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European regulatory News Q1 & Q2 2020
European regulatory News Q1 & Q2 2020
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European regulatory News Q1 & Q2 2020

21/04/2020


Round-up of the latest European regulatory news

Select your region

  • AIFMD / UCITS V DIRECTIVE×
  • AML/CFT×
  • BANKING & PRUDENTIAL REGULATION×
  • BENCHMARKS REGULATION×
  • BREXIT×
  • CMU×
  • CSDR×
  • EMIR×
  • ESA REVIEW×
  • EU×
  • FINTECH×
  • MIFID 2 /MIFIR×
  • MMFR×
  • PRIIPs×
  • PROSPECTUS×
  • SFTR×
  • SHORT-SELLING REGULATION×
  • SOLVENCY II×
  • SUSTAINABLE FINANCE×
  • TRANSPARENCY DIRECTIVE×

AIFMD / UCITS V DIRECTIVE

30/01 - ESMA launches supervisory action on UCITS liquidity management

The European Markets & Securities Authority (ESMA) has launched a common supervisory action alongside national competent authorities (NCAs) on the supervision of UCITS managers' liquidity risk management across the EU. NCAs will request data from numerous UCITS managers based in their respective Member States to develop a general overview of the supervisory risks. NCAs will then focus on a sample of this data to conduct in-depth analyses. Throughout 2020, NCAs will share information through ESMA to ensure supervisory convergence in the supervision of liquidity risk management, where ESMA seeks to enhance investor protection.

05/02 - ESRB publishes considerations regarding AIFMD

In a letter to the European Commission's (EC) DG FISMA, the European Systemic Risk Board (ESRB) outlined its considerations on the shortcomings of the current AIFMD framework, given the EC's plans to launch the review of AIFMD in early 2021. The letter outlines that the macroprudential framework for investments funds should be developed to better mitigate risks related to leverage, liquidity and maturity mismatches, procyclicality and contagion, either through the upcoming AIFMD review or in a subsequent review process.

27/03 - ESMA consults on its draft guidance to address leverage risks in the Alternative Investment Fund sector.

The consultation is part of the ESMA response to the ESRB's recommendations in April 2018 to address liquidity and leverage risk in investment funds. The consultation deadline is 1 September 2020.

31/03 - ESMA consults on standardised information to facilitate cross-border funds distribution

ESMA launched a consultation on the standard forms, templates, and procedures that NCAs should use to publish information on their websites to facilitate cross-border distribution of funds. In particular, the standard information should cover: (i) national laws, regulations and administrative provisions governing marketing requirements for AIFs and UCITS and the summaries thereof; and (ii) regulatory fees and charges they levy for carrying out their duties in relation to the cross-border activities of fund managers. ESMA will consider the feedback it receives to this consultation by 30 June 2020 with a view to finalising the implementing technical standards for submission to the EC by 2 February 2021.

03/04 - ESMA’s fund-fee guidelines expand to cover alternative managers

ESMA has published its final guidance on performance fees in investment funds – applicable to UCITS and certain types of AIFs. The guidelines provide comprehensive guidance to fund managers when designing performance fee models for the funds they manage, including the assessment of the consistency between the performance fee model and the fund’s investment objective, policy and strategy, particularly when the fund is managed in reference to a benchmark.

09/04 - ESMA sets out supervisory expectations on publication of investment funds periodic reports

ESMA has issued a public statement directed at Fund Managers concerning their obligations to publish yearly and half-yearly reports. The entities concerned are the following: (i) UCITS management companies, (ii) self-managed UCITS investment companies, (iii) authorised AIFMs, (iv) non-EU AIFMs marketing AIFs pursuant to Article 42 of the AIFMD, (v) EuVECA managers, and (vi) EuSEF managers. ESMA is aware that the confinement measures taken by Member States to prevent Covid-19 contagion present significant difficulties and challenges for Fund Managers and auditors in preparing their periodic reports for a publication within the regulatory deadlines. While recognising the importance of periodic reports for timely and transparent disclosure, ESMA is of the view that the burdens on Fund Managers associated with the Covid-19 outbreak should be taken into account by NCAs in a coordinated way. In the current situation, ESMA expects NCAs to adopt a risk-based approach and not prioritise supervisory actions against these market participants in respect of the upcoming reporting deadlines.

AML/CFT

14/01 - Council - List of persons and organisations subject to sanctions relating to terrorism renewed

The Council has renewed the list of persons, groups, and organisations subject to EU-wide sanctions, including the freezing of assets for reasons relating to terrorism. This list is reviewed at least every six months and is implemented through an implementing regulation and decision published in the Official Journal of the EU (OJEU). It does not address Al-Qaida or ISIL as they are subject to separate sanctions regimes.

05/02 - EBA - Report on competent authorities' approach to AML-CFT supervision of banks published

The EBA has published a report on the approach of NCAs to the AML-CFT supervision of banks, highlighting the need to move away from the focus on tick box compliance when assessing. NCAs are encouraged to take more proportionate and sufficiently dissuasive measures to correct deficiencies in banks' AML-CFT systems and controls. Furthermore, the report found that not all NCAs were able to cooperate effectively with domestic and international stakeholders.

05/02 - EBA - Consultation on revised guidelines on money laundering and terrorist financing risk factors launched

The EBA has launched a consultation to update Risk Factor Guidelines to apply the Customer Due Diligence (CDD) rules under the AMLD5 and adds new sector-specific Guidelines for crowdfunding platforms, account information and payment initiation service providers, currency exchanges and corporate finance.

BANKING & PRUDENTIAL REGULATION

21/01 - ECB - Recommendation on dividend distribution policies under CRR adopted

The ECB has adopted a recommendation on dividend distribution policies under CRR. The recommendation stresses credit institutions should develop dividend policies by using conservative and prudent assumptions to ensure they meet the applicable capital requirements as well as the outcomes of the supervisory review and evaluation process.

04/02 - BIS FSI - Paper on convergence of prudential regulation of banks published

The BIS Financial Stability Institute (FSI) has published a paper on convergence in the prudential regulation of banks, highlighting the challenge of fragmentation in prudential requirements. The paper identifies three sources of regulatory fragmentation for the banking sector, including heterogeneous practices in the measurement of assets, differences in the scope of application of the Basel III regulatory requirements for Pillar 1 and differences in the implementation of supervision under Pillar 2.

31/01 - EBA - Annual assessment of the consistency of internal model outcomes released

The EBA has published two reports on credit risk and market risk benchmarking as part of its work to improve the regulatory framework and increase supervisory convergence. The reports asses the consistency of risk weighed assets (RWAs) across all EU Institutions authorized to use internal approaches for the calculation of capital requirements. It was found that most deviations were caused by problems related to data quality and reporting.

31/01 - EBA - 2020 EU-wide stress test exercise launched

The EBA has launched the 2020 EU-wide stress test and released the macroeconomic scenarios which will be tested through the developed methodology. The adverse scenario will follow a lower for longer narrative, i.e. a recession coupled with low or negative interest rates for a prolonged period of time. The test will be conducted on a sample of 51 banks and the results of the exercise are expected to be published by 31 July 2020.

