The following posts provide a snapshot of the principal U.S., European and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.
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European Commission Vice President Addresses CCP Temporary Equivalence and Sustainable Finance in London Speech
11/15/2019
The Vice President of the European Commission, Valdis Dombrovskis, has given a keynote speech at the Guildhall in London covering, amongst other things, the EU’s proposals for the development of the European sustainable finance framework and a proposed extension to the temporary equivalence regime for U.K. central counterparties.
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Financial Stability Board Publishes 2019 Resolution Report
11/14/2019
The Financial Stability Board has published its 2019 Resolution Report, providing updates on its implementation of policy measures to enhance the resolvability of systemically important financial institutions.
Read more.TOPIC: Recovery & Resolution -
European Banking Authority Consults on Draft Technical Standards on Passport Notifications Under Capital Requirements Directive
11/13/2019
The European Banking Authority has published draft amended Regulatory and Implementing Technical Standards regarding the exercise of credit institutions’ rights to freedom of establishment and freedom to provide services (i.e. passporting rights) under the Capital Requirements Directive. The EBA reviewed the original Technical Standards in 2018 and found several areas for improvement that would enhance the quality and consistency of passport notifications and the ability of EU national regulators to use them. It has produced the draft amended standards with a view to updating the information requirements that must be notified by a credit institution to its home national regulator. Responses to the consultation should be submitted by February 13, 2020.
Read more.TOPIC: Financial Services -
European Commission Publishes EU Delegated Regulation Aligning KID Publication Requirements under PRIIPS Regulation
11/08/2019
A Commission Delegated Regulation amending secondary legislation supplementing the Packaged Retail and Insurance-Based Investment Products Regulation has been published in the Official Journal of the European Union.
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EU Single Resolution Board Launches Consultation on Expectations for Banks
11/08/2019
The Eurozone Single Resolution Board has launched a public consultation on its proposed “Expectations for Banks”, a draft document outlining best practice for banks in implementing resolution planning. The consultation is being undertaken as part of the SRB’s endeavours to work with Eurozone banks and other stakeholders and to demonstrate transparency in its approaches and decisions.
Read more.TOPIC: Recovery & Resolution -
UK Information Commissioner’s Office Consults on Application of Powers under Proceeds of Crime Act
11/08/2019
The U.K. Information Commissioner’s Office, the U.K.’s independent body for the upholding of information rights in the public interest, has issued a consultation paper on proposals that it be granted investigative and other powers under the Proceeds of Crime Act 2002. The proposals are in response to the increasing number of cases in which financial gains are made by criminals involved in the theft of personal data.
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European Commission Publishes Commission Delegated Regulation Amending Auctioning Allowances Rules
11/08/2019
A Commission Delegated Regulation amending the EU Auctioning Regulation has been published in the Official Journal of the European Union. The Delegated Regulation will apply directly in all EU Member States from November 28, 2019. The EU Auctioning Regulation provides for EU emission allowances to be auctioned and specifies key aspects of the auctions, including their design, timing and eligibility requirements.
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US Securities and Exchange Commission Extends No-Action Relief for MiFID II Inducements and Research
11/08/2019
The U.K. Financial Conduct Authority has welcomed the U.S. Securities and Exchange Commission’s extension of no-action relief addressing a potential conflict between U.S. regulation and the inducements and research provisions of the revised Markets in Financial Instruments Directive. One of MiFID II’s objectives is to give investors transparency into the cost of both research and trading commissions by requiring payments for these elements to be unbundled.
Read more.TOPIC: MiFID II -
European Banking Authority Reports Reduction in EU Banks’ Non-Performing Loans
11/08/2019
The European Banking Authority has published a report on non-performing loans in the EU banking sector, in which it finds that total NPLs have decreased from over €1.5 trillion in June 2015 to €636 billion in June 2019. The level of European NPLs was a key concern for EU supervisors and market participants following the financial crisis, triggering efforts to deal with the issue at a supervisory, political and market participant level.
