United Kingdom (and EU regulation)

ESMA final draft RTS for CCP colleges under EMIR 2.2

On 30 March 2020, the European Securities and Markets Authority (ESMA) published its final report containing draft amendments to the regulatory technical standards (RTS) incorporated in Commission Delegated Regulation (EU) No 876/2013 on colleges for central counterparties (the Delegated Regulation). The Delegated Regulation has been developed by ESMA and adopted by the European Commission in … Continue Reading

ECB recommendation to delay dividends until October 2020

On 27 March 2020, the European Central Bank (ECB) updated its recommendation to banks on dividend distributions. The ECB recommends that at least until 1 October 2020 no dividends are paid out and no irrevocable commitment to pay out dividends is undertaken by credit institutions for the financial year 2019 and 2020 and that credit … Continue Reading

PRA statements on approach to VAR back-testing exceptions and exposure value for internal models method CCR

On 30 March 2020, the PRA published statements on: value at risk (VAR) back-testing exceptions temporary approach. The PRA is aware that the exceptional levels of market volatility over the past few weeks has led to an elevated level of VAR back-testing breaches across the industry. In order to mitigate the possibility of procyclical market … Continue Reading

Adapting to change is business as usual: keeping you connected throughout the pandemic

The client money regime Over the coming weeks, partners from our financial services team will be sharing with clients and contacts a series of video diaries setting out their views on the latest developments in respect of COVID 19 impacts in the various areas of financial services. In our second video diary, Hannah Meakin provides … Continue Reading

ESMA consults on guidance to address leverage risk under the AIFMD

On 27 March 2020, the European Securities and Markets Authority (ESMA) issued a public consultation on draft guidelines to address leverage risks in the alternative investment fund sector. The consultation has been drafted in response to a recommendation by the European Systemic Risk Board for ESMA to produce guidance on Article 25 of the Alternative … Continue Reading

April 40 minute briefing webinar – Managing your relationship with the regulators: The accountability agenda

We live in an era in which regulators and the court of public opinion are often unforgiving of any perceived or actual failings. The implementation of the Senior Managers and Certification Regime (SMCR) for FCA firms has brought this home but it is part of a much bigger picture. We have seen an increasing focus … Continue Reading

ESMA confirms application date of equity transparency calculations

On 27 March 2020, the European Securities and Markets Authority (ESMA) announced that it had decided to keep the date of application of the transparency calculations for equity instruments of 1 April 2020 unchanged. ESMA has recently been asked by some stakeholders to postpone the date of application – required by MiFID II / MiFIR … Continue Reading

ESMA guidance on financial reporting deadlines in light of COVID-19

On 27 March 2020, the European Securities and Markets Authority (ESMA) issued a statement on the implication of the COVID-19 pandemic on the deadlines for publishing financial reports which apply to listed issuers under the Transparency Directive (TD). In the statement ESMA notes that issuers maybe prevented from fulfilling their reporting requirements due to COVID-19, … Continue Reading

ESMA consults on post-trade risk reduction services under the EMIR Refit Regulation

On 26 March 2020, the European Securities and Markets Authority (ESMA) launched a public consultation on post trade risk reduction services (PTRR) under the European Market Infrastructure Regulation (EMIR). ESMA is mandated to provide a final report to the European Commission, in cooperation with the European Systemic Risk Board, on whether any trades that directly … Continue Reading

ESMA consults on draft technical standards relating to trade repositories under EMIR Refit Regulation

On 26 March 2020, the European Securities and Markets Authority (ESMA) launched a consultation paper on draft Regulatory and Implementing Technical Standards (RTS and ITS) under Regulation (EU) 2019/834 (EMIR REFIT). The ESMA consultation paper covers the technical standards on reporting requirements, procedures to reconcile and validate the data and access by relevant authorities under … Continue Reading

Delegated Regulation amending RTS on risk mitigation techniques on uncleared OTC derivatives under EMIR in context of STS securitisations published in OJ

On 27 March 2020, there was published in the Official Journal of the EU Commission Delegated Regulation (EU) 2020/448 amending Commission Delegated Regulation (EU) 2016/2251, which contains regulatory technical standards (RTS) supplementing the European Market Infrastructure Regulation on risk mitigation techniques for over-the-counter derivative contracts, in connection with certain simple, transparent and standardised securitisations for … Continue Reading

Delegated Regulation with RTS specifying criteria for arrangements to mitigate CCP credit risk associated with covered bonds and securitisations under EMIR published in OJ