17/02 - EU banks short almost EUR 180B in loss-absorbing capital, regulator says

European banks are short almost EUR 180 billion in loss-absorbing capital which they need to build up to protect taxpayers from paying out in a collapse, the EU banking regulator said today. The European Banking Authority (EBA) found around half of EU banks with a resolution strategy in place faced a shortfall in minimum requirement for own funds and eligible liabilities (MREL) totalling EUR178 billion as of 2019.

06/03 - CRD IV | EBA launches consultation to update methodology to identify G-SIIS

The European Banking Authority launched a consultation to update the identification methodology of global systemically relevant institutions (G-SIIs) and related capital buffer rates. The need for this revision was prompted, on one hand, by the revised framework for global systemically important banks (G-SIBs) published by the Basel Committee on Banking Supervision in July 2018 and, on the other hand, by the recent mandate given to the EBA to draft an additional methodology for the allocation of G-SII buffer rates to identified G-SIIs. The consultation runs until 5 June 2020.

20/03 - ECB Banking Supervision provides further flexibility to banks in reaction to coronavirus

The ECB announced further measures to ensure that its directly supervised banks can continue to fulfil their role to fund households and corporations amid the coronavirus-related economic shock to the global economy and (i) gives banks further flexibility in prudential treatment of loans backed by public support measures, (ii) encourages banks to avoid excessive procyclical effects when applying the IFRS 9 international accounting standard, (iii) activates capital and operational relief measures announced on March 12, 2020, and (iv) announced capital relief amounts to EUR 120 billion and could be used to absorb losses or potentially finance up to EUR 1.8 trillion of lending.

25/03 - EBA provides clarity to banks and consumers on the application of the prudential framework in light of Covid-19 measures

Following its call on 12 March 2020 to Competent Authorities to make use of the full flexibility provided for in the existing regulation, the EBA issued a second statement to explain a number of additional interpretative aspects on the functioning of the prudential framework in relation to the classification of loans in default, the identification of forborne exposures, and their accounting treatment. These clarifications should help ensure consistency and comparability in risk metrics across the whole EU banking sector, which are crucial to monitor the effects of the current crisis. The EBA also reminded financial institutions of their consumer protection obligations, temporarily lifts some reporting obligations for payment service providers (PSPs), and calls on PSPs to raise their contactless payment thresholds to the legal limit.

27/03 - Governors and Heads of Supervision announce deferral of Basel III implementation to increase operational capacity of banks and supervisors to respond to Covid-19

The measures endorsed comprise the following changes to the implementation timeline of the outstanding Basel III standards: (i) the implementation date of the Basel III standards finalised in December 2017 has been deferred by one year to 1 January 2023; (ii) the accompanying transitional arrangements for the output floor has also been extended by one year to 1 January 2028; (iii) the implementation date of the revised market risk framework finalised in January 2019 has been deferred by one year to 1 January 2023; and (iv) the implementation date of the revised Pillar 3 disclosure requirements finalised in December 2018 has been deferred by one year to 1 January 2023. The revised timeline is not expected to dilute the capital strength of the global banking system, but will provide banks and supervisors additional capacity to respond immediately and effectively to the impact of Covid-19.

01/04 - BRRD | SRB publishes key bank resolution policy: expectations for banks

The Single Resolution Board (SRB) published its final ‘Expectations for Banks’ document, along with an overview of SRB responses to the industry consultation. The consultation took place between 23 October and 4 December 2019.The ‘Expectations for Banks’ document, which has been updated to reflect industry feedback, sets out the capabilities the SRB expects banks to demonstrate in order to show that they are resolvable. It describes best practice and sets benchmarks for assessing resolvability. It also provides clarity to the market on the actions that the SRB expects banks to take in order to demonstrate resolvability. The ‘Expectations for Banks’ will be subject to a gradual phase-in. Banks are expected to have built up their capabilities on all aspects by the end of 2023, except where indicated otherwise. Where needed and on a bilateral basis, the SRB and banks may agree alternative phase-in dates. The Expectations are tailored to each individual bank and its resolution strategy, allowing for flexibility and proportionality. The SRB acknowledges the challenges that banks face in the current and unprecedented situation related to the Covid-19 pandemic, and that their focus is on business continuity and supporting the economy. The SRB, in close cooperation with other authorities and the banks under its remit, is carefully monitoring the situation. The SRB is prepared to give banks the flexibility they may need to implement the ‘Expectations for Banks’ on an individual basis.

01/04 - Eurozone banks may get more time to raise bail-in capital during coronavirus crunch

Banks may be given more time to raise loss-absorbing capital from markets due to the turmoil brought on by the coronavirus, Europe's top manager for banking crises said today. The Single Resolution Board said it may adapt the transition periods for Eurozone banks to build up minimum requirement for own funds and eligible liabilities. The Brussels-based SRB added it could adjust banks' MREL targets to reflect the lowering of basic capital requirements already given by regulators to help banks keep up lending through the crisis.

BENCHMARKS REGULATION

14/02 - BMR | ESMA responds to European Commission consultation on the Benchmark Regulation review

ESMA has published its response to the European Commission’s Consultation on the review of the Benchmark Regulation (BMR). ESMA’s responses focus on the cessation of critical benchmarks, parity between EU and third-country benchmarks and transparency.

09/04 - BMR - ESMA promotes coordinated action regarding benchmarks external audit requirements

ESMA has issued a Public Statement to promote coordinated action by NCAs regarding the timeliness of fulfilling external audit requirements for interest rate benchmark administrators and contributors to interest rate benchmarks. ESMA and NCAs are aware of the difficulties due to the Covid-19 pandemic encountered by interest rate benchmark administrators and contributors to interest rate benchmarks in fulfilling the external audit requirements set out in the Benchmarks Regulation (BMR). ESMA therefore, in coordination with NCAs, expects NCAs not to prioritise supervisory actions against administrators and supervised contributors relating to the timeliness of fulfilling those audit requirements where the audits are carried out by 30 September 2020. In addition, ESMA encourages NCAs to generally apply a risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of the BMR in a proportionate manner concerning the timeliness of fulfilling those audit requirements.

BREXIT

06/01 - OJEU - Amendment to the EU temporary equivalence arrangement for UK CCPs in the event of a no-deal Brexit published

An amendment to the EU temporary equivalence arrangement for three UK CCPs in the event of a no-deal Brexit has been published in the Official Journal of the European Union (OJEU), extending the time-limited equivalence from 31 Mar 2020 to 1 Feb 2021. The current temporary arrangements are not expected to be used given expectations for a rapid adoption of the Withdrawal Agreement in the UK. Notably, the decision includes a recital which states that the EU might by the end of July 2020 announce its intention to mitigate risk to the EU by limiting access to certain products, activities, or services provided by UK CCPs.

24/01 - Brexit: withdrawal agreement signed by the EU

On 24 January 2020, Presidents Charles Michel and Ursula von der Leyen signed the Agreement on the Withdrawal of the UK in Brussels. The European Parliament's plenary will hold a vote on the agreement on 29 January. Once the European Parliament has given its consent, the Council will adopt, by written procedure, the decision on the conclusion of the agreement on behalf of the EU.

