisions applicable to Q&As (new Article 16b), which require ESMA … Continue Reading

ESMA report on issuers’ use of APMs

On 20 December 2019, the European Securities and Markets Authority (ESMA) published a report on EU issuers’ use of alternative performance measures (APMs) and their compliance with the ESMA APM guidelines. The report highlights that the use of APMs is widespread in all sectors and within all regulated documents. Significant diversity exists in the number … Continue Reading

European System of Financial Supervision reforms – legislation published in OJ

On 27 December 2019, there was published in the Official Journal of the EU (OJ): Regulation (EU) 2019/2175 (Regulation concerning the powers, governance and funding of the European Supervisory Authorities); Directive (EU) 2019/2177 (Directive amending MiFID II and the Solvency II Directive); and Regulation (EU) 2019/2176 (Regulation amending the Regulation establishing the European Systemic Risk … Continue Reading

ESMA announces MiFID scheduled publication dates for 2020

On 19 December 2019, the European Securities and Markets Authority (ESMA) published its 2020 calendar of MiFID II / MiFIR relevant publications for the transparency regime and systematic internalisers’ tests. During 2020, ESMA will publish for the first-time transparency and systemic internalisers calculations for derivatives. During 2019, publications on derivatives were not executed given the … Continue Reading

EBA consults to revise standards to identify staff with a material impact on the institution’s risk profile

On 19 December 2019, the European Banking Authority (EBA) issued a consultation paper on draft regulatory technical standards (RTS) on the criteria to identify all categories of staff whose professional activities have a material impact on the institutions’ risk profile. The draft RTS have been revised in light of Article 94(2) of CRD IV as … Continue Reading

AFME, FIA, ICMA, ISDA and ISLA publish Master Regulatory Reporting Agreement

On 19 December 2019, the  Association of Financial Markets in Europe, Futures Industry Association, International Capital Market Association, International Swaps and Derivatives Association, Inc. and International Securities Lending Association co-published a new agreement intended to simplify reporting across different EU regulatory regimes. The Master Regulatory Reporting Agreement gives market participants an option to use a … Continue Reading

ESMA proposes strengthened rules to address undue short-termism in securities markets

On 18 December 2019, the European Securities and Markets Authority (ESMA) published a report on undue short-term pressure on corporations. The report is in response to the call for advice from the European Commission as part of its Action Plan, Financing Sustainable Growth, and will inform policy actions that could be taken to ensure that … Continue Reading

Political agreement reached on the “taxonomy Regulation”

On 17 December 2019, the European Parliament announced that negotiators from the European Parliament and Council of the EU had reached an agreement concerning the so-called “taxonomy Regulation” which sets out criteria to determine whether an economic activity is environmentally sustainable. The agreement reached by the European Parliament negotiating team will first need approval by … Continue Reading

ESRB recommendation on exchange of information on foreign branches

On 9 December 2019, the European Systemic Risk Board (ESRB) published a recommendation on the exchange and collection of information for macro-prudential purposes on branches of banks having their head office in another Member State or in a third country. The ESRB also published a report which provides an analysis on the topic. The report: … Continue Reading

ESMA consults on procedural rules to impose penalties on supervised entities

On 13 December 2019, the European Securities and Markets Authority (ESMA) issued a consultation paper on procedural rules for penalties imposed on third-country central counterparties (CCPs), trade repositories (TRs) and credit rating agencies (CRAs). In the consultation paper ESMA sets out its preferred options for the procedural rules on the imposition of penalties to third … Continue Reading

IOSCO launches framework for monitoring leverage in funds that may pose stability risks

On 13 December 2019, the International Organization of Securities Commissions (IOSCO) published a final report, Recommendations for a Framework Assessing Leverage in Investment Funds, setting out a two-step process aimed at achieving a meaningful and consistent assessment of leverage-related risks of a fund or group of funds. Step 1 provides an approach to how regulators … Continue Reading

Global Asset Management Quarterly – 13th edition now available online

The latest issue of Global Asset Management Quarterly is now available here. This issue contains the following articles: UK/Europe UK and European overview The new EU prudential regime for investment firms Navigating the AIFMD EU progresses on its Sustainable Finance Action Plan Contracting for indices EU/UK regulatory roundup Luxembourg update Ireland update Asia Pacific The … Continue Reading

GFXC agrees priorities for updating the FX Global Code

On 4 December 2019, the Global Foreign Exchange Committee (GFXC) published a press release setting out its priorities for updating the FX Global Code (the Code). Following the first day of its two-day meeting held in Sydney on 4-5 December, the GFXC discussed the feedback received on the Code and agreed to focus its work … Continue Reading

ESMA guidance on registering securitisation repositories

On 2 December 2019, the European Securities and Markets Authority (ESMA) published guidance on registering securitisation repositories. ESMA has direct responsibilities regarding the registration and supervision of securitisation repositories under the Securitisation Regulation laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation. The purpose of the … Continue Reading

Council adopts ESFS reforms

On 2 December 2019, the Council of the EU meeting in its configuration as the Justice and Home Affairs Council adopted the legislative texts reforming the European System of Financial Supervision (ESFS). The legislative texts comprise: Omnibus Regulation (PE-CONS 75/19) (Regulation concerning the powers, governance and funding of the European Supervisory Authorities); Omnibus Directive (PE-CONS … Continue Reading

ESMA publishes CRA market share calculation for 2019

On 29 November 2019, the European Securities and Markets Authority (ESMA) published its annual report on market share calculation for EU registered credit rating agencies for 2019 (CRAs). The purpose of the report is to provide guidance on Article 8d of the Regulation on CRAs which provides that issuers or related third parties are required … Continue Reading

FSB final report on the evaluation of the effects of financial regulatory reforms on SME financing

On 29 November 2019, the Financial Stability Board (FSB) published a final report on the evaluation of the effects of financial regulatory reforms on small and medium-sized enterprise (SME) financing. The FSB’s intention behind the final report is motivated by the need to better understand the effects of the reforms introduced by the G20 in … Continue Reading

EBA publishes guidelines on ICT and security risk management

On 28 November 2019, the European Banking Authority (EBA) published its final guidelines on ICT and security risk management (the Guidelines). The Guidelines are addressed to financial institutions, which for these purposes are: payment services providers (PSPs) as defined in Article 4(11) of the revised Payment Services Directive (PSD2) and credit institutions and investment firms … Continue Reading

PSD2: German regulator sets deadline for migration to SCA for online card-based payments

The German Federal Financial Supervisory Authority (BaFin) will allow payment service providers with seat in Germany to execute card-based payments online without strong customer authentication (SCA) until 31 December 2020. Based on a communication dated 17 October 2019 (link; only available in German), BaFin thus takes into account the relating opinion of the European Banking Authority (EBA) … Continue Reading
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