AIFMD – ESMA Updates its Q&A on AIFMD Application

ESMA updated its questions and answers on the application of the AIFMD on 2 and 15 December 2015. The 2 December update focussed on various questions around leverage and liquidity disclosures. The 15 December update focussed on clarification around the “look through” basis of depositary liability.

EMIR – Confirmed Start Date for Clearing and New CCP Cooperation Agreements

ESMA has confirmed the start date for clearing of EUR, GBP, JPY and USD denominated basis and fixed-to-floating interest rate swaps; as well as EUR, GBP and USD denominated forward rate agreements and overnight index swaps - 21 June 2016 for “Category 1” entities, 21 December 2016 for “Category 2” entities and 21 June 2017 for: “Category 3” entities.

For more detailed information, see the Dechert OnPoint 'Confirmed Start Dates for Clearing Under EMIR'

ESMA confirmed that it had entered into co-operation agreements with Canadian and Swiss regulators on CCP recognition on 7 January 2016.

MiFID II – ESMA Issues Final Reports on the Assessment of Knowledge and Competence, Cross Selling Practices and Transaction Reporting

ESMA issued its final report on guidelines for the assessment of knowledge and competence under MiFID II on 17 December 2015. These guidelines come into force on 3 January 2017, and specify the criteria for the assessment of the necessary knowledge and competence requirements of investment firms’ staff.

Read the press release 'ESMA Publishes Final Report on MiFID II Guidelines on Assessment and Knowledge of Competence'

ESMA also issued its final report on guidelines on cross-selling practice under MiFID II on 22 December 2015. These guidelines come into force on 3 January 2017, and include principles on improving disclosures when products are cross sold, addressing conflicts of interest and improving understanding on whether purchasing individual products offered in package is possible.

Read the press release 'ESMA issues MiFID II Guidelines on Cross-Selling Practices'

ESMA issued a consultation paper on guidelines on transaction reporting, reference data, order record keeping & clock synchronisation on 23 December 2015. The consultation is open for comment until 23 March 2016.

Read the press release 'ESMA Consults on Transaction Reporting, Reference Data, Record-Keeping and Clock Synchronisation Under MIFIR'

Other EU Developments – Transparency of Securities Financing Transaction Regulation, Remuneration Policies and EU Regulatory Work Programme

The regulation on transparency of securities financing transactions and of reuse (the “SFTR”) was published on 23 December 2015. The SFTR will eventually bring an EMIR-style transaction reporting regime to securities lending, requiring counterparties to report securities financing transactions to a trade repository.

For more detailed information, see the Dechert OnPoint 'New EU Regulation on Securities Financing Transactions and Reuse of Collateral'

The EBA published final guidelines on sound remuneration policies and its opinion on the application of proportionality on 21 December 2015. The guidelines aim to ensure that institutions calculate correctly and consistently the so called ‘bonus cap' by setting out specific criteria for mapping all remuneration components into either fixed or variable pay and detailing how specific remuneration elements such as allowances, sign-on bonuses, retention bonuses and severance pay are to be recognised.

Read the press release 'EBA Publishes Final Guidelines on Sound Remuneration Policies and its Opinion on the Application of Proportionality'

The opinion is available on the EBA website. 

The EU Council published its work programme for the next 18 months on 30 December. The following areas will be priorities:

• Money Market Funds Regulation
• Banking Structural Reform Regulation
• Single Resolution Mechanism implementation
• Upcoming proposal on the Resolution of Central Counterparties ("non-bank resolution")
• Review of funding and governance of structures of European Supervisory Authorities
• European Deposit Insurance Scheme
• Capital Markets Union Action Plan, including a reduction of capital charges for infrastructure investments
• Securitisation proposal
• Review of the Prospectus Directive

Read the press release '18-month Programme of the EU Council for the Dutch, Slovak and Maltese Presidencies'