30/01 - ECB - Statement on Brexit preparations published

The ECB has published a press release defining its preparations taken in anticipation of Brexit. It notes that it has activated a currency swap arrangement with the Bank of England (BoE), through which the BoE offers to lend euros to UK banks on a weekly basis. It also underlines that the BoE's current share in the ECB’s subscribed capital, will be reallocated among both the euro area national central banks (NCBs) and the remaining non-euro area NCBs on the basis of an updated key for subscription to the ECB’s capital.

04/02 - EC / UK Government - Mandates for EU/UK negotiations published

The EC has issued its draft recommendation to the Council to open trade negotiations with the United Kingdom. The draft recommendation highlights the EU’s preferred terms for the future partnership with the UK, covering a wide-range of areas, including trade and economic cooperation, fisheries as well as internal security. Reacting to this, the UK Government has issued a statement setting out the UK’s priorities for the future EU-UK relationship.

27/02 - UK gives up on key demands for financial services in EU trade deal

The U.K. has not included previous key demands for its financial services sector in its official negotiating position for trade talks with the EU published today. The U.K.’s position paper includes a limited section on financial services set out under chapter 16, but stops short of requesting preferential access to EU markets. The EU’s chief Brexit negotiator rejected such demands earlier this month. The U.K.’s policy paper is aligned with the EU position that trading in financial services would take place on the basis of the equivalence regime and regulatory cooperation.

03/03 - Brexit | ECB publishes a paper on the implications of Brexit for the EU financial landscape

Brexit will result in a substantial structural change to the EU’s financial architecture over the coming years. It could be particularly significant for derivatives clearing, investment banking activities and securities and derivatives trading as the reliance on service provision by UK financial firms is more pronounced in these areas and the provision of such services is currently linked to the EU passporting regime. At the same time, the precise overall impact of Brexit on the EU’s future financial architecture in general – and on these specific areas in particular – is difficult to predict at this stage, and may change over time.

30/03 - Brexit: European Commission releases statement on the implementation and application of the Withdrawal Agreement.

The Statement notes that proper and timely implementation of the Withdrawal Agreement is a key priority for the EU. This concerns in particular safeguarding the rights of around 4.5 million EU citizens and UK nationals, and maintaining peace and stability on the island of Ireland, while ensuring the integrity of the Single Market. A new partnership can only be built on the faithful and effective implementation of the Withdrawal Agreement. The parties have decided to launch the work of the six Specialised Committees on the key areas for the implementation of the Withdrawal Agreement. Both sides will now work closely to prepare the next meeting of the Joint Committee, currently foreseen for June.

06/04 - EU approves UK coronavirus state aid package

The EU approved U.K. state aid plans worth £50 billion to support companies impacted by the coronavirus. A statement from the European Commission said the plans were “necessary, appropriate and proportionate to remedy a serious disturbance in the economy of the U.K.” It said the support package met the temporary rules the bloc drew up to govern state aid through the coronavirus crisis. U.K. Chancellor Rishi Sunak announced a state-guaranteed loan scheme for businesses, as well as direct grants and tax breaks, and loans direct from the government for some firms. He has also promised investment in research and development for the coronavirus and support to boost testing facilities to develop new products to tackle the outbreak. Britain legally left the EU at the end of January 2020 but remains part of its institutions until the end of the Brexit transition period in December 2020, meaning it remains subject to EU state aid rules.

CMU

06/01 - Covered bonds package published in the OJEU

The covered bonds package, comprising the covered bonds directive and the covered bonds regulation amending the CRR, has been published in the Official Journal of the European Union (OJEU). Both the directive and regulation will enter into force on 7 Jan 2020. The transposition deadline for the covered bonds directive is 8 Jul 2021 and both pieces of legislation will apply from 8 Jul 2022.

11/01 - STS - EU Commission adopts Delegated Regulation on STS notification requirements

EU Commission adopted the 11 December 2019 delegated Regulation supplementing Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 and laying down regulatory technical standards specifying the information to be provided in accordance with the STS notification requirements.

20/02 - Europe must take ‘politically difficult’ steps to build capital markets, forum says

Europe needs to take “politically difficult” decisions to create deep and liquid capital markets, according to an advisory report out today. The High-Level Forum on capital markets union (CMU), set up by the European Commission, has beefed up an interim report to include more pointed language on national barriers hampering the development of U.S.-style capital markets in the EU. “For the completion of the CMU,” the report says, “it is now essential to target the measures that may be politically difficult, but that will lead to tangible results.”

06/04 - ESMA report stresses impact of costs on retail investor benefits

ESMA published its second annual statistical report on the cost and performance of retail investment products in the European Union (EU.). The analysis contained in this report complements ESMA’s risk assessment and supervisory convergence work within its investor protection mandate, and contributes to the European Commission’s project on cost and performance of investment products under the Capital Markets Union Action Plan.

CSDR

04/02 - ESMA - Amendment to CSDR RTS on Settlement Discipline issued

ESMA has submitted an amendment to the Regulatory Technical Standards (RTS) on the settlement discipline under the Regulation on settlement and central securities depositories (CSDR) to the EC in order to delay the implementation of the new settlement discipline from 13 Sep 20 to 01 Feb 21. ESMA attributes the postponement to a delay in the implementation of the Target 2 Securities (T2S) penalty mechanism, necessary for supporting the implementation of the settlement discipline. The draft RTS has been submitted to the EC for consideration and adoption, during which the EC can make changes or choose to adopt it without changes.

05/02 - ESMA - Draft RTS taking into account the postponement of CSDR settlement discipline published

ESMA has published final draft regulatory technical standards (RTS) to postpone the date of entry into force of the Delegated Regulation on settlement discipline under the Central Securities Depositories Regulation (CSDR) to 1 Feb 2021. This delay takes into account the additional time needed to establish the functioning of the settlement discipline regime. Following the endorsement of the RTS by the EC, the Commission Delegated Regulation will be subject to the non-objection of the EP and of the Council.

17/02 - CSDR | ESMA updates CSDR Q&As

The ESMA has updated its Q&As regarding the implementation of the Central Securities Depositories Regulation. The updated Q&As provide answers to questions regarding practical issues on the implementation of the new CSDR regime. The latest set of 7 CSDR Q&As clarify the implementation of the settlement discipline regime with respect to (i) the costs of the penalty mechanism that are charged to participants by a CSD; (ii) settlement instructions sent by CCPs, and (iii) regarding the buy-in process.

EMIR

06/01 - ECB - Working paper on euro area derivatives clearing interdependencies published

The ECB has published a working paper analysing data reported under the European Market Infrastructure Regulation (EMIR) to assess interconnectedness in the centrally-cleared derivatives market. The paper gives indications on structural features of the euro area derivatives market and discusses policy relevant implications and future applications. The paper concludes that the level of interconnectedness in the euro area derivatives market is high and consequently, the ECB emphasises the need to continue and upscale authorities' efforts to perform supervisory-led macro-prudential stress testing of CCPs.

07/01 - ESMA - Report on membership arrangements and due diligence for CCPs published

ESMA has published a report on a survey conducted into central counterparties' (CCPs) membership criteria and due diligence rules defined under EMIR. ESMA investigated how CCP assess the financial resources and operational capacities of individuals that are clearing members, what membership criteria EU CCPs apply and whether they apply specific criteria to non-financial counterparties as defined in EMIR, and how EU CCPs conduct due diligence monitoring of their clearing members. ESMA has also published an updated Q&A document on EMIR implementation with a new dedicated section on the level of stringency in admission criteria.

