UK Financial Regulatory Developments - January 2016 #4


ACER updates REMIT Q&A

ACER has updated its REMIT Q&A adding new items on reporting through Registered Reporting Mechanisms and on obligations and prohibitions of market participants. (Source: ACER Updates REMIT Q&A)


ACER reports on final stage of REMIT implementation

ACER has published its fourth quarterly report on guidance on the application of the Regulation on Energy Market Integrity and Transparency (REMIT) and transaction reporting. This issue includes updates on:

  • data reporting, noting that more than one million data records have been submitted to ACER daily since 7 October 2015, and preparing for the final stage of data collection as of 7 April; and
  • the first economic sanctions applied by Spanish and Estonian National Regulatory Authorities on REMIT breach cases in those countries.

(Source: ACER REMIT Quarterly Issue 4 2015)


ESRB responds to NSFR consultation

ESRB has published its response to the EBA consultation on the net stable funding ratio (NSFR). ESRB puts forward the following considerations:

  • a flexible use of the NSFR should not be pre-empted as there is only limited experience with the macroprudential use of the ratio;
  • the microprudential NSFR standard should be finalised first, then its net effects both on bank-specific and systemic liquidity risks assessed before drawing conclusions for the macroprudential use; and
  • departing from a globally-agreed methodology could have undesired and unknown effects for the EU banking system, in terms of level playing field, incentives and systemic liquidity risk.

In relation to specific areas in Article 510 CRR, ESRB proposes:

  • to rely, in general, on the same required stable funding and available stable funding weights as agreed by the Basel Committee;
  • to explicitly mention the NSFR as a potential macroprudential tool in the CRR;
  • not to introduce preferential treatment for specific business models unless it is proven that there is no risk stemming from maturity mismatch;
  • to maintain the reporting of the NSFR by significant currency;
  • to apply the NSFR on a consolidated and individual basis, subject to appropriate waivers or exemptions; and
  • to introduce an NSFR requirement by significant currency.

(Source: ESRB Responds to NSFR Consultation)


ECB publishes SSM priorities for 2016

ECB has published its 2016 priorities for supervising the significant banks in the euro area under the Single Supervisory Mechanism (SSM). The five areas build on the assessment of key risks faced by banks in the current environment. The priorities are:

  • business model and profitability risk;
  • credit risk;
  • capital adequacy;
  • risk governance and data quality; and
  • liquidity.

(Source: ECB Publishes SSM Priorities for 2016)


EIOPA publishes preparatory IDD survey

EIOPA has published an online survey in anticipation of a call for advice from the Commission on the Insurance Distribution Directive (IDD) delegated acts. The survey closes on 22 January. EIOPA expects the final text of the IDD to be published in the OJEU in January or February. (Source: EIOPA Publishes Preparatory IDD Survey)


ESMA publishes Financial Innovation Day materials

ESMA has published materials from its Financial Innovation Day held in December 2015. The day focused on “innovation in a Capital Market Union: harnessing innovation to improve access to finance and spur investment”. The materials available include key speeches and outlines of four panel discussions conducted on the topics of:

  • crowdfunding;
  • corporate bonds and whether innovation can reduce the liquidity gap in these markets;
  • Distributed Ledger Technology (Blockchain); and
  • leveraged loan funds.

(Source: ESMA Publishes Financial Innovation Day Materials)


ESMA agrees EMIR MoUs with Canadian and Swiss regulators

ESMA has established three Memoranda of Understanding (MoUs) with Central Counterparties (CCPs) in Canada and Switzerland who have applied for recognition under the European Markets Infrastructure Regulation (EMIR). It agreed two MoUs with the following Canadian regulators:

  • the Alberta Securities Commission;
  • the Autorité des Marchés Financiers of Québec;
  • the Manitoba Securities Commission; and
  • the Ontario Securities Commission.

ESMA agreed one MoU with the following Swiss regulators:

  • the Swiss Financial Market Authority; and
  • the Swiss National Bank.

(Source: ESMA Agrees EMIR MoUs with Canadian and Swiss Regulators)

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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