ESMA

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

Posted on

 

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.

ESMA Publishes 2019 Work Program for Credit Rating Agencies, Trade Repositories and Third-Country CCPs and CSDs

Posted on

 

On February 19, EMSA published its 2018 annual report and 2019 work program relating to its supervision of credit rating agencies (“CRAs“), trade repositories (“TRs“) and its monitoring of third-country central clearing counterparties (“TC-CCPs“) and central securities depositories (“TC-CSDs“) (ESMA80-199-273). READ MORE →

ESMA Updates MiFID II Transitional Transparency Calculations for Electricity Derivatives

Posted on

 

On January 22, the European Securities and Markets Authority (“ESMA“) published an updated version of its transitional transparency calculations (“TTC“) required under the MiFID II Directive (2014/65/EU) and the Markets in Financial Instruments Regulation (600/2014) (“MiFIR“).

The update relates to the TTC for commodity derivatives and affects only electricity derivatives.

Further information is contained in section E10 of ESMA’s frequently asked questions (“FAQ“) (ESMA50-164-677) on the TTC, which explains why the last TTC results for commodity derivatives, published on December 6, 2017, have been modified.

The transparency calculations can be found here and the FAQs, which were published on ESMA’s website, can be found here.

EIOPA Publishes Call for Evidence on Integration of Sustainability Risks in Solvency II

Posted on

 

On January 17, the European Insurance and Occupational Pensions Authority (“EIOPA“) published a call for evidence on the integration of sustainability risks and factors in the prudential assessment of assets and liabilities for insurers and (re)insurers under the Solvency II Directive (2009/138/EC). The Commission’s initiatives on sustainable finance form part of its broader initiative to establish the capital markets union (“CMU“).

The deadline for responses to the call for evidence is March 8, 2019. EIOPA plans to prepare a draft opinion for consultation during the second half of 2019 for submission to the European Commission in the third quarter of 2019.

The call for evidence relates to the European Commission’s call for advice from EIOPA and ESMA in July 2018, following which EIOPA launched a survey to help it build up a suitable evidence base on the sustainable finance legislative proposals.

EIOPA expects to collect market data to analyze how sustainability risks affect (re)insurers investments, with particular focus on climate change, as well as data on market practices on insurance underwriting. The Commission has asked EIOPA to assess whether Solvency II presents any inherent incentives or disincentives to sustainable investment, including but not limited to investments in unrated bonds and loans, unlisted equity and real estate. National competent authorities will collect information from individual undertakings within their jurisdiction to support EIOPA’s analysis.

ESMA Publishes First Annual Statistical Report on Retail Investment Products

Posted on

 

On January 10, ESMA published its first annual statistical report on the performance and costs of retail investment products in the EU (ESMA 50-165-731).

The report highlights, in particular, the significant impact of costs on the final returns that retail investors make on their investments. It covers undertakings for collective investments in transferable securities (“UCITS“), alternative investment funds sold to retail investors (“retail AIFs“) and structured retail products (“SRPs“).. READ MORE →

ESMA Renews Restriction of CFDs for Further Three Months

Posted on

 

On December 19, European Securities and Markets Authority (“ESMA”) published a press release announcing it is renewing the restriction on the marketing, distribution or sale of contracts for differences (“CFDs”) to retail clients. The restriction has been in effect since August 1, 2018 and the extension is for 3 months from February 1, 2019. The extension is because ESMA considers that a significant investor protection concern related to the offer of CFDs to retail clients continues to exist. The renewal is on the same terms as the previous renewal on November 1, 2018 and include:

  • Leverage limits on the opening of a position by a retail client from 30:1 to 2:1, which vary according to the volatility of the underlying.
  • A margin close out rule on a per account basis.
  • Negative balance protection on a per account basis.
  • A restriction on the incentives offered to trade CFDs.
  • A standardized risk warning, including the percentage of losses on a CFD provider’s retail investor accounts.

ESMA Adopts Decision to Renew Ban on Marketing, Distribution or Sale of Binary Options

Posted on

 

On December 21, European Securities and Markets Authority (“ESMA”) published a notice of its decision to renew the prohibition on the marketing, distribution or sale of binary options to retail clients as it considers that a significant investor protection concern related to the offer of binary options to retail clients continues to exist. The decision renews on the same terms as the previous renewal decision of September 21, 2018. The decision was made under Article 40 of the Markets in Financial Instruments Regulation (600/2014) and applies from January 2, 2019 for three months.

ESMA Publishes Statement on No-Deal Brexit Contingency Plans of CRAs and Trade Repositories

Posted on

 

ESMA published a statement on the contingency plans of credit rating agencies (“CRAs“) and trade repositories (“TRs“) in the context of Brexit (ESMA80-187-149) on November 9.

ESMA has published the statement to raise market participants’ awareness of the readiness of CRAs and TRs for the possibility of there being a no-deal Brexit. ESMA states that entities using services provided by CRAs and TRs need to consider the scenario of a no-deal Brexit and the consequences of TRs and CRAs established in the UK losing their EU registration when the UK leaves the EU. READ MORE →

ESMA Further Extends the Prohibition on Binary Options

Posted on

 

European Securities and Markets Authority (“ESMA“) published a press release on November 9 stating that it has agreed to renew the prohibition of the marketing, distribution or sale of binary options to retail clients for a further three-month period from January 2, 2019.

ESMA published a decision notice on the prohibition in June, which has been in effect since July 2. In August, ESMA announced that it would extend the prohibition from October 2 for a further three-month period.

ESMA is extending the prohibition again as it considers that a significant investor protection concern related to the offer of binary options to retail clients continues to exist. The measure will be renewed on the same terms as the previous renewal decision.

ESMA intends to adopt the renewal measure in the coming weeks, following which it will publish an official notice on its website. The measure will then be published in the Official Journal of the EU.

Under the Markets in Financial Instruments Regulation (Regulation 600/2014) (“MiFIR“), ESMA can only introduce temporary intervention measures for a three-month period, following which the measures must be renewed or they automatically expire.