26/03 - ESMA consults on technical standards on Trade Repositories under EMIR REFIT

ESMA has launched a consultation on draft Regulatory and Implementing Technical Standards (RTS and ITS) under the Regulation (EU) 2019/834 (EMIR REFIT) covering reporting to Trade Repositories (TRs), procedures to reconcile and validate the data, data access by the relevant authorities and registration of the TRs.

26/03 - ESMA consults on Post-Trade Risk Reduction Services under EMIR REFIT

ESMA has launched a public consultation on Post Trade Risk Reduction Services (PTRR) under the European Market Infrastructure Regulation (EMIR). Portfolio compression is an existing requirement in the current framework for OTC derivative contracts and EMIR REFIT mandates ESMA, in cooperation with the ESRB, to investigate whether any trades that directly result from PTRR services, including portfolio compression, should be exempted from the clearing obligation.

31/03 - ESMA publishes advice on fines and penalties for 3rd country CCPs

The European Securities and Markets Authority (ESMA) has published its final technical advice to the European Commission (EC) on procedural rules for imposing fines and penalties on third country central counterparties (TC-CCPs) and alignment of those for TRs and CRAs. ESMA has included advice on some specific aspects including: (i) the right to be heard by the independent investigation officer (IIO); (ii) the content of the file to be submitted by the IIO; (iii) access to the file; (iv) the procedure for imposing fines; (v) the adoption of interim decisions; (vi) the limitation periods for imposition and enforcement of penalties; (vii) the collection of fines and penalties; and (viii) the relevant calculation periods.

31/03 - EMIR 2.2 | ESMA publishes draft regulatory technical standards for CCP colleges

ESMA has published its Final Report containing draft regulatory technical standards (RTS) for central counterparty (CCP) colleges under the European Markets Infrastructure Regulation (EMIR) 2.2.The proposed amendments are limited in scope and concern the practical arrangements for the functioning of the college regarding: (i) voting procedures; (ii) the procedures for setting the agenda of college meetings; (iv) review and evaluation of the arrangements, strategies, processes and mechanisms implemented by the CCP and the risks to which the CCP is exposed; (v) the minimum timeframes for the assessment of the relevant documentation by the college members; and (vi) the modalities of communication between college members. The draft RTS proposals amend the Commission Delegated Regulation (EU) No 876/2013 (RTS on colleges for central counterparties) and reflect the changes to Article 18(6) of EMIR (Regulation (EU) No 648/2012) introduced by EMIR 2.2 (Regulation (EU) No 2019/2099) which entered into force on 1 January 2020. Next steps: following the endorsement of the draft RTS by the European Commission, the Commission Delegated Regulation will then be subject to the non-objection of the European Parliament and of the Council.

03/04 - ESMA consults on clearing solutions for Pension Scheme Arrangements under EMIR

ESMA has launched a public consultation on a range of issues regarding potential central clearing solutions for Pension Scheme Arrangements (PSAs) under the European Market Infrastructure Regulation (EMIR). The consultation is based on ESMA’s First Report to the European Commission documenting the progress made to date towards potential clearing solutions for PSAs.

03/04 - Basel Committee and IOSCO announce deferral of final implementation phases of the margin requirements for non-centrally cleared derivatives

In light of the significant challenges posed by Covid-19, including the displacement of staff and the need for firms to focus resources on managing risks associated with current market volatility, the BCBS and IOSCO have agreed to extend by one year the deadline for completing the final two implementation phases of the margin requirements for non-centrally cleared derivatives. This extension will provide additional operational capacity for firms to respond to the immediate impact of Covid-19 and at the same time, facilitate covered entities to act diligently to comply with the requirements by the revised deadline.

ESA REVIEW

06/01 - OJEU - ESAs review package published

The European Supervisory Authorities (ESAs) review package has been published in the Official Journal of the European Union (OJEU). The package consists of an Omnibus Regulation amending the ESAs founding Regulations, MiFIR, the Benchmarks Regulation (BMR) and the Transfer of Funds Regulation; an Omnibus Directive amending MiFID 2, Solvency 2, and the Anti-Money Laundering Directive (AMLD); and an amendment to the European Systemic Risk Board (ESRB) founding regulation. The ESAs review package entered into force on 30 Dec 19 and the changes to the ESAs and ESRB founding Regulations as well as the Transfer of Funds Regulation have become applicable. The changes to Solvency II and the AMLD will apply from 30 Jun 2021, and the changes to MiFID 2/R and the BMR will apply from 1 Jan 2022.

EU

08/01 - ECB - Paper on bank funding costs and solvency published

The ECB has published a paper investigating the relationship between senior bond yields and bank solvency for euro area banks. It finds a notable negative relationship between bank solvency and other funding cost types, and shows that senior bond yields are more sensitive to a change in solvency than deposit or interest rates. The paper also concludes that the ECB monetary policy stance, uncertainty in the financial markets and sovereign risks drive up bank funding costs.

09/01 - ESMA - Strategic Orientation for 2020-22 published

ESMA has published its Strategic Orientation for 2020-22, setting out its core objectives. It underlined the completion of the Capital Markets Union (CMU), the promotion of sustainable finance and consistent implementation of the Single Rulebook. It will examine new opportunities and cyber threats that arise from digitalisation, will continue to promote open EU financial markets and ensure a proportionate regulatory approach. ESMA also reflects upon its expanded supervisory responsibilities and powers granted by the ESAs Review and EMIR 2.2. Among others, these include enhanced supervisory convergence tools and the strengthening of investor protection.

20/01 - EESC - Summary of relevant opinions on EMU completion published

The European Economic and Social Committee (EESC) has published its third summary of relevant EESC opinions on topics pertaining to the EMU, such as the EU's economic priorities and financing growth. It makes several recommendations, including a stable monetary and financial pillar, a strong economic pillar, an expansion of the social pillar and a political pillar that guarantees democracy, solidarity and unity. The paper also explores the EMU's external dimension and the international role of the Euro, and calls for a more pro-active stance to promote the EU's interests

22/01 - Council - Outcome of the ECOFIN meeting published

The Economic and Financial Affairs Council (ECOFIN) has published the outcome of their latest meeting, which took place on 17 Jan 20. The issue of digital taxation topped the agenda in part because of the forthcoming OECD meting aimed at finding common ground for a global framework at the end of the month, while Finance ministers reiterated their support for an international solution and commitment to actively engage in OECD negotiations. The recently proposed Green Deal was also discussed, where Member States are expected to express their views in the coming months on the concrete policy actions proposed by the EC.

23/01 - ECB launches review of its monetary policy strategy

The ECB launched a review of its monetary policy strategy. Review will encompass quantitative formulation of price stability, monetary policy toolkit, economic and monetary analyses and communication practices. Other considerations, such as financial stability, employment and environmental sustainability, will also be part of the review. It is expected to be concluded by end of 2020 and will be based on thorough analysis and open minds, engaging with all stakeholders.

