Financial Regulatory Developments (FReD) - 11 October 2013

HEADLINES

DBIS finds little payday lending improvement UK regulators respond on banking standards report FCA publishes update of interest rate hedging review BBA responds on financial crime CLLS worried about AIFMD timing EUROPEAN UNION AND INTERNATIONAL

EU Legislation Tracker

Please follow the relevant link to see the European Parliament's (EP) "OEIL" voting date forecasts and access EP reports and positions on major legislative initiatives:

Bank Recovery and Resolution Directive (BRRD) OEIL file

Single Resolution Mechanism Regulation (SRM Regulation) OEIL file

Omnibus 2 Directive OEIL file

UCITS5 OEIL file

Money Market Funds Regulation (MMFR) OEIL file

Directive on European long-term investment funds (ELTIF Diretive) OEIL file

Central Securities Depositories Regulation (CSD Regulation) OEIL file

Recast Markets in Financial Instruments Directive (MiFID2) OEIL file

Markets in Financial Instruments Regulation (MiFIR) OEIL file

Market Abuse Regulation (MAR) OEIL file

Directive on Criminal Sanctions for Market Abuse (CSMAD) OEIL file

Fourth Money Laundering Directive (MLD4) OEIL file

Recast Insurance Mediation Directive (IMD2) OEIL file

Payment Accounts Directive (PAD) OEIL file

Key Information Document for Packaged Retail Investment Products Regulation (PRIPs Regulation) OEIL File

Review of the Payment Services Directive (PSD2) OEIL file

Contact: Emma Radmore or Juan Jose Manchado

European Commission (Commission)

Commission consults on crowdfunding: The Commission has published a questionnaire seeking views on the benefits and risks of crowdfunding and what policy framework would best support it. It wants to understand whether EU level action could help cross-border crowdfunding. The consultation looks at the diversity of crowdfunding models and the risks and challenges they present. It focuses on fraud, intellectual property and money laundering risks. It also looks at how current legislation covers some types of crowdfunding. The Commission asks for views by 31 December. (Source: Commission Consults on Crowdfunding)

Contact: Jeremy Cohen or Josie Day

European Banking Authority (EBA)

EBA publishes 2014 work programme: EBA has published its work programme for 2014. Its regulatory work will continue to focus on the development of the Single Rulebook. During 2014 EBA has to deliver 71 draft binding technical standards under the fourth Capital Requirements Directive (CRD4) and 23 under BRRD. Separately, EBA announced the Commission has agreed to extending some of the deadlines for the submission of binding technical standards under the Capital Requirements Regulation (CRR). In relation to oversight, EBA says it will have to develop operational relationships with the European Central Bank. Regarding consumer protection, EBA will look into the phenomenon of banks' self placement of financial instruments to their own retail depositors. (Source: EBA Work Programme 2014 and Revised Deadlines for the Delivery of EBA Technical Standards)

Contact: Emma Radmore or Juan Jose Manchado

European Securities and Markets Authority (ESMA)

ESMA publishes 2014 work programme: ESMA foresees that work related to the European Market Infrastructure Regulation (EMIR) will continue to require the highest priority during early 2014. Its attention will then turn to preparatory work under MiFID#2/MiFIR. (Source: ESMA Publishes 2014 Work Programme)

Contact: Emma Radmore or Juan Jose Manchado

ESMA publishes CCP college guidelines translations: ESMA has published, in all EU official languages, its guidelines on written agreements between members of central counterparty (CCP) colleges. Competent authorities now have two months to notify ESMA whether they comply or intend to comply with the guidelines. (Source: Guidelines on CCP Colleges)

Contact: Emma Radmore or Juan Jose Manchado

European Insurance and Occupational Pensions Authority (EIOPA)

EIOPA publishes colleges action plan: EIOPA has published the Action Plan 2014/15 for colleges of supervisors and a list of cross-border insurance groups for which a college is in place. (Source: EIOPA Publishes Colleges Action Plan)

Contact: Rosalie Pretorius or Juan Jose Manchado

Agency for the Co-operation of Energy Regulators (ACER)

ACER publishes 2014 work programme: ACER's 2014 work programme sets out its priorities as to the development of Framework Guidelines and Network Codes and the transition to the operational phase of the Regulation on Energy Market Integrity and Transparency (REMIT), which will require market participants' registration, data collection and monitoring. (Source: ACER Work Programme 2014)

Contact: Luca Salerno or Juan Jose Manchado

UK GOVERNMENT AND PARLIAMENT

Parliament

Banking Reform Bill completes first Committee day: The Financial Services (Banking Reform) Bill (the Banking Reform Bill) has completed its first day in Committee in the House of Lords. This stage involves a line-by-line review. The second day will take place on 15 October. (Source: Banking Reform Bill Completes First Committee Day)

Contact: Andrew Barber or Juan Jose Manchado

HM Treasury (Treasury)

Treasury publishes draft bail-in annex to SRR Code: The Treasury has published a draft annex to the Code of Practice that authorities must consider when exercising the powers under the Special Resolution Regime (SRR) created by the Banking Act 2009. This draft annex covers the likely use that authorities will make of the new bail-in tool, which is currently being discussed in Parliament as secondary legislation under the Banking Reform Bill. The new tool comprises the power to cancel, modify or convert a bank's liabilities provided that the affected creditors do not incur greater losses than those that would have been incurred had the bank entered insolvency proceedings ("no creditor worse off" principle). The proposed annex also states the principle that, when using the tool, authorities should respect the creditor hierarchy in insolvency, but contemplates the possibility that they treat liabilities in the same class differently where this is warranted by expediency, systemic or value preservation concerns. Concerning the bail-in of derivatives, the annex clarifies that, when closing out open positions, authorities will follow the applicable contractual provisions so far as possible and will only bail-in the non-secured part of a counterparty's exposure to the bank. The Treasury will make a safeguards order, similar to that in relation to partial property transfers, requiring the protection of netting, among other arrangements. When the Bank of England decides to use the bail-in tool, it must submit a report that the Chancellor will lay before Parliament. (Source: Banking Reform Bill: Government Notes on Amendments: SRR Code of Practice Annex)

Contact: Rosalie Pretorius or Juan Jose Manchado

Treasury tables new Payments Systems Regulator legislation: Treasury has published feedback on the responses to its March 2013 consultation on opening up the UK's payments system and tabled amendments in the Lords Committee stage of the Banking Reform Bill that create a new competition-focused, utility-style Payment Systems Regulator. It will be established as a separate body and overseen by FCA and have a discrete set of objectives, duties and powers, but the Bank of England will retain veto rights over any of its decisions impacting on integrity and stability. The Government expects that the industry will replace the Payments Council with a trade body that the Payments Systems Regulator can instruct to develop UK payments. A payment system will be brought within the scope of regulation by Treasury designation, which will also extend to...