European Securities and Markets Authority

Short Selling Regulation: ESMA Call for Evidence

Posted on

On February 12, the European Securities and Markets Authority (ESMA) published a call for evidence in order to evaluate the effects of the Short Selling Regulation.  The call for evidence was published in response to the European Commission’s request for technical advice, issued in December 2012.

The call for evidence is focused on the six main areas of the Short Selling Regulation:

  • Requirements relating to transparency and reporting.
  • Restrictions on the short selling of sovereign debt and shares.
  • Restrictions on entering uncovered sovereign credit default swaps.
  • Settlement discipline, including buy-in procedures.
  • Exemptions.
  • Intervention powers and emergency measures.

The deadline for responses to the call for evidence is March 15, 2013.

AIFMD: ESMA Final Guidelines on Sound Remuneration Policies

Posted on

On February 11, the European Securities and Markets Authority (ESMA) published its final report in relation to sound remuneration policies under the Alternative Investment Fund Managers Directive (AIFMD).  The guidelines are intended to ensure that the provisions on remuneration in Articles 13 and 22(2)(e) and (f) of Annex II to the AIFMD are applied in a consistent and uniform manner.

The full text of the final guidelines is contained in Annex III to the report and include key information on:

  •  the categories of staff that they apply to;
  • the types of remuneration covered by the guidelines; and
  • internal governance arrangements of Alternative Investment Funds in respect of remuneration.

The guidelines will apply from July 22, 2013, subject to the transitional provisions prescribed by the AIFMD.

ESMA Statement on Regulation of Cross-Border OTC Derivatives

Posted on

On December 4, the European Securities and Markets Authority issued a statement following a meeting with a number of global regulators regarding the reform of the OTC derivatives market.  The authorities identified several inconsistencies, duplications and potential conflicts within their current rules, acknowledging that such issues may result in confusion and regulatory arbitrage.  As a start to addressing these issues, the authorities reached a number of understandings in the following areas:

  •  Clearing – to consult further prior to bringing in rules relating to mandatory clearing of derivative contracts and to consider implementing clearing requirements in respect of products or product classes which certain authorities may identify should be subject to clearing.
  • Transitional provisions – in order to prevent regulatory arbitrage and market confusion, to consider the provision of transitional implementation periods for jurisdictions which are later in implementing OTC derivatives reform.

New Temporary Short Selling Bans Introduced by Spain, Italy and Greece

Posted on

On July 23, Spain, Italy and Greece introduced new temporary bans in relation to short selling in response to the recent extreme volatility in the European financial markets.

The Comisiòn Nacional del Mercado de Valores (“CNMV”) has decided to ban short selling on Spanish regulated markets with immediate effect. The ban will apply for three months until October 23, although CNMV may choose to extend it for a further period.

The Commissione Nazionale per le Società e la Borsa (“CONSOB”) announced a ban on short selling in respect of shares of certain companies in the Italian banking and insurance sectors that will last from July 23 to July 27.

In addition, on July 24, Greece’s Hellenic Capital Market Commission (“HCMC”) announced an extension to the current short selling prohibition on the Athens Stock Exchange for an additional three months until October 31. Press Release.

For further details, please see updated version of the European Securities and Markets Authority (“ESMA”)’s table of members’ short selling measures. Updated Version.

ESMA Proposed Rules on Derivatives, Central Counterparties and Trade Repositories

Posted on

On June 25, the European Securities and Markets Authority (ESMA) issued a consultation paper containing draft Regulatory Technical Standards and draft Implementing Technical Standards, which set out specific details of how the Regulation of the European Parliament and Council on OTC derivatives, central counterparties and trade repositories (EMIR) will be implemented. A public hearing will be held on July 12, and comments on the paper must be submitted by August 5. Press Release. Consultation Paper.

ESMA Publishes Responses to Call for Evidence on Transaction Reporting

Posted on

The European Securities and Markets Authority (ESMA) has published the responses it has received to its May 2012 call for evidence on transaction reporting. On 7 May 2012, ESMA published a call for evidence on transaction reporting. The purpose of the call for evidence was to gather initial views on ESMA’s work to develop guidelines on harmonised transaction reporting under the Markets in Financial Instruments Directive (2004/39/EC) (MiFID). This followed the commitment made by ESMA’s predecessor, the Committee of European Securities Regulators (CESR), to review its May 2007 Level 3 guidelines on MiFID transaction reporting.

On the basis of responses received, ESMA intends to launch a full public consultation on guidelines on harmonised transaction reporting. Call for Evidence. Responses.

ESMA Launches Two New MiFID I Consultations

Posted on

On 22 December 2011, ESMA published two new Consultation papers: one on the MiFID I suitability requirements (ESMA Consultation Paper 2011/445), the other on the MiFID I compliance function requirements (ESMA Consultation paper 2011/446). The draft guidelines on stability requirements focus on firm policies and procedures in relation to recommending suitable investment choices. The draft guidelines on the compliance function addresses the MiFID I organisational requirements and are also aimed at reinforcing the importance of the compliance function. Responses to the two consultation papers may be submitted for consideration by ESMA in Q1 2012. The final report and guidelines are expected in Q2 2012.

ESMA Publishes Final HTF Guidelines

Posted on

On 22 December 2011, the European Securities and Markets Authority (ESMA) published its Final Report on Guidelines on systems and controls in an automated trading environment for trading platforms, investment firms and competent authorities. The guidelines will become effective one month after the publication by the relevant national competent authority. According to this schedule, market participants should ensure that they are compliant with the guidelines from 1 May 2012. ESMA Final Report 2011/465.

ESMA Provides Technical Advice on the Level Two Implementation of the Alternative Investment Fund Managers Directive

Posted on

On 16 November 2011, the European Securities and Markets Authority (“ESMA”) published its final advice to the European Commission (the “Commission”) on possible implementing measures under the Alternative Investment Fund Managers Directive (the “Directive”). Although ESMA’s advice is extensive (over 500 pages), there are some headline issues. There is growing industry concern that ESMA’s advice supports a “strict liability” approach towards depositaries for the acts and omissions of their sub-custodians. The industry is likely to welcome other elements of the advice including ESMA’s proposal that where portfolio or risk management is delegated to an entity outside the EU, that entity need not be subject to regulatory requirements which are identical to those under the Directive.

ESMA’s Technical advice can be read in full by clicking here.

ESMA Discussion Paper on Implementation of AIFMD

Posted on

On April 15, the European Securities and Markets Authority issued a discussion paper on the implementation of Article 3 of the Alternative Investment Fund Managers Directive. The paper specifies ESMA‘s proposed approach regarding: (i) the calculation of assets under management to indentify funds under the authority of the Directive; (ii) the influence of leverage and cross-holding on such a determination; (iii) registration requirements; and (iv) procedures for smaller fund managers to “opt in” to the Directive. Comments must be submitted by May 16. ESMA Paper.