23/01 - Commission to ’strive for more’ in 2020 work plan

The European Commission will promise to “strive for more at home in order to lead in the world” in its 2020 work plan, according to the latest draft obtained by POLITICO. An 11-page communication, dated January 23 and set to be discussed by commissioners at a College meeting on Wednesday, is organized around the six themes listed by Ursula von der Leyen in her political guidelines, which include the Green Deal, digital issues, foreign policy and democracy. The draft work plan states the “driving force” between the Commission’s 2020 agenda is achieving a “fair, climate-neutral, digital Europe” in the context of “increasingly volatile” global events. The document also describes developing a new relationship with the United Kingdom after Brexit as an “unprecedented” challenge and one that should not be underestimated.

28/01 - ECB - 2019 SREP report published

The ECB has published its 2019 Supervisory Review and Evaluation Process (SREP) report, assessing the sustainability of banks' business models, adequacy of internal risk management and governance, risks to capital and risks to liquidity and funding. The report highlights that earnings of most significant institutions are below their cost of capital, that guidance scores for internal governance appear to be worsening and noted that some banks reported losses as a result of conduct risk occurrences. In response, supervisors intend to intensify efforts to address sustainability of banks’ business models, aim to improve management effectiveness and strengthen internal controls and risk management.

28/01 - Commission adopts 2020 work program

The European Commission has confirmed it will launch 43 new initiatives under its 2020 work plan/ The agenda for the coming year adopted today is organized around six themes: the Green Deal, digital affairs, the economy, foreign policy, migration and security, and democracy. New initiatives range from a European Climate Law and regulation on artificial intelligence to a new industrial strategy and plans to tackle unfair foreign subsidies. The full list of work program documents can be found here.

04/02 - ESMA guidelines on enforcement of financial information published

ESMA has published an amended version of its guidelines to further harmonise the enforcement of financial information by national regulators. The amendments to the guidelines aim to strengthen supervisory convergence across the European Economic Area (EEA) and prevent regulatory arbitrage, resulting to the contribution of investor protection. The amendments will become effective on 01 Jan 2022.

05/02 - EC - Communication on Economic Governance Review published

The EC has published its communication on the Economic Governance Review, which aims to assess the extent to which the economic and fiscal surveillance framework established by the six-pack and two-pack reforms have been effective in ensuring sustainable government finances, enabling closer coordination of economic policies and promoting convergence in Member States' economic performances. The EC will run a consultation on this communication from 17 Feb 20 until 30 Jun 20.

18/02 - Cayman Islands, Panama land on EU tax haven blacklist

Finance ministers today added four countries to the EU’s blacklist for tax havens outside the bloc, including Panama and U.K. territory Cayman Islands. The blacklist in full includes American Samoa, Cayman Islands, Fiji, Guam, Oman, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, U.S. Virgin Islands and Vanuatu. Blacklisting the Cayman Islands, a British overseas territory, should be a warning to the U.K. in the context of post-Brexit talks between London and Brussels, German conservative lawmaker Markus Ferber said in a statement.

FINTECH

06/01 - ECB - Working paper on tiered CBDC published

The ECB has released a working paper discussing the potential impact of general purpose central bank digital currency (CBDC) on the structure of the financial system. The paper suggests that a tiered remuneration system could address many of the challenges involved in CBDC, such as bank disintermediation, noting that the payment and store of value functions of money could be treated.

08/01 - EP Think Tank - Paper on competition in the digital economy published

The EP's Think Tank has published a paper on competition issues in the digital economy. It stresses the high level of concentration and high entry barriers to data-dependent markets linked to data access. In addition, it discusses regulating the sharing of data.

10/01 - IMF - Papers on Fintech regulation, supervision and crypto assets published

The IMF has published policy papers focusing on institutional arrangements for Fintech regulation as well as supervision and the regulation of crypto assets. The paper on Fintech supervision provides an overview of the existing regulatory arrangements for the supervision and regulation of Fintech. On crypto assets, the IMF maps out relevant elements that authorities should consider when putting in place a regulatory framework to address risks arising from crypto assets.

10/01 - UK FCA - FCA becomes AML/CTF supervisor for UK cryptoasset activities

The UK Financial Conduct Authority (UK FCA) has become the supervisor on anti-money laundering and counter terrorist financing (AML/CTF) issues for UK businesses carrying out cryptoassets activities, as set out under the amendment made to the 2017 Money Laundering, Terrorist Financing and Transfer of Funds Regulation.

21/01 - Central banks form group to explore digital currency creation

The group - comprising The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS) - will assess CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies.

22/01 - Council - Outcome of the ECOFIN meeting published

The Economic and Financial Affairs Council (ECOFIN) has published the outcome of their latest meeting which took place on 17 Jan 20. The issue of digital taxation topped the agenda in part because of the forthcoming OECD meting aimed at finding common ground for a global framework at the end of the month, while Finance ministers reiterated their support for an international solution and committed to actively engage in OECD negotiations. The recently proposed Green Deal was also discussed, where Member States are expected to express their views in the coming months on the concrete policy actions proposed by the EC.

24/01 - BIS - Report on central bank digital currencies published

The BIS has published a report which highlights efforts by central banks towards adopting central bank digital currencies (CBDCs). The report investigates motivations behind CBDCs adoption, the current legal status of CBDCs, intentions of central banks and the status of other digital currencies such as cryptocurrencies. The paper concludes that research into CBDCs by central banks is ongoing, but that little evidence exists of a move towards experimentation. The report also underlined a need for central banks to collaborate in assessing the risks of private digital tokens.

30/01 - BIS - Report on policy responses to Fintech published

The BIS has published a cross-country overview of the responses that financial authorities have pursued in relation to Fintech. Based on responses to a survey conducted in early 2019 by the Financial Stability Institute (FSI), the report finds that in order to enable technologies such as cloud computing or artificial intelligence, regulators have adjusted their existing regulations to add technology-specific elements in existing laws, regulation or guidelines. It also finds that the most common response to cryptoassets are warnings and clarifications of the regulatory treatment, with new crypto-specific licences or authorisations emerging in a few jurisdictions.

31/01 - OECD - Revised workplan on digital and corporate taxation published

The OECD has published a revised workplan outlining its plans to reach a global deal on the digital and corporate tax reform agendas before the end of 2020. The OECD has decided to adopt a two-step approach with plans to have key policy features approved by July 2020 and a more comprehensive technical report approved by the end of the year.

04/02 - BIS - Working Paper on economic forces driving Fintech adoption across countries published

The BIS has published a paper on the scale of adoption of Fintech by different economies. The paper identifies multiple factors to explain the level of Fintech adoption including unmet demand for financial services, macroeconomic conditions, regulation and demographic forces. Finally, the paper shows that Fintech adoption supports economic growth, in particular in Emerging Markets and Developing Economies (EMDEs).

04/02 - BIS - Paper on central bank digital currency published

The BIS has updated a survey on central bank digital currency (CBDC), showing that 10% of the central banks surveyed are likely to issue a CBDC in the short term, representing 20% of the global population. Finally, the paper outlines the need for collaboration on understanding the impact of private digital tokens, which is explained by comparing the adoption of stablecoin where cryptocurrency has failed.

