Posts by: Editorial Board

BRRD and CRR Legislation come into Force

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Following publication in the Official Journal of the EU on December 27, 2017, Directive (EU) 2017/2399 and Regulation (EU) 2017/2395, amending the Bank Recovery and Resolution Directive (“BRRD“) and the Capital Requirements Regulation (“CRR“) respectively, came into force on 28 December 2017.

The directive amending the BRRD relates to the ranking of debt following an insolvency whereas the CRR amendment is focused on the necessary transitional arrangements for mitigating the introduction of IFRS 9. The BRRD Directive must be brought into force by the EU Member States by December 29, 2018, whereas the CRR amendment became applicable to EU Member States on January 1, 2018.

ESMA Publishes Report on Short Selling Regulation

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A final report was published by ESMA on December 21, 2017, which contained further technical advice on the Short Selling Regulation. In relation to a number of topics which had been flagged as potentially controversial, the report, which was based on feedback received from market participants, proposes a number of amendments with an aim to improve coherency and efficiency. The key areas which are focused on within the report are the exemption for market making activities, bans on short-term short-selling and transparency of short positions which are held by market participants. The full report is available here.

Rating Agency Developments

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On December 6, 2017, DBRS issued a report entitled: Operational Risk Assessments for Canadian Structured Finance. Release.

On December 6, 2017, DBRS issued a report entitled: Master Canadian Structured Finance Surveillance Methodology. Release.

On December 6, 2017, DBRS issued a report entitled: Rating Canadian Structured Finance Transactions. Release.

On December 6, 2017, S&P issued a report entitled: ABS: Global Framework For Assessing Operational Risks Specific To Wireless Device Payment Plan Agreements. Release.

On December 5, 2017, Moody’s issued a report entitled: Apparel Companies. Release.

On December 4, 2017, DBRS issued a report entitled: Rating European Covered Bonds Addendum: Market Value Spreads. Release.

On December 4, 2017, DBRS issued a report entitled: Rating European Covered Bonds. Release.

On December 4, 2017, Fitch issued a report entitled: Exposure Draft: U.S. RMBS Surveillance and Re-REMIC Rating Criteria. Release.

On December 1, 2017, Fitch issued a report entitled: Covered Bonds Rating Criteria. Release.

On November 30, 2017, Fitch issued a report entitled: Dealer Floorplan ABS Rating Criteria. Release.

On November 30, 2017, Fitch issued a report entitled: Insurance Rating Criteria. Release.

On November 30, 2017, Fitch issued a report entitled: U.S Utility Tariff/Stranded Cost Bonds Rating Criteria. Release.

On November 30, 2017, Fitch issued a report entitled: U.S. Equipment Lease and Loan ABS Rating Criteria. Release.

On November 30, 2017, Fitch issued a report entitled: Trade Receivables Securitisation Rating Criteria. Release.

FRB Requests Public Comment on Proposal to Amend Regulation A

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On December 4, 2017, the Federal Reserve Board (“FRB“) requested public comment on a proposal to amend Regulation A to make certain technical adjustments, including to reflect the expiration of the Term Asset Backed Securities Loan Facility (“TALF“) program.  Regulation A governs extensions of credit by Federal Reserve Banks.   The proposed amendments are “intended to allow the regulation to address circumstances in which the Federal Open Market Committee has established a target range for the federal funds rate rather than a single target rate, and to reflect the expiration of the TALF program.”  Comments on the proposal must be received within 30 days of publication in the Federal Register. Release. Proposal.

