Tracker, Financial Services Regulation & Compliance - Investment Firms
Irish Stock Exchange welcomes announcement to review stamp duty on share transactions
The ISE has welcomed the Department of Finance's announcement, on 11 October, that it will review the application of stamp duty rules to share transactions as part of the Government's response to Brexit. The ISE believe a review of Ireland's stamp duty regime will increase its attractiveness as a location for international investment, which has become increasingly important in light of Brexit.
ESMA publishes Consultation Paper on the guidelines on trading halts under MiFID II
The European Securities and Markets Authority (ESMA) has published a Consultation Paper regarding draft guidelines on trading halts under MiFID II. Article 48(5) of MiFID II states that "Member States shall require a regulated market to be able to temporarily halt or constrain trading if there is a significant price movement in a financial instrument on that market or a related market during a short period and, in exceptional cases, to be able to cancel, vary or correct any transaction". ESMA intends to provide guidelines on how these halts should be implemented and is seeking input from industry stakeholders. The Consultation will run until 6 December 2016.
ESMA publishes list of third-country central counterparties recognized to offer services in the EU
ESMA has published an updated list of CCPs established in third countries that have been recognised as being permitted to offer services and activities in the EU under the European Markets Infrastructure Regulation (EMIR) (Regulation (EU) No 648/2012).
ESMA publishes Final Report and Guidelines on information relating to commodity derivatives markets or related spot markets for the purpose of the definition of inside information on commodity derivatives under the Market Abuse Regulation (MAR)
ESMA has published its Final Report and Guidelines on information relating to commodity derivatives markets or related spot markets for the purpose of the definition of inside information on commodity derivatives under MAR. Under MAR, ESMA is required to publish guidelines setting out a non-exhaustive list of information which would fall under the definition of inside information under Article 7 of MAR. ESMA launched a consultation in March 2016 for this purpose and these Guidelines reflect the responses received in that consultation.
ESMA publishes Consultation Paper on draft Regulatory Technical Standards and Implementing Technical Standards under the Securities Financing Transactions Regulation amendments to related Regulatory Technical Standards under EMIR
ESMA has published a Consultation Paper on draft RTS and ITS issued under the SFTR (Regulation (EU) No 2015/2365) and certain amendments to RTS issues under EMIR. ESMA state in the Consultation Paper that the reason for these draft RTS and ITS is "to take into account legal developments as well as to ensure consistency, where relevant, between the frameworks of both regulations".
European Commission issues publication showing the current state of play in respect of the implementation of MiFID II and MiFIR
On 20 October, the Commission published a table showing the current state of play in respect of the implementation of MiFID II and MiFIR. The table shows that the majority of the MiFID II RTS have passed the end of the European Parliament and Council scrutiny periods. However, none of the RTS have been published in the Official Journal of the EU as publication is on hold until a Corrigendum is finalised. Only the ITS relating to the description of the functioning of MTFs and OTFs have been published in the Official Journal.
ESMA publishes Consultation Paper on the guidelines on specific notions under MiFID II related to the management body of market operators and data reporting services providers
ESMA has issued a Consultation Paper on the draft Guidelines on specific notions under MiFID II related to the management body of market operators and data reporting services providers (DRSPs). MiFID II is set to introduce certain requirements for all members of the management bodies of market operators and DRSPs such as requiring all members to "be of sufficiently good repute, possess sufficient knowledge, skills and experience to perform their duties, shall commit sufficient time to perform their functions in the market operator, shall act with honesty, integrity and independence of mind". ESMA have the responsibility for developing the Guidelines in relation to these requirements and are seeking input from various stakeholders. The Consultation will run until 5 January 2017.
ESMA publishes Consultation Paper on draft product governance Guidelines under MiFID II
ESMA has issued a Consultation Paper on the draft Guidelines on the product governance requirements that are set to be introduced under MiFID II. The Consultation will run until 5 January 2017.
ESMA publishes Final Report and Guidelines on transaction reporting, order record keeping and clock synchronisation under MiFID II
On 10 October 2016, ESMA published its Guidelines on transaction reporting, order record keeping and clock synchronisation under MiFID II (the Guidelines) and its Final Report on the Guidelines (the Report). The Guidelines and the Report are the result of ESMA's consultation on the draft RTS on transaction reporting, order record keeping and clock synchronization.
ESMA publishes Q&A MiFID II and MiFIR investor protection topics
On 10 October, ESMA published a Q&A document on MiFID II and MiFIR investor protection topics. While MiFID II and MiFIR, along with the relevant technical standards, will not be applicable until January 2018, the purpose of this Q&A document is to ensure the application of a consistent supervisory approach across the EU when the new regime becomes effective. The Q&A contains responses to queries raised by competent authorities, market participants and the general public on issues such as best execution, record keeping, and investment advice on an independent basis. This document will be updated as and when new queries and responses are received.
