Latest ICMA developments
AMIC published on 29 May its weekly COVID-19 market update podcast in which Robert Parker, Chairman of AMIC, reviewed the market events of the last week, with a specific focus on the European Commission proposal for a €750 billion EU recovery fund, the drivers behind the bond and equity rallies, and the risk of a Brexit stalemate.
ICMA issued on 28 May a report on performance of the European investment grade corporate bond markets during the last weeks of February through March and April 2020, as the COVID-19 pandemic caused levels of market volatility and dislocation surpassing those seen during the global financial crisis of 2007-2008. The report is based on market data as well as interviews and surveys of buy-side and sell-side market participants.
AMIC ExCom will meet virtually on 9 June.
AMIC will organise on 11 June a virtual event on the "First lessons of the COVID-19 crisis for the asset management industry".
ICMA Asset Management and Investors Council (AMIC) Regulatory Update
25 May 2020 EBA: "COVID-19 is placing unprecedented challenges on EU banks"
The European Banking Authority (EBA) has published a preliminary assessment of the impact of COVID-19 on the EU banking sector. With the global economy facing unprecedented challenges, banks entered the health crisis with strong capital and liquidity buffers and managed the pressure on operational capacities activating their contingency plans. The crisis is expected to affect asset quality and, thus, profitability of banks going forward. Nonetheless, the capital accumulated by banks during the past years along with the capital relief provided by regulators amounts on average to 5p.p. above their overall capital requirements (OCR). This capital buffer should allow banks to withstand the potential credit risk losses derived from a sensitivity analysis based on the 2018 stress test.
26 May 2020 ECB warns that the pandemic increases risks to financial stability
Despite the immense social and economic disruption in the wake of the coronavirus (COVID-19) pandemic, decisive policy responses have helped to prevent a seizing-up of the financial system. However, even as infection rates fall in many countries, the impact on the economy and markets has unearthed and increased existing vulnerabilities for euro area financial stability, according to the May 2020 Financial Stability Review (FSR) of the European Central Bank (ECB). Financial stability risks could arise as these vulnerabilities, identified in earlier issues, interact with the pandemic. These include richly valued asset prices, fragile investment funds, the sustainability of sovereign and corporate debt, and weak bank profitability.
26 May 2020 Financial policymakers discuss responses to COVID-19 with the private sector
Financial policymakers and international standard setters have met virtually with private sector executives to discuss international policy responses to COVID-19. Organised by the FSB’s Standing Committee on Supervisory and Regulatory Cooperation (SRC), in cooperation with Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI), the International Association of Insurance Supervisors (IAIS) and the International Organization of Securities Commissions (IOSCO), the meeting brought together senior representatives from central banks, regulatory authorities and finance ministries as well as about 30 international banks, insurance firms, asset managers, market infrastructures and credit rating agencies. The meeting was chaired by Himino Ryozo, Chair of the SRC and Vice Minister for International Affairs, Japan Financial Services Agency.
27 May 2020 The European Commission put forward its proposal for a EU recovery plan
The European Commission has put forward its proposal for a major recovery plan. To ensure the recovery is sustainable, even, inclusive and fair for all Member States, the European Commission is proposing to create a new recovery instrument, Next Generation EU, embedded within a powerful, modern and revamped long-term EU budget. The Commission has also unveiled its adjusted Work Programme for 2020, which will prioritise the actions needed to propel Europe's recovery and resilience.Next Generation EU of €750 billion as well as targeted reinforcements to the long-term EU budget for 2021-2027 will bring the total financial firepower of the EU budget to €1.85 trillion.
27 May 2020 ESMA published its monthly newsletter
ESMA has continued to closely monitor the impact that COVID-19 is having on EU financial markets and, in this isssue, we give an update on ESMA's recent activities related to COVID-19 and we take a closer look at the Thematic Report on Collateralised Loan Obligations credit ratings in the EU. The newsletter also highlights deadlines for closing consultations next month and the full list of publications from April and May.
