Financial Regulatory Developments (FReD) - 28 June 2013

Headlines

CRD4 adopted and published in OJEU ECOFIN agrees RRD Presidency and Council progress KID Regulation COREPER agrees MAR FATF releases plenary results

European Union and International

Financial Stability Board (FSB)

FSB updates on reform progress: FSB has met in Basel, where it announced forthcoming action to strengthen global financial regulation. Over the summer it will release guidance to support recovery and resolution plans for systemically important financial institutions, as well as Annexes to the Key Attributes of Effective Resolution Regimes that will cover insurance groups, financial market infrastructures, the protection of client assets in resolution and information sharing among authorities. It will also identify an initial list of global systemically important insurers. FSB has also announced a consultation on a methodology to enable the International Monetary Fund to assess countries' implementation of the Key Attributes. Regarding other areas of regulatory reform, FSB highlighted the launch of a study on global aggregation and sharing of data reported to trade repositories. FSB has also established a steering group to co-ordinate the reviews of interest rate benchmarks. (Source: Meeting of FSB in Basel)

Contact: Rosali Pretorius or Juan Jose Manchado

Council of the European Union (Council)

CRD4 adopted and published in OJEU: The Council adopted the fourth Capital Requirements Directive and Regulation (collectively known as CRD4) package on 20 June on a qualified majority vote, with the UK objecting to certain provisions. The CRD4 package has now been published in the Official Journal of the EU (OJEU) and it will take effect from 1 January 2014, although there are certain delayed implementation periods, transitional provisions and national discretions within the package. (Source: Council Adopts CRD4, CRD4 (Directive - CRD) Text as published in OJEU and CRD4 (Regulation - CRR) Text as published in OJEU)

Contact: Rosali Pretorius or Juan Jose Manchado

ECOFIN agrees RRD: The Economic and Finance Ministers (ECOFIN) within the Council have reached political agreement on the Recovery and Resolution Directive (RRD). The Presidency had previously published a note on its approach and a compromise proposal. It noted the importance of the "resolution triangle" comprising (i) the design of the bail in tool, in particular the balance between harmonisation and flexibility, (ii) minimum requirements for own funds and eligible liabilities and (iii) financing. Agreement on each of these elements is critical and a change in approach to one would affect the others. The Presidency believes it has now achieved a balance between harmonisation and flexibility that should meet the demands of conflicting Member State preferences. Michel Barnier, welcoming the agreement, said trilogue discussions should now begin. (Source: Approach Note on RRD, Compromise RRD 19 June and Commission Welcomes RRD Agreement)

Contact: Rosali Pretorius or Andrew Barber

Presidency reports on CSD Regulation progress: The outgoing Irish Presidency of the Council (Presidency)has reported on the stage it has reached in negotiation towards a Regulation on Central Securities Depositories (CSDs). It says it has made progress, but several issues are outstanding, including the need for further discussion on settlement discipline, a third country regime and the need for authorisation of CSDs that are also authorised to provide banking services. This is the main area of debate, with some Member States opposing the need for authorisation for banking CSDs and some opposing the proposal that the European Securities and Markets Authority (ESMA) should have the final decision on authorisation. The Irish Presidency urges the Lithuanian Presidency to continue the negotiations. (Source: Presidency Reports on CSD Regulation Progress)

Contact: Rosali Pretorius or James Brennan

Presidency and Council progress KID Regulation: The Presidency of the Council published the latest in a series of compromise texts on the proposed Regulation for a Key Information Document for packaged retail investment products (PRIPs) (the KID Regulation). The text has changed to reflect conflicting requests from Member States to change its scope. Member States also cannot agree on whether there should bea harmonised administrative sanctions regime for breach of the KID Regulation or whether each Member State should still be allowed to impose criminal sanctions. The current compromise, agreed by the Committee of Permanent Representatives (COREPER) on 26 June, reflects the stance taken in the Markets in Financial Instruments Directive and Regulation (MiFID 2 and MiFIR) package. The Economic and Monetary Committee (ECON) in EP is yet to vote on its report. The Presidency urges negotiations with EP on the basis of the compromise text, with a view to reaching agreement on the text at first reading. (Source: KID Regulation Approach and KID Regulation Compromise Text 24 June)

Contact: Emma Radmore or Josie Day

COREPER agrees MAR: COREPER has approved the Presidency compromise text on the Market Abuse Regulation (MAR), part of the package to update the Market Abuse Directive (MAD 2). MAR has now been agreed with EP, and the EU institutions will now negotiate agreement on the accompanying Directive on criminal sanctions for market abuse (CSMAD), with a view to both parts of the MAD 2 package being adopted at first reading. A mark-up of the proposals shows the agreed position that EP should now adopt, subject to some final changes to reflect policy decisions reflected in the MiFID 2 package. (Source: COREPER agrees MAR and Agreed MAR position)

Contact: Josie Day or James Brennan

European Parliament (EP)

EP updates voting dates: EP's Legislative Observatory (OEIL) shows an indicative voting date for the proposal for a new Market Abuse Regulation (MAR) of 10 September. The date had previously moved from July to October. (Source: OEIL File on MAR)

Contact: Josie Day or James Brennan

ECON publishes MLD4 opinions: EP's Economic and Monetary Affairs Committee (ECON) has published draft opinions on for the Legal Affairs Committee (JURI) on the proposals to amend the Money Laundering Directive (MLD4) and Wire Transfer...