On February 25, the FCA published the final notice it issued to David Hobbs, a former derivatives trader, banning him from performing any regulatory function.
The final notice follows the decision of the Upper Tribunal (Tax and Chancery Chamber), which found that in putting forward a false defense to the FSA (the FCA’s predecessor) and in maintaining that defense in evidence before the tribunal, he had exhibited a lack of integrity. It held that he was not a fit and proper person to perform regulatory functions. Final Notice.
On February 25, the European Parliament published a press release announcing that political agreement has been reached with the Council of the EU on the proposed UCITS V Directive.
The press release notes the following areas of agreement:
- Payment of fund managers.
- The appointment of a depository by UCITS or UCITS management companies.
- Provision of penalties by EU member states for funds failing to comply with national UCITS authorization and reporting rules. Press Release.
On February 25, ESMA published a speech by ESMA Executive Director Verena Ross on the issues surrounding the implementation of MiFID II.
The issues include the following:
- ESMA will publish a discussion paper on MiFID II technical standards once the European Parliament has approved the final text of MiFID II.
- More frequent processing of requests and issuance of opinions on pre-trade waivers by ESMA.
- ESMA expects to be involved in the decisions on the compatibility of national competent authorities’ proposed position limits for commodity derivatives.
- Information on the transparency and micro-structural regimes provided for in Level 2 will be maintained and published by ESMA, together with ensuring consistent implementation and monitoring their effects on the EU markets, with periodic recalibration of these parameters where required.
- Q&As will be issued by ESMA when the MiFID II Level 2 measures enter into force. Speech.
On February 17, the European Securities and Markets Authority (ESMA) published a questions and answers paper (Q&A) on the application of the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFM Directive or AIFMD) (2014/ESMA/163).
The aim of the Q&A is to promote common supervisory approaches and practices in the application of the AIFMD and its implementing measures. The answers are also intended to help alternative investment fund managers (AIFMs) by providing clarity as to the content of the AIFMD rules. The questions relate to the following matters: first application of the remuneration rules, remuneration rules in the case of delegation of portfolio management or risk management activities, annex IV of the AIFMD, notification of alternative investment funds (AIFs) and reporting under Article 42 of the AIFMD. Q&A.
On February 14, the European Banking Authority (EBA) updated its questions and answers (Q&As) on the single rulebook with the publication of over 70 answers on the issue of supervisory reporting including common reporting (COREP), financial reporting (FINREP), leverage, liquidity and large exposures.
The Q&As relate to the CRD IV package of reforms: the CRD IV Directive (2013/36/EU) and the Capital Requirements Regulation (Regulation 575/2013) (CRR), and the related technical standards and guidelines developed by the EBA. Q&A.
On February 13, the European Commission updated its webpage on EMIR (the Regulation on OTC derivative transactions, central counterparties (CCPs) and trade repositories) (Regulation 648/2012) to announce that it has adopted regulatory technical standards (RTS) specifying the contracts that are considered to have a direct, substantial and foreseeable effect within the EU, and to prevent the evasion of rules and obligations. Webpage.
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On February 10, the FCA published two factsheets, both dated February 7, 2014, concerning EMIR.
- A factsheet for EMIR compliant counterparties. Reporting started for such entities on February 12, 2014, following an FCA review on reporting obligations and subsequent discussions with counterparties. Reporting Factsheet.
- A factsheet for EMIR compliant non-financial counterparties calculating the clearing threshold and which are part of a group containing entities that are financial counterparties. The factsheet details the results of an additional FCA review on how such entities define their hedging activities and monitor their statuses in relation to the clearing threshold. Non-financial Counterparties Factsheet.
On February 11, ESMA published a consultation paper on the implementation of the CRA III Regulation containing draft regulatory technical standards (RTS) on the following:
- The content and format of fees charged by Credit Rating Agencies (CRAs) to their clients for the ongoing supervision provided by ESMA, together with pricing policy.
- The requirements for adequate information that must be published by issuers, originators and sponsors in relation to structured finance instruments and their underlying assets, together with updating requirements. A standard disclosure template is also provided.
- Up-to-date information on the outlooks and ratings issued by CRAs will be provided on the European Rating Platform (ERP) website. In order to integrate them into the ERP, the draft RTS includes changes to ESMA’s regulatory reporting system and its database on performance statistics and rating activity.
The consultation closes on April 11, 2014, with a public hearing to be held on March 14, 2014. The draft RTS must be submitted for endorsement to the European Commission by June 21, 2014. Consultation Paper.
On February 12, the European Securities and Markets Authority (ESMA) published its 2014 regulatory work program, setting out a detailed account of the various areas and initiatives for which each unit or division is responsible. These include:
- MiFID II
- CSD Regulation
- Market Abuse Regulation
- CRA III
- Omnibus II