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Regulatory updates

We have an ongoing regulatory watch system

Management Solutions compiles new regulations published in recent weeks by different regulatory and supervisory authorities (with a focus on the financial industry).


Relevant publications

 

CCAR 2019

(28/06/2019) Fed – Comprehensive Capital Analysis and Review 2019: assessment framework and results
The Fed has published the assessment framework and results of the CCAR 2019, which includes both a quantitative assessment that evaluates a firm’s capital adequacy and planned capital distributions, and a qualitative assessment of capital planning practices. In the CCAR 2019, 18 firms have participated, although only 17 firms were subject to the qualitative assessment.

Risk information Centre (CIR)

(27/06/2019) BdE – Proyecto de Circular por el que se modifica la Circular 1/2013, sobre la Central de Información de Riesgos / Anejo 1. Módulos de datos / Anejo 2. Instrucciones para elaborar los módulos de datos / Anejo 3. Información de los riesgos que se facilitará a las entidades declarantes y a los intermediarios de crédito inmobiliario
The Bank of Spain (BdE) has published a Draft Circular amending Circular 1/2013 on the CIR, to adapt the CIR to the changes introduced by the Law 5/2019. In particular, this Draft Circular aims to adapt these changes to the new regulatory developments and to include the adjustments identified in the reported information according to the AnaCredit Regulation for the purpose of improving the reporting to the CIR of certain operations and additional clarifications in relation to the requirements for reporting claims to the CIR.

Stress test 2020

(26/06/2019) EBA – Draft Methodological Note of the EU-wide stress test 2020 / Draft 2020 EU-wide stress test – Template Guidance / Draft 2020 EU-wide stress test – Draft Templates
The EBA has published the 2020 EU-wide stress test draft methodology for discussion, describing how banks should calculate the stress impact of the common scenarios and establishing constraints for their bottom-up calculations. In particular, this Draft aims to provide banks with adequate guidance and support for performing the EU-wide stress test and builds on the methodology prepared for the 2018 exercise. Further, it includes the preliminary list of institutions participating in the 2020 exercise.

DFAST 2019

(24/06/2019) Fed – Dodd-Frank Act Stress Test 2019: Supervisory Stress Test Results
The Fed has published the results for the Dodd-Frank Act Stress Test 2019 (DFAST 2019), in which 18 firms have participated. In conducting its supervisory stress test, the Fed calculates its projections of each firm’s balance sheet, risk-weighted assets (RWAs), net income, and resulting regulatory capital ratios under the adverse and severely adverse scenarios.

Credit granting

(20/06/2019) EBA – Consultation Paper on Draft Guidelines on loan origination and monitoring
The EBA has now published a Consultation Paper (CP) on Guidelines (GL) on loan origination and monitoring in order to improve institutions’ practices and associated governance arrangements, processes and mechanisms in relation to credit granting for ensuring that institutions have robust and prudent approaches to credit risk taking, management and monitoring, and newly originated loans are of high credit quality, whilst respecting and protecting the interests of consumers.

IFRS

(17/06/2019) BdE – Proyecto de Circular, a establecimientos financieros de crédito, sobre normas de información financiera pública y reservada, y modelos de estados financieros
The BdE has published a Draft Circular, addressed to specialised lending institutions (SLIs), on public and confidential financial information rules and formats, with the aim to keep the convergence of the Spanish accounting standards of supervised institutions to the IFRS framework. In particular, the new Circular will be the accounting regime for SLIs and will cover the documents that these institutions and their groups must publish, as well as the rules on recognition, valuation, submission and disclosure of information to be included in the financial report and the rules on the breakdown that shall be applied in its preparation, including models on public and confidential financial statements.

Banking reform

(10/06/2019) EP and Council – Banking package. Revised rules on capital requirements (CRR II/CRD V) and resolution (BRRD II/SRMR II)
The EP and the Council have published in the OJEU a reform package of the banking system, which introduces amendments included to the Capital Requirement Directive (CRD IV), the Capital Requirement Regulation (CRR), the Bank Recovery and Resolution Directive (BRRD), the Single Resolution Mechanism Regulation (SRMR), and the Regulation on EMIR. In particular, some of the key elements of this reform are the leverage ratio (LR), the net stable funding ratio (NSFR), the minimum requirements for own funds and eligible liabilities (MREL), and the review of some issues regarding the framework for credit, market and counterparty credit risks.

Resolution

(04/06/2019) FSB – Consultation Paper on Discussion Paper regarding disclosures on resolution planning and resolvability / Consultation Paper on Discussion Paper regarding solvent wind-down of derivatives and trading portfolios
The FSB has published a Consultation Paper (CP) on Discussion Paper regarding disclosures on resolution planning and resolvability, that explores how general and firm-specific disclosures on resolution planning and resolvability could be further enhanced, focusing mainly on disclosures of resolution planning for G-SIBs. Moreover, the FSB has also issued a CP on Discussion Paper regarding solvent wind-down of derivatives and trading portfolios, that sets out considerations related to the solvent wind-down of such portfolios of a G-SIB, draws on the practices that are emerging in some jurisdictions and describes capabilities and arrangements that may need to be put in place to ensure a solvent wind-down plan can be effectively executed.

