ESMA

ESMA Will Not Renew Temporary Restriction on Marketing, Distributing and Selling CFDs to Retail Clients

On July 31, European Securities and Markets Authority (ESMA) published a press release which announced it would not renew the temporary restriction on the market, distribution or sale of contracts for difference (CFDs) to retail clients in the EU. Therefore, the measures in ESMA Decision (EU) 2049/679 automatically expired on July 31.

This decision was made because most national competent authorities have taken permanent national product intervention measures relating to CFDs, which are at least as stringent as ESMA’s temporary measures. However, it will continue to monitor activity relating to CFDs to determine whether other EU-wide measures may be needed. Release.

ESMA Updates MiFIR Data Reporting Q&As: July 2019

 

On July 29, ESMA published an updated version of it Q&As on data reporting under the Markets in Financial Instruments Regulation (MiFIR) ((EU) 600/2014). There is one additional Q&A in section 5 about the date to use in field 24 (expiry date) of RTS 23 for financial instruments without a defined expiration date.

The updated Q&As can be found here.

ESMA Publishes Final Report on Frequent Batch Auctions for Equity Instruments Under MIFID II

On June 11, the European Securities and Markets Authority (ESMA) published its final report (ESMA70-156-1035) following a call for evidence on frequent batch auctions, a type of periodic auction trading system for equity instruments under the MiFID II Directive (2014/65/EU) and the Markets in Financial Instruments Regulation (600/2014) (MiFIR). READ MORE

ESMA Updates Q&As on BMR: May 2019

 

On May 23, the European Securities and Markets Authority (ESMA) published an updated version (ESMA70-145-11) of its Q&As on the Benchmarks Regulation ((EU) 2016/1011) (BMR), which were previously updated in January 2019. The updated Q&As can be found here.

The Q&As have been updated to include:

  • A new Q&A 7.4 on the relevant time to determine the member state of reference in an application for recognition under Article 32(4) of the BMR.
  • A new Q&A 7.5 on the information on which national competent authorities may rely on in an external audit report of compliance with the International Organization of Securities Commission (IOSCO) principles for oil reporting agencies under Article 32(2) of the BMR.
  • A new Q&A 8.5 on the type of information that should be included in the field “contact info” of ESMA’s register of benchmark administrators.

ESMA Establishes New CNS

 

On May 23, the European Securities and Markets Authority (ESMA) published a press release which announced the establishment of a new coordination network on sustainability (CNS), which will be chaired by Ana María Martínez-Pina Garcia for two years with immediate effect. The CNS will:

  • Develop the coordination of national competent authorities’ (NCAs) work on sustainability.
  • Be responsible for the development of policy in this area, with a strategic view on issues related to integrating sustainability considerations into financial regulation.

The work will support the European Commission’s sustainability action plan in the areas of investment services and investment funds. The EU envisages a shift towards a more sustainable finance system in the medium and long term and securities regulators must therefore make sustainable finance a key part of their supervisory and enforcement activities.

ESMA Publishes Consolidated Guidelines on the Application of the Endorsement Regime Under CRA Regulation

 

On March 20, the European Securities and Markets Authority (ESMA) published the official translations of its consolidated guidelines on the application of the endorsement regime under Article 4(3) of the Credit Rating Agencies Regulation (Regulation 1060/2009) (CRA Regulation) (ESMA33-9-282). READ MORE

ESMA Fines Fitch CRAs for Breaching Conflict of Interest Requirements

 

On March 28, ESMA fined three credit rating agencies, all belonging to the Fitch Group, a total of €5,132,500, in relation to breaching the conflict of interest requirements under the CRA Regulation (1060/2009) (CRAR). They were fined because, between June 2013 and April 2018, 20% of three Fitch subsidiaries were indirectly owned by an individual through a French entity. However, that same individual was also sitting on the boards of three entities rated by the Fitch subsidiaries.

Each of the three subsidiaries voluntarily undertook measures to ensure similar infringements would not be committed again, and this was considered by ESMA, along with other mitigating and aggravating factors, when the fines were determined. The subsidiaries can appeal the decision but this will not have a suspensive effect.

The public notice issued in relation to the fines can be found here.

ESMA Publishes Guidelines on Risk Factors Under Prospectus Regulation

 

On March 29, the European Sescurities and Markets Authority (ESMA) published a report setting out final guidelines on how national competent authorities (NCAs) should review risk factors as required by the new Prospectus Regulation. The aim of the guidelines is to encourage more appropriate, focussed and streamlined risk factor disclosures for securities and are intended to assist NCAs in their review of disclosure. ESMA noted that in 2019 it will focus on the consistency of application of the guidelines on risk factors by NCAs.

The purpose of including risk factors in a prospectus is to help investors make informed investment decisions by enabling them to assess the risks. Risk factors generally include information concerning: the issuer’s financial situation, business activities and industry; the nature of the security; external risks such as legal and regulatory, environmental, social and governance.

A copy of the report can be found here.

ESMA Announces Recognition of UK CSD in Event of No-Deal Brexit

 

On March 1, the European Securities and Markets Authority (ESMA) published a press release announcing that in the event of a no-deal Brexit, it will recognize Euroclear UK and Ireland Ltd, the UK central securities depository (UK CSD), as a third country CSD under the Central Securities Depositories Regulation (909/2014) (CSDR).

ESMA has adopted this recognition decision in order to allow the UK CSD to serve Irish securities and to avoid any negative impact on the Irish securities market. ESMA has previously communicated that its board of supervisors supports continued access to the UK CSD.

The UK CSD will be recognized to provide its services to the EU, having been assessed as meeting the recognition conditions under Article 25 of the CSDR.

The recognition decision would take effect on the date following Brexit date, under a no-deal Brexit scenario.