Financial Regulatory Developments (FReD) - 14 June 2013

Headlines

ESMA reports on remuneration guidelines EBA publishes near-final own funds RTS Banks agree to "same day retry" scheme FCA publishes more AIFMD information Up next from FCA

European Union and International

European Commission (Commission) Commission publishes bank structural reform FAQ: The Commission has published some FAQ on the templates accompanying its consultation on bank structural reform. It clarifies doubts on the assumptions on future scenarios that respondents must make when filling the template. It also reminds respondents that any information they provide that is not confidential nor a business secret will be accessible by the public. (Source: Consultation by the Commission on the Structural Reform of the Banking Sector)

Contact: Rosali Pretorius or Andrew Barber

Presidency of the Council of the European Union (Presidency) Presidency publishes further MiFID 2 compromises: The Presidency has published a further compromise text for the revised Markets in Financial Instruments Directive (MiFID 2) and Regulation (MiFIR). The changes to MiFID 2 relate to organised trading facilities (OTF). A new provision allows Member States to permit an investment firm or market operator operating an OTF to engage in dealing on own account other than matched principal trading only with regard to sovereign debt instruments for which there is not a liquid market. A deletion removes certain detail on what is regarded as discretionary execution of orders on an OTF. The MiFIR changes address the definition of a "sovereign issuer" and also propose that ESMA reports by six months before MiFIR takes effect on whether to exclude exchange traded derivatives from the central counterparty (CCP) and trading venue access requirements for three years (in place of the current three-year exemption without the need for a study). (Source: Compromise Text MiFID 2 10 June and Compromise Text MiFIR 10 June)

Contact: Rosali Pretorius or Luca Salerno

European Parliament (EP) MEPs worried about slow progress: Members of the EP are worried about the slow progress being made on key regulatory initiatives. They pointed, among other causes, to the failure of the Council's consensus model and to the attention paid to industry views. They said some legislative initiatives should have been started earlier and others, once started, should have been forced ahead more quickly. MEPs noted in particular concerns over the progress of key initiatives including MiFID 2, the Deposit Guarantee Schemes Directive (DGSD), the proposed Directive amending the Investor Compensation Schemes Directive (ICSD), the proposed Omnibus II Directive, the proposals to revise the Market Abuse Directive (MAD 2), the proposed Regulation on central securities depositaries (CSDs), the proposed Bank Recovery and Resolution Directive (RRD), UCITS V, the revisions to the Insurance Mediation Directive (IMD2), and the proposed Securities Law Regulation. (Source: MEPs Worried About Slow Progress, Motion for Resolution and EU Countries and Commission Need to Deliver Faster on Financial Sector Reform)

Contact: Emma Radmore or Juan Jose Manchado

New voting forecasts: The Economic and Monetary Affairs Committee (ECON) in EP has postponed its vote on IMD2 and on the Directive on a key information document for packaged investment products (KID) until 8 July. There is a new indicative date for the plenary vote on the payment accounts proposals of 9 December. (Source: OEIL File for IMD2, OEIL File for KID and OEIL File for Payment Accounts)

Contact: Emma Radmore or Juan Jose Manchado

European Securities and Markets Authority (ESMA) ESMA reports on remuneration guidelines: ESMA has published its final report on remuneration guidelines under MiFID. The guidelines aim to improve implementation of the conflicts of interest and conduct of business provisions in MiFID. They cover the governance and design of remuneration policies and cover all staff who have a material impact on the services the firm provides. National regulators should "comply or explain" within two months of ESMA's publishing the official translation of the guidelines. (Source: ESMA Reports on Remuneration Guidelines)

Contact: Rosali Pretorius or Emma Radmore

ESMA publishes CCP interoperability guidelines: ESMA has published guidelines, addressed to national supervisors, on how they should expect CCPs to meet the requirements on interoperability arrangements under the European Market Infrastructure Regulation (EMIR). The first guideline concerns legal risk. Interoperability arrangements must be clearly defined, transparent and enforceable in all relevant jurisdictions. This legal certainty must extend to netting, the point of irrevocability of orders, default procedures and enforceability of collateral. The second guideline provides that any denial or restriction on access to interoperability arrangements must be based only on risk grounds. The rest of the guidelines deal with risk management, protection of collateral from default and cooperation between national supervisors. (Source: Guidelines and Recommendations for Establishing Assessments of Interoperability Arrangements)

Contact: Rosali Pretorius or James Brennan

ESMA compares prospectus liability regimes: In response to a request for advice, ESMA has prepared for the Commission a comparison table of the different liability regimes Member States apply under the Prospectus Directive. It includes information on civil, administrative, government and criminal liability, as well as on the sanctions attached. ESMA clarifies that the document does not have legal effect. (Source: ESMA Publishes Report on Prospectus Directive Liability Regimes in the EU)

Contact: David Cohen or Laura Cansdale

ESMA updates EMIR Q&A: EMIR has updated the Q&A document for EMIR. (Source: EMIR Q&A)

Contact: Rosali Pretorius or James Brennan

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