Dear All,


ICMA/AMIC activities

The latest version of the ICMA Quarterly Report has now been published. Please particularly note the Asset Management segment, which appears on pages 68-75. This includes articles on Fund Liquidity; IOSCO’s Leverage Recommendations; ELTIFs; ESA’s review of PRIIPS; Sustainable Finance; Other Buy Side Regulatory Developments; and Buy-side Oriented Research.

The next AMIC Conference and Executive Committee meeting will take place in Paris on 11 March. We will let you know more details in due course.

Upcoming ICMA Courses

      22 January: SFTR workshop - repo reporting in practice (more sessions to come)
25-26 February: Introduction to Green Bonds 
    30-31 March: Collateral Management
           2-3 April: Securitisation - An Introduction



  • (7.1.2020) ESMA clarifies SFTR reporting

The European Securities and Markets Authority (ESMA) has published its final report, its guidelines on reporting under the Securities Financing Transactions Regulation (SFTR), amended SFTR validation rules and a statement on Legal Entity Identifiers (LEI).

The guidelines aim to clarify a number of provisions of SFTR and to provide practical guidance on the implementation of some of those provisions. 

The guidelines provide clarity as to the following aspects:

-the reporting start date when it falls on a non-working day.
-the number of reportable SFTs;
-the population of reporting fields for different types of SFTs;
-the approach used to link SFT collateral with SFT loans;
-the population of reporting fields for margin data;
-the population of reporting fields for reuse, reinvestment and funding sources data;
-the generation of feedback by TRs and its subsequent management by counterparties, namely in the case of (i) rejection of reported data and (ii) reconciliation breaks; and
-the provision of access to data to authorities by TRs.

The final report contains a detailed assessment of the feedback received to the proposals in the consultation paper published in May 2019, as well as a more detailed discussion on the market transactions that are not in scope.

The LEI statement clarifies the expectations with regards to reporting of LEI for issuers of securities used in SFTs, as well as the relevant supervisory actions to be carried out by authorities.

Finally, ESMA has updated the SFTR validation rules. The amended SFTR validation rules are fully aligned with the updated XML schemas published in December 2019, as well as with the aforementioned LEI statement.

  • (7.1.2020) FCA and BoE announce proposals for data reforms across the UK financial sector

The Financial Conduct Authority (FCA) and the Bank of England (Bank) have outlined their plans to develop their data and analytics capabilities.

The FCA’s refreshed Data Strategy sets out a transformation plan to become a highly data-driven regulator. The strategy outlines the organisation’s increased focus on the use of advanced analytics and automation techniques to deepen its understanding of how markets function and allow the FCA to efficiently predict, monitor and respond to firm and market issues.

The Bank of England has published a Discussion Paper (DP), “Transforming data collection from the UK financial sector”, to improve the timeliness and effectiveness of data collection from firms across the financial system.

Risk Management
  • (7.1.2020) ESMA clarifies rules for CCPs' membership criteria and due diligence

The European Securities and Markets Authority (ESMA) has issued a report on a survey it conducted into membership arrangements and due diligence by central counterparties (CCPs) towards their clearing members.

The report further clarifies existing rules under the European Market Infrastructure Regulation (EMIR) for clearing members in both areas.
  • (7.1.2020) ECB issues working paper on the fundamentals of safe assets

The European Central Bank (ECB) has issued a working paper on the fundamentals of safe assets and what makes government bonds a safe asset.  

The paper finds that We find that inertia (whether the bond behaved as a safe asset in the past) and good institutions foster a safe asset status, while the size of the debt market is also significant, reflecting the special role of the US. Finally, the safe asset status does not appear to depend on whether the change in global risk is driven by financial shocks rather than by US monetary policy.
  • (9.1.2020) ESRB issues report on the procyclicality of margins and haircuts in derivatives markets and securities financing transactions

The European Systemic Risk Board (ESRB) has published a report on mitigating the procyclicality of margins and haircuts in derivatives markets and SFTs.  