ESMA publishes Q&A relating to the provision of CFDs and other speculative products to retail investors under MiFID
On 11 October, ESMA published an updated Q&A document on the provision of contracts for difference (CFDs) and other speculative products to retail investors under MiFID. The document provides answers to questions raised by competent authorities throughout the EU in relation to the application of MiFID and its implementing measures. The purpose is to promote a uniform and consistent approach by the relevant supervisory authorities across the EU. The contents of this document are continually updated as new questions and answers are received. This latest draft contains four new sections relating to the withdrawal of funds from trading accounts when investing in CFDs or other speculative products, the use of trading benefits and leverage when offering CFDs or other speculative products, and the best execution obligations for firms offering CFDs or other speculative products.
ESMA publishes Q&A on MiFID II and MiFIR transparency topics
On 3 October 2016, ESMA published a Q&A document on MiFID II and MiFIR transparency topics. The questions contained in the document relate to the "double volume cap mechanism", in particular, the differences in its application between the MiFID I and MiFID II regimes.
ESMA publishes Consultation Paper on draft RTS specifying the scope of the consolidated tape for non-equity financial instruments under MiFID II
On 3 October 2016, ESMA published a Consultation Paper on the draft RTS specifying the scope of the consolidated tape for non-equity financial instruments under MiFID II. The Consultation will run until 5 December 2016.
The European Fund and Asset Management Association publishes report on responsible investment
EFAMA has published a report on responsible investment setting out a number of recommendations for the investment and asset management industry. The report is split in two with the first part setting out the role of the European asset management industry in relation to responsible investment and the second part providing a country by country analysis of the various legal frameworks and initiatives across different Member States.
ESMA publishes 2017 Work Programme
ESMA has published its Work Programme for 2017 setting out its areas of priority for the year. The Programme provides that ESMA will focus on supervisory convergence across the EU, with the goal of achieving a more uniform and consistent approach by competent authorities, thereby improving investor protection and the stability of financial markets.
European Commission seeks approval of Council and Parliament of the final draft RTS on risk mitigation techniques for OTC derivative contracts not cleared by a central counterparty
On 4 October 2016, the European Commission wrote to both the European Parliament and Council seeking approval of the final draft RTS for risk mitigation techniques for OTC derivative contracts not cleared by a central counterparty, under EMIR. The draft RTS have been approved by the Commission following their submission by the European Supervisory Authorities. The Parliament and Council now have three months within which they can object to the RTS before the RTS are published in the Official Journal of the EU.
European Systemic Risk Board publishes report on market liquidity and market-making
The ESRB published a report in which it investigates whether a significant decline in market liquidity could threaten financial stability.
European Systemic Risk Board publishes an opinion addressed to the European Securities and Markets Authority on securities financing transactions (SFTs) and leverage under Article 29 of the Securities Financing Transaction Regulation
The opinion published in October 2016 concluded that SFTs can lead to the buildup of significant leverage both inside and outside the banking system which is not address by existing regulation and put forward several proposals to address this buildup of leverage.
ESMA publishes MAR Guidelines relating to persons receiving market soundings and to delay in the disclosure of inside information
On 21 October, ESMA published two separate sets of Guidelines relating to MAR, the first, relating to persons receiving market soundings and the second, to delay in the disclosure of inside information. The first set of Guidelines outlines the obligations of persons receiving market soundings, in particular, their compliance and reporting obligations under MAR.
The second set of Guidelines provides an indicative list of legitimate interests of an issuer that will allow for a delay in disclosing inside information under MAR.
ESMA issues a report assessing securities financing transactions, leverage and pro-cyclicality
On 4 October 2016, ESMA published a report in cooperation with the EBA and the ESRB assessing "(a) whether the use of SFTs leads to the build-up of significant leverage that is not addressed by existing regulation; (b) where appropriate, the options available to tackle such a build-up; (c) whether further measures to reduce the pro-cyclicality of that leverage are required". The report was submitted to the Commission, European Parliament and the Council on 13 October 2016.
Corrigendum to the Market Abuse Regulation published in the Official Journal of the EU
A Corrigendum to the MAR was published in the Official Journal of the EU on 21 October 2016. The Corrigendum makes some minor amendments to the wording of recital 76, Article 3(1) and Article 37. Recital 76 relates to the types of market practices existing before the entry into force of MAR that may remain applicable. The amendment at Article 3(1) is a slight amendment to part (d) of the definition of "person closely associated", while the amendment at Article 37 simply removes a footnote related to the list of Directives that are repealed by MAR.
ESMA publishes draft legislation amending secondary EMIR legislation
ESMA has published two pieces of draft legislation that propose amendments to Commission Delegated Regulation (EU) No 148/2013 supplementing EMIR, and Implementing Regulation (EU) No 1247/2012 laying down ITS under EMIR, respectively.
ESMA publishes updated Q&A on the implementation of the Market Abuse regulation
ESMA published an updated MAR Q&A on 26 October 2016. This latest update introduces new questions and answers on the exchange rate to be used when determining thresholds for non-Euro transactions and a number of questions related to the classification of certain communications as "investment recommendations" under MAR.
For further information please contact a member of the Financial Regulation team.
Date published: 04 Nov 2016