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Basel Committee on Banking Supervision Publishes Consultation on Coordination of Prudential and AML/CFT Supervision
11/08/2019
The Basel Committee on Banking Supervision has published a consultation paper on the “Introduction of guidelines on interaction and cooperation between prudential and anti-money laundering/counter-terrorism financing supervision”. Under the consultation paper, the Basel Committee proposes to amend its guidelines on the “Sound management of risks related to money laundering and financing of terrorism” to include guidance on the interaction between prudential and AML/CFT supervision in a bid to enhance the effectiveness of the supervision of banks’ AML/CFT regimes. Responses to the consultation should be submitted by February 6, 2020.
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Financial Stability Board Plenary Meets to Review Global Financial System Vulnerabilities, FinTech and its 2020 Work Program
11/07/2019
The Financial Stability Board has met in Paris to review key issues facing financial markets, including vulnerabilities in the global financial system, FinTech developments and its 2020 work program.
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European Commission Confirms Fitness of EU Supervisory Reporting Requirements for Financial Services
11/07/2019
The European Commission has published the results of its “fitness check” of EU supervisory reporting requirements. The reporting requirements imposed by EU and national regulatory authorities require regulated institutions to provide information to their respective authorities regarding their financial condition and activities. The European Commission assessed the effectiveness, coherence, relevance and efficiency of existing reporting requirements in order to identify areas that may be simplified or streamlined.
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EU Technical Standards On Homogeneity Conditions For STS Securitizations
11/06/2019
Regulatory Technical Standards under the EU Securitization Regulation on the conditions for a securitization to be considered "homogenous" have been published in the Official Journal of the European Union. Homogeneity is one of the requirements for a securitization to be classed as a simple, transparent and standardized securitization or STS securitization. Exposures related to STS securitizations will attract lower risk weightings for firms subject to the Capital Requirements Regulation. The RTS will apply directly across the EU from November 26, 2019.
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HM Treasury Publishes Equivalence Determinations for EU Financial Services Legislation
11/06/2019
HM Treasury has published the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019, providing U.K. government ministers with a temporary power to make equivalence and exemptions directions for the EU and EEA Member States under relevant financial services legislation. The temporary power will come into force on the date that the U.K. leaves the EU (currently expected to be no later than January 31, 2020) and can only be used for up to twelve months from that date.
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EU Consultation on Changes to Position Limits for Commodity Derivatives
11/05/2019
Following its Call for Evidence issued in May this year, the European Securities and Markets Authority has launched a consultation on proposed revisions to the legal framework for position limits and position management in commodity derivatives. The position limits regime was introduced by the revised Markets in Financial Instruments Directive. MiFID II requires the European Commission to report to the European Parliament and the Council on the impact of the application of position limits and position management on liquidity, market abuse and orderly pricing and settlement conditions in commodity derivatives markets. ESMA must provide the Commission with advice regarding this new regime to support the Commission's preparation of the report, including any recommendations for changing the legislative requirements. Responses to ESMA's consultation should be submitted by January 8, 2020.
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IOSCO Confirms That Stablecoins Are Potentially Within the Securities Regulatory Perimeter
11/04/2019
The International Organization of Securities Commissions has issued a statement confirming that it is possible, depending on their structure, for stablecoins to fall within the scope of securities market regulation. IOSCO has undertaken an in-depth study (not published) of stablecoins and has concluded that each proposed stablecoin, the manner in which it is intended to operate and the rights and obligations conferred on participants needs to be analyzed to assess the risks and benefits of the particular stablecoin. The statement is widely considered to be in response to Facebook's announcement about its proposed stablecoin, Libra. According to IOSCO, certain stablecoins may have features that are similar to securities and accordingly will be within the regulatory perimeter of some countries. IOSCO calls on entities that wish to launch stablecoins to engage with regulators so that any risks associated with the operation of the stablecoin might be mitigated.