06/02 - EIOPA - Final guidelines on outsourcing to cloud service providers published

EIOPA has released the final version of its guidelines on outsourcing to cloud service providers which aim to provide market clarity and foster supervisory convergence in this area. Through the course of the public consultation, EIOPA sought to streamline these guidelines to focus more upon the outsourcing of critical functions, and to clarify the scope of its application. NCAs will confirm whether they comply or intend to comply with the guidelines within the next two months. The application date of the guidelines has also been pushed back from 1 July 2020 to 1 January 2021.

13/02 - OECD: digital tax could bring countries $100 billion annually

A global digital tax deal would rake in up to $100 billion annually across high-, middle- and low-income economies, according to preliminary calculations by the OECD. The biggest losers of corporate tax revenue would be so-called investment hubs, which have low effective tax rates and a high proportion of foreign investments in relation to gross domestic product, such as Ireland, Switzerland, the Netherlands and Luxembourg. The OECD is in the midst of revamping global rules on taxing digital giants and aims to reach a deal by the end of 2020. The OECD’s calculations assume that global tax deal does not have a “safe harbor” regime, a proposal floated by U.S. Treasury Secretary Steven Mnuchin to let American companies choose to operate under the new regime or not.

19/02 - Commission presents strategies for data and Artificial Intelligence

The EU is rolling out strategic plans on data, artificial intelligence and platform regulation. The EU’s executive arm on Wednesday unveiled a series of proposals laying out the bloc’s approach to data, artificial intelligence and platform regulation over the next five years and beyond. The policy initiatives aims to wean Europe off its dependence on foreign-owned tech companies while bolstering the bloc’s own tech sector, with the aim of becoming more competitive against rivals in China and the United States. Presenting the package, which is made up of three documents, European Commission President Ursula von der Leyen underscored that technology should comply with people’s rights.

20/02 - The European Systemic Risk Board (ESRB) published a report on cyber risk.

The ESRB, made up of EU supervisors and central banks, listed a number of examples of how a cyberattack could lead to a financial crisis, considering how digital the industry has become. Hackers targeting account balances, for example, could lead to “loss of confidence in the system, triggering liquidity freezes, bank runs and panic” and undermine “the integrity of data.” Putting central banks in charge of “emergency communications” could ensure lenders react to a cyber-crisis, while “intervention” powers would give the sector a liquidity lifeline in a credit crunch, the report said.

19/02 - Digital | EU Commission package on Digital Strategy

On February 19, the EC adopted a comprehensive package on Digital Strategy, including a new data strategy and a White Paper on Artificial Intelligence. This strategy aims to generate an adequate data ecosystem in Europe to spur innovation in artificial intelligence (AI), and other new technologies such as the Internet of Things (IoT). The priority is to develop during 2020 a legislative framework for the governance of common EU data spaces to establish what data can be used in what situations, facilitate cross-border data use and prioritise interoperability. The EC will collect feedback from industry, civil society and national governments over the next several months. Concrete laws are not expected until the end of the year.

28/02 - Blockchain | EU Commission published study on blockchains - Legal, Governance and Interoperability Aspects

Blockchain and Distributed Ledger Technologies (DLT) as a set of trust technology is a key in free flow of data that underpins every data driven society. The study provides an extensive analysis on scenarios in building an EU legal framework for developing and deploying blockchain and DLT.

24/03 - Iosco report examines how existing regulations could apply to stablecoins

The Board of the International Organization of Securities Commissions today published a report identifying the possible implications of global stablecoin initiatives for securities markets regulators.

03/04 - EU moves toward “open finance” in consultation on digital gateways.

The European Commission is considering whether all financial institutions, not just banks, should develop digital gateways that allow online competitors to access their customer data to develop new services. These gateway demands do “not cover other types of data relevant to financial services and held by other firms within and outside the financial sector,” said the consultation, which ends June 26. “The Commission is reflecting upon additional steps in the area of financial services inspired by the principle of open finance”. The consultation is open until 28 June 2020.

03/04 - Fintech – EC launches consultation on a new digital finance strategy for Europe / FinTech action plan

As set out in the Commission work programme, given the broad and fundamental nature of the challenges ahead for the financial sector, the Commission will propose in Q3 2020 a new digital finance strategy / FinTech action plan that sets out a number of areas that public policy should focus on in the coming five years. This new strategy will build on the work carried out during the previous mandate, in particular in the context of the FinTech action plan. It will take into consideration all the recent market and technological developments that are likely to impact the financial sector in the near future. Responses to this consultation will inform forthcoming work on a digital finance strategy / FinTech action plan. The consultation is open until 26 june 2020.

14/04 – FSB publishes consultation addressing the regulatory, supervisory and oversight challenges raised by “global stablecoin” (GSC) arrangements

The consultative document (i) describes GSCs and how they may differ from other crypto-assets and other stablecoins; (ii) analyses the potential risks raised by GSCs; (iii) considers existing regulatory, supervisory and oversight approaches to GSCs and (iv) identifies issues that regulators, supervisors and oversight authorities may need to address; (v) considers the specific challenges arising in a cross-border context, including the need for cross-border cooperation and coordination; and (vi) makes high-level recommendations for regulatory, supervisory and oversight responses, including multilateral actions.

MIFID 2 /MIFIR

31/01 - ESMA - Consultation on the new MiFIR And MiFID II regimes for third country firms launched

ESMA has launched a consultation on draft technical standards on the provision of investment services and activities in the EU by third-country firms under MiFIR and MiFID II. The responses from the consultation will fed into the draft technical Standards for the EC. Deadline for response: 31 Mar 2020.

04/02 - ESMA - Consultation on MiFIR transparency regime for equity instruments launched

ESMA has launched a consultation on a MiFID II/ MiFIR review report on the transparency regime for equity and equity-like instruments, the double volume cap mechanism and the trading obligations for shares. ESMA is required to submit a report to the EP and the Council on the impact of the transparency obligations established in accordance with MiFIR. This consultation is of interest to competent authorities and firms that are subject to MiFID II and MiFIR, in particular investment firms and credit institutions. Deadline for submissions: 17 Mar 2020.

04/02 - ESMA - Final report on product intervention requirements under MiFIR published

EMSA has published a final report on Technical Advice to the EC on the effects of product intervention measures, summarising the feedback received in response to the call for evidence by ESMA on 30 September 2019. ESMA has recommended the EC to address the risk of arbitrage between MiFID firms and fund management companies. In order to improve to level playing field across the Single Market, ESMA has advised the transformation of temporary measures into permanent measures and recommended the extension of their powers allowing the introduction of temporary bans (up to 18 months).

05/02 - ESMA - CSA on MIFID II suitability rules launched

ESMA has launched, in conjunction with NCAs, a common supervisory action (CSA) on the application of MIFID II suitability rules across the EU in order to gauge progress made by intermediaries in their application. The CSA also aims to examine how the costs of investment products are taken into account by firms when recommending investment products to clients.

17/02 - Brussels unveils reforms to core financial markets rules

Brussels has unveiled possible reforms to its financial markets rules, including creating a consolidated tape for share prices and easing some investor protection requirements. The European Commission set out its proposals in a consultation to review the second Markets in Financial Instruments Directive and Regulation (MiFID II and MiFIR). The EU’s top securities regulator has supported the creation of the equities tape to boost transparency. The consultation, which runs until April 20, also suggests changes to investor protection requirements following criticism that the rules are too stringent.

