Securities and markets regulatory news, September 2020

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Recent regulatory developments of interest to financial institutions and markets. Includes updates on the FCA's Market Watch, the Securitisation Regulation, EMIR, CSDR, MiFIR, BMR and more.

Contents

  • Accessing and using wholesale data: FCA extends call for input deadline
  • FCA Market Watch issue 64
  • Securitisation Regulation: technical standards in force 23 September 2020
  • EMIR 2.2: European Commission adopts Delegated Regulation on CCP colleges
  • CSDR settlement discipline: postponed entry into force
  • MIFIR transparency requirements for equity and non-equity instruments: ESMA call for evidence
  • BMR amending draft Regulation: deadline for comments
  • Continuity of access to FMIs for firms in resolution: FSB questionnaire

Accessing and using wholesale data: FCA extends call for input deadline

The UK Financial Conduct Authority (FCA) has extended the deadline for responses to its call for input on the use and value of data and advanced analytics in wholesale financial markets, now and in the future. The deadline has been further extended to 7 January 2021.

The FCA notes that the roundtables that had been due to be held at the end of April have also been postponed. It will confirm on its website timings for the rescheduled roundtables later in the year as well as the timings for its feedback statement.

FCA Market Watch issue 64

The FCA has published issue 64 of Market Watch, its newsletter on market conduct and transaction reporting issues. In issue 64, the FCA provides information to help MiFID II firms prepare for the end of the Brexit transition period on 31 December 2020.

The FCA reminds firms that they must ensure that their Approved Reporting Mechanisms must comply with the changes to their regulatory obligations by the end of the transition period. Firms that are unable to comply fully with the transaction reporting regime immediately following the end of the transition period will need to be able to back-report missing, incomplete or inaccurate transaction reports as soon as possible.

The FCA also confirms that, as part of the development of a post-exit MiFID regime, industry testing for the FCA's Financial Instruments Transparency System (FCA FITRS) will open on 5 October 2020. The FCA's Financial Instruments Reference Data System (FCA FIRDS) is still available for testing. The FCA has dedicated webpages on both the FCA FITRS and FCA FIRDS.

Securitisation Regulation: technical standards in force 23 September 2020

The following delegated and implementing regulations laying down technical standards for securitisations have been published in the Official Journal of the EU:

  • Commission Implementing Regulation (EU) 2020/1227 of 12 November 2019 laying down implementing technical standards with regard to templates for the provision of information in accordance with the STS notification requirements;
  • Commission Implementing Regulation (EU) 2020/1225 of 29 October 2019 laying down implementing technical standards with regard to the format and standardised templates for making available the information and details of a securitisation by the originator, sponsor and SSPE;
  • Commission Implementing Regulation (EU) 2020/1228 of 29 November 2019 laying down implementing technical standards with regard to the format of applications for registration as a securitisation repository or for extension of a registration of a trade repository pursuant to Regulation (EU) 2017/2402 of the European Parliament and of the Council;
  • Commission Delegated Regulation (EU) 2020/1226 of 12 November 2019 supplementing Regulation (EU) 2017/2402 of the European Parliament and of the Council and laying down regulatory technical standards specifying the information to be provided in accordance with the STS notification requirements;
  • Commission Delegated Regulation (EU) 2020/1229 of 29 November 2019 supplementing Regulation (EU) 2017/2402 of the European Parliament and of the Council with regard to regulatory technical standards on securitisation repository operational standards for data collection, aggregation, comparison, access and verification of completeness and consistency;
  • Commission Delegated Regulation (EU) 2020/1230 of 29 November 2019 supplementing Regulation (EU) 2017/2402 of the European Parliament and of the Council with regard to regulatory technical standards specifying the details of the application for registration of a securitisation repository and the details of the simplified application for an extension of registration of a trade repository; and
  • Commission Delegated Regulation (EU) 2020/1224 of 16 October 2019 supplementing Regulation (EU) 2017/2402 of the European Parliament and of the Council with regard to regulatory technical standards specifying the information and the details of a securitisation to be made available by the originator, sponsor and SSPE.

The regulations enter into force on 23 September 2020. The European Securities and Markets Authority (ESMA), has confirmed that the different elements of the new regime under the Securitisation Regulation (SR) will come into force on 23 September 2020.