View IOSCO's statement. -
UK Conduct Regulator Requests Fund Managers to Review Liquidity Management Practices
11/04/2019
The U.K. Financial Conduct Regulator has published a “Dear Chairman” letter addressed to Authorized Fund Managers requesting them to review certain aspects of the liquidity management arrangements for the authorized funds that they manage. The letter follows the FCA’s recent policy statement establishing new rules for open-ended funds that invest in inherently illiquid assets and aims to address concerns that open-ended funds may not always be able to liquidate funds fast enough to comply with redemption requests. In its policy statement, the FCA acknowledged that its new rules did not capture open-ended UCITS funds such as the LF Woodford Equity Income Fund. This latest letter urges firms to recognise that effective liquidity management is a core function for all open-ended funds.
Read more.TOPIC: Funds -
Financial Action Task Force Consults on Digital Identity in Customer Due Diligence Guidance
10/31/2019
The Financial Action Task Force is seeking feedback from private sector stakeholders on its draft guidance on the use of digital identity systems in customer due diligence. The guidance will supplement Recommendation 10 of the FATF's Recommendations regarding customer due diligence and demonstrates how authentication of customer identities in the digital finance and digital ID context supports broader anti-money laundering/counter-terrorism financing efforts. Stakeholders should submit responses to the consultation by November 29, 2019. The FATF intends to make further amendments to its draft guidance at its February 2020 meetings.
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Basel Committee on Banking Supervision Considers Key Supervisory and Policy Initiatives
10/31/2019
The Basel Committee on Banking Supervision met on October 30-31, 2019 to discuss key policy and supervisory issues, including: (i) a proposed consultation on adjustments to the credit valuation adjustment risk framework; (ii) a proposed consultation on revised market risk and sovereign exposure disclosure requirements; (iii) a proposed discussion paper on the prudential treatment of cryptoassets; (iv) a proposed consultation on guidelines for enhanced cooperation between prudential regulatory authorities and anti-money laundering/counter-terrorism financing authorities; and (v) its reports into the implementation of the Net Stable Funding Ratio and large exposures standards in Argentina and China. All of the proposed consultation papers, as well as the NSFR/large exposures reports, are expected to be published in November 2019.
Other topics under discussion included benchmark rate reforms, the implementation of the Basel Committee's guidance on managing foreign exchange settlement risk and the usability of capital buffers. On the latter subject, the Basel Committee has also published a newsletter reiterating the importance of the capital buffer framework and emphasizing that the buffers are designed to be usable. The Basel Committee has announced that Canada will host the 21 International Conference of Banking Supervisors on October 21-22, 2020.
View the Basel Committee's press release on its October 30-31 2019 meeting.
View the Basel Committee's newsletter on capital buffers.
View details of the 21 International Conference of Banking Supervisors. -
UK Conduct Regulator Postpones Implementation Date for Brexit Contingency Plans
10/30/2019
The U.K. Financial Conduct Authority has extended the date by which firms must implement Brexit contingency plans following the extension of the Brexit deadline from October 31, 2019 to January 31, 2020. Firms and funds should now notify the FCA for entry into the temporary permissions regime by January 30, 2020 and fund managers have until January 15, 2020 to notify the FCA if they wish to change their existing notification. Firms should continue to comply with transaction and trade reporting requirements under the Markets in Financial Instruments Directive and European Market Infrastructure Directive, respectively.
View the FCA's statement on contingency planning deadlines. -
European Banking Authority Publishes Opinion on Strengthening Depositor Protection in the EU
10/30/2019
The European Banking Authority has published the second in a series of three opinions on the implementation of the Deposit Guarantee Scheme Directive in the EU. This opinion relates to DGS payouts. The first opinion related to the eligibility of deposits, coverage level and cooperation between deposit guarantee schemes and was published in August 2019. The third opinion will cover DGS funding and the uses of DGS funds. The opinions have been prepared to assist the European Commission in its obligation to report on the implementation of the DGSD.
