Investment Funds Update – Europe: Legal and regulatory updates for the funds industry from the key asset management centres and primary European fund domiciles - Issue 11, 2019: European Union

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MiFID II – updated Q&As on MiFID II and MiFIR transparency topics and obligations on disclosure of information to clients in the context of Brexit

ESMA updated its Q&As on 4 January on MiFID II and MiFIR transparency topics. 

The updated Q&As address:

  • Publication of request for market data (RFMD) transactions;
  • Default transparency regime for equity instruments (amendment to an existing Q&A); and, 
  • Default LIS and SSTI thresholds for bonds

Read: The updated Q&As

Read: The associated press release

ESMA issued a statement on 19 December reminding firms of their MiFID obligations on disclosure of information to clients in the context of the United Kingdom withdrawing from the European Union.

The statement emphasised that the following information should be provided as soon as possible, once available, and should cover at least the following areas:

1.Impact of UK departure:

2.Actions the firm is taking:

3.Implications of any corporate restructuring:

4.Impact on contractual rights

Read: The statement

Read: The associated press release 

EMIR – statement in recognition applications for a no-deal Brexit scenario

ESMA issued a public statement on 19 December confirming that it is ready to review UK CCPs’ recognition applications for a no-deal Brexit scenario: 

Read: The statement

Read: The associated press release

Other – accepted market practice under the Market Abuse Regulation (“MAR”), advice on Initial Coin Offerings and Crypto-Assets and further restrictions on CFDs

ESMA issued a report on 18 December to the European Commission on the application of accepted market practices under the Market Abuse Regulation. 

The includes ESMA’s views on the application of accepted market practices together with recommendations to National Competent Authorities

Read: The report

Read: The associated press release

ESMA published its advice on 9 January: Initial Coin Offerings and Crypto-Assets.

The advice identified a number of concerns in the current financial regulatory framework regarding crypto-assets. These gaps and issues fall into two categories:

  • For crypto-assets that qualify as financial instruments under MiFID, there are areas that require potential interpretation or re-consideration of specific requirements to allow for an effective application of existing regulations; and
  • Where these assets do not qualify as financial instruments, the absence of applicable financial rules leaves investors exposed to substantial risks.

At a minimum, ESMA believes that Anti Money Laundering (AML) requirements should apply to all crypto-assets and activities involving crypto-assets. There should also be appropriate risk disclosure in place, so that consumers can be made aware of the potential risks prior to committing funds to crypto-assets.

Read: The advice 

Read: The associated press release

ESMA confirmed on 19 December that it would renew restrictions on selling CFDs to retail clients for a further three months from 1 February. 

Read: The press release

EMIR – ESMA updates list of derivative subject to clearing

ESMA updated its public register of derivatives on 6 December subject to the clearing obligation.

Read: The register

MIFID II – consolidated lists of implementing and delegated acts and regulatory technical standard

The European Commission issued updated tables on 13 December listing MiFID II’s implementing and delegated acts, and its regulatory technical standards. The tables are available here:

Read: Implementing and delegated acts 

Read: Regulatory Technical Standards

Other – ESMA focusses on “regtech”?

Patrick Armstrong of ESMA gave an overview on 27 November of ESMA’s position on regulatory technology or “regtech.” The speech focused on ESMA’s “evolutionary rather than revolutionary approach.”

Read: The speech

 

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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