On 27 March 2020, there was published in the Official Journal of the EU Commission Delegated Regulation (EU) 2020/447 supplementing the European Market Infrastructure Regulation with regard to regulatory technical standards on the specification of criteria for establishing the arrangements to adequately mitigate counterparty credit risk associated with covered bonds and securitisations and amending Delegated … Continue Reading

Basel Committee announces deferral of Basel III implementation

On 27 March 2020, the Basel Committee on Banking Supervision (Basel Committee) announced the following changes to its implementation timeline of the outstanding Basel III standards: implementation date of the Basel III standards finalised in December 2017 has been deferred by one year to 1 January 2023. The accompanying transitional arrangements for the output floor … Continue Reading

Short selling update

As market volatility has increased in the wake of the Covid-19 outbreak, several competent authorities have imposed bans on short sales in certain shares. Approach taken by the FCA To date, the FCA has introduced only temporary prohibitions on short selling in certain listed instruments, on the 13 and 17 March 2020, as set out … Continue Reading

FCA Handbook Notice 75

On 27 March 2020, the FCA published Handbook Notice 75. In this Handbook Notice the FCA summarises the changes it made in the FCA Handbook on 26 March 2020 using the following instruments: Handbook Administration (No 52) Instrument 2020; Financial Services Compensation Scheme (Management Expenses Levy Limit 2020/2021) Instrument 2020; Listing Rules (Contents of Circulars) … Continue Reading

GFXC statement on FX market conditions

On 26 March 2020, the Global Foreign Exchange Committee (GFXC) issued a statement on foreign exchange (FX) market conditions. The statement explains that given the intense volatility seen in global financial markets, FX market participants may execute larger than usual FX volumes during end-of-month benchmark fixings. In addition, FX market participants may face more operational … Continue Reading

PRA occasional consultation paper: March 2020

On 26 March 2020, the PRA published Consultation Paper 3/20: Occasional Consultation Paper – March 2020 (CP3/20). In CP3/20 the PRA sets out its proposals to make minor amendments to PRA rules, supervisory statements (SS), national specific templates (NSTs) and associated LOG files, and the market risk sensitivities data item and associated instructions. Specifically CP3/20 … Continue Reading

FCA announces delay to launch of directory for certified and assessed persons

On 25 March 2020, the FCA updated its web page concerning the Directory of Certified and Assessed Persons. The updated web page states that following the COVID-19 outbreak, the FCA has delayed the publication of the directory of certified and assessed persons, which was due to be published on the FS Register by the end … Continue Reading

FCA updates payment holiday aspects of guidance for mortgage providers

On 25 March 2020, the FCA updated its web page providing guidance for mortgage lenders and administrators, and home purchase providers and administrators, on the fair treatment of customers in the light of the COVID-19 pandemic. The section on payment holidays has been updated providing that where a customer is experiencing or reasonably expects to … Continue Reading

Joint statement by FRC, FCA and PRA on corporate reporting

On 26 March 2020, the FCA, PRA and Financial Reporting Council (FRC) issued a joint statement in which they announced a series of actions to ensure that information continues to flow to investors and support the continued functioning of the UK’s capital markets. Such actions include: a statement by the FCA allowing listed companies an … Continue Reading

FCA outlines financial resilience expectations for FCA solo-regulated firms

On 26 March 2020, the FCA issued a short statement outlining its financial resilience expectations for solo-regulated firms. Key points in the statement include: the FCA wants firms to continue operating in this challenging period, and, where it can, it intends to provide flexibility to regulated firms to ensure this; capital and liquidity buffers are … Continue Reading

LSB updates Information for Practitioners document relating to Standards of Lending Practice for business customers on product sale

On 26 March 2020, the Lending Standards Board (LSB) published an updated version of its Information for Practitioners document relating to the Standards of Lending Practice for business customers (Standards) on product sale. The LSB has updated paragraph 4 of the document to take account of short-term measures to support lending to small and medium-sized … Continue Reading

PRA Dear CEO letter on IFRS 9, capital requirements and loan covenants

On 26 March 2020, the PRA published a Dear CEO letter setting out guidance in three areas: consistent and robust IFRS 9 accounting and the regulatory definition of default; the treatment of borrowers who breach covenants due to COVID-19; and the regulatory capital treatment of IFRS 9. The PRA states that all aspects of the … Continue Reading
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