During the Christmas period the international and EU regulatory authorities published a number of papers that you may have missed should you have been on vacation. The following is a summary of some of the papers that were published.
MiFID II / MiFIR
On 18 December 2015, the European Securities and Markets Authoruty (ESMA) published a final report on guidelines for the assessment of knowledge and competence under MiFID II. The guidelines will come into effect on 3 January 2017. They will be translated into the official EU languages and published on ESMA’s website. Publication will trigger a two month period during which national competent authorities must notify ESMA whether they comply or intend to comply with the guidelines.
On 22 December 2015, ESMA published a final report setting out guidelines on cross-selling practices under Article 24(11) of MiFID II. The guidelines are addressed to competent authorities and are intended to ensure that investors are treated fairly when an investment firm offers two or more financial products or services as part of a package. They will apply from 3 January 2017.
On 23 December 2015, ESMA published a consultation paper on guidelines on its draft regulatory technical standards (RTS) on transaction reporting, reference data, order record keeping and clock synchronisation. The deadline for comments is 23 March 2016. ESMA expects to publish a final version of the guidelines in the second half of 2016.
Market Abuse Regulation
On 18 December 2015, there was published in the Official Journal of the EU (OJ) a European Commission Implementing Directive relating to reporting to competent authorities of actual or potential infringements. The Implementing Directive sets out rules specifying the procedures relating to reporting actual or potential breaches of the Market Abuse Regulation as set out in Article 32(1), including the arrangements for reporting and for following-up reports, and measures for the protection of persons working under a contract of employment and measures for the protection of personal data.
On 18 December 2015, the European Banking Authority (EBA) published an opinion on the interaction of Pillar 1, Pillar 2 and combined buffer requirements and restrictions on distribution.
On 21 December 2015, the EBA published final guidelines on sound remuneration policies under Articles 74(3) and 75(2) of the CRD IV and disclosures under Article 450 of the CRR. The guidelines apply from 1 January 2017. The guidelines on remuneration policies and practices published by the Committee of European Banking Supervisors in December 2010 will be repealed on 31 December 2016.
On 21 December 2015, the EBA published an opinion on the application of the principle of proportionality to remuneration provisions in the CRD IV.
On 22 December 2015, the EBA published a consultation paper concerning draft guidelines on remuneration policies and practices relating to the sale and provision of retail banking products and services. The deadline for comments is 22 March 2016. The EBA expects to publish final guidelines in the summer of 2016.
On 18 December 2015, the Basel Committee on Banking Supervision (BCBS) issued supervisory guidance on credit risk and accounting for expected losses.
On 21 December 2015, the BCBS published a consultative document on guidance on the application of the core principles for effective banking supervision to the regulation and supervision of institutions relevant to financial inclusion. The deadline for comments is 31 March 2016.
Bank Recovery and Resolution Directive
On 17 December 2015, the EBA published:
- final draft RTS and guidelines on business reorganisation plans under the Bank Recovery and Resolution Directive (BRRD). The draft RTS have been submitted to the European Commission for endorsement; and
- final draft RTS on the valuation of derivatives under Article 49(4) of the BRRD. The draft RTS have been submitted to the European Commission for endorsement.
Also on 17 December 2015, the European Commission adopted a Delegated Regulation on the criteria for the calculation of ex-ante contributions and on the deferral of ex-post contributions to the Single Resolution Fund. The next steps will be for the Council of the EU and the European Parliament to consider the Delegated Regulation.
IOSCO reports on business continuity plans for trading venues and intermediaries
On 22 December 2015, the International Organization of Securities Commissions published two reports that are intended to enhance the ability of financial markets and intermediaries to manage risks, withstand catastrophic events, and swiftly resume their services in the event of disruption. The reports were: (i) Mechanisms for trading venues to effectively manage electronic trading risks and plans for business continuity; and (ii) Market intermediary business continuity and recovery planning.
Single Resolution Mechanism
The Single Resolution Mechanism (SRM) became fully operational on 1 January 2016. The SRM implements the BRRD in the euro area. The full resolution powers of the Single Resolution Board (SRB) also apply as of 1 January 2016.
On 16 December 2015, the European Commission adopted a Delegated Regulation laying down general principles and criteria for the investment strategy and rules for the administration of the Single Resolution Fund.
On 24 December 2015, there was published in the OJ an agreement between the European Parliament and the SRB on the exercise of accountability and oversight over the performance of the tasks conferred on the SRB under the SRM. The agreement came into force on 17 December 2015.
On 23 December 2015, the text of the revised Payment Services Directive (PSD2) was published in the OJ. The PSD2 will enter into force on 12 January 2016. The deadline for Member States to transpose the PSD2 into their national laws and regulations is 13 January 2018.
On 18 December 2015, the EBA published a report that set out the findings of its analysis and market practice assessment of the synthetic securitization market.
Regulation on transparency of securities financing transactions
On 23 December 2015, the text of the Regulation on transparency of securities financing transactions and of reuse was published in the OJ.
Financial Conglomerates Directive
On 11 December 2015, there was published in the OJ a European Commission Delegated Regulation supplementing the Financial Conglomerates Directive with regard to RTS specifying the definitions and coordinating the supplementary supervision of risk concentration and intra-group transactions. The Delegated Regulation contained provisions related to significant intra-group transactions, significant risk concentration and supervisory measures. The Delegated Regulation entered into force on 31 December 2015.