The Board of the International Organization of Securities Commissions (IOSCO) has unveiled a two-step framework designed to facilitate monitoring of leverage in investment funds that could potentially pose risks to financial stability.
For step 1, IOSCO recommends that regulators use Gross Notional Exposure (GNE) or adjusted GNE as baseline analytical tools. By collecting information on long and short exposure, on an asset class basis, the regulatory community will gain greater insight on the direction of leverage.
For step 2, IOSCO recommends that each regulator determine its approach to define appropriate risk based measures for analysing funds identified under Step 1 that may potentially pose significant leverage related risks to the financial system.
The European Securities and Markets Authority (ESMA) has published the final report on the draft Regulatory Technical Standards (RTS) under Article 25 of the regulation on European long-term investment funds (ELTIF).
The European Securities and Markets Authority (ESMA) has issued its second annual report on sanctions (penalties and measures) imposed by national competent authorities (NCAs) under the Undertakings for Collective Investments in Transferable Securities (UCITS) Directive. This report covers the year 2018.
While the number of NCAs issuing sanctions remains stable at 15, compared to the previous report for the period 2016-2017, the total number of sanctions issued has decreased based on a year on year comparison.
The European Securities and Markets Authority (ESMA) has published its second annual report regarding supervisory measures carried out and penalties imposed by national competent authorities (NCAs) under the European Market Infrastructure Regulation (EMIR).
The Report, covering the period from January to December 2018, focuses on NCAs supervisory measures and enforcement actions, their powers and the interaction between NCAs and market participants, when monitoring compliance with the following EMIR requirements:-the clearing obligation for certain OTC derivatives (Art. 4 EMIR);
-the reporting obligation of derivative transactions to TRs (Art. 9 EMIR);
-requirements for non-financial counterparties (Art. 10 EMIR); and
-risk mitigation techniques for non-cleared OTC derivatives (Art. 11 EMIR).
The European Securities and Markets Authority (ESMA) has published its second Annual Statistical Report (Report) analysing the European Union’s (EU) derivatives markets. The report is based on data submitted under the European Markets and Infrastructure Regulation (EMIR) and provides a comprehensive market-level view of the EU’s derivatives markets in 2018, which had a total size of €735tn gross notional amount outstanding, an increase of 11% on 2017.
The European Securities and Markets Authority (ESMA) has issued a briefing on the recognition regime under the Benchmark Regulation (BMR).
The briefing aims to clarify some aspects of the recognition application, such as:-the means to determine the member state of reference; and
-the instances where cooperation arrangements between EU and third-country competent authorities are needed.
The European Securities and Markets Authority (ESMA) has issued an update of its Question and Answers (Q&As) on the European Benchmarks Regulation (BMR). The modified Q&A provide clarification on the transitional provisions applicable to third country benchmarks.
The European Banking Authority (EBA) has published its Action plan on sustainable finance outlining its approach and timeline for delivering mandates related to environmental, social and governance (ESG) factors.
The Action plan explains the EBA’s sequenced approach, starting with key metrics, strategies, risk management and moving towards scenario analysis and evidence for any adjustments to risk weights. The Action Plan also aims to communicate key messages on the EBA’s policy direction and the expectations from financial institutions on areas where action is needed now to support the move towards more sustainable finance in the EU.
Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (the Disclosure Regulation) and Regulation (EU) 2019/2089 of the European Parliament and of the Council of 27 November 2019 amending Regulation (EU) 2016/1011 as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks (the Low Carbon Benchmarks Regulation) have been published in the Official Journal.
The European Commission has presented the European Green Deal - a roadmap with actions to boost the efficient use of resources by moving to a clean, circular economy and stop climate change, revert biodiversity loss and cut pollution. It outlines investments needed and financing tools available, and explains how to ensure a just and inclusive transition. The European Green Deal covers all sectors of the economy, notably transport, energy, agriculture, buildings, and industries such as steel, cement, ICT, textiles and chemicals.
Meeting the objectives of the European Green Deal will require significant investment. Achieving the current 2030 climate and energy targets is estimated to require €260 billion of additional annual investment, representing about 1.5% of 2018 GDP. The Commission will present in early 2020 a Sustainable Europe Investment Plan to help meet investment needs.
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