The report expands on the work of a previous ESRB report published in 2017 by providing new analysis and setting out possible policy options to address systemic risks arising from the procyclicality associated with margin and haircut practices.  The policy options in consideration are as follows: (i) the pass-through by CCPs of any intraday VM collected in the course of the same day; (ii) the introduction of IM floors in both CCP and non-CCP cleared derivatives markets; (iii) the reduction of risks of procyclicality in client clearing by limiting the discretion of client clearing service providers towards their clients; (iv) the introduction of adequate notice periods to changes in collateral haircuts and eligibility; (v) the introduction of a cash collateral buffer for market participants active in CCP and non-CCP cleared derivatives markets; and (iv) the mandatory use of IM and VM as risk mitigation techniques in non-CCP cleared SFT markets.  In setting out these policy options, which should not be understood as formal ESRB warnings or recommendations, the ESRB is mindful that their implementation would require further work and engagement with market participants and international fora.
  • (9.1.2020) ESMA publishes second statistical report on EU AIFs

The European Securities and Markets Authority (ESMA) has published its second statistical report on EU AIFs, finding sector in 2018, as measured by NAV, amounted to €5.8tn or nearly 40% of the total EU fund industry.  The report is based on data from 30,357 AIFs, or almost 100% of the market.  

The two sectors with the largest percentage of retail investors, funds of funds (FoF) with 31% and real estate (RE) with 21%, are also the sectors where the report finds potential issues linked to liquidity. Many of the funds in the RE sector offer daily liquidity, which indicates a structural vulnerability risk as they invest in illiquid assets while allowing investors to redeem their shares over a short time-frame. For the FoF sector there is a mismatch in liquidity, as 35% of the NAV is redeemable within a day, while only 24% of assets can be liquidated within that timeframe. The hedge fund sector amounted to €333bn in NAV, or 6% of all AIFs, however, when looking at gross exposure they total 67% of all AIFs due to their increasing reliance on the use of derivatives. These funds are exposed to financing risk, as one third of their financing is overnight, however, the fact that they maintain large cash buffers offers some security.

  • (8.1.2020) Speech by Luis de Guindos (ECB) on Europe’s role in the global financial system

Speech by Luis de Guindos, Vice-President at the European Central Bank (ECB), on Europe’s role in the global financial system.

In the speech he outlined why Brexit underscores the need to renew our ambition on CMU and complete the work on banking union. He explained how both the capital markets union and the banking union provide a framework that encourages innovation and integration. Further work on these agendas will enhance the attractiveness of the EU capital markets on the global stage beyond Brexit.

Supervisory priorities
  • (9.1.2020) ESMA announces key priorities for 2020-22

The European Securities and Markets Authority (ESMA) has published its Strategic Orientation for 2020-22. The Strategic Orientation sets out ESMA’s future focus and objectives and reflects its expanded responsibilities and powers following the ESAs Review, and EMIR 2.2, which increases its focus on supervisory convergence, strengthens its role in building the Capital Markets Union (CMU) and gives it with more direct supervision responsibilities.

The strategy details ESMA’s planned activities, based on its enhanced role, to respond to the challenges faced by the EU, its citizens and capital markets including developing a large retail investor base to support the CMU, promoting sustainable finance and long-term oriented markets, dealing with the opportunities and risks posed by digitalisation, the EU’s role in international finance and ensuring a proportionate approach to regulation.
  • (9.1.2020) AMF unveils its priorities for 2020

The Autorité des Marchés Financiers (AMF) has issued its priorities for action and supervision for 2020. 

The AMF has defined five priority areas, for which set the following objectives:

-The attractiveness of financial markets in terms of both corporate financing and the allocation of household savings; 
-The regulatory framework and supervision of asset management with the aim of supporting a clearer architecture and greater regulatory convergence in Europe;
-Continued preparation for the post-Brexit period;
-The transition to sustainable finance by contributing to the definition of a permanent framework that combines the quality and comparability of the non-financial information of listed companies, making ESG approaches to asset management more transparent, and monitoring the climate commitments of the Paris financial centre; and
-the competitiveness of European financial centres as regards digital technology.

Kind regards,


The AMIC Secretariat



Tel: +44 20 7213 0348



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