CFTC Staff Grants Time-Limited Extension of Swap Data Reporting Relief for Certain Swap Dealers and Major Swap Participants Established under the Laws of Australia, Canada, the European Union, Japan or Switzerland

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On November 30, 2017, the U.S. Commodity Futures Trading Commission‘s (“CFTC“) Division of Market Oversight announced in a no-action letter that it had extended relief it provided certain CFTC-registered swap dealers (“SD“) and major swap participants (“MSP“) in November 2016.  The no-action letter states that the Division of Market Oversight “will not recommend that the CFTC take an enforcement action against a non-U.S. SD or a non-U.S. MSP established in Australia, Canada, the European Union, Japan or Switzerland, that is not part of an affiliated group in which the ultimate parent entity is a U.S. SD, U.S. MSP, U.S. bank, U.S. financial holding company, or U.S. bank holding company, for failure to comply with the swap data reporting requirements of Part 45 and Part 46 of the CFTC’s regulations (SDR Reporting Rules), with respect to its swaps with non-U.S. counterparties that are not guaranteed affiliates, or conduit affiliates, of a U.S. person.”  The relief provided in the no-action letter is subject to certain terms and conditions as outlined in the letter, and is time-limited.  The Division of Market Oversight does not currently intend to extend the no-action relief beyond December 1, 2020. Release. No-Action Letter.

Rating Agency Developments

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On August 7, 2017, Fitch released a report entitled: Corporate Rating Criteria. Report.

On August 4, 2017, Fitch released a report entitled: U.S. Private Student Loan ABS Rating Criteria. Report.

On August 4, 2017, Fitch released a report entitled: CMBS Large Loan Rating Criteria. Report.

On August 3, 2017, Fitch released a report entitled: Toll Roads, Bridges and Tunnels Rating Criteria. Report.

CFTC Unanimously Approves Revisions to Delegated Authorities and Technical Amendments

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On June 20, 2017, the U.S. Commodity Futures Trading Commission (“Commission“) unanimously approved a Final Rule on Revisions to Commission Delegated Authority Provisions and Technical Amendments (“Final Rule“). As a result of the recent Commission restructuring, the Final Rule amends certain Commission organizational and procedural provisions to facilitate the movement of the Division of Market Oversight Surveillance Branch to the Division of Enforcement. Specifically, the Final Rule establishes new, and amends certain existing, delegations of authority to Commission staff and makes a limited number of conforming technical corrections to certain Commission regulations. The Final Rule is effective upon publication in the Federal Register. Release.

Rating Agency Developments

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On June 21, 2017, Moody’s published its ratings methodology assessing rated issuers in the pharmaceutical industry. Report

On June 21, 2017, Moody’s published its ratings methodology assessing rated issuers in the automobile manufacturer industry. Report.

On June 21, 2017, Moody’s issued a report entitled Global Mass Transit Enterprises Methodology. Report.

On June 20, 2017, Fitch issued a report entitled Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria. Report.

On June 15, 2017, Moody’s published its ratings methodology assessing rated issuers in the media industry. Report.

Rating Agency Developments

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On June 14, 2017, Moody’s released a report entitled Global Passenger Railway Companies. Report.

On June 14, 2017, Moody’s released a report entitled Global Manufacturing Companies. Report.

On June 14, 2017, Moody’s released a report entitled Medical Product and Device Industry. Report.

On June 13, 2017, Fitch issued a report entitled Fitch Updates Future Flow Securitisation Criteria; No Rating Impact. Release.

On June 13, 2017, Fitch issued a report entitled Fitch Revises Distressed Debt Exchange Rating Criteria. Release.

On June 13, 2017, Moody’s released a report entitled Regional and Local Governments. Report.

On June 13, 2017, Moody’s released a report entitled Financial Statement Adjustments in the Analysis of Financial Institutions. Report.

On June 9, 2017, Fitch issued a report entitled Fitch Updates RMBS Lender’s Mortgage Insurance Rating Criteria; No Rating Impact. Release.

On June 8, 2017, Moody’s released a report entitled Moody’s Approach to Rating Structured Finance Interest-Only (IO) Securities. Report.

On June 8, 2017, Fitch issued a report entitled Fitch Releases Updated Thermal Power Project Rating Criteria. Release.