 

 

 

Other publications of interest

 

Economic Bulletin

(27/06/2019) BdE – Boletín Económico 2/2019
The BdE has published the Economic Bulletin 2/2019, which covers the Quarterly Report on the Spanish economy, and the analytical articles and economic notes published during the second quarter of 2019. In particular, this Economic Bulletin analyses the recent developments in the Spanish economy, within the international context and the Euro area and includes an analysis of the main relevant economic issues.

Leverage ratio

(26/06/2019) BCBS – Standards on revisions to leverage ratio disclosure requirements / Standards on leverage ratio treatment of client cleared derivatives
The BCBS has published the Standards on revisions to leverage ratio (LR) disclosure requirements which sets out additional requirements for banks to disclose their LR based on quarter-end and on daily average values of securities financing transactions. Further, the BCBS has also issued the Standards on the LR treatment of client cleared derivatives which sets out a targeted revision to align the LR measurement of client cleared derivatives with the measurement determined per the standardised approach to measuring counterparty credit risk exposures (SA-CCR).

Contract for differences (CFD)

(26/06/2019) ESMA – Opinion on the product intervention measures relating to contract for differences proposed by CNMV of Spain
The European Securities and Markets Authority (ESMA) has published an Opinion, addressed to the Spanish National Securities Market Commission (CNMV) on the product intervention measures relating to contract for differences (CFD). In particular, this Opinion concludes that the national measure consisting of a permanent prohibition on the marketing, distribution or sale of CFD to retail clients in or from Spain is justified and proportionated.

Restructuring

(26/06/2019) EP and Council – Directive (UE) 2019/1023, on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency)
The European Parliament (EP) and the Council have published the Directive (UE) 2019/1023 on preventing restructuring frameworks, on discharge of debt and disqualifications that introduces several amendments to the Directive (UE) 2017/1132 on, among other aspects, the preventive restructuring frameworks (e.g. availability of preventing restructuring frameworks); the discharge of debt and disqualifications (e.g. access and period of discharge); or measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (e.g. judicial and administrative authorities, supervision and remuneration of practitioners).

MREL

(25/06/2019) SRB – Addendum to the SRB 2018 MREL policy on new CRR requirements
The Single Resolution Board (SRB) has published an Addendum that updates its policy on minimum requirement for own funds and eligible liabilities (MREL) in light of the amendments introduced into the CRR through the CRR II. In particular, this Addendum focuses on the total loss absorbing capacity (TLAC) requirements for globally systemically important institutions (G-SIIs), and the permission regime to replace or reduce eligible liabilities instruments for all banks in the CRR II. Moreover, this document also describes the key aspects of the approval process, including time-limits and documentation supporting the application.

Reporting

(25/06/2019) PRA – Consultation Paper 14/19 on Pillar 2 liquidity: PRA110 reporting frequency threshold
The Prudential Regulation Authority (PRA) has published the Consultation Paper (CP) 14/19 on the proposal to amend the reporting frequency of the PRA110 reporting template when a firm is in stress. In particular, this CP introduces a further threshold of total assets of £5 billion and firms above this threshold, that would otherwise report PRA110 monthly, would report on every business day if (and for as long as) there is a specific liquidity stress, or market liquidity stress in relation to the firm, branch, or group in question.

Sustainable finance

(24/06/2019) ESMA – Explanatory Note on survey on undue short-term pressure on corporations from the financial sector
The ESMA has published an Explanatory Note on the survey related to potential short-term pressures on corporations stemming from the financial sector. In particular, this survey aims to collect information on market practices on investment strategy and investment horizon; disclosure of Environmental, Social and Governance (ESG) factors and the contribution of such disclosure to long-term investment strategies; the role of fair value in better investment decision-making; institutional investor’s engagement; remuneration of fund managers and corporate executives; and use of credit default swaps (CDS).

Fed’s annual report

(24/06/2019) Fed – Annual Report 2018
The Fed has published its 2018 Annual Report covering operations and activities during the last year. In particular, this Annual Report includes information on the monetary policy and economic developments; the Fed’s operations, the regulatory developments and the policy actions and litigation, statistical data, and Fed’s audits, budgets and organization.

Pillar 2

(21/06/2019) BCBS – Report on the overview of Pillar 2 supervisory review practices and approaches
The BCBS has published a Report with the overview of Pillar 2 supervisory review practices and approaches that describes key concepts of Pillar 2 and supervisory review practices in use across the BCBS’ member jurisdictions. In particular, this Report analyses key areas such as the risk assessment process; risk appetites; Board and senior management roles and supervisory practices adopted to enhance transparency; and bank disclosure practices.