29 May 2020 IOSCO encourages issuers’ fair disclosure about COVID-19 related impacts
IOSCO has issued a public statement highlighting the importance to investors and other stakeholders of having timely and high-quality information about the impact of COVID-19 on issuers´ operating performance, financial position and prospects.
5 May 2020 the ESAs warn the EC on the need to postpone the regulation on sustainability disclosure
The summary of the conclusions of the Board of ESMA of May 5th highlights that the ESAs sent a letter warning the European Commission (EC) on the delay of the delivery of the Joint draft RTS on the ESG disclosure and encouraging the EC to provide sufficient time for proper implementation of the implementing acts.
28 May 2020 ESMA updates its Q&As on the securitisation regulation
ESMA has updated its Questions and Answers on the Securitisation Regulation (Regulation 2017/2402).The majority of the new Q&As in this document provide clarification on different aspects of the templates contained in the draft technical standards on disclosure.
28 May 2020 ESMA publishes updates to EMIR Q&As
ESMA has updated its Questions and Answers document on practical questions regarding data reporting issues, under the European Markets Infrastructure Regulation (EMIR). The newly added Trade Repository Q&A 54 provides clarifications on reporting of OTC derivatives by a financial counterparty on behalf of a non-financial counterparty below clearing threshold under EMIR Refit.
28 May 2020 ESMA updates Q&AS on MiFID II investor protection
ESMA has updated its Q&As on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR). It includes a new answer on ‘MiFID inducements’ which provides clarification on the application of the definition of “acceptable minor non-monetary benefits”.
29 May 2020 ESMA updates its Q&As on MiFID II and MiFIR transparency and market structures topics
ESMA has updated its Questions and Answers regarding market structures and transparency issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
25 May 2020 The European Parliament's Committee on Economic and Monetary Affairs adopt a opinion on the future EU-UK relationship
Regarding financial services, the Committee on Economic and Monetary Affairs "has taken the view that (...) the EU’s regulatory and supervisory dialogue with the UK should be conducted on the basis of a voluntary regulatory dialogue among policy-makers, regulators and supervisors in order to foster regulatory alignment and share supervisory concerns and best practices, including those on new innovative services and on issues of mutual interest; is of the opinion that the future agreement should include specific provisions on cooperation between the European Supervisory Authorities and the UK financial supervisory authorities to provide regular notifications on changes regarding the legal framework and its implementation; acknowledges the fact that the EU’s financial ecosystem has been heavily interconnected with services provided by UK-based banks and market infrastructures; believes that efforts should be made to retain a smooth level of cooperation, ensure a level playing field and limit regulatory divergence by the UK on financial services thereby maintaining integrated capital markets and access for EU financial institutions to appropriate market infrastructure in the UK."
29 May 2020 ESMA concludes its work on relocation of firms due to Brexit
ESMA's Supervisory Coordination Network (SCN) was established in May 2017 as a response to emerging supervisory convergence risks with respect to the treatment of authorisation requests by EU-27 national competent authorities (NCAs) in the context of the UK’s withdrawal from the European Union (EU). The SCN held discussions on 250 cases, as well as more than 150 follow-up discussions on these cases, held several thematic discussions and gathered data that allowed it to identify trends in the behaviour of relocating firms.The SCN will hold a final follow-up meeting before the end of the year to take stock of the relocation situation and close its work.
26 May 2020 The EC launches public consultation on the protection and facilitation of investment within the EU on Capital Markets Union
The European Commission has launched a public consultation on the protection and facilitation of cross-border investment within the EU. Private investment is essential to finance Europe's economy and businesses. It contributes to the creation of jobs and to the diversification of services and products in our Single Market. Following the recent termination of the intra-EU Bilateral Investment Treaties, today's public consultation invites EU citizens and other stakeholders to express their views on the strengths or weaknesses of cross-border investing in the EU. The aim is to assess the current framework of investment protection, including both substantive rules and dispute settlement mechanisms.