United Kingdom (and EU regulation)

Commission Delegated Regulation supplementing MiFID II by specifying the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level

On 14 July 2021, the European Commission adopted a Delegated Regulation supplementing MiFID II by specifying the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level. Article 2(4) of MiFID II empowered the Commission to adopt regulatory technical standards (RTS) specifying the criteria for … Continue Reading

EBA consults to amend its technical standards on currencies with constraints on the availability of liquid assets

On 16 July 2021, the European Banking Authority launched a public consultation on amendments to its Implementing Technical Standards on currencies with constraints on the availability of liquid assets in the context of the liquidity coverage ratio. The proposed amendments remove the Norwegian Krone from the list, with the result that no currency will be … Continue Reading

ESMA third report on CSDR implementation

On 16 July 2021, the European Securities and Markets Authority issued its latest report on the implementation of the Central Securities Depositories Regulation (CSDR). The report looks at the provision of banking-type ancillary services by central securities depositories (CSDs). The report contains suggestions to enhance the authorisation process for CSDs to provide banking-type ancillary services … Continue Reading

Update on PS21/7: FCA regulated fees and levies 2021/22

On 16 July 2021, the FCA provided an update on Policy Statement 21/7: FCA regulated fees and levies 2021/22. The update reads: “We published an updated version of PS21/7 with an amended fees and levies rates instrument in Appendix 1. Under FEES 7A Annex 3R the amended instrument correctly states the 2021/22 levy rate for … Continue Reading

EBA consults on the draft guidelines on the limited network exclusion under the PSD2

On 15 July 2021, the European Banking Authority (EBA) issued a consultation paper on draft guidelines that set out its view on the application of the limited network exclusion requirements, which certain payment instruments might benefit from, as laid down in the revised Payment Services Directive (PSD2). Article 3(k) of the PSD2 specifies that the … Continue Reading

GFXC updates FX Global Code, publishes new templates for disclosures and guidance paper on Pre-hedging

On 15 July 2021, the Global Foreign Exchange Committee (GFXC) completed its review of the FX Global Code, updating its principles of good practice in the foreign exchange market in several key areas. The GFXC also published templates for industry participants to use in improving disclosures and assisting with transaction cost analysis. The GFXC is … Continue Reading

Government circular on the confidentiality and sensitivity of suspicious activity reports in civil litigation

On 7 July 2021, the UK Home Office published a circular (the Circular) setting out the Government’s position on the use of Suspicious Activity Reports (SARs) in civil litigation. There is a tension between the fact that SARs can be disclosable in civil litigation (see previous blog here) and that disclosing that a SAR has … Continue Reading

FCA CP21/22: LIBOR transition and the derivatives trading obligation

On 14 July 2021, the FCA published Consultation Paper 21/22: LIBOR transition and the derivatives trading obligation (CP21/22). The proposals in CP21/22 will be of interest to financial counterparties, like investment firms and banks, and non-financial counterparties that are or could become subject to the derivatives trading obligation (DTO). It will also be of interest … Continue Reading

Letter from PRA to Treasury Committee on conditions for assessing a proposed change in control of a regulated firm

On 14 July 2021, the House of Commons’ Treasury Committee published a letter it had received from Sam Woods (Deputy Governor and CEO, PRA) which discussed the conditions for assessing a proposed change in control of a regulated firm. During an appearance before the Treasury Committee Mr Woods was asked to set out his thoughts … Continue Reading

Supervisory approach on the MiFIR open access provisions for ETDs

On 13 July 2021, the European Securities and Markets Authority (ESMA) issued a public statement concerning its supervisory approach on the MiFIR open access provisions for exchange traded derivatives (ETDs). The statement notes that: Article 54(2) of MiFIR provides Member State national competent authorities (NCAs) with the possibility to temporarily exempt trading venues and central … Continue Reading

ESMA consults on EMIR reporting guidelines

On 13 July 2021, the European Securities and Markets Authority (ESMA) issued a consultation paper on draft guidelines for derivatives reporting under the European Market Infrastructure Regulation (EMIR). When finalised the guidelines will apply to financial and non-financial counterparties to derivatives as defined in Articles 2(8) and 2(9) of EMIR, to trade repositories as defined … Continue Reading