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UK Government Agrees Extension of Brexit Deadline With European Union
10/30/2019
The U.K. Government has published legislation extending the deadline for the U.K.'s withdrawal from the European Union, following an agreement reached with relevant European Union bodies on the extended Brexit deadline. The European Union (Withdrawal) Act 2018 (Exit Day) (Amendment) (No. 3) Regulations 2019 amend the day of the U.K.'s exit from the European Union from October 31, 2019 to January 31, 2020, granting the U.K. government an additional three months in which to ratify its proposed Brexit deal.
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UK Regulator Publishes Final Technical Standards on Strong Customer Authentication in the Event of a No-Deal Brexit
10/25/2019
The U.K. Financial Conduct Authority has published a Policy Statement, final Technical Standards and changes to the Handbook rules on strong customer authentication and common and secure open standards of communication to be applicable when the U.K. leaves the EU. The FCA consulted on the proposed SCA RTS in early 2019 when the U.K. was due to leave the EU on March 29, 2019, and before the EU SCA Regulatory Technical Standards application date. Since then, Brexit has been extended and the EU SCA RTS has applied directly across the EU since September 14, 2019. As a result, the EU SCA RTS would be onshored into U.K. law under the Withdrawal Act. However, in preparation for a no-deal Brexit, the U.K. Payment Services Regulations would require firms to apply the U.K. SCA RTS. As a result, the EU SCA RTS would be revoked and the FCA's SCA RTS will apply in the U.K. in the event of a no-deal Brexit.
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Regulatory Oversight Committee Launches Consultation on Legal Entity Identifiers for General Government Entities
10/25/2019
The Legal Entity Identifier Regulatory Oversight Committee has launched a consultation on the allocation of LEIs to government entities. LEIs are reference codes allocated to legal entities for the purposes of unique identification in financial transactions and for other public sector uses. General government entities are eligible for LEIs as they are legal entities, but many (such as Ministries, Agencies and Republics) are not incorporated or do not otherwise have legal personality
Read more.TOPIC: Financial Services -
UK Prudential Regulator Launches Consultation on More Proportionate Capital Requirements for Credit Unions
10/24/2019
The U.K. Prudential Regulation Authority has launched a consultation on the capital requirements that apply to credit unions. The PRA considers that credit unions approaching the thresholds of £10 million in assets or 15,000 members may find barriers to expansion under the current capital regime. It also finds that the risks that the capital regime endeavours to tackle could be addressed in a simpler manner than the link between capital and credit union membership size and activity which is currently used. The PRA also considers that engaging with small credit unions earlier could increase chances of a non-failure solution.
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UK Conduct Regulator Publishes Feedback on Regulatory Framework for Stewardship Discussion Paper
10/24/2019
The U.K. Financial Conduct Authority has published a feedback statement on the discussion paper, “Building a regulatory framework for effective stewardship” that it published in January 2019 together with the Financial Reporting Council. The discussion paper called for input on how best to encourage the capital markets community to engage more actively in “stewardship” of the assets in which they invest.
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Financial Action Task Force Publishes Best Practices for Beneficial Ownership Transparency
10/24/2019
The Financial Action Task Force has published best practices on beneficial ownership for legal persons. Global standards require authorities to be able to ascertain the ultimate owner of a company or foundation to provide transparency and mitigate against the use of legal persons for financial crime purposes. The FATF's Best Practices document identifies the issues faced in achieving transparency of beneficial ownership and provides recommendations for an effective system that ensures accurate and up-to-date information to authorities in a timely manner. The FATF highlights that using a multi-pronged approach with numerous information sources is considered more effective and the document sets out the key features of an effective multi-pronged system.
