The European Court of Justice (ECJ) has held in the case of Banif Plus Bank Zrt. V. Marton Lantos and Martonne Lantos (Case C-312/14) (3 December 2015) that foreign exchange transactions which are part of foreign currency denominated loans do not constitute investments services and so are not subject to the provisions of the Markets in Financial Instruments Directive (2004/39/EC) (MiFID).

On October 30, 2015 the European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the proposal for preparatory guidelines on product oversight and governance arrangements by insurance undertakings and insurance distributors.

The guidelines will be addressed to competent authorities and will provide support and guidance on how to proceed in the preparatory period leading up to the transposition of the Insurance Distribution Director (IDD).

The paper invites consultation responses – responses must be received by January 29, 2016.

Following the first reading of the proposed Regulation on reporting and transparency of securities financing transactions (SFT Regulation) in the European Parliament, the Council of the EU has published a note setting out the proposals.

The Council’s note explains what the policy makers aim to achieve through the new regulation and also sets out the outcomes of the Parliament’s first reading, including discussion of proposed amendments to the regulation.

The European Banking Authority (EBA) published on November 5, 2015 its EU-wide stress test and draft methodology for discussion. The stress-test exercise to be carried out in 2016 will assess a sample of banks covering broadly 70% of the banking sector in the EU against a common macroeconomic baseline and adverse scenario. The objective will be to provide supervisors, banks and other market participants with a common analytical framework to compare and assess the resilience of the EU banking system to shocks.

Details of the stress test are set out in a press release published by the EBA, and the draft methodology note is also available for review.

The Basel Committee on Banking Supervision (BCBS) has published a consultation document on haircut floors for non-centrally cleared securities financing transactions.

The report is published following a recommendation by the Financial Stability Board that the BCBS incorporate the haircut floors into capital requirements for non-centrally cleared SFTs by setting significantly higher capital requirements for transactions traded below the haircut floors.

The document welcomes consultation responses, and specifically asks whether the public sees any weakness in the proposals or any specific implementation challenges. Responses must be received by January 5, 2016.

The FCA, in its September Regulation Round-up, outlined recent changes to its supervisory model. The new strategy aims to take a more holistic approach to the classification of firms, focusing increasingly on how markets work as a whole, with greater emphasis on sector and market-wide analysis. Firms will now be categorized as either ‘fixed portfolio’ or ‘flexible portfolio’ and will be approached differently, with flexible portfolio firms being more proactively supervised.

Coinciding with this regulatory change, the FCA has published a new Financial Services Register and re-designed FCA handbook. Both new products aim to be more user-friendly and easier to navigate.

The International Organization of Securities Commissions (IOSCO) Task Force on cross-border regulation has this week published its final report.

Following a period of consultation launched in November 2014, the report presents a ‘Toolkit’ of cross-border regulatory tools commonly used by IOSCO members to regulate cross-border securities market activities. This includes the following ‘tools’:

1. National Treatment – by which entities domiciled in or operating from foreign jurisdictions are generally treated in the same manner as domestic entities in terms of market access and ongoing regulatory requirements;
2. Recognition – by which a host regulator is able to recognize a foreign regulatory regime, or parts thereof; and
3. Passporting – by which a common set of rules may be applicable in multiple jurisdictions covered by the passporting arrangement.

Danièle Nouy, Chair of the Supervisory Board of the European Central Bank (ECB), made a speech on September 15, 2015 at a Financial Markets Authority conference in Austria. She discussed the role of the Supervisory Board of the Single Supervisory Mechanism and stressed that “supervised banks should be subject to consistent prudential requirements based on their inner characteristics regardless of where their business is located”.

For approximately eight months the board has been developing a policy package tackling options and national discretions. The resulting draft legislation will be subject to a public consultation from the beginning of November this year.