Alex Sobolev

Senior Associate

London

asobolev@orrick.com

Read full biography at www.orrick.com

Alex Sobolev advises on compliance, risks and strategy for operating business online. His practice focuses on data protection matters, but intersects with consumer law, software development and crypto.

Alex’s multidisciplinary practice and transatlantic experience enable him to provide strategic commercial advice for technology led companies, including coordinating and implementing data and consumer risk mitigation projects, providing outsourcing advice and developing key legal risk mitigation strategies in relation to products where the pace of innovation nearly always outpaces the law.

He has advised companies at all stages of the corporate lifecycle, from software development and product launch, through technology licensing, sale and purchase, to mergers and acquisitions of data and tech-heavy businesses. He has assisted organisations with the design, development and implementation of global data protection and compliance policies, as well the management of risk and security associated with data retention, processing and transfer.

Posts by: Alexei Sobolev

EC and Banks Disagree on Capital Markets Union Priorities

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Of the five priorities for early action listed in the European Commission’s Capital Markets Union green paper (lowering barriers to accessing capital markets, widening the investor base for SMEs, building sustainable securitization, developing European private placement markets, and boosting long-term investment), bankers speaking at the International Capital Market Forum’s annual conference earlier this month strongly agreed with only one of them: securitization. The other early priorities were not listed by panelists as immediate concerns.

Panelists agreed that it would make sense to approach first those aspects where there is political will and change is already underway, such as the Prospectus Directive review and regulatory relief for simple and transparent securitizations (which was highlighted as the area where benefits would be seen most quickly).

Participants said that the regulatory distinction between market making and proprietary trading also needed to be an early action item for the CMU, though their other priorities, namely the harmonization of EU insolvency laws, were at odds with the immediate priorities listed in the CMU green paper.

European Supervisory Authorities Launch Second Consultation on Draft Regulatory Technical Standards

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The European Supervisory Authorities (ESAs) have launched a second consultation on draft Regulation Technical Standards (RTS) outlining the framework of the European Market Infrastructure Regulation (EMIR). The document is the result of engagement with other authorities and industry stakeholders and focuses only on a narrow set of topics in order to clarify and finalize all the operation issues that may arise from the implementation of the EMIR framework. These draft RTSs prescribe the regulatory amount of initial and variation margin that counterparties should exchange, as well as the methodologies for their calculations, for over-the-counter derivative transactions not subject to central clearing. The RTSs also outline the criteria for eligible collateral, and establish the criteria to ensure that such collateral is sufficiently diversified and not subject to wrong-way risk. The consultation closes on July 10, 2015.  Release.

ESMA, ISDA, and FIA Europe Publish Capital Markets Union Responses

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The European Securities and Markets Authority (“ESMA”), the International Swaps and Derivatives Association (“ISDA”) and FIA Europe have published their responses to the European Commission’s Green Paper on Building a Capital Markets Union (“CMU”).

Whilst supporting the aim of building deeper and more integrated capital markets across all of the EU, ESMA’s response stressed how its main objectives of enhancing investor protection and promoting stable and orderly financial markets can contribute to the CMU. The response contains specific proposals for improved access to credit information for SMEs and increasing cross-border retail participation in investment funds such as UCITS. ISDA and FIA Europe’s joint response highlights the crucial role derivatives play in capital markets and those derivative reforms in Europe governing clearing, margining and trading activities should be calibrated to a standard that also facilitates the efficient functioning of derivatives markets, without damaging liquidity.

ESMA Responds to Prospective Directive and Securitization Consultations

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ESMA has responded to the European Commission’s consultations on the Prospective Directive and Securitization, recommending, in relation to prospectuses, an approach that would facilitate access to capital, while stressing the need for maintaining a robust level of investor protection.  It argues that the prospectus should be more comprehensible, focusing on the actual purpose of the prospectus while reducing the burden on issuers where possible. On securitization, ESMA emphasized the need to assess the full impact of ongoing reforms, and to provide investors with incentives to conduct adequate risk surveillance, monitor ongoing risks and perform thorough due diligence of their securitization investments.

