European Parliament

European Parliament Adopts ELTIF Regulation

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On March 10, the European Parliament published a press release announcing that it has adopted the proposed Regulation on European Long-Term Investment Funds (ELTIF Regulation). The adopted text has not yet been made publicly available.

ELTIFs are vehicles designed to boost non-bank investment in the real economy across the EU. ELTIF investment funds will have to apply for authorisation, have a regulated structure and comply with uniform rules to ensure that they offer long-term and stable returns. ELTIF investors will have to make a long-term commitment as they will not be able to withdraw their money easily. However, to protect retail investors, the Parliament and the Council of the EU agreed “redemption” rules that would enable an ELTIF that has enough liquid assets to return an investor’s money at the investor’s request.

The ELTIF Regulation now needs to be formally adopted by the Council. The press release states that the ELTIF Regulation should apply six months after its entry into force.  Press Release.

European Parliament Adopts MIF Regulation

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On March 10, 2015, the European Parliament published a press release announcing that it has adopted the proposed Regulation on interchange fees for card-based payment transactions (MIF Regulation). The adopted text has not yet been made publicly available.

Among other things, the MIF Regulation is intended to lead to transparent fee-capping for cross-border and domestic retail purchases. It is hoped that the lower costs will benefit retailers and shoppers.

The MIF Regulation now needs to be formally adopted by the Council. The press release states that the MIF Regulation should apply six months after its entry into force.  Press Release.

Council of the EU Endorses Agreement with the European Parliament Regarding the MLD4

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On February 10, the Council of the European Union published a press release stating that agreement had been reached with the European Parliament regarding the Fourth Money Laundering Directive (MLD4) and the proposed revised Wire Transfer Regulation (WTR).

MLD4 has an extended scope and introduces due diligence requirements for a greater number of traders by lowering the threshold required for anti-money laundering steps from €15,000 to €10,000.

The agreement between the Council and the European Parliament means that MLD4 and WTR will go to second reading and can now be adopted. Member States will have two years to transpose the Directive into national law; the Regulation will be directly applicable.  Press Release.

ECON Votes in Favor of the MIF Regulation

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On January 27, the Economic and Monetary Affairs Committee (“ECON”) released a press release stating that it had voted in favour of the proposed Regulation on multilateral interchange fees (“MIF Regulation”). This vote confirms an informal deal struck with the Council of Europe in December and will enforce a cap on the fees that banks can charge retailers for processing shoppers’ payments.

The European Parliament as a whole is expected to vote on the deal at the second plenary session in April.  Press Release.

ECON Publishes Draft Reports on Regulation on Banking Structural Reforms and Regulation on Securities Financing Transactions

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The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published two draft reports on (i) the proposed Regulation on banking structural reforms and (ii) the proposed Regulation on securities financing transactions.

Each of the draft reports contains a European Parliament legislative resolution on each of the Regulations which set out suggested amendments to the European Commission’s original proposals. The draft reports are to be considered by ECON during March 2015 and the European Parliament is scheduled to consider the Regulations at its plenary session on April 27 – 30, 2015.  Report (i).  Report (ii).

UCITS 5 Political Agreement Reached

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On February 25, the European Parliament published a press release announcing that political agreement has been reached with the Council of the EU on the proposed UCITS V Directive.

The press release notes the following areas of agreement:

  • Payment of fund managers.
  • The appointment of a depository by UCITS or UCITS management companies.
  • Provision of penalties by EU member states for funds failing to comply with national UCITS authorization and reporting rules.   Press Release.

ESMA Publishes MiFID II Implementation Speech

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On February 25, ESMA published a speech by ESMA Executive Director Verena Ross on the issues surrounding the implementation of MiFID II.

The issues include the following:

  • ESMA will publish a discussion paper on MiFID II technical standards once the European Parliament has approved the final text of MiFID II.
  • More frequent processing of requests and issuance of opinions on pre-trade waivers by ESMA.
  • ESMA expects to be involved in the decisions on the compatibility of national competent authorities’ proposed position limits for commodity derivatives.
  • Information on the transparency and micro-structural regimes provided for in Level 2 will be maintained and published by ESMA, together with ensuring consistent implementation and monitoring their effects on the EU markets, with periodic recalibration of these parameters where required.
  • Q&As will be issued by ESMA when the MiFID II Level 2 measures enter into force.   Speech.

The European Parliament Votes to Adopt CSMAD

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On February 4, the European Parliament published a press release reporting that it had voted at its plenary session to adopt the proposed directive on criminal sanctions for insider dealing and market manipulation (CSMAD). The CSMAD, together with the proposed regulation on insider dealing and market manipulation (MAR), make up the MAD II legislative proposals that will replace the Market Abuse Directive (2003/6/EC) (MAD).

The European Commission has welcomed the Parliament’s adoption of the rules in a press release and has published a set of frequently asked questions on CSMAD.

Following adoption by the Council of the EU and publication (expected in June 2014), member states will have two years to implement the CSMAD. Press Release EU Parliament.  Press Release EU Commission.  CSMAD FAQs

Trialogue Agreement on MiFID II

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On January 14, the Council of the EU and the European Parliament reached political agreement in trialogue on the MiFID II legislative proposals (the proposed MiFID II Directive and the proposed Markets in Financial Instruments Regulation (MiFIR)).

Key elements of the agreement are:

o   The market structure framework;
o   Equity market transparency;
o   Strengthening supervisory powers;
o   Controls for algorithmic trading activities; and
o   Access to EU markets for firms from third countries.

The MiFID II legislative proposals will replace and recast the Markets in Financial Instruments Directive (2004/39/EC) (MiFID).

The Parliament press release sets out the agreements that were reached.  Press Release.

ECON Report on Proposed Directive on Payment Accounts

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On November 20, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) published its report (dated November 19) on the proposed Directive on payment accounts.

The report contains a European Parliament legislative resolution on the proposed Directive on payment accounts, the text of which sets out suggested amendments to the European Commission’s original proposal, which was published in May 2013.  Report.