AIFMD: Revised Q&A

ESMA published revised Q&A’s on 26 March 2015 on AIFMD scope issues. The Q&A includes updated or new questions and answers on reporting, notification and holding of additional own funds.

Read Q&A: Application of the AIFMD

Maijoor Further Endorses Capital Markets Union

ESMA continues to promote the idea of a CMU, with Steven Maijoor, ESMA chair, outlining his vision of the necessary components for a fully integrated capital markets union (CMU). His speech of 12 March 2015 focused on how to increase capital availability and support economic growth in the EU over a five-year period.

Read the full speech

EMIR: New MoU and Revised Opinion on Interest Rate Swaps

New MoU: ESMA published a memorandum of understanding (MoU) on 9 March 2015 that it has entered into with the Monetary Authority of Singapore (MAS) under EMIR, setting out the co-operation arrangements between the two authorities regarding central counterparties (CCPs) that are established in Singapore and have applied to ESMA for recognition under Article 25 of EMIR.

Read the full MoU

Revised opinion: ESMA published a revised opinion on 6 March 2015 on draft regulatory technical standards (RTS) on the clearing obligation for interest rate swaps (IRS) under EMIR. Besides incorporating practical issues raised by the European Commission's January 2015 corrigendum notification, the revised opinion does not introduce material changes compared to the original opinion and the draft IRS RTS have not been modified.

Read the full revised opinion

MiFID II: ESMA Consults on Complex Debt Instruments and Deposits

ESMA launched a consultation on draft guidelines on complex debt instruments and structured deposits on 24 March 2015. These guidelines offer further clarification on which types of financial instruments and structured deposits can be provided without the firm assessing a client’s knowledge and experience (i.e. to carry out an appropriateness test). This CP also covers the concept of embedded derivatives for debt instruments. The consultation will be open until 15 June 2015. ESMA expects to publish final guidelines in Q4 2015.

Read the full consultation

Draft Report Published on Proposed Money Market Funds Regulation

On 26 February 2015, the European Parliament published a press release announcing that its Economic and Monetary Affairs Committee (ECON) has voted on a draft report on the proposed Regulation on Money Market Funds (MMF Regulation). The press release highlights the proposed amendments made by ECON:

• Limiting constant net asset value (CNAV) MMFs to two types. These are retail CNAV MMFs, available for subscription only for charities, non-profit organisations, public authorities and public foundations, and public debt CNAV MMFs which are required to invest 99.5% of their assets in public debt instruments.
• Introducing low volatility net asset value (LVNAV) MMFs.
• Requiring MMFs to diversify their asset portfolios and have in place sound stress-testing processes.
• Preventing MMFs from receiving external support from third parties including from their sponsors.
• Requiring MMFs to report certain information to their investors on a weekly basis.
• Requiring public debt and retail CNAVs and LVNAVs to apply "liquidity fees" and "redemption gates" in circumstances to help stem sudden outflows.
• ECON also voted to remove the requirement for CNAV MMFs to hold a cash capital buffer equal to 3% of their assets.

Read the press release "Making money market funds more resilient to financial crises" (25 February 2015)

Shadow Banking: EBA Consults on Exposures to Shadow Banking

The European Banking Authority (EBA) published a consultation paper on 19 March 2015 on guidelines on limits on exposures to entities that carry out banking activities outside a regulated framework under the Capital Requirements Regulation. The guidelines set out requirements for institutions to set limits to their individual exposures to shadow banking entities and to the shadow banking sector in its entirety.

Read the full consultation paper

UCITS: New KIID Q&A

ESMA published revised Q&A’s on the KIID on 26 March 2015. The Q&A includes a new question on the treatment of past performance information in case of fund mergers.

Read the full Q&A