18/02 - MIFID II / MIFIR | ESMA updates Q&As on MIFID II and MIFIR investor protection topics

The ESMA has updated its Questions and Answers on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR). The Q&As on MiFID II and MiFIR investor protection and intermediaries’ topics includes new answers on ‘MiFID practices for firms selling financial instruments subject to the BRRD resolution regime’.

31/03 – ESMA provides clarifications for best execution reports under MiFID II

ESMA has urged NCAs not to prioritise supervisory action against execution venues and firms in respect of the deadlines of the general best execution reports under MiFID II in light of the Covid-19 pandemic. Due to the disruption, business execution venues may be unable to publish regulatory technical standard (RTS) 27 reports by the 31 March deadline. ESMA confirmed it will now allow affected firms until 30 June to submit reports and suggested that NCAs allow RTS 28 reports to be filed by 30 June instead of 30 April. The Authority is further encouraging NCAs to “generally apply a risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of RTS 27 and 28 concerning these deadlines”.

01/04 - ESMA completes review of MiFID II commodity derivatives regime

ESMA has t published a review report on the impact of position limits and position management on commodity derivatives markets, following over two years of the Markets in Financial Instruments Directive (MiFID II).

01/04 - ESMA advises the European Commission on inducements and costs and charges disclosures

ESMA published its advice to the European Commission (EC) on inducements and costs and charges disclosures under MiFID II. In the advice, ESMA encourages the EC to conduct further analysis on the topic of inducements, which is key for the protection of investors, and proposes some changes to the regime mainly aimed at improving the clients’ understanding of inducements. In relation to costs and charges disclosure, ESMA has found that the MiFID II disclosure regime generally works well and that it helps investors make informed investment decisions. However, ESMA advises that some disclosure obligations vis-a-vis eligible counterparties and professional investors be scaled back.

03/04 - MiFID 2/ MiFIR Review - Extension of response date of the EC consultation

The European Commission announced a four-week extension for the response date on the consultation on the review of MiFID 2/ MiFIR. The deadline for response is now 18 May (instead of 20 April). The report contains proposals to make the commodity derivatives framework operate more efficiently for market participants and competent authorities. This includes refocusing the position limit regime on the most important commodity derivatives contracts, and improving convergent implementation of position management controls by trading venues through Level 2 measures.

09/04 - ESMA extends MIFID II/MIFIR transparency review report consultation to 14 june 2020

The European Securities and Markets Authority (ESMA) has decided, in view of the effects of the ongoing Covid-19 pandemic on stakeholders and market participants, to further extend the response date for the consultation on the MiFID II/MiFIR review report on the transparency regime for non-equity instruments and the trading obligation for derivatives to 14 June 2020.

09/04 - ESMA postpones publication dates for annual non-equity transparency calculations and quarterly SI data

ESMA has issued a Public Statement postponing the application of the annual non-equity transparency calculations and the calculations for the systematic internaliser test for derivatives, ETCs, ETNs, emission allowances and structured finance products (SFPs) under MiFID II. ESMA believes that compliance with these obligations, originally scheduled for publication on 30 April and 1 May, could create unintended operational risks for market participants in the current market environment. ESMA, in cooperation with NCAs, is taking this approach in recognition of the difficulties encountered by market participants in complying with an update of the transparency calculations for non-equity instruments, in a situation where they already face significant challenges due to the Covid-19 pandemic.

MMFR

31/03 - ESMA announces update to reporting under the Money Market Funds Regulation

ESMA announced that the first reports by Money Market Funds (MMF) managers under the MMF Regulation (MMFR) should be submitted in September 2020. The original date for submissions was April 2020. This change in timeline comes as there will be an update to the XML schemas that should be used for the reporting, and MMF managers will need additional time to comply with the reporting obligation.

PRIIPs

22/01 - ESMA - Responses to joint consultation paper on PRIIPs KID published

ESMA has published the responses to their consultation paper concerning the amendments to the PRIIPs KID which were open to submission until 13 Jan 20

PROSPECTUS

14/01 - ESMA - Compliance table on Guidelines on Risk factors under the Prospectus Regulation published

ESMA has published a table on compliance by competent national authorities complying or their intention to comply with its Guidelines on Risk factors under the Prospectus Regulation. The competent authorities of all but two Member States are presently in compliance, with those from Hungary and Iceland intending to comply by 31 Mar 20 and 01 Apr 20 respectively.

03/02 - ESMA - Technical advice on general equivalence criteria for prospectuses published

ESMA has published a letter to the EC's Directorate-General for Financial Services, Financial Stability and the Capital Markets Union (DG FISMA) regarding the equivalence criteria relative to the Prospectus Regulation. The letter raises significant practical challenges of operating an equivalence regime. ESMA suggests that the limited demand for an equivalence regime would not translate to major difficulties should the EC not maintain its mandate to issue technical advice on equivalence criteria. In addition, they point out an existing alternative for third-country issuers to gain access.

18/02 - Prospectus Regulation | ESMA updates its Q&As

The two Q&As provide clarification on the following issues in relation to the Prospectus Regulation: (i) the number of additional pages that can be included in a summary where there is more than one guarantor; and (ii) the number of additional pages that can be included in a summary relating to several securities, as per Article 7(7) of the PR.

SFTR

06/01 - ESMA - Guidelines on reporting under SFTR published

ESMA has published guidelines on reporting under the Securities Financing Transactions Regulation (SFTR). The guidelines address elements such as the provision of data access to authorities by trade repositories, the number of reportable transactions, and the population of reporting fields for certain data. ESMA also published its final report on these guidelines, as well as amended SFTR validation rules, and a statement on the implementation of legal entity identifier (LEI) requirements under this reporting regime.

19/03 - ESMA sets out approach to SFTR implementation

ESMA is issuing a Public Statement to ensure coordinated supervisory actions on the application of Securities Finance Transactions Regulation (SFTR), in particular, on the requirements regarding the reporting start date, as well as the registration of Trade Repositories (TRs). This approach is needed in response to the effect of current adverse developments events as a result of the Covid-19 pandemic. ESMA expects competent authorities not to prioritise their supervisory actions towards entities subject to Securities Finance Transactions (SFT) reporting obligations as of 13 April 2020 and until 13 July 2020. ESMA also expects TRs to be registered sufficiently ahead of the next phase of the reporting regime, i.e. 13 July 2020, for credit institutions, investment firms, CCPs and CSDs and relevant third-country entities to start reporting as of this date.

26/03 - ESMA clarifies position on SFTR backloading

ESMA has issued a revised version of its 19 March Public Statement on coordinated supervisory actions on the application of Securities Finance Transactions Regulation (SFTR). The revised statement clarifies that SFTs concluded between 13 April 2020 and 13 July 2020 and SFTs subject to backloading under SFTR also fall within those issues in respect of which competent authorities are not expected to prioritise in their supervisory actions towards counterparties, entities responsible for reporting and investment firms in respect of their reporting obligations under SFTR or MiFIR and to generally apply their risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner.