Corporate bond markets

(21/06/2019) IOSCO – Final Report 10/2019 on liquidity in corporate bond markets under stressed conditions
The International Organization of Securities Commissions (IOSCO) has published the Final Report 10/2019 on liquidity in corporate bond markets under stressed conditions, which examines how liquidity in secondary corporate bond markets tends to evolve when those markets experience stress. In particular, this Report concludes, among other aspects, that the structure of corporate bond markets has evolved since the financial crisis, driven primarily by changes in the behavior of market intermediaries and in the supply of and demand for corporate bonds.

PSD2

(21/06/2019) EBA – Opinion on the elements of strong customer authentication under PSD2
The EBA has published an Opinion on the elements of strong customer authentication (SCA) under the revised Payment Services Directive (PSD2) which analyses the authentication approaches currently observed in the market and states whether or not they are considered to be SCA compliant regarding to the three elements of SCA, i.e. knowledge, possession and inherence. Further, the EBA clarifies that it is legally not able to postpone the application date of the PSD2, and therefore this Directive will be in force by September 2019

MiFID II

(21/06/2019) ESMA – Updated results of the annual transparency calculations for equity and equity-like instruments

The ESMA has updated the annual transparency calculations for equity and equity-like instruments in order to reflect, among other aspects, the adjustment of the average daily number of transactions (ADNTE) on the most relevant market in terms of liquidity (MRM); or late corrections of the underlying data used to perform the calculations by reporting entities.

Economic bulletin

(20/06/2019) ECB – Economic Bulletin Issue 4/2019
The ECB has published the Economic Bulletin 4/2019, which provides a comprehensive analysis of the economic and monetary developments, including an evaluation of macroeconomic projections by Eurosystem experts. In particular, this document covers the following aspects: i) external environment, ii) financial developments, iii) economic activity, iv) prices and costs, v) money and credit, and vi) fiscal developments.

Countercyclical capital buffer

(19/06/2019) BdE – Colchón de capital anticíclico
The Bank of Spain (BdE) has decided to maintain the countercyclical capital buffer (CCB) at 0% for credit exposures in Spain, during the third quarter of 2019.

Cyber regulation

(18/06/2019) IOSCO – Final Report on Cyber Task Force
The International Organization of Securities Commission (IOSCO) has published its Final Report on cyber regulation which is intended to serve as a resource for financial market regulators and firms, raise awareness of existing international cyber standards and frameworks, and encourage the adoption of good practices to protect against cyber risk. In particular, this Report examines the application of the CPMI-IOSCO Guidance on cyber resilience for financial market infrastructure; the National Institute of Standards and Technology (NIST) framework for improving critical infrastructure cybersecurity; and the International Organization for Standardization (ISO) 27000 series standards.

Insurance

(18/06/2019) EC – Delegated Regulation (EU) 2019/981, amending Delegated Regulation (EU) 2015/35 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)
The European Commission (EC) has published the Delegated Regulation (EU) 2019/981, amending the Delegated Regulation (EU) 2015/35 supplementing the Directive on Solvency II. In particular, this Delegated Regulation includes new rules that will ease the capital requirements for insurance institutions and will allow them to invest more in equity and private debt in order to channel funds to the real economy, especially the investment of SMEs.

Central securities depository regulation (CSDR)

(18/06/2019) ESMA – Updated Q&As on the application of the CSDR
The European Securities and Markets Authority (ESMA) has updated its Q&As on the implementation of the Central Securities Depository Regulation (CSDR) in order to promote common supervisory approaches and practices in the application of CSDR. In particular, the new Q&As clarify the interaction between the main authorisation procedure and the passporting procedure; details what should be considered as a change in the range of services provided on a cross-border basis; and addresses the process to be followed in case a host Member State authority disapproves the assessment of the measures proposed by the CSD to comply with the law of that host Member State; among others.

Insurance stress test

(18/06/2019) PRA – Methodology on insurance stress test 2019
The Prudential Regulatory Authority (PRA) has launched its 2019 insurance stress test which covers the life insurance stress test and the general insurance stress test. In particular, the PRA has published the scenario specification, guidelines and instructions for both exercises as well as the templates that are required to comply with.

Remuneration

(17/06/2019) FSB – Sixth Progress report on the implementing the FSB Principles for sound compensation practices and their implementation standards
The FSB has published the sixth Progress Report on the implementation of the FSB’s Principles and Standards for sound compensation practices and the evolvement of compensation practices since 2009. In particular, this Report highlights a number of changes for significant banks, such as compensation processes are conducted with greater oversight; compensation arrangements include mechanisms that better align them with effective risk management practices; or the increased focus on compensation as a tool to address conduct risk.