View the FATF best practices on beneficial ownership for legal persons. -
European Supervisory Authorities Issue Guidance on Scope of Application to Bonds of the PRIIPs Regulation
10/24/2019
The Joint Committee of the European Supervisory Authorities has published a Supervisory Statement on the scope of application to bonds of the EU Packaged Retail and Insurance-based Investment Products Regulation. The ESAs have issued the Supervisory Statement in an attempt to avoid the adoption of diverse approaches by national regulators across the EU as to when a Key Information Document is required for different types of bonds under the PRIIPs Regulation. The PRIIPs Regulation, directly applicable across the EU since January 1, 2018, imposes a requirement upon issuers of packaged retail and insurance-based investment products to issue KIDs to retail investors describing key features of their products, in order to enhance transparency and improve investor protection in the PRIIPs market.
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European Banking Authority Publishes Opinion on Regulatory Treatment of Non-Performing Exposure Securitizations
10/23/2019
The European Banking Authority has published an opinion recommending amendments to the regulatory treatment of the securitization of non-performing exposures. The opinion examines how securitizations may be used to fund the reduction of NPEs and outlines regulatory constraints imposed on the use of securitizations in this way, alongside its proposals for amendments to the regulatory framework.
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European Securities and Markets Authority Publishes Enforcement Priorities for 2019 Financial Reports
10/22/2019
The European Securities and Markets Authority has published its annual Public Statement on European enforcement priorities for listed companies’ 2019 financial reports. The priorities will guide the areas of focus when ESMA and relevant national enforcement authorities assess the reports.
Read more.TOPIC: Corporate Governance -
European Commission Consults on Alternative Standardized Approach for Market Risk
10/22/2019
The European Commission has invited responses to its consultation on proposed changes to the standardized approach for market risk. The changes follow the Basel Committee on Banking Supervision’s revisions to the Basel III market risk capital framework, which were published in January 2019.
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Committee on Payments and Market Infrastructures Publishes Toolkit for Reducing Wholesale Payments Fraud
10/22/2019
The Committee on Payments and Market Infrastructures has prepared a “toolkit” to assist central banks to reduce the risk of wholesale payments fraud related to endpoint security. The Financial Stability Institute at the Bank for International Settlements has also announced that it will make tutorials on wholesale payments security freely available to central banks on request.
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G7 Working Group Reports on the Impact of Global Stablecoins
10/18/2019
The G7 working group on stablecoins has published a report investigating the impact of global stablecoins. The working group is comprised of senior officials from the G7 central banks, the International Monetary Fund, the Bank for International Settlements and the Financial Stability Board, and is chaired by Benoît Cœuré (Chair of the Committee on Payments and Market Infrastructures).
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Financial Stability Board to Assess Potential Risks of Stablecoins
10/18/2019
The Financial Stability Board has published a report on regulatory issues arising with respect to so-called stablecoins. The FSB defines a stablecoin as "a crypto-asset designed to maintain a stable value relative to another asset (typically a unit of currency or commodity) or a basket of assets" which may be "collateralised by fiat currency or commodities, or supported by algorithms".
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Financial Stability Board Publishes Report on Progress of Over-The-Counter Derivatives Market Reforms
10/15/2019
The Financial Stability Board has published a report on the progress its member jurisdictions have made in 2019 on the implementation of agreed G20 reforms to over-the-counter derivatives markets. The report finds that there has been limited additional implementation of the reforms since the FSB’s 2018 report.
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EU Council Adopts Laws on Enhanced Supervision of Third-Country CCPs
10/15/2019
The Council of the European Union has adopted the amendments to EU law on CCP supervision. The adopted laws revising the European Market Infrastructure Regulation (EMIR 2.2) will change how both EU CCPs and third-country CCPs are supervised, and implement into legislation the controversial EU "location policy" for the largest third-country CCPs. According to the Council's press release, EMIR 2.2 is scheduled to be published in the Official Journal of the European Union on December 12, 2019 and would come into force 20 days later. The legislative process relevant to EMIR 2.2 has taken place with the U.K. exit from the European Union in the background and many of the changes relevant to third-country CCPs are effectively a response to the U.K.'s decision to leave the EU, given that two of the three largest European Union clearing houses are U.K.-based.