EBA Outlines Upcoming Initiatives for the Regulation of Retail Payments

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The European Banking Authority (“EBA”) has announced details of its plans to harmonize regulatory and supervisory practices to ensure secure, easy and efficient payment services across the EU. The Payment Services Directive (PSD2) is expected to mandate improved operational and security requirements for payment services, in close cooperation between the EBA and the European Central Bank (ECB) through the Forum for the Security of Retail Payments which the ECB and the EBA chair jointly. As the security requirements under PSD2 are not expected to come into force until 2018/9, the final Guidelines issued by the EBA in December 2014 (applicable as of August 1, 2015) will apply until such time.

EBA Issues Guidance on the Implementation of Resolution Tools

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The EBA has published three sets of final guidelines aimed at facilitating the implementation of resolution tools in the banking sector across the EU. The guidelines have been developed under Articles 39, 42 and 65 of the EU Bank Recovery and Resolution Directive, which mandates the EBA to promote the convergence of supervisory and resolution practices on the effectiveness of the sale of business tool, on the conditions for applying the asset separation tool and on the power to require the provision of services following a transfer under resolution. The guidelines are addressed to Competent Authorities, and provide detailed guidance on the circumstances they should assess when taking their resolution decisions. The guidelines will apply from August 1, 2015.

ESMA Recognizes Third-Country CCPs

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The European Securities and Markets Authority (ESMA) has recognised ten third-country Central Counterparties (CCPs) in Australia, Hong Kong, Japan, and Singapore. The recognition allows these CCPs to provide clearing services to clearing members or trading venues established in the EU. The recognition is based on an assessment of these jurisdictions by the European Commission as “equivalent” with regard to their legal and supervisory arrangements for CCPs, as well as several other steps, including the conclusion of cooperation agreements with the relevant third-country authorities and the consultation of certain European competent authorities and central banks, as required by EMIR. ESMA has published a list of the recognised third-country CCPs as well as the classes of financial instruments covered by the recognition.

Fourth Money Laundering Directive and Wire Transfer Regulation

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The European Commission has published two communications to the European Parliament concerning the position of the Council of the EU on the adoption of the proposed Fourth Money Laundering Directive (MLD4), and the proposed Wire Transfer Regulation (WTR). Both MLD4 and the WTR were adopted by the Council of the EU at first reading on April 20, 2015. In each case the Commission confirms that the Council’s position reflects the political agreement reached on December 16, 2014, between the Parliament and the Council, including elements proposed by both institutions, and states its support for this agreement.

European Parliament Votes to Adopt ECON Report on MMF Regulation

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On April 29, 2015, the European Parliament adopted a report by its Committee on Economic and Monetary Affairs (ECON) containing amendments to the European Commission’s proposed Regulations on Money Market Funds (MMF Regulation). The ECON  report proposes:

  • limiting constant net asset value (CNAV) MMFs to two types (retail CNAV MMFs and public debt CNAV MMFs);
  • introducing low volatility net asset value MMFs, requiring MMFs to divest their asset portfolios and have in place sound stress-testing processes;
  • preventing MMFs from receiving external support from third parties, including their sponsors;
  • requiring MMFs to report certain information to their investors on a weekly basis; and
  • requiring public debt and retail CNAV MMFs and low volatility net asset value MMFs to apply “liquidity fees” and “redemption gates” to help stem sudden outflows.

European Commission’s CCP Recovery and Resolution Roadmap

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The European Commission has published a roadmap for non-bank recovery and resolution to provide a high-level public description of the planned initiative. Roadmaps give a first description of planned Commission initiatives – they describe the problem and set out possible policy options. They also provide an overview of the different planned stages in the development of the initiative, including consultation of stakeholders and impact assessment work. This roadmap identifies central counterparties as the sector for which a recovery and resolution framework may be necessary. An impact assessment is currently under preparation, with a legislative proposal on central counterparties expected in the third quarter of 2015.