FIA Publishes Report on the Status of Clearing Members' Brexit Contingency Plans

The Futures Industry Association ("FIA") published a report on the status of clearing members' Brexit contingency plans on June 5, 2018. The report is available here.

The report is based on the FIA's interviews with 15 of its primary members reflecting a cross-section of clearing firms by jurisdiction (UK, EU27, US and Swiss central counterparties ("CCPs")), market segment and size to discuss their Brexit implementation plans in relation to their client clearing businesses. The results show that firms are not willing to restructure their business at any cost and may either stop certain client relationships, stop giving access to financial market infrastructures ("FMIs") or close entire business lines.

The survey illustrates that there is not one solution that will suit all firms on their post Brexit contingency planning. To address the uncertainties about how EU regimes will work post Brexit, the report has recommended firms ask questions in the following areas:

• UK firms may be permitted to benefit from the third country passport under the Markets in Financial Instruments Regulation (Regulation 600/2014) ("MiFIR"). If so, from when?
• UK CCPs will be capable of recognition under the European Market Infrastructure Regulation ("EMIR"). If so, from when?
• Will UK CCPs retain their qualifying central counterparty ("QCCP") status under the Capital Requirements Regulation ("CRR")?

Will EU27 CCPs be able to continue to service UK clearing members and clients?

OJ Publishes Ninth Implementing Regulation Extending Transitional Periods Related To Own Fund Requirements for CCP Exposures

Commission Implementing Regulation ((EU) 2018/815) on the extension of the transitional periods related to own funds requirements for exposures to central counterparties ("CCPs"), set out in the Capital Requirements Regulation (Regulation 575/2013) ("CRR") and the European Market Infrastructure Regulation ("EMIR") (Regulation 648/2012) has been published in the Official Journal of the EU ("OJ").

Commission Implementing Regulation ((EU) 2017/2241) was published in the OJ on June 4, 2018. It is available here. The Implementing Regulation will enter into force on June 7, 2018.

Rating Agency Developments

On May 30, 2018, DBRS published a report entitled: Updated Operational Risk Assessment for U.S. ABS Servicers Methodology. Release.

On May 25, 2018, Fitch published a report entitled: U.S. Timeshare Loan ABS Rating Criteria. Release.

RMBS and Other Securities Litigation

RMBS Trustees Defeat Motion for Class Certification in California State Court

On May 30, 2018, Judge Ronald L. Bauer of the Superior Court of the State of California, County of Orange denied investor Plaintiffs' (led by BlackRock Balanced Capital Portfolio (FI)) Motion for Class Certification and Appointment of Class Representative and Class Counsel in an action alleging breach of contract against RMBS Trustees Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas. Ruling from the bench, Judge Bauer based his decision on the difficulties Plaintiffs would face in "presenting evidence of causation and damages" in a class action without making an individualized showing. He further noted that the analysis would be "intensely factually oriented" and would require reviewing "an enormous number of detailed transactions." Judge Bauer also referred to the issues of standing, statute of limitations, and choice of law in the case as "impossible" to pursue in a class action. Order.