Amy Roper

Associate

London


Read full biography at www.orrick.com

Amy Roper, an associate in the London office, is a member of the Complex Litigation and Dispute Resolution team. Amy has experience advising on a wide range of commercial litigation and dispute resolution matters, including High Court litigation and professional discipline proceedings.

Amy joined Orrick as a trainee in August 2015 and also has experience working in the Finance, Restructuring, Corporate, Employment and Real Estate groups.

Posts by: Amy Roper

House of Lords EU Committee Launches Inquiry into Brexit and Financial Services

 

On August 31, 2016, the House of Lords EU Sub-Committee on Financial Affairs published a webpage announcing the launch of an inquiry into Brexit and financial services in the UK. The Sub-Committee will begin its inquiry with two evidence sessions concentrating on the consequences of the referendum result for financial services and potential future arrangements.

The issues to be considered by the inquiry are as follows:

  • The reaction of financial services firms to the outcome of the EU referendum result
  • The possibility of the relocation of financial services firms from the UK
  • Priorities for the UK financial services sector in the withdrawal negotiations and in negotiating a future relationship for the UK with the EU
  • Equivalence rights to access the EU single market for the UK
  • Financial regulatory co-operation between the UK and the EU under different models of EU membership
  • A potential free trade agreement and the UK’s financial sector
  • Potential transitional arrangements
  • The importance of passporting rights for firms operating in the UK
  • Risks for retail customers and investors
  • Considerations for non-EU firms wishing to gain access to the EU through the EU’s equivalence regime

European Commission Implementing Regulation Establishing a List of Critical Benchmarks Used in Financial Markets under Benchmarks Regulation in OJ

 

On August 12, 2016, the European Commission Implementing Regulation (EU) 2016/1368 establishing a list of critical benchmarks used in financial markets pursuant to the Regulation on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (2016/1011/EU) (Benchmarks Regulation), was published in the Official Journal of the EU (OJ).

The Regulation highlights that benchmarks play an important role in the determination of the price of many financial instruments and financial contracts and of the measurement of performance for many investment funds. In order to fulfill their economic role, benchmarks need to be representative of the underlying market or economic reality they reflect. Should a benchmark no longer be representative of an underlying market, such as interbank offered rates, there is a risk of negative effects on, inter alia, market integrity, the financing of households (loans and mortgages) and businesses in the Union.

The Implementing Regulation, which specifies the Euro Interbank Offered Rate (EURIBOR) as a critical benchmark, enters into force on the day following its publication in the OJ (that is, August 13, 2016). It will apply from January 1, 2018.

Addendum to ECB Guide on Harmonizing Options and Discretions Available in Union Law

 

On August 10, 2016, the European Central Bank (ECB) published an addendum to its guide on options and discretions (O&Ds) available in Union law.

The addendum complements the guide and ECB Regulation that were published in March 2016. It lays down the ECB’s approach to the exercise of eight O&Ds provided for in the Capital Requirements Regulation (Regulation 575/2013) (CRR) and the CRD IV Directive (2013/36/EU). The objective is to provide coherence, effectiveness and transparency regarding the supervisory policy that will be applied in the supervisory assessment of applications from significant supervised entities within the scope of the single supervisory mechanism (SSM).

A press release also published on August 10, highlights that the publication of the addendum signals the end of the consultation process. A consolidated version of the guide, including the addendum and the approach for the recognition of institutional protection schemes, is to be published on the ECB’s website later in 2016.

European Commission Adopts Implementing Regulation on Information for Calculation of Technical Provisions and Basic Own Funds for Q3 2016 Reporting under Solvency II

 

On August 8, 2016, the European Commission adopted an Implementing Regulation laying down information for the calculation of technical provisions and basic own funds for reporting with reference dates from June 30 until September 29, 2016 (that is, the third quarter of 2016) in accordance with the Solvency II Directive (2009/138/EC).

In the Regulation, technical information on relevant risk-free interest rate term structures, fundamental spreads for the calculation of the matching adjustment and volatility adjustments are formulated for every reference date, in order to guarantee uniform conditions for the calculation of technical provisions and basic own funds by insurance and reinsurance undertakings for the purposes of Solvency II.

