ESMA Updates Q&A on EMIR Implementation

On March 20, ESMA published an updated version of its questions and answers document (Q&A) on the implementation of EMIR (the Regulation on over-the-counter (OTC) derivatives, central counterparties (CCPs) and trade repositories (TRs)) (Regulation 648/2012).  The updated Q&A includes a table of questions on pages 6 and 7, setting out which questions have been updated as of March 20, 2014, and to which article(s) in EMIR the updated questions relate.  They include:

    • Intragroup transactions;
    • Notional amounts;
    • Risk mitigation techniques for OTC derivative contracts not cleared by a CCP;
    • Reporting of outstanding positions following the entry into force of EMIR (backloading); and
    • Various issues relating to TR reporting requirements.  ESMA Q&A.

Responses to ESMA and EBA Consultation on Guidelines for Complaints Handling in the Securities and Banking Sectors

On March 19, the European Securities and Markets Authority (ESMA) published a list of the responses it received to its November 2013 consultation on draft guidelines for complaints handling in the securities and banking sectors.  The list includes responses from the following bodies:

    • Association for Financial Markets in Europe;
    • British Bankers’ Association;
    • European Banking Federation;
    • European Fund and Asset Management Association.

ESMA and the European Banking Authority (EBA), who carried out the consultation jointly with ESMA, intend to publish a final report and guidelines in the first quarter of 2014.  Competent authorities will be expected to incorporate the guidelines into their supervisory practices as appropriate.  ESMA List of Responses.

ESMA Publishes MiFID II Implementation Speech

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.

ESMA Publishes CRA III Regulation Implementation Consultation Paper

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.

ESMA Publishes 2014 Work Program

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

Work Program.

Protocol on the Operation of the ESMA MiFID Database

On January 29, the European Securities and Markets Authority (ESMA) updated its protocol on the operation of its MiFID database (ESMA/2013/68b).

The protocol relates to practical arrangements for the cooperation of the national competent authorities (NCAs) of the member states and the staff of ESMA. The purpose behind it is to ensure these bodies manage the calculation and publication of market transparency calculations required under Article 33 of the MiFID Implementing Regulation (Regulation 1287/2006) between them. Protocol.

ESMA Publishes New Version of “Prospectuses: Questions and Answers”

On January 15, ESMA published version 21 of its “Prospectuses: Questions and Answers.”

Two new questions have been incorporated, addressing the following areas:

o   Format for the individual summary relating to several securities (question 91); and
o   Applicable registration document schedule where a listed issuer proposes to issue convertible or exchangeable debt securities where the underlying securities are the issuer’s shares (question 92).  Prospectuses.

FCA Publishes Statement on Reporting Requirements of AIFMs

On November 4, the FCA published a statement on reporting requirements for managers of AIFs (AIFMs) under the AIFMD.

In certain circumstances, firms already authorized as AIFMs will be required to provide regulatory reports to the FCA in the first quarter of 2014, using the XML v1.0 reporting template, which was published by ESMA in October 2013.

Further details on the reporting mechanism are due to be published on the FCA website in due course.  Statement.

ESMA Publishes Speech on AIFMD and ETF Initiatives

On November 5, ESMA published a speech given by the Chair of ESMA, Steven Maijoor, at the European Fund and Asset Management Association investment management forum. The speech states that:

  • ESMA has finished its work on memoranda of understanding which relate to the AIFMD, although negotiations continue with several non-EU authorities, including those in South Africa, Russia and China.
  • ESMA is due to start drafting a report on the extension of the AIFMD passport to non-EU AIFs and AIF managers.

ESMA is examining why retail exposure to exchange traded funds (ETFs) is relatively low.  Speech.

ESA Issues ESMA and EBA Consultation for Securities and Banking Complaints Handling

On November 6, the Joint Committee of the European Supervisory Authorities (ESAs) issued a consultation paper by the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) concerning draft guidance for the handling of complaints in the securities and banking industries. This guidance aims to:

  • clarify expectations on firms’ procedures for complaints handling;
  • give guidance on the provision of information to complainants and the procedures for answering complaints;
  • harmonize the complaint handling arrangements of firms in order to help protect consumers; and
  • set a minimum level of supervision for firms’ complaint handling arrangements on an EU-wide basis.

The guidance applies to investment firms, UCITS management companies and UCITS investment companies that have not designated a management company, AIFMs providing MiFID services, credit institutions and e-money institutions.

The deadline for responses to the consultation is February 7, 2014, with the final report scheduled to be published in the first quarter of 2014.  Consultation Paper.