On February 7, the European Securities and Markets Authority (“ESMA”) published an updated version of its questions and answers (Q&As) on transparent topics under MiFID II Directive (2014/65/EU) and the Markets in Financial Instruments Regulation (Regulation 600/2014). The Q&As were last updated in December 2017.
The two new Q&As are in relation to pre-trade transparency waivers.
On February 5, the European Securities and Markets Authority (“ESMA”) published an updated version of its Q&As on the implementation of the Regulation on indices used in financial instruments and financial contracts or to measure the performance of investment funds (Regulation (EU) 2016/1011) (Benchmarks Regulation or BMR). The Q&As were first published in July 2017 and were last updated in December 2017.
The two new Q&As relate to commodity benchmarks (how the threshold in the exemption under Article 2(2)(g) of the BMR should be calculated – Q&A 4.4) and the definition of a benchmark and investment funds (what types of investment funds are considered to be using an index for the purpose of “tracking the return of [an] index” – Q&A 5.3).
On February 8, the European Securities and Markets Authority (“ESMA”) published its 2018 regulatory work program, which provides a detailed breakdown of the individual work streams outlined in the 2018 work program. The areas covered in the regulatory work program include the following initiatives: European Social Entrepreneurship Funds (EuSEF) Regulation, European Venture Capital Funds (EuVECA) Regulation, EMIR, MiFID II, Market Abuse Regulation (MAR), Securities Financing Transactions Regulation (SFTR) and Proposed Regulation establishing a framework for the recovery and resolution of central counterparties (CCPs).
The 2018 regulatory work program can be found here.
The European Securities and Markets Authority (“ESMA“) published a further version of its Q&As on the Market Abuse Regulation (“MAR“) on November 21, 2017.
The two new questions and answers are on the following topics:
ESMA states that the types of transaction by a PDMR prohibited during a closed period under Article 19(11) of MAR are the same as those types of transaction subject to the notification requirements set out under Article 19(1) of MAR, although Article 19(11) of MAR only applies to a PDMR when conducting transactions on its own account or for the account of a third party, whereas the notification of transactions required under Article 19(1) of MAR also applies to persons closely associated to a PDMR.
The European Securities and Markets Authority (ESMA) has published an updated version of its Q&A paper on the application of the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive (2009/65/EC) as most recently revised by UCITS V (2014/91/EU). The purpose of the Q&A is to promote common supervisory approaches and practices in the application of the UCITS and its implementing measures. The most recent updates reflect a Q&A relating to the valuation of OTC derivatives and are highlighted in yellow in the paper.
The latest version of the Q&A is available here.
On July 13, 2016 the European Securities and Markets Authority published a new consultation paper relating to Credit Rating Agency methodologies. This follows on from a discussion paper published on November 17, 2015 and an open hearing on January 25, 2016.
The consultation and review is based around CRA’s application of Articles 8(3) and 8(5) of the CRA regulation and articles 7 and 8 of the Regulatory Technical Standards. ESMA believes that publication of official guidelines will help to ensure the consistent application of validation and review measures for demonstrating the discriminatory power, predictive power and historical robustness of methodologies.
The consultation will be open for 5 weeks, and ESMA aims to finalize the proposed guidelines and publish a final report in Q1 2017.
The following bodies have released their 2015 annual reports in the past week:
Each report contains a review of achievements from 2015 as well as looking forward to the objectives and challenges which will be relevant in the coming year.
On June 7, 2016, the European Parliament published a press release announcing that it has voted to postpone the implementation of MiFID II (the MiFID II Directive (2014/65/EU)) and the Markets in Financial Instruments Regulation (Regulation 600/2014) (MiFIR)) until January 3, 2018. This grants member states a year’s extension on the original July 3, 2016 deadline to transpose the legislation. The extension was triggered by the European Commission and the European Securities and Markets Authority’s (ESMA) delay in producing the necessary technical standards.
MiFID II intends to close the gaps left by MiFID I. Following the financial crisis, it was introduced to create a single market for investment services and activities, with the aim of improving the competitiveness of EU financial markets. The Parliament, through MiFID II, seemingly aims to introduce: (i) a dedicated regime for the treatment of package transactions with regards to pre-trade transparency obligations; (ii) clarification for the own-account exemption for corporate end-users and securities financing transactions, which are excluded from MiFID transparency obligations; and (iii) a technical cross-referencing issue between the Prospective Directive (2003/71/EC) and MiFID II.
On June 8, the Parliament proceeded to publish the provisional edition of: (i) the text of the legislative proposal for a Directive amending the MiFID II Directive as regards certain dates; and (ii) the text of the legislative proposal amending the MiFIR, the Market Abuse Regulation (Regulation 596/2014) (MAR) and the Regulation on improving securities settlement and regulating central securities depositories (CSDs) (Regulation 909/2014) (CSDR) as regards certain dates.
It now remains for the proposals to be formally adopted by the Council, following which they will be published in the Official Journal of the EU (OJ) and enter into force in line with the timing stipulated in the legislation.
On May 4, 2016, The European Securities and Markets Authority (ESMA) published its final report requesting an amendment of ESMA draft regulatory technical standards (RTS) on transaction reporting under the Markets in Financial Instruments Regulation (MiFIR).
The draft RTS were submitted to the European Commission in September 2015. However, ESMA has since identified a need to amend Article 2 of RTS 22 as a result of an unintentional omission in the final stage of drafting.
The amendment relates to the list of instances that are not considered to be reportable transactions for the purposes of Article 26 of MiFIR. It resolves an unintended omission by adding acquisitions or disposals that are solely a result of a transfer of collateral to the list of exclusions from transaction reporting specified in Article 2(5) of RTS 22. It thus ensures that investment firms are not required to submit transaction reports for transfers of collateral, which ESMA concluded would be costly and bring no supervisory benefit. ESMA anticipates that the amendment will be taken into account in the context of the Commission’s endorsement of RTS 22.
On April 15, the European Securities and Markets Authority (“ESMA”) published a paper on stakeholder engagement in peer reviews.
The paper sets out six high-level principles guiding the interaction with stakeholders with the objective of obtaining background information relevant for the peer review:
The principles contribute to ESMA’s commitment to focus on supervisory convergence in 2016. ESMA may in the future, in light of its experience, prepare a set of procedures for stakeholder engagement in peer reviews, which could be annexed to the Methodology for peer reviews (ESMA/20131709). Paper.