SHORT-SELLING REGULATION

16/03 - ESMA leashes short-sellers amid coronavirus turmoil

Europe’s top securities regulator is putting short-sellers on a tight leash in an effort to limit sharp falls in stock markets due to the coronavirus outbreak. ESMA lowered the threshold for investors to disclose short positions, to 0.1 percent from 0.2 percent, to give national watchdogs information earlier. The Paris-based authority said it took the decision after European stock markets plummeted 30 percent in less than a month due to fears over the economic fallout because of the pandemic.

SOLVENCY II

20/01 - ESRB - Response to consultation on Solvency II review published

The European Systemic Risk Board (ESRB) has published its response to EIOPA's consultation paper on the 2020 review of Solvency II. The response focuses on how to better feed macroprudential considerations into Solvency II, on establishing a harmonised recovery and resolution framework across the EU, and aims to ensure that risks are contained correctly in Solvency II. The ESRB highlighted that a comprehensive regulatory framework is required to ensure that the sector remains functional during crises.

28/01 - EIOPA - Information on Solvency II reporting published

EIOPA has published its annual report on the use of limitations and exemptions for 2018 and Q1 2019 under Solvency II. EIOPA underlined their support for the assessment and revision of the proportionality principle, but stresses the importance of understanding its current implementation. It notes that, in addition to the concrete proportionality measures in the form of limitations and exemptions, others should also be considered, such as embedded proportionality, risk-based thresholds, limitations in the scope of information and exemptions for undertakings from quarterly and annual reports if templates are reported on an item-by-item basis.

29/01 - EIOPA - Risk dashboard on Solvency II data for Q3 2019 published

EIOPA has published an updated risk dashboard for Q3 2019 based on Solvency II data. The dashboard assessed risks from macroeconomic developments, credit, securities markets, liquidity and funding, profitability and solvency, interlinkages and imbalances, insurance underwriting and general market perceptions. The results indicate that risks related to credit, liquidity and funding, profitability and solvency and insurance underwriting remained stable, while those of interlinkages and imbalances increased. It concluded that macro risks remained stable and high, while market risks were high but in decline.

05/02 - EIOPA - Consultation on proposals for Solvency II 2020 review launched

EIOPA launched a consultation on the review of technical implementation means for the package of Solvency II Supervisory Reporting and Public Disclosure, aiming to improve the efficiency and effectiveness of the reporting and disclosure framework, and reduce the costs associated with the processes. Deadline for submissions: 20 Apr 2020.

07/04 - EIOPA publishes opinion on the supervision of remuneration principles in the insurance and reinsurance sector

EIOPA has published an Opinion on the supervision of remuneration principles in the insurance and reinsurance sector. The Opinion addresses how to ensure consistent practices in the application of the remuneration principles included in Solvency II.

SUSTAINABLE FINANCE

14/01 - EC - European Green Deal Investment Plan and Just Transition Mechanism published

The EC has presented both its Communication on the Sustainable Europe Investment Plan and its Proposal for a Regulation establishing the Just Transition Fund. The Sustainable Europe Investment Plan seeks to mobilise EUR 1 trillion in sustainable investments, enable both public and private investors to identify sustainable investments, and provide practical support to public authorities and project promoters in implementing sustainable projects. The Just Transition Mechanism aims to mobilise at least EUR 100 billion of targeted support to regions most impacted by the transition between 2021 and 2027.

15/01 - EC - Consultation on the Just Transition Fund launched

The EC has launched a consultation on the Just Transition Fund (JTF) following its publication by the EC yesterday. It aims to gather feedback on the JTF proposal which is a key aspect underpinning the Green Deal's emphasis on a “just transition” as it aims to compensate workers, industries and Member States that are heavily reliant on carbon and energy intensive activity. Deadline for response: 11 March 2020.

22/01 - Council - Outcome of the ECOFIN meeting published

The Economic and Financial Affairs Council (ECOFIN) has published the outcome of their latest meeting which took place on 17 Jan 20. The issue of digital taxation topped the agenda in part because of the forthcoming OECD meting aimed at finding common ground for a global framework at the end of the month, while Finance ministers reiterated their support for an international solution and committed to actively engage in OECD negotiations. The recently proposed Green Deal was also discussed, where Member States are expected to express their views in the coming months on the concrete policy actions proposed by the EC.

06/02 - ESMA - Strategy on sustainable finance published

ESMA has published its strategy on sustainable finance, which highlights how sustainability will be placed at the core of the institution by adopting environmental, social and governance (ESG) factors in its work. Key priorities include transparency obligations, risk analysis on green bonds, ESG investing, taxonomy, supervision and convergence of national supervisory practices on ESG factors. ESMA will establish a consultative working group of stakeholders in the coming months to support their Coordination Network on Sustainability.

26/02 - EU pitches green action in country specific reports

Brussels today presented each EU government with tailored reforms that aim to boost the economy and help make the bloc carbon-neutral by 2050. The EU’s executive arm handed out the non-binding instructions through its so-called European Semester, which aims to coordinate economic policies by issuing countries with individual reports.

09/03 - EU expert report outlines detailed list of sustainable investment criteria

A technical expert group today released its final report on what should count as sustainable investment activities under the EU's new taxonomy rules. The report lists sustainability criteria for 70 economic activities that help reduce emissions, such as renewable energy, and for 68 activities that contribute to climate change adaptation such as climate-proof infrastructure, according to comment by the expert group.

31/03 - Sustainable Finance | ESAs reports on short-termism

Under its Action Plan ‘Financing Sustainable Growth’, the EC had an action point related to “fostering sustainable corporate governance and attenuating short-termism in capital markets”. In this context, it asked the three ESAs to investigate potential sources of undue short-termism on corporations from the financial sector and provide advice. The call for advice invited the ESAs to follow four steps in order to fulfil their mandate: (i) collect initial evidence of undue short-termism within their respective remits; (ii) assess possible drivers of undue short-termism; (iii) identify areas in existing regulations which contribute to mitigating undue short-termism and identify areas where the rules exacerbate short-term pressures; (iv) on the basis of the evidence, provide policy recommendations in specific areas. The EBA, the ESMA and the EIOPA have published reports on undue short-term pressures on corporations from the financial sector.

08/04 - Sustainable Finance - EU Commission consults on the renewed sustainable finance strategy

Building on the 2018 Action Plan on financing sustainable growth, the renewed sustainable finance strategy will provide a roadmap with new actions to increase private investment in sustainable projects and activities to support the different actions set out in the European Green Deal and to manage and integrate climate and environmental risks into our financial system. The initiative will also provide additional enabling frameworks for the European Green Deal Investment Plan. Consultation period: 8 April 2020 - extended to 15 July 2020.

TRANSPARENCY DIRECTIVE

27/03 - ESMA issues guidance on financial reporting deadlines in light of Covid-19

ESMA has issued a public statement on the implications of the Covid-19 pandemic on the deadlines for publishing financial reports which apply to listed issuers under the Transparency Directive. The Statement acknowledges the difficulties encountered by issuers in preparing financial reports and the challenges faced by auditors in carrying out timely audits of accounts due to the Covid-19 pandemic, which may impair the ability of issuers to publish within the legislative deadlines. On that basis, the Statement recommends NCAs to apply forbearance powers towards issuers who need to delay publication of financial reports beyond the statutory deadline.

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