AMIC secretariat published its second COVID-19 market update podcast in which Robert Parker, Chairman of AMIC, reviews the market events of the last week, with specific focus on performance in the IG and HY bond market sectors, and provides an outlook for the third quarter of 2020.
ICMA underlined that existing guidance for Social and Sustainability Bonds is immediately applicable to efforts addressing the COVID-19 crisis. Additional advice for issuers in the form of new Q&A and case studies has been provided.
In light of increasing electronification of repo markets, ICMA has conducted a mapping exercise of electronic repo trading platforms. The directory is intended to help market participants understand what execution venues are available for repo trading, product scope, as well as differences in trading protocols, clearing and collateral configurations.
Following the publication of European Securities and Markets Authority (ESMA) statement delaying the start of the SFTR reporting obligations, ICMA has clarified the key practical implications for reporting firms.
ICMA Asset Management and Investors Council (AMIC) Regulatory Update
Extensions of deadlines
31 March 2020 ESMA announces update to reporting under the money market funds regulation
The European Securities and Markets Authority (ESMA) has announced that the first reports by Money Market Funds (MMF) managers under the MMF Regulation (MMFR) should be submitted in September 2020. The original date for submissions was April 2020.
2 April 2020 ECB extends review of its monetary policy strategy until mid-2021
The Governing Council of the European Central Bank (ECB) has decided to extend the timeline for the review of its monetary policy strategy. In the current situation, the decision-making bodies and staff of the ECB and the national central banks of the Eurosystem are focusing all their efforts on addressing the challenges posed by the coronavirus pandemic. The conclusion of the strategy review will therefore be postponed from the end of 2020 to mid-2021.
3 April 2020 European Commission extends Consultations (banking and finance)
The European Commission has extended the timeline for consultations launched by Directorate‑General for Financial Stability, Financial Services and Capital Markets Union. This includes consultations on the MiFID review and the NFRD review.
New consultations relevant for AMIC members
27 March 2020 ESMA consults on guidance to address leverage risk in the AIF sector
ESMA has launched a public consultation on its draft guidance to address leverage risks in the Alternative Investment Fund (AIF) sector. The consultation is part of the ESMA response to the recommendations of the European Systemic Risk Board (ESRB) in April 2018 to address liquidity and leverage risk in investment funds.
30 March 2020 ESMA publishes call for evidence on credit rating information data
ESMA has published a call for evidence on the availability and use of credit rating information and data. The purpose of this call for evidence is to gather information on the specific uses of credit ratings as well as how the users of credit ratings are currently accessing this information.
31 March 2020 ESMA consults on standardised information to facilitate cross-border funds distribution
ESMA has launched a consultation on the standard forms, templates, and procedures that National Competent Authorities (NCAs) should use to publish information on their websites to facilitate cross-border distribution of funds.
In particular, the standard information should cover:
- National laws, regulations and administrative provisions governing marketing requirements for AIFs and UCITS and the summaries thereof; and
- Regulatory fees and charges they levy for carrying out their duties in relation to the cross-border activities of fund managers.
3 April 2020 ESMA publishes guidance on performance fees in UCITS and certain AIFS
ESMA has published its final guidance on performance fees in investment funds – applicable to Undertakings for the Collective Investment in Transferable Securities (UCITS) and certain types of Alternative Investment Funds (AIFs).
30 March 2020 ESMA publishes draft regulatory technical standards for CCP colleges
ESMA has published its Final Report containing draft regulatory technical standards (RTS) for central counterparty (CCP) colleges under the European Markets Infrastructure Regulation (EMIR) 2.2.
31 March 2020 ESMA publishes advice on fines and penalties for 3rd country CCPS
ESMA has published its final technical advice to the European Commission (EC) on procedural rules for imposing fines and penalties on third country central counterparties (TC-CCPs) and alignment of those for TRs and CRAs.
2 April 2020 ESMA consults on clearing solutions for pension scheme arrangements under EMIR
ESMA has launched a public consultation on a range of issues regarding potential central clearing solutions for Pension Scheme Arrangements (PSAs) under the European Market Infrastructure Regulation (EMIR). The consultation is based on ESMA’s First Report to the European Commission documenting the progress made to date towards potential clearing solutions for PSAs.
1 April 2020 ESMA completes review of MiFID II commodity derivatives regime
ESMA has published a review report on the impact of position limits and position management on commodity derivatives markets, following over two years of the Markets in Financial Instruments Directive (MiFID II). The report contains proposals to make the commodity derivatives framework operate more efficiently for market participants and competent authorities. This includes refocusing the position limit regime on the most important commodity derivatives contracts, and improving convergent implementation of position management controls by trading venues through Level 2 measures.
1 April 2020 ESMA advises the European Commission on inducements and costs and charges disclosures
ESMA has published its advice to the European Commission (EC) on inducements and costs and charges disclosures under MiFID II. In the advice, ESMA encourages the EC to conduct further analysis on the topic of inducements, which is key for the protection of investors, and proposes some changes to the regime mainly aimed at improving the clients’ understanding of inducements.
27 March 2020 ECB asks banks not to pay dividends until at least October 2020
The European Central Bank (ECB) has updated its recommendation to banks on dividend distributions. To boost banks’ capacity to absorb losses and support lending to households, small businesses and corporates during the coronavirus (COVID-19) pandemic, they should not pay dividends for the financial years 2019 and 2020 until at least 1 October 2020. Banks should also refrain from share buy-backs aimed at remunerating shareholders.
2 April 2020 BoE issues Market notice on Additional Corporate Bond Purchases
The Bank of England has issued a Market notice on Additional Corporate Bond Purchases bringing clarifications on eligibility criteria and operating parameters. The Bank intends to purchase at least £10 billion of eligible sterling non-financial corporate bonds in coming months, taking the stock of purchased corporate bonds to at least £20 billion. It expects to make these purchases at a significantly faster pace than in the 2016 scheme.
Investors protection (COVID-19)
1 April 2020 The Pensions Regulator and the FCA urges savers to not " rush financial decisions" during Covid-19
The Pensions Regulator and the FCA, are urging savers to keep calm and not rush to make any decisions about their pension in response to the coronavirus (COVID-19) pandemic. They say fears over the impact of the pandemic on markets and personal finances may make savers more vulnerable to scams or making a decision that could damage their long-term interests.
2 April 2020 ESMA updates its risk assessment in light of the COVID-19 pandemic
ESMA just updated its risk assessment to account for the impact of the COVID-19 pandemic. It sees a prolonged period of risk to institutional and retail investors of market corrections and very high risks across the whole of its remit.