The technical information to be used by insurance and reinsurance undertakings when calculating technical provisions and basic own funds for reporting with reference dates from June 30 until September 29, 2016 are detailed in the annexes to the Implementing Regulation, as follows:

  • Annex 1: the relevant risk-free rate term structures
  • Annex 2: the fundamental spreads for the calculation of the matching adjustment
  • Annex 3: the volatility adjustments for each relevant national market

The Regulation will enter into force the day after it has been published in the Official Journal of the EU (OJ). It will apply from June 30, 2016.

EBA Publishes Final Draft RTS on Separation of Payment Card Schemes and Processing Entities under IFR

On July 28, 2016 the EBA published final draft regulatory technical standards (RTS) relating to the separation of payment card schemes and payment processing entities under the Interchange Fee Regulation ((EU) 2015/751) (IFR) (EBA/RTS/2016/05).

The final draft RTS have been developed under Article 7(6) of the IFR. Under this article the EBA must specify the requirements with which payment card schemes and processing entities have to comply in order to guarantee the independence of their accounting, organizational and decision-making processes. The accompanying press release highlights that the aim of the final draft RTS is to facilitate greater competition among processing services providers, which is in line with the general objective of the IFR to create a single market for card payments across the EU.

Under the final draft RTS payment card schemes and processing entities are required to:

  • have accounting processes in place to produce annual information related to separated profit and loss accounts reviewed by an independent and certified auditor;
  • have separate workspaces; and
  • ensure the independence of senior management, management bodies and staff.

The final draft RTS will now be submitted to the European Commission for endorsement.

European Commission Intends to Endorse, with Amendments, Draft RTS on Risk Mitigation Techniques for Uncleared OTC Derivative Contacts under EMIR

On July 28, 2016, The European Commission published a letter to the Joint Committee of the European Supervisory Authorities (ESAs) informing them that it intends to endorse, with amendments, the draft regulatory technical standards (RTS) on risk mitigation techniques for OTC derivative contracts not cleared by a central counterparty (CCP) under Article 11(15) of EMIR. The Commission also published the revised text of the draft RTS, together with the accompanying annexes.

The letter highlights that the Commission intends to make several clarifications and to restructure the legal text of the draft RTS. The changes include:

  • introducing a recital containing reasoning for the delayed phase-in of the requirements for equity options;
  • clarification that EU counterparties wishing to rely on the intragroup exemption may submit their application after the RTS enter into force;
  • clarification that cash initial margin may be held with equivalent third country institutions (as well as with authorized EU credit institutions);
  • clarification that requirements relating to foreign exchange (FX) contracts should start to apply from the date of application of the relevant Delegated Act under the MiFID II framework, as opposed to the date of entry of this Delegated Regulation; and
  • changes to one provision relating to concentration limits for pension scheme arrangements.

The ESAs now have six weeks to amend the draft RTS and resubmit them to the Commission in the form of a formal opinion.

EBA Publishes Final Draft RTS on Criteria for Preferential Treatment in Cross-Border Intra-Group Financial Support under LCR

On July 27, 2016, the EBA published a report containing final draft regulatory technical standards (RTS) on the specification of the additional objective criteria for preferential treatment in cross-border intra-group financial support in the calculation of the liquidity coverage requirement (LCR) under the Capital Requirements Regulation (Regulation 575/2013) (CRR) (EBA/RTS/2016/04).

The CRR permits a preferential treatment in the calculation of the LCR for intra-group liquidity flows. The Commission Delegated Regulation on the LCR ((EU) 2015/61) (LCR Delegated Regulation) specifies additional objective criteria for this preferential treatment for flows in the context of credit and liquidity facilities within a group or an institutional protection scheme (IPS) Articles 422(10) and 425(6) of the CRR mandate the EBA to develop RTS to further specify these additional objective criteria.

