regulatory technical standards

Draft Regulatory Technical Standards on Supplementary Prospectuses Published

The European Commission has published a draft of regulatory technical standards on the issue of secondary prospectuses which, minor drafting amendments aside, match those published by the European Securities and Markets Authority in December 2013.

Currently, under article 16(1) of the European Prospectus Directive, a supplemental prospectus must be issued if any new factor arises (or a material inaccuracy in a prospectus is detected) between the approval of a prospectus and the closing of the offer or commencement of trading of the relevant securities to which it relates.  The draft regulatory technical standards set out the specific triggers for and contents of supplementary prospectuses.

Having now cleared the European Commission, the next step is for the regulations to be put before the European Parliament and Council for their consideration prior to their eventual enactment.  Draft Regulatory Technical Standards.

Responses to ESMA Consultation Paper on EMIR Clearing Obligation

On September 17, the European Securities and Markets Authority (ESMA) published responses to its July 2013 consultation paper on draft regulatory technical standards (RTS) on contracts having a direct, substantial and foreseeable effect within the EU and on the non-evasion of provisions of EMIR (Regulation 648/2012).  ResponsesConsultation Paper.

ESMA Publishes Opinion on Draft Regulatory Technical Standards Under the AIFMD

On August 20, the European Securities and Markets Authority (ESMA) published the opinion it submitted to the European Commission about draft regulatory technical standards (RTS) required under Article 4(4) of the Alternative Investment Fund Managers Directive (AIFMD).

The opinion comes after the Commission’s concerns about ESMA’s approach to the differentiation between open and closed-ended alternative investment funds (AIFs) in the draft RTS.  To alleviate the concerns, ESMA has submitted an amended version of the draft RTS for the Commission’s consideration, which are contained in Annex I to the opinion.

Under the amended RTS, the key element for the identification of an open-ended AIF is the existence of repurchases or redemptions of the AIF’s shares or units prior to the commencement of its liquidation phase or wind-down, provided that the repurchases or redemptions happen at the investors’ request.  Opinion.

ESMA Consults on Non-EU Counterparties OTC Derivative Transactions

On July 17, the European Securities and Markets Authority (ESMA) launched a consultation on draft regulatory technical standards (RTS).  The consultation is aimed at implementing the provisions of the European Markets Infrastructure Regulation (EMIR) related to OTC derivative transactions by non-EU counterparties and at preventing attempts by non-EU counterparties to evade EMIR’s provisions.

The consultation paper clarifies conditions where EMIR’s provisions regarding central clearing or risk mitigation techniques applies to OTC derivatives by two non-EU counterparties which have a direct, substantial and foreseeable effect in the EU.  The RTS would only apply when (i) two counterparties to the same transaction are established outside the EU; (ii) their jurisdictions’ rules are not considered equivalent to EMIR; and (iii) where either a) one of the two non-EU counterparties is guaranteed by an EU financial counterparty for at least €8 billion of OTC derivatives entered into and for an amount of at least 5% of the OTC derivatives exposures of the EU financial counterparty, or b) the two non-EU counterparties execute transactions via their EU branches.  Consultation.