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Financial Stability Board Publishes Report on Progress of Over-The-Counter Derivatives Market Reforms
10/15/2019
The Financial Stability Board has published a report on the progress its member jurisdictions have made in implementing the agreed G20 reforms to over-the-counter derivatives markets in 2018. The report finds that good progress has been made in implementation of the agenda.
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UK FICC Markets Standards Board Publishes Statement of Good Practice on Conflicts of Interest
10/14/2019
The U.K. Fixed Income, Currencies and Commodities Markets Standards Board has published a statement of good practice for the FICC markets on conflicts of interest. The statement of good practice represents the FMSB’s view of best practice but is not subject to the FMSB’s adherence framework, so failure to comply will not indicate a failure to meet regulatory obligations.
Read more.TOPIC: Conduct & Culture -
Financial Stability Board Publishes Update on Market Fragmentation Work
10/14/2019
The Financial Stability Board has published a progress update on its ongoing work to tackle market fragmentation. The update follows the FSB’s June 2019 Report on Market Fragmentation, which explored the link between market fragmentation and financial stability and identified four areas for further work to address the issue: deference (e.g. the reliance authorities place on one another when regulating or supervising participants on a cross-border basis); pre-positioning of capital and liquidity; regulatory and supervisory coordination and information-sharing; and market fragmentation as part of the evaluation of reforms, starting with the “too-big-to-fail” evaluation.
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Financial Stability Board Publishes Letter to G20 Ministers on Effect of Reforms and Future Work
10/13/2019
The Financial Stability Board has published a letter to G20 Finance Ministers and Central Bank Governors describing the progress of post-financial crisis reforms and key focus areas for the future. Over the past ten years, the FSB has proposed a number of reforms to the global financial system, working with international organizations on implementation to improve financial stability.
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UK Prudential Regulator Implements New Waiver of Deposit Protection Rules
10/13/2019
The U.K. Prudential Regulation Authority has announced that it will provide a new waiver by consent of the Continuity of Access Rules under the Depositor Protection Part of the PRA Rulebook. The DPP Rulebook sets out rules requiring firms to ensure that eligible depositors have access to deposits covered by the Financial Services Compensation Scheme in the event of the firm’s insolvency, by establishing systems to facilitate a transfer of such deposits (the so-called “Continuity of Access” rules).
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UK Financial Policy Committee Issues Summary of UK Financial System
10/11/2019
The U.K. Financial Policy Committee has issued a summary of the resilience of the U.K. financial system to potential economic shocks and the vulnerabilities it faces. The summary follows the FPC’s meeting on October 2, 2019, at which the FPC agreed on its intended policy action going forward. The FPC is made up of Bank of England staff, the Chief Executive of the U.K. Financial Conduct Authority and certain external members who work to identify, monitor and take action to remove or reduce systemic risks to the U.K. financial system.
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UK Government Responds to Committee Report on Conduct Authority's Perimeter of Regulation
10/10/2019
The U.K. government has published a response to the Treasury Committee's report on the Financial Conduct Authority's perimeter of regulation. The Committee's Report is part of its ongoing inquiry, The Work of the Financial Conduct Authority, which is considering: (i) the timeliness in which the FCA is able to take action; (ii) the transparency of the FCA's work and decisions; and (iii) the scope of the FCA's regulatory perimeter.
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International Bodies Issue Report on Governance Arrangements for Derivatives Data
10/09/2019
The Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions have published a joint report on governance arrangements for critical data elements for over-the-counter derivatives. The report does not cover governance arrangements for the Unique Transaction Identifier and Unique Product Identifier, which are being reviewed separately by the Financial Stability Board. The report aims to contribute to international efforts to improve transparency, mitigate systemic risk and prevent market abuse in derivatives markets.
Read more.TOPIC: Derivatives -
Financial Stability Board Publishes Governance Arrangements for Unique Product Identifier
10/09/2019
The Financial Stability Board has published a report on governance arrangements for the Unique Product Identifier, a globally harmonized code identifying over-the-counter derivatives products reported to trade repositories. The UPI will enable authorities to aggregate data on OTC derivatives transactions, which will in turn help them to assess systemic risk and detect market abuse.