Under the final draft RTS:

  • a low liquidity risk profile of the liquidity provider and receiver required in the LCR Delegated Regulation will be determined on the basis of its compliance with the LCR and the Pillar 2 requirements, as well as on the basis of the outcome of the latest supervisory review and evaluation process (SREP);
  • credit institutions’ management bodies will be required to submit a written and reasoned legal opinion certifying that the credit or liquidity line in the LCR Delegated Regulation is a committed line legally and practically available at any time. The line is also subject to other requirements such as currency denomination or maturity date, to reinforce its appropriateness for the application of the preferential treatment; and
  • The LCR Delegated Regulation requires that the liquidity risk profile of the liquidity receiver be taken into account in the liquidity risk management plans of the liquidity provider. Under the RTS, the liquidity provider must monitor and oversee the liquidity position of the receiver on a daily basis. The contingency funding plan of the liquidity provider must ensure that, from this monitoring, the liquidity support to the receiver is guaranteed, even in times of stress.

The final draft RTS will now be submitted to the European Commission for endorsement.

Delegated Regulation on Recovery and Resolution Planning under BRRD Published in OJ

On July 8, 2016, the Commission Delegated Regulation ((EU) 2016/1075) supplementing the Bank Recovery and Resolution Directive (2014/59/EU) (“BRRD”) on recovery and resolution planning, was published in the Official Journal of the EU (“OJ”). The Delegated Regulation details regulatory technical standards (“RTS’) outlining the following:

  • the content of recovery plans, resolution plans and group resolution plans;
  • the minimum criteria that the competent authority is to assess regarding recovery plans and group recovery plans;
  • the conditions for group financial support;
  • the requirements for independent valuers;
  • the contractual recognition of write-down and conversion powers; and
  • the procedures and contents of notification requirements and of notice of suspension and the operational functioning of the resolution colleges.

It is hoped that the above RTS will be included in a single Delegated Regulation to ensure coherence between the provisions dealing with the resolution framework laid down in the BRRD.

The Delegated Regulation was adopted by the Commission on March 23, 2016. It comes into force twenty days after publication in the OJ and as such on July 28, 2016.

Cyber Security: European Parliament Formally Adopts Network and Information Security Directive at Second Reading

On July 6, 2016, the European Parliament plenary session formally adopted the Network and Information Security Directive (“NIS Directive”) at second reading.

Securing network and information systems in the EU is fundamental to keep the online economy running and to ensure prosperity. The NIS Directive is the key instrument supporting Europe’s cyber resilience. The aim of the NIS Directive is to bring cybersecurity capabilities at the same level of development in all EU member states and ensure that exchanges of information and cooperation are efficient, including at a cross border level.

The NIS Directive also stipulates security obligations for operators of essential services, including transport, health and finance and digital service providers, such as online marketplaces, search engines and cloud services. Any disruption to the services provided by essential operators poses a severe risk to society and the economy and therefore the requirements will be stronger for such operators than for digital service providers. Each member state will also be required to designate one or more national authorities and lay down a strategy to deal with cyber threats.

The NIS Directive will now be published in the OJ and will enter into force on the twentieth day after publication. The EU member states will then have 21 months to transpose the NIS Directive into their national laws and six further months to identify operators of essential services.

For further information, please see the European Parliament press release.

European Commission Calls for Further Technical Advice from EBA on Prudential Regime for Investment Firms under CRD IV

On July 6, 2016, the EBA published a call for advice, dated June 13, 2016, that it has received from the European Commission relating to the prudential requirements applicable to investment firms under the Capital Requirements Regulation (Regulation 575/2013) (“CRR”) and the CRD IV Directive (2016/36/EU) (together referred to as CRD IV).

The EBA already provided advice on this matter to the Commission in December 2015, in which it broadly concluded that the current prudential regime for investment purposes is not adequate. To better inform the Commission’s decision, it is seeking further technical advice from the EBA on the details of the high level recommendations set out in the December 2015 advice. It has asked the EBA to provide advice on the following:

  • the criteria and thresholds for each of the three proposed classes of investment firm;
  • the design and calibration of all relevant aspects of a new prudential regime for the three proposed classes of investment firm;
  • the application of the CRD IV remuneration requirements to the different proposed classes of investment firm, and if whether the proposed new classes would affect the applicability of the CRD IV corporate governance rules; and
  • any other issues or inconsistencies the EU competent authorities have identified in implementing the rules relating to investment firms.

The EBA is to consult with ESMA when preparing its advice. The deadline for preparing the advice on the analysis relating to class one investment firms is September 31, 2016. The EBA must prepare its final report on the substantive content and calibration of the proposed regimes for the different classes of investment firms to the Commission by June 30, 2017.