In this issue:

- Derivatives

- Regulatory Capital

- Financial Services

- Enforcement

- Events

- People

- Excerpt from Derivatives -

ESMA Requests Clarification on Definition of Derivatives under EMIR -

On 17 February 2014, the European Securities and Markets Authority (“ESMA”) published a letter it had sent to Michel Barnier, the Commissioner for Internal Market and Services of the European Commission. The letter raises the issue of the definition of derivatives or derivatives contract in the European Market Infrastructure Regulation (“EMIR”) which refers to the list of financial instruments in the Markets in Financial Instruments Directive (“MiFID”). MiFID has been transposed into the national laws of Member States with the result that there is no common definition of derivative or derivative contract in the EU. The result is that it will be very difficult to achieve consistent application of EMIR across the EU. In particular, the definition should be clarified in relation to FX forwards, spot FX and physically settled commodity forwards. Until such clarification, ESMA understands that national regulators will not implement EMIR for contracts that are not clearly identified as derivatives contracts across the EU. ESMA suggests that the Commission uses its powers under MiFID to adopt an implementing act providing for such clarification.

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