The publication of the technical standards triggers:

  • opening of applications for entities to register as Securitisation Repository (SecRep). Entities which wish to be registered as a SecRep by ESMA can submit their applications from 23 September 2020. Until ESMA has registered at least one SecRep, information that should be made available by reporting entities to SecReps on public securitisations must be made make it available via a website which meets certain requirements; and
  • entry into force of new disclosure templates developed by ESMA. These must be used to make any new information available about a securitisation in accordance with Article 7 of the Securitisation Regulation. ESMA has published guidance on how to fill in the disclosure templates in its Q&A Document on Securitisation Topics. XML schema and validation rules as well as reporting instructions for these templates are available on ESMA's website.

EMIR 2.2: European Commission adopts Delegated Regulation on CCP colleges

The European Commission has adopted a Delegated Regulation containing draft regulatory technical standards (RTS) for central counterparty (CCP) colleges under EMIR 2.2, the Regulation amending the supervisory regime for CCPs under the European Market Infrastructure Regulation (EMIR).

The draft RTS amend Commission Delegated Regulation (EU) No 876/2013 (RTS on colleges for CCPs) and reflect the changes to Article 18(6) of EMIR introduced by EMIR 2.2, which came into force on 1 January 2020.

CSDR settlement discipline: postponed entry into force

On 24 August 2020, Delegated Regulation (EU) 2020/1212 amending Delegated Regulation (EU) 2018/1229 supplementing the Central Securities Depositories Regulation (CSDR) with regard to RTS on settlement discipline was published in the Official Journal of the EU.

Delegated Regulation (EU) 2018/1229 was due to enter into force on 13 September 2020. However, this has been postponed and it will now enter into force on 1 February 2021. Delegated Regulation (EU) 2020/1212 came into force on 27 August 2020.

Since proposing this delay, ESMA has concluded that the severe impact of COVID-19 indicates that it would be extremely difficult for market stakeholders to comply with the requirements of the RTS on settlement discipline by 1 February 2021. Therefore, in response to a request from the Commission, ESMA has now published its final report (dated 26 August 2020) on draft RTS, definitively postponing the date of entry into force of the settlement discipline regime under the CSDR until 1 February 2022.

As the proposed amendment is limited in scope and reflects the input provided by market participants calling for the delay, ESMA has not consulted on the draft RTS.

Following the endorsement of the draft RTS by the Commission, the Delegated Regulation will be subject to the non-objection of the European Parliament and the Council of the EU.

MIFIR transparency requirements for equity and non-equity instruments: ESMA call for evidence

ESMA has published a call for evidence in the context of its review of transparency requirements for equity and non-equity instruments under the Market in Financial Instruments Regulation (MiFIR).

ESMA seeks input and views on the practical issues related to the application of Commission Delegated Regulation (EU) No 2017/587 (RTS 1) and Commission Delegated Regulation (EU) No 2017/583 (RTS 2) since the implementation of MiFID II/MiFIR. ESMA would also like to receive feedback on any technical issue and policy gap that market participants have encountered at implementation level, as well as unclear provisions.

The deadline for responding to the call for evidence is 31 October 2020. ESMA will consider the feedback received to prepare a consultation paper for the RTS 1 and 2 review, which will follow in 2021.

BMR amending draft Regulation: deadline for comments

The European Commission has updated its webpage on the proposed Regulation amending the Benchmarks Regulation (BMR) as regards the exemption of certain third-country foreign exchange benchmarks and the designation of replacement benchmarks for certain benchmarks in cessation. The Commission adopted the proposed Regulation on 24 July 2020. It is asking for comments on it by 6 October 2020.

Continuity of access to FMIs for firms in resolution: FSB questionnaire

The Financial Stability Board (FSB) has published a common template questionnaire for gathering information about the continuity of access to financial market infrastructures (FMIs) for firms in resolution.

All FMIs are encouraged to complete the questionnaire. Responses should be published or otherwise made available to firms that use the FMI services and to the resolution authorities to inform their resolution planning. The FSB says the use of the template could reduce the “many to one” nature of inquiries from banks and authorities to FMIs, streamline the provision of this information from FMIs to firms and authorities, and streamline the information gathering process for firms who are members of multiple FMIs.

In the questionnaire, the FSB sets out an indicative timeline for FMIs to provide a standardised set of responses, which FMIs are encouraged to consider. The FSB advises that it can hold information sessions where industry will be welcome to ask questions about content and process.

The FSB will host a webinar for stakeholders, on 23 September 2020, to explain the questionnaire and answer any questions. During the course of 2021, it intends to review the experience of using the questionnaire. The FSB explains that FMIs, banks and other stakeholders will have the opportunity to provide feedback and suggestions on the questionnaire itself and the process. The questionnaire will be updated, if appropriate.

[View source.]

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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