Episode 9 of the Regulation Tomorrow Podcast – out now

Episode 9 of the Regulation Tomorrow Podcast is available to stream and download on your usual podcast platform. In this month’s podcast we speak to Jonathan Herbst about the future of financial services in the UK and also the HMT Wholesale Markets Review. We are joined by Sam Ramer from our US practice, who explains … Continue Reading

PRA statement: Update on shareholder distributions by large UK banks

On 13 July 2021, the PRA issued a statement that provides an update on shareholder distributions by large UK banks. The PRA previously issued a statement last December on capital distributions by large UK banks and set out certain guardrails for distributions to ordinary shareholders in relation to full-year 2020 results. The PRA has reviewed … Continue Reading

The Money Laundering and Terrorist Financing (Amendment) (No.2) (High-Risk Countries) Regulations 2021

On 12 July 2021, there was published on the legislation.gov.uk website The Money Laundering and Terrorist Financing (Amendment) (No. 2) (High-Risk Countries) Regulations 2021. These Regulations amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRS) by substituting the list of high-risk third countries in Schedule 3ZA for … Continue Reading

ESMA publishes methodology for assessing third country CCPs systemic importance

On 13 July 2021, the European Securities and Markets Authority (ESMA) published a methodology for assessing whether a third country central counterparty (TC-CCP) or some of its clearing services are of such substantial systemic importance that the TC-CCP should not be recognised to provide certain clearing services or activities in the European Union. The methodology … Continue Reading

ESMA final report – technical advice on simplification and harmonization of fees to TRs under EMIR and SFTR

On 12 July 2021, the European Securities and Markets Authority (ESMA) issued a final report setting out its technical advice to the European Commission regarding the simplification and harmonisation of its fee regulations applicable to trade repositories (TRs) under the European Market Infrastructure Regulation and the Securities Financing Transactions Regulation (SFTR). In particular in section … Continue Reading

FSB interim report on lessons learnt from the COVID-19 pandemic from a financial stability perspective

On 13 July 2021, the Financial Stability Board (FSB) published an interim report on the lessons learnt from the COVID-19 pandemic from a financial stability perspective. Among other things the interim report notes that: So far, the global financial system has weathered the COVID-19 pandemic thanks to greater resilience, supported by the G20 reforms, and … Continue Reading

ESMA warns firms and investors about risks arising from payment for order flow

On 13 July 2021, the European Securities and Markets Authority (ESMA) issued a public statement to remind firms that the receipt of payment for order flow (PFOF) raises significant investor protection concerns. The statement also reminds firms of their key MiFID II obligations intended to ensure that firms act in their clients’ best interest when … Continue Reading

Assessing the resilience of market-based finance

On 13 July 2021, the Bank of England (BoE) and the FCA published a report on assessing the resilience of market-based finance.  The report includes the conclusions of the joint FCA and BoE review into vulnerabilities associated with liquidity mismatch in open-ended funds. In particular, the BoE and the FCA have put forward a suggested … Continue Reading

EBA publishes final guidelines for the use of data inputs in the expected shortfall risk measure under the IMA

On 13 July 2021, the European Banking Authority (EBA) published final guidelines that clarify the requirements that the data inputs used to determine the scenarios of future shocks applied to modellable risk factors should meet. The guidelines, which have been developed in accordance with Article 325bh(3) of the Capital Requirements Regulation (CRR), become applicable from … Continue Reading

SFDR draft RTS further delayed – what does it mean for firms?

Earlier this year, the European Supervisory Authorities (ESAs) published a final report containing draft regulatory technical standards (RTS) on the content, methodologies and presentation of sustainability-related disclosures under the empowerments set out in Articles 2a, 4(6) and (7), 8(3), 9(5) and 10(2) and 11(4) of the Sustainable Finance Disclosure Regulation (SFDR). At the time of … Continue Reading
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