Financial Services Regulation and Compliance Bulletin - Investment Firms April 2019

DOMESTIC

Euronext registered as EU Benchmark Administrator

On 17 April 2019, Euronext announced that ESMA had registered four of its market operators as Benchmark Administrators under the new Benchmarks Regulation in relation to their compliance with the provisions set out in this Regulation. This announcement certifies the quality of Euronext's principles of control and governance. An application for authorisation as Benchmark Administrator will be made by Euronext Dublin later this year.    

EUROPEAN

ESMA updates its Q&As on MiFID II and MiFIR transparency topics as well as investor protection, intermediaries and MAR topics

ESMA has updated its Q&A document with the purpose of promoting common supervisory approaches and practices in the application of MiFID II and MiFIR regarding market structures and transparency issues. The new Q&As provide clarity in relation to the following (among other things):

  • money market instruments
  • turnover in relation to AVT calculation
  • liquidity status in between systematic internaliser determination dates
  • quoting obligations 
  • the reporting of prime brokerage transactions

ESMA provided new updates in their Q&A document on the implementation of investor protection under MiFID II and MiFIR to provide new responses relating to:

  • product governance
  • reverse solicitation
  • the use of generic statements
  • durable mediums
  • best execution
  • the provision of information on costs and charges

ESMA also updated its MAR Q&A document. This update clarifies the scope of firms who are subject to the obligation to detect and report suspicious orders and transactions. It also provides detailed responses on the meaning of parent and related undertakings and the disclosure of inside information concerning emission allowances.

Proposal for a Regulation on sovereign bond-backed securities (SBBS)

The EU Commission launched a risk-reduction proposal to introduce new rules which would remove unwarranted regulatory obstacles to the market-led development of SBBS. This proposal sets out the eligibility criteria which would need to be satisfied by SBBS, in order for such securities to benefit from the envisaged regulatory treatment. SBBS would be issued by private institutions as claims on a portfolio of euro-area government bonds and would not implicate a mutualisation of losses and risks among euro area Member States. The proposal aims to assist investors (i.e. insurance companies, investment funds or banks) to diversify their sovereign portfolios, resulting in the greater integration of financial markets.

For more information on this topic please contact any member of A&L Goodbody's Financial Regulation team.

Date published: 13 May 2019