ICMA has published its latest issue of the Quarterly Report. Please particularly note the Asset Management segment, which appears on pages 53 - 58. This includes articles on Short Termism; Fund Liquidity; ELTIF Review; MIFID II/R Research Unbundling; Other Buy Side Regulatory Developments; and Buy-side Oriented Research.
Speech by Valdis Dombrovskis, Executive Vice-President and Commissioner-designate for An Economy that Works for People, during his hearing by the European Parliament.
Dombrovskis said in the previous mandate, the EU made significant progress on the Banking Union and the Capital Markets Union. He emphasised the need to support small and medium enterprises, describing them as the backbone of Europe’s economy and he urged the EU to continue pursuing a Capital Markets Union.
On green bond standards, he said they have asked the Technical Expert Group to provide a report, which was published in June and creating the EU green bond standards that can be available to all issuers. They will ensure transparency in the process.
The Next CMU High-Level Group has published its final report titled Savings and Sustainable Investment Union. In addition to the group suggesting to rename the CMU as the "Savings and Sustainable Investment Union", the group recommends EU leaders to focus on two marjor objectives:
-Adopting and promoting a capital market that offers saving products to serve citizens’ needs and that allocates capital to value creating investments in the real, innovating and sustainable economy; and
-Building/strengthening an integrated, competitive, deep and liquid European Capital Market, to maintain the EU as one of the top two financial centres of the world.
The group also recommends four capital market components:
-Generate more Long-Term Savings and Investment opportunities;
-Massively develop Equity Markets;
-Increase financial flow fluidity between EU financial market places; and
-Develop Debt, Credit and Forex financing tools in a manner that increases the international funding currency role of the Euro.
The High-Level Group of Wise Persons has published an independent report on the European financial architecture, Europe in the World: The Future of the European Financial Architecture for Development.
The report observes that the present fragmentation of the European development finance architecture, especially between the EIB and the EBRD, is detrimental to the fulfilment of the EU's priority goals and the achievement of the desired development impact. This argues for the consolidation and streamlining of development finance and climate activities outside the EU into a single entity, a European Climate and Sustainable Development Bank, in order to avoid overlaps, and strengthen the EU's presence, role and long-term capacity to deliver on EU development priorities.
The report considers three options for such consolidation:
-building on the EBRD and the external financing activities of the EIB;
-pulling together the external activities of the current EU financial institutions in a new financial institution with mixed ownership; or
-transferring all external activities of the EIB into an EIB subsidiary with significant other shareholders.
The three European Supervisory Authorities (ESAs) have published their second joint Opinion on the risks of money laundering (ML) and terrorist financing (TF) affecting the European Union's (EU) financial sector.
The ESAs are concerned about weaknesses in the control frameworks put in place by financial institutions, particularly for transaction monitoring and suspicious transactions reporting, in sectors with high volumes of transactions.
The ESAs acknowledge that the use of new technologies may offer opportunities to better fight financial crime, however, this Opinion also confirms that the increasing use of new technologies by credit and financial institutions may give rise to ML/TF risks if vulnerabilities are not understood and mitigated.
The European Securities and Markets Authority (ESMA) has launched a consultation on possible amendments to the trading obligation under MiFIR following the introduction of EMIR Refit.
The recent changes introduced to EMIR via Refit modify the scope of counterparties subject to the clearing obligation – exemption for small financial counterparties and modified determination of non-financial counterparties. The introduction of EMIR Refit has not been accompanied by direct amendments to MiFIR, which currently leads to a misalignment between the scope of counterparties subject to the clearing obligation (CO) under EMIR and the derivatives trading obligation (DTO) under MiFIR. Instead, in light of the close interconnection between those two obligations, EMIR Refit mandates ESMA to assess whether the DTO under MiFIR should be aligned with changes to the CO introduced by EMIR Refit, and to submit its findings in a report to the Commission.
As a first step towards this report, ESMA developed a range of arguments on the necessity and appropriateness of aligning both obligations within this consultation paper (CP). ESMA’s initial proposal in the CP would be to formulate a recommendation to the European Commission to align the scope of counterparties subject to the clearing and the trading obligation.
The European Securities and Markets Authority (ESMA) has updated its Questions and Answers on data reporting under the Market in Financial Instruments Regulation (MiFIR).
The Q&As provide clarifications in relation to the requirements for submission of reference data and transactions under MiFIR. In particular, the Q&As relate to reporting of FX forward financial instruments under art. 26 and art. 27 of MiFIR.
The European Securities and Markets Authority (ESMA) has issued its final report on a set of Regulatory Technical Standards (RTS) on the application of the Market Abuse Regulation (MAR).
ESMA’s RTS cover cooperation arrangements between national competent authorities and their counterparts in third-countries for the purpose of efficiently exchanging information and enforcing the obligations related to market abuse.
ESMA has submitted these RTS for endorsement to the European Commission. Once fully implemented, these RTS will form part of the single rulebook for EU securities markets.
The European Securities and Markets Authority (ESMA) has published its final report on the Guidelines on standardised procedures and messaging protocols. The Guidelines aim to clarify the scope of the requirement contained in Article 6(2) of the Central Securities Depositories Regulation (CSDR) and provide guidance on the standardised procedures and messaging standards used for compliance.
Investment firms are expected to take measures to limit the number of settlement fails and to – at least – set up arrangements with their professional clients to ensure prompt communication of the necessary settlement information.
ESMA, following a public consultation, has drafted final guidelines which set out how investment firms should ensure the requirements set out in Article 6(2) and Article 2 of the RTS on Settlement Discipline are complied with.
Speech by Robert Ophèle, Chairman of the Autorite des Marches Financiers (AMF), on how AI, Blockchain & Cryptoassets and other Disruptive technology is shaping the future of regulation and compliance.
Robert discusses the necessity for Financial Authorities to rapidly adapt their regulatory stance to these possibly disruptive technologies in order both to suppress the regulatory barriers blocking their experimentation and to mitigate the new risks they triggered.
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