ESMA Publishes Q&As on EMIR
On August 8, the European Securities and Markets Authority (ESMA) published Questions and Answers on the implementation of Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR).
ESMA's statutory role is to build a common supervisory culture by promoting common supervisory approaches and practices. The Q&As were published to achieve a consistent application of EMIR. The first version of this document was published on March 20, and the second version on June 6. This document is expected to be updated and expanded as and when appropriate.
This version of the Q&As provides guidance on a number of issues including clarification on calculation of the clearing threshold, the nature of segregation and portability and the requirements for registration of trade repositories. Q&As.
Banking Liaison Panel Publish Annual Report
On August 5, the Treasury published the annual report of its Banking Liaison Panel for 2012-13. The Panel advises the Treasury about the effect of the special resolution regime (SRR) (established under the Banking Act 2009) on banks, the financial markets and those doing business with banks.
The report looks at the work that the panel will be doing for the remainder of 2013 and 2014, which concerns non-bank resolution regimes and EU legislative proposals on the Recovery and Resolution Directive (RDD) and the euro banking union. The Panel also expects to review the findings of the second phase of the statutory review of the special administrative regime (SAR) for investment banks. Annual Report.
FSMA (OTC Derivatives, CCPs and TRs) (No. 2) Regulations Published
On August 5, the Financial Services and Markets Act 2000 (FSMA) (OTC Derivatives, Central Counterparties (CCPs) and Trade Repositories (TRs)) (No. 2) Regulations 2013 SI 2013/1908 were published. The regulations were made on July 30, and the majority of the regulations will come into force on August 26.
The regulations relate to the clearing of financial transactions through recognized clearing houses. The regulations implement in part Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR) and amend the following:
Supervisory, investigatory and enforcement powers of the Bank of England and the Financial Conduct Authority.
Companies Act 1989 to facilitate segregation and transfer of indirect clients' assets and positions.
Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001(S.I. 2001/995) (the Recognition Requirements Regulations). They impose new requirements on recognized central counterparties and recognized clearing houses, which are not central counterparties. Regulations.
ESMA Publishes Final Report on Reporting to Trade Repositories Under EMIR
On August 8, the European Securities and Markets Authority (ESMA) published its final report to the European Commission proposing that the start date for reporting exchange traded derivatives to trade repositories be postponed by one year to January 2015.
ESMA proposes to amend Article 5 of the Commission's Implementing Regulation (1247/2012), which sets out the implementing technical standards (ITS) on the format and frequency of reporting to trade repositories under the Regulation on OTC derivative transactions, central counterparties and trade repositories (Regulation 648/2012) (EMIR).
The current reporting start dates in Article 5 do not distinguish the methods of trading (exchange traded derivatives as against over-the-counter). ESMA believes that specification of exchange traded derivatives is necessary to ensure harmonized reporting. The delay allows ESMA time to develop guidelines and recommendations to ensure that reporting is consistent and capable of being efficiently used, and will allow time for their implementation by counterparties, trade repositories and regulators. Final Report.
Russian Note Trustee (a Bondholders Representative) and Other Changes in Corporate Bond Regulations
This Orrick law alert relates to the changes made in the Russian securities law by Federal Law No. 210-FZ dated July 23 (On Amendments to the Federal Law on the Securities Market and to Certain Russian Laws and Regulations). Specifically, said Law has introduced the concept of a bondholders' representative and expanded the concept of a general meeting of bondholders. The new amendments also set out in more detail how to redeem or repurchase Russian bonds before maturity. Orrick has actively assisted the Association of Russian Regional Banks in the drafting and promotion of the new law. For the complete alert, please click here.