Tracker, Financial Services Regulation & Compliance - Investment Firms
The People’s Bank of China announces a quota for Ireland of 50 billion yuan under the Renminbi Qualified Foreign Institutional Investors (RQFII) scheme
This allocation will enable Irish domiciled Investment Managers to apply to invest directly in Chinese securities. Where a jurisdiction has an RQFII quota, investment managers in that jurisdiction can apply to be granted a certain portion of that quota.
European Securities and Markets Authority published list of recognized third-country central counterparties
The list which was last updated on 14 December 2016 contains all third-country central counterparties recognised to offer services and activities in the Union in accordance with Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (EMIR). ESMA has added ICE Clear US Inc. to the list.
The Commission publishes an implementing Regulation on the extension of the transitional periods related to own funds requirements for exposures to central counterparties
The 15 month transitional period in the Capital Requirements Regulation and the European Markets Infrastructure Regulation has been extended by an additional six months until 15 June 2017.
Commission adopts equivalence decisions for central counterparties and trading venues in ten non-EU jurisdictions
The Commission has determined that India, Brazil, New Zealand, Japan Commodities, United Arab Emirates (UAE) and Dubai International Financial Centre (DIFC) have equivalent regulatory regimes for central counterparties to the European Union. The Commission has also determined that the rules governing trading venues in Australia, Canada, Japan and Singapore can be deemed equivalent to those in the EU.
European Securities and Markets Authority publishes an Opinion on an accepted market practice (AMP) notified by the CNMV, the Spanish securities markets regulator
ESMA decided that the proposed AMP, which involves liquidity contracts where a credit institution or investment firm (financial intermediary) quotes in the equity market on behalf of the issuer, with a view of reinforcing liquidity in that share, is compatible with the Market Abuse Regulation.
European Securities and Markets Authority (ESMA) publishes table of competent authorities who have informed ESMA that they comply, do not comply or intend to comply with the ESMA’s guidelines on cross-selling practices
The table details responses form EU Member States (who all intend to comply), EEA EFTA States and European Territories under Article 355(3) TFEU.
European Securities and Markets Authority publishes an updated questions and answers document (Q&A) on the application of the Alternative Investment Fund Managers Directive
The Q&A included one updated question which clarified that when a non-EU AIFM reports information to the national competent authorities of a Member State under Article 42, only the AIFs marketed in that Member State have to be taken into account for the purpose of the reporting. When Member States apply ESMA’s opinion on collection of additional information under Article 24(5) of the AIFMD, AIFMs should also report information on non-EU master AIFs not marketed in the EU that have either EU feeder AIFs or non-EU feeder AIFs marketed in the Union under Article 42.
European Securities and Markets Authority updates MiFID II and MiFIR Q&A on investor protection
Q&As in relation to best execution, suitability reports, underwriting and placing, inducements (research), post-sale reporting and information on costs and charges have been updated.
European Securities and Markets Authority publishes Consultation Paper on draft technical standards on data to be made publicly available by Trade Repositories (TRs) under Article 81 of the EMIR Regulation
The Consultation presents the proposals related to the publication of data by trade repositories and in particular for the avoidance of double counting of cleared derivatives, on the details of aggregations for commodity derivatives and derivatives using benchmarks, as well as on the general technical aspects of publication of aggregate data. The Consultation will close on 15 February 2017.
Commission publishes Commission Delegated Regulation (EU) 2016/2251 of 4 October 2016 supplementing the EMIR Regulation
The Commission Delegated Regulation provides regulatory technical standards for risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty.
European Fund and Asset Management Association respond to ESMA Consultation Paper on regulatory technical standards specifying the scope of the consolidated tape for non-equity financial instruments
The Response welcomed the proposal to introduce a non-equity consolidated tape (CT) for non-equities, however, EFAMA did not agree with: the proposal to allow non-equity Consolidated Tape Providers (CTPs) to specialize their offering; the proposal to have a threshold; and the proposal to provide for a grace period of up to 6 months after the first assessment date for including new sources into the data stream.
European Fund and Asset Management Association respond to ESMA Consultation Paper on draft regulatory and implementing technical standards under the Securities Finance Transactions Regulation and amendments to related EMIR regulatory technical standards
EFAMA's response commented that the proposed Regulation required an excessive amount of data and the proposed RTS and ITS would result in increasing pressure on funds to provide collateral without having the tools to meet those obligations as well as burdensome reporting requirements.
