In this issue:

- Derivatives

- Regulatory Capital

- Recovery & Resolution

- Bank Structure

- Financial Market Infrastructure

- Financial Services

- Funds

- Consumer Protection

- Enforcement

- Events

- Excerpt from Derivatives:

ESMA Consults on the Calculation of Counterparty Risk by UCITS -

On 22 July 2014, the European Securities and Markets Authority (“ESMA”) published a discussion paper seeking comments on its proposals for the calculation of counterparty risk by Undertakings for Collective Investment in Transferable Securities (“UCITS”) for OTC derivative transactions subject to the clearing obligation under the European Market Infrastructure Regulation (“EMIR”). ESMA is concerned about the impact of a failing clearing member, or client of a clearing member, on a UCITS entering cleared OTC derivatives. UCITS are retail investment funds and are regulated across the EU to ensure investor protection. ESMA is seeking views on: (i) how a UCITS should calculate limits on counterparty risk in centrally cleared OTC derivative transactions; and (ii) whether the same rules should be applied by a UCITS for centrally cleared OTC transactions as for exchange-traded derivatives (“ETDs”). Under existing UCITS legislation, a UCITS’ investments in OTC derivatives are subject to counterparty risk exposure limits. ETDs are not subject to the same limitation. The discussion paper is open until 22 October 2014.

Please see full newsletter below for more information.

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Topics:  Banks, Capital Markets, CFTC, Derivatives, EMIR, ESMA, European Commission, Exchange-Traded Products, Financial Regulatory Reform, Leverage Ratio, Market Participants, OCR, UCITS

Published In: General Business Updates, Consumer Protection Updates, Finance & Banking Updates, International Trade Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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