Financial Industry Developments
2016 Data Breach Legislation Roundup: What to Know Going Forward
States were busy updating their data breach notification statutes in 2016. With 2016 in the rear view, let's take a look back at the legislative changes that will impact corporate incident response processes and what those trends portend going forward. To read the full article, please click here.
CFTC Extends Public Comment Period for the Supplemental Proposal for Regulation Automated Trading
On January 23, 2017, the U.S. Commodity Futures Trading Commission announced an extension for the public comment period for the supplemental proposal for Regulation Automated Trading (Regulation AT). Comments may now be submitted through May 1, 2017. Release.
Rating Agency Developments
On January 23, 2017, DBRS issued a report entitled North American CMBS Rating Methodology. Report.
On January 23, 2017, DBRS issued a report entitled Rating U.S. Federal Family Education Loan Program Securitizations. Report.
On January 23, 2017, Moody's issued a report entitled Global Packaged Goods. Report.
On January 23, 2017, Moody's issued a report entitled Global Pay Television – Cable and Direct-to-Home Satellite Operators. Report.
On January 20, 2017, DBRS issued a report entitled Master European Structured Finance Surveillance Methodology. Report.
European Financial Industry Developments
ECJ Clarifies Payment Services Directive
On January 26, 2017, the Court of Justice of the EU ("ECJ") published its judgment in BAWAG PSK Bank für Arbeit and others v. Verein für Konsumenteninformation (Case C-375/15) [2017] ECLI:EU:C:2017:38.
The judgment responds to a request for a preliminary ruling from the Oberster Gerichtshof (Austrian Supreme Court) concerning the interpretation of articles 36(1) and 41(1) of the Payment Services Directive (Directive 2007/64/EC) ("PSD"). The request was made during the proceedings relating to a clause included in the contracts of BAWAG PSK Bank für Arbeit (the "Bank") entered into with consumers for the provision of e-banking services.
The ECJ was required to consider whether the information given by the Bank to its customers through an e-banking mailbox is "provided," as opposed to being "made available," through a "durable medium" for the purposes of the PSD.
The ECJ's conclusion was that articles 41(1) and 44(1) of the PSD should be read in conjunction with article 4(25), meaning that the changes to the information and conditions as well as changes to the framework contract that are transmitted by the Bank to the customer through the electronic mailbox of an online banking website may not be considered to have been provided on a durable medium unless the following two conditions are met:
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The website must allow the user to store information addressed to them personally in such a way that they may access and reproduce it unchanged for an adequate period, without any unilateral alteration of its content by the user or any other professional being possible; and
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If the user is obliged to consult the website to become aware of that information, the transmission of that information must be accompanied by active behavior on the part of the user, aimed at drawing attention to the existence and availability of the information on the website.
If the user is obliged to consult a website to become aware of the relevant information, that information is merely made available to the user when the transmission of that information is not accompanied by such active behavior on the part of the user. The Austrian Supreme Court must now determine whether, in the case of the main proceeding, the two specified conditions have been met and whether the changes to the information and conditions, and the relevant framework contract, can be regarded as having been actively communicated by the Bank to the user of those services.
European Commission Consults on CMU Mid-Term Review
On January 20, 2017, the European Commission published a consultation paper requesting targeted input on revisions on the capital markets union ("CMU") action plan, together with frequently asked questions on the consultation.
The Commission intends to publish its mid-term review of the CMU action plan in June 2017. The aim of the review is to take stock of the progress towards implementing the action plan, to reframe actions in light of new developments and to add new measures to the action plan. The CMU action plan was published in September 2015, and it set out the Commission's proposed initiatives for the establishment of the CMU.
In the consultation, the Commission seeks views from stakeholders on potential revisions to the action plan on any additional actions that could:
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Improve financing for innovation, start-ups and non-listed companies.
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Improve the ability of companies to enter and raise capital on public markets.
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Foster long-term infrastructure and sustainable investment.
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Foster retail investment.
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Strengthen banking capacity to support the wider economy.
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Facilitate cross-border investment.
The consultation sets out the current position of the CMU initiatives already underway and the expected timings for their next steps, where applicable.
The deadline for responses is March 17, 2017. The Commission will evaluate the responses and produce a summary feedback statement. It will also hold more focused roundtable discussions on small and medium enterprises, access to finance, retail investigator engagement and institutional investment.
Brexit: Supreme Court Ruling
The UK Supreme Court rules that the Government cannot trigger Article 50 without a vote in Parliament.
Following the June 2016 referendum, the UK Government proposed to use its prerogative powers to withdraw from the EU by serving a notice in accordance with Article 50 of the Treaty on European Union, withdrawing the UK from the EU treaties. To read the full article, please click here.
EIOPA Chair Gives Speech on the Challenges and Opportunities in the Digital Era
The European Insurance and Occupational Pensions Authority ("EIOPA") has published a speech given by its chair, Gabriel Bernardino, on the future of the European insurance industry.
He stated that during 2017, the EIOPA will organize a series of roundtables dedicated to InsurTech and that, in particular, EIOPA wants to evaluate the impact of digital technologies on the insurance value chain.
With the implementation of the Insurance Distribution Directive ((EU 2106/97) ("IDD"), stronger and more effective supervision of intermediation activities is needed across the EU. One of EIOPA's key priorities for the next three years is to enhance supervisory convergence to move towards a common European supervisory culture.
Boards of insurance companies have a key role to play in putting in place an effective risk management system. Mr. Bernardino called on them to set, communicate and enforce a risk culture that consistently influences, directs and aligns with the strategy and objective of the business, rather than operating as a box-ticking exercise. Under the Solvency II regime, information on the solvency and financial condition of companies will be made publicly available for the first time in 2017. EIOPA encourages insurance companies to actively engage in consistent and high-quality communication with stakeholders, stressing the importance of being transparent on the use and impact of transitional and long-term guarantee measures.