European Fund and Asset Management Association respond to ESMA Consultation Paper on draft regulatory technical standards under the Benchmarks Regulation
EFAMA's response highlighted that an alignment is necessary between the content of the disclosure requirements under Benchmark Regulation and under ESMA Guidelines on ETFs and other UCITS issues.
European Commission adopts rules to strengthen regulation of commodities markets
The rules consist of two Delegated Regulations and complete the rulebook of secondary measures under MIFID II. The regulatory standards define parameters for competent authorities to determine "position limits", i.e. the maximum amount of commodity derivatives that can be held by a single trader, and which represent a tool to help to limit commodity speculation.
International Organization of Securities Commissions publishes Report on the IOSCO Survey on Retail OTC Leveraged Products
The Report identified various risks related to the marketing and sale of complex OTC leveraged products to retail investors, and described how some regulators are responding to the challenges these products present. The Report also described possible regulatory approaches and standards for mitigating the risks that OTC leverage products pose to retail investors.
International Organization of Securities Commissions publishes Report on Order Routing Incentives
The Report focused on a review of the approaches and practices used by regulators regarding incentives for order routing and execution that may influence the behavior of intermediaries. The IOSCO did not propose any further steps beyond the Report.
International Organization of Securities Commissions publishes Update to the Report on the IOSCO Automated Advice Tools Survey
The updated report concluded that the continued development of automated investment advice tools requires ongoing monitoring to help regulators understand its impact on the provision of investment advice to retail clients. The update report also includes a summary of responses to the survey questions and an overview of the regulatory measures and guidance adopted by some survey respondents.
European Securities and Markets Authority proposes new digital format for issuers’ financial reporting
ESMA concluded that Inline XBRL is the most suitable technology to meet the EU requirement for issuers to report their annual financial reports in a single electronic format. The digital format will allow users such as investors, analysts and auditors to carry out software supported analysis and comparison of large amounts of financial information.
Commission amends list of third countries whose supervisory and regulatory requirements are considered equivalent for the purposes of the treatment of exposures under the Capital Requirements Regulation
The Implementing Decision adds Turkey, New Zealand, Faroe Islands and Greenland to the list of third countries with equivalent supervisory and regulatory requirements set out in Commission Implementing Decision 2014/908/EU.
European Securities and Markets Authority publishes MiFIR Q&A regarding data reporting
The Q&A provided responses to questions posed by the general public, market participants and competent authorities in relation to the practical application of MiFID II and MiFIR on: Legal Entity Identifiers (LEI) of the issuer; and the date and time of the request of admission and admission.
European Securities and Markets Authority updates Q&A on Prospectus Directive
The Q&A included one new question and answer on the application of the ESMA guidelines on Alternative Performance Measures to prospectuses. The question clarified how to apply the guidelines when constituent parts of a prospectus straddle the date on which ESMA’s Alternative Performance Measures Guidelines came into force (3 July 2016).
European Securities and Markets Authority publishes updated MAR Q&A
The updated Q&A includes new questions and answers on the notification of managers’ transactions and how to handle investment recommendations.
European Banking Authority launches a data collection for commodity derivatives firms
The data collection will support the European Commission in the calibration of the new prudential regime for investment firms. The data collected will comprise of general and financial information, regulatory capital, liquidity and large exposures.
European Securities and Markets Authority launches Consultation on fees for Trade Repositories (TRs) under Securities Financing Transactions Regulation (SFTR) and on certain amendments to the fees under EMIR
ESMA is providing technical advice to the Commission to assist it in formulating a Regulation on fees for TRs. The Consultation Paper establishes the general approach for the determination of fees under EMIR and SFTR, presents the supervision fees under EMIR and SFTR and recognition fees under SFTR refers to conditions of payment and reimbursement.
European Securities and Markets Authority updates Q&A in relation to transparency topics and market structures topics under MiFID
The updated Q&A document sets a timetable for MiFID II waiver applications and provides the waiver application schedule for 2017 in order for competent authorities and ESMA to handle applications in time for 3 January 2018.
European Securities and Markets Authority publishes Q&A on the commodity derivatives regime under MiFID
The Q&A deals with position limits and ancillary activities requirements. The Q&A clarifies a number of points in relation to position limits including (amongst other things) what is a ‘lot’ for energy products and economically equivalent OTC contracts, and in relation to ancillary activities, clarifies that the exemption for non-financial firms below the thresholds from being authroised under MiFid, is not available for legal entities which deal in commodity derivatives within a financial group.
For further information please contact a member of the Financial Regulation team.
Date published: 06 Jan 2017