Tracker, Financial Services Regulation & Compliance - Investment Firms


Central Bank of Ireland publishes consultation on a capital requirement framework for market operators

The Central Bank of Ireland is consulting on a proposed new risk-based Capital Requirement Framework for Market Operators in Ireland. The proposal is that there would be a Market Operator Risk and Capital Adequacy Assessment Process made up of both a risk governance element and a risk based assessment of what capital would be required where an institution is in recovery or wind down. Those contributing are also asked to give their opinion on the appropriateness of a capital add-on for newly authorised Market Operators proposed by the Central Bank. Views are sought prior to the Consultation deadline on 6 May 2016.


ESMA updates public register for the clearing obligation under EMIR

In accordance with the Regulation on OTC derivatives, central counterparties and trade repositories, (EMIR), ESMA have published an updated Public Register for the clearing obligation under EMIR. The public register is maintained by ESMA and aims to inform market participants in relation to the clearing obligation. The register was updated with Category 1 clearing members, as identified by ESMA, who will be the first firms to start the central clearing of certain types of derivative contracts by 21 June 2016.

ESMA updates Q&As on EMIR implementation

ESMA has updated its Q&As ahead of the compliance deadlines set down for the first RTS on the clearing obligation which entered into force on 21 December 2015. The document contains clarifications on how the clearing obligation should apply to swaps resulting for the exercise of a 'swaption' and explains the approach on frontloading that has been adopted for the first RTS.

ESMA publishes its 2016 Supervisory priorities for credit rating agencies and trade repositories 

ESMA Chair Steven Maijoor has published the Authority's supervisory priorities for 2016 outlining an intention to focus on quality supervision. Priorities will be to focus on CRA governance, fees charged and information security for all supervised entities, strategy and the quality of credit ratings and the quality and access to trade repository data. ESMA at the same time published its 2015 Annual Supervisory Review outlining work achieved in these areas which included an enforcement case where a €30,000 fine was imposed investigation of the techniques applied by CRAs in validating credit rating methodologies.

ESMA publishes supervisory convergence work programme for 2016

ESMA has published its first supervisory convergence work programme. The Authority's priorities in this area for 2016 include (i) preparing for the implementation and supervision of MiFID2/MiFIR, (ii) finalising the supervision of OTC derivatives and (iii) supporting the application of the Capital Markets Union plan.

ESMA launches Consultation on the technical implementation of the Benchmarks Regulation.

ESMA has launched a Consultation seeking stakeholder input into future proposals on draft Regulatory Technical Standards and Technical Advice to accompany the Benchmarks Regulation once it comes into force (date as yet unknown). According to ESMA, the Regulation aims to improve governance and control over the benchmark process, which is important for the pricing of many financial instruments. Ahead of the Regulation the Authority is seeking views as to: the appropriate definition of benchmarks; the authorisation and registration of an administrator; governance and control requirements for supervised contributors; requirements for the benchmark oversight function; requirements for the benchmark input data; and what the appropriate transparency requirements regarding the benchmark methodology should be.

ESMA publishes draft Regulatory Technical Standards on settlement discipline for the Central Securities Depository Regulation

ESMA has published draft RTS in line with the CSDR which harmonises the authorisation and supervision of EU central securities depositories. The RTS sets out how settlement fails can be prevented via automated matching, partial settlement and a 'hold and release mechanism'. The RTS also includes a cash penalties mechanism and a buy-in process where settlement fails occur.

EU Commission publishes a common approach for transatlantic CCPs with the US Commodity Futures Commission

The European Commission has announced its intention to adopt an equivalence decision with respect to CFTC requirements, allowing US CCPs to provide services in the EU whilst complying primarily with their own local requirements. In turn, the CFTC will also permit EU CCPs to provide services in the US whilst complying primarily with their own local requirements, and will also streamline the registration process for EU CCPs. This agreement reflects a 2009 commitment by G20 leaders to make the use of CCPs mandatory for standardised derivatives contracts. ESMA has welcomed this announcement of a common approach and will resume its US CCP recognition process.

Commissioner Jonathon Hill speech on the EU Commission's 2016 priorities for an approach to resolution for CCPs

In a speech at the Centre for European Policy Studies Commissioner Hill said a system is required for the resolution of CCPs. Commissioner Hill said the Commission will work alongside the G20 agenda and will table a proposal for an effective recovery and resolution regime for clearing houses towards the end of 2016.

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

Date published: 02 March 2016