Tracker, Financial Services Regulation & Compliance - Investment Firms


The Central Bank of Ireland (CBI) and the Irish Stock Exchange (ISE) publish their responses to the European Commission's green paper on 'Building a Capital Markets Union'

The CBI and ISE have published their responses to the European Commission's green paper on building a Capital Markets Union (CMU). The purpose of the green paper was to consult all interested parties on the Commission’s overall approach to putting in place the building blocks for CMU by 2019. The CBI's response states that it supports measures to increase the safety and efficiency of Europe's capital markets and that the realisation of a CMU will take "significant effort and commitment on the part of all stakeholders in the EU.  The response outlines the CBI's belief that a realistic timeframe for implementing priority areas on a phased basis will need to be set down and highlights a number of key areas where it believes policy initiatives would materially improve the functioning of Europe's capital markets. In particular the CBI stated that: "a harmonised framework for predictable and expeditious recovery of client assets (and investor monies) from a failed regulated financial services firm … domiciled in any one of EU jurisdictions should be a feature of CMU".


European Securities and Markets Authority (ESMA) publishes final guidelines clarifying the definition of commodity derivatives under MiFID

The guidelines issued by ESMA concern the application of the definition of commodity derivatives and their classification under C6 and C7 listed in section C, Annex I of MiFID and apply from 7 August 2015. Different interpretations on what should constitute a financial instrument and what should be classified as a commodity derivative may lead to an inconsistent application of MiFID and EMIR among competent authorities and could lead to the reporting of certain transactions in one Member State but not in others. ESMA has stated that definition C6 has a broad application, applying to all commodity derivative contracts, including forwards, provided that they can or must be physically settled and they are traded on a regulated market and/or an MTF. C7 forms a category that is distinct from C6 and applies to commodity derivative contracts that can be physically settled which are not traded on a regulated market or an MTF provided that the commodity derivative contract : (i) is not a spot contract as defined under Article 38(2) of Regulation 1287/2006/EC; (ii) is not for commercial purposes described under Article 38(4) of Regulation 1287/2006/EC; and (iii) meets one of the three criteria under Article 38(1)(a) and also the separate criteria under Article 38(1)(b) and 38(1)(c) of Regulation 1287/2006/EC. The phrase “physically settled” incorporates a broad range of delivery methods, including physical delivery of the relevant commodities themselves, delivery of a document giving rights of an ownership nature to the relevant commodities or quantity thereof; or another method of bringing about the transfer of rights of an ownership nature in relation to the relevant quantity of commodities without physically delivering them (including notification, scheduling or nomination to the operator of an energy supply network) that entitles the recipient to the relevant quantity of the commodities.

Joint Committee of the three European Supervisory Authorities (ESAs) publishes its recommendations on securitisation

The Joint Committee of the ESAs has published its report detailing its recommendations with regard to due diligence, supervisory reporting and retention rules in existing EU law on Structured Finance Instruments (SFIs). The Committee states that its recommendations should take into account the already existing requirements for disclosure, due diligence and reporting for comparable instruments. The main recommendations of the Committee are that due diligence obligations be harmonised throughout EU sectorial legislation and should be seen as a dynamic process throughout the life cycle of an investment, that investor reports should be standardised and stored in a centralised public space and that a harmonised due diligence and disclosure framework should be complimented by a comprehensive framework for supervision and enforcement regarding SFIs.

European Securities and Markets Authority (ESMA) publishes its responses to green paper on Capital Markets Union

ESMA has stated that it is fully supportive of the aims of the Capital Markets Union and has stated that an increased participation of investors will be essential and that the level of confidence and trust of investors in capital markets needs to grow. The responses set out how ESMA's objectives in enhancing investor protection and promoting orderly financial markets can contribute to the Capital Markets Union and contain proposals about where improvements can be made to access to credit information for SMEs and increased cross-border retail participation in investment funds such as UCITS.

Bank for International Settlements (BIS), European Central Bank (ECB) and the International Monetary Fund (IMF) publish Handbook on Securities Statistics

The handbook recognises the need for relevant, coherent and internationally comparable statistics in securities markets. The ECB issued a press release expounding on the importance of good securities data together with monetary and financial statistics and stated that the handbook strengthens the collection of securities data "through conceptual advice and guidance to harmonise the presentation of securities statistics."

For further information please contact a member of the Financial Regulation team.

Date published: 03 June 2015