Read more.TOPIC: Derivatives -
Final EU Guidelines For Improving Settlement Efficiency Published
10/08/2019
The European Securities and Markets Authority has published a final report and final Guidelines on standardized procedures and messaging protocols for investment firms under the Central Securities Depositaries Regulation.
CSDR requires investment firms to take steps to limit settlement fails, including by ensuring that they have all the necessary transaction data on the day of the transaction. Investment firms must also have in place arrangements with their professional clients to ensure prompt communication of an allocation of securities to the transaction, confirmation of that allocation and confirmation of the acceptance or rejection of the terms in good time before the intended settlement date. The content of the messages and deadlines for sending them is contained in the Regulatory Technical Standards on settlement discipline (Commission Delegated Regulation (EU) 2018/1229). The Guidelines clarify the scope of these requirements and provide guidance on the standardized procedures and messaging standards to be used for firms to comply with the requirement.
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Brexit: European Banking Authority Again Warns Against Letter-Box Entities
10/08/2019
The European Banking Authority has issued a further Communication on issues associated with the U.K.'s withdrawal from the EU, scheduled to take place on October 31, 2019. The EBA notes that financial institutions have made progress on their preparations for a no-deal Brexit. However, national regulators have highlighted concerns about the operationalization of relocation plans and customer communication. In particular, national regulators have noted that in some cases authorization has been obtained, but it remains unclear whether the firm has transferred assets, skilled staff and risk function to fully operationalize the new business. The EBA reminds firms of the principles it set out in its October 2017 Opinion on structures, and particularly the need for firms not to set up so-called "empty shells".
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Final EU Technical Standards on Cooperation Arrangements with Third-Country Regulators on Market Abuse Issues
10/08/2019
The European Securities and Markets Authority has published a final report and final draft Regulatory Technical Standards on supervisory cooperation between EU national regulators and third-country national regulators. The Market Abuse Regulation requires national regulators, where necessary, to enter into cooperation arrangements with supervisory authorities in non-EU countries for the exchange of information and enforcement of market abuse obligations. ESMA is charged with preparing draft RTS containing a template for those cooperation arrangements. ESMA's template provides a flexible approach for national regulators by allowing only parts of the template to be used, depending on what is deemed as necessary by a national regulator.
ESMA's preparation of the draft RTS was delayed so that ESMA could take into account the entry into force of the EU General Data Protection Regulation. The draft RTS requires national regulators to have safeguards in place for the transfer of data from the EU to a third-country where the transfer of data takes place in the usual course of business and practice, and in the absence of an equivalence decision.
The final draft RTS have been submitted to the European Commission for adoption.
View the final report and draft RTS. -
Eurozone Supervisory Priorities for 2020
10/07/2019
The European Central Bank's Banking Supervision arm has published the 2020 supervisory priorities of the Single Supervisory Mechanism and a risk assessment for 2020. ECB Banking Supervision has identified the following risks to the euro banking sector: (i) economic, political and debt sustainability challenges in the euro area; (ii) business model sustainability; (iii) cybercrime; (iv) execution risk related to banks' strategies for non-performing loans; (v) easing lending standards; (vi) repricing in financial markets; (vii) misconduct, money laundering and terrorism financing; (viii) Brexit; (ix) global outlook and geopolitical uncertainties; (x) reaction to regulation; and (xi) climate-change related risk.
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European Securities and Markets Authority Issues Public Statements on No-Deal Brexit Preparations
10/07/2019
The European Securities and Markets Authority has issued four public statements on its preparations for a no-deal Brexit in the event the U.K. fails to agree a deal with the EU or extend the Brexit deadline before October 31, 2019. In its public statement on preparations for a possible no-deal Brexit, ESMA notes that it had already put in place no-deal contingency plans ahead of the U.K.’s previous Brexit deadline extension on April 10, 2019.
Read more.