Deposit guarantee schemes

(17/06/2019) EBA – Updated data on Deposit Guarantee Schemes (DGS) across the EU
The EBA has updated data on Deposit Guarantee Schemes Directive (DGSD) in order to enhance the transparency and public accountability of DGSs regarding the available financial means and covered deposits. In particular, the available financial means data as of 31 December 2018 shows that 32 out of a total of 43 DGSs in EU Member States had increased their funds since 31 December 2017; and that the target level of 0.8% of covered deposits had already been achieved by 17 of the 43 DGSs in the EU.

Annual report

(17/06/2019) ESMA – Annual Report 2018
The ESMA has published its Annual Report 2018 which reviews its achievements against its 2018 priorities and objectives in meeting its mission of enhancing investor protection and promoting stable and orderly financial markets in the EU. In particular, this Report focuses on: i) promoting supervisory convergence; ii) assessing risks to investors, markets and financial stability; iii) completing single rulebook for EU financial markets; and iv) directly supervising specific financial entities.

CNMV annual report

(17/06/2019) CNMV – Informe anual sobre los mercados de valores y su actuación 2018
The Spanish National Securities Market Commission (CNMV) has published its Annual Report on 2018 which contains a description of market trends. In particular, this Report covers the following aspects: i) main features of the economic and financial environment and financial market trends; ii) activity of the CNMV in different areas of action (i.e. supervision of markets and financial intermediaries, investor relations and relations with other market participants, and international activity); iii) some aspects of the CNMV's internal organisation and strategy, including FinTech, advice on draft legislation and a set of indicators to evaluate the performance and activity of the CNMV.

Reporting

(17/06/2019) Fed/FDIC/OCC – Final rule on reduced reporting for Covered Depository Institutions
The Fed, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have published a Final rule on reduced reporting for Covered Depository Institutions that permit insured depository institutions with total assets of less than $5 billion that do not engage in certain complex or international activities to file the most streamlined version of the FFIEC 051 Call Report. In particular, this Final rule would reduce by approximately one-third, the number of existing data items reportable for the first and third calendar quarters.

EMIR

(14/06/2019) ESMA – Updated Q&As on EMIR data reporting
The ESMA has updated its Q&As on EMIR data reporting to promote common supervisory approaches and practices in the application of EMIR. In particular, these Q&As provide further clarity regarding the implementation of EMIR Refit with respect to: i) Q&A OTC 3 on the calculation framework towards the clearing thresholds; and ii) TR Q&A 51 regarding the notifications to be made by market participants to their competent authorities to apply an intragroup exemption from reporting.

MiFIR

(13/06/2019) ESMA – Updated register of derivatives to be traded on-venue under MiFIR
The European Securities and Markets Authority (ESMA) has updated its public Register of derivative contracts that are subject to the trading obligation under the Markets in Financial Instruments Regulation (MiFIR) in order to add to the list UK venues where the derivatives subject to the trading obligation are available for trading. In particular, this update provides clarity on, among others: i) the classes of derivatives subject to the trading obligation; ii) the trading venues on which those derivatives can be traded; and iii) the dates on which the obligation takes effect per category of counterparties.

Insurance sector’s supervision

(13/06/2019) ECB/EIOPA – Common Minimum Standards for data revisions for supervisory and statistical reporting by (re)insurance undertakings
The ECB and the European Insurance and Occupational Pensions Authority (EIOPA) have published the Common Minimum Standards for data revisions in order to align their expectations for the minimum acceptable level of data quality for reporting. In particular, this document specifies the request for revisions to financial institutions, the synchronization (i.e. the same data has to be available at all levels and times), the timeliness, and the need for historical revisions (i.e. review of those issues that affect back-data).

SME’s financing

(07/06/2019) FSB – Consultative document on evaluation of the effects of financial regulatory reforms on small and medium-sized enterprise (SME) financing
The FSB has published a Consultative document on the evaluation of the effects of financial regulatory reforms on small and medium-sized enterprise (SME) financing that examines the effects of the post-crisis financial regulatory reforms on the financing of SMEs. In particular, this document focuses on the SME financing trends (i.e. structure, trends and drivers), the financial regulations (i.e. regulation vs other factors, Basel III reforms), the evaluation approach (i.e. methodology, cost-benefit considerations), and the effects of reforms (e.g. effects of G20 reforms on SME financing, or effects across jurisdictions).

ESMA newsletter

(07/06/2019) ESMA – Newsletter Nº5
The ESMA has published the Fifth edition of its Newsletter providing the full list of publications from May and the consultations on EMIR 2.2. In particular, this Newsletter includes 25 publications on, among others, reporting guidelines under Securities Financial Transactions Regulation (SFTR) (e.g. information that should be reported by trade repositories (TRs); Brexit (e.g. application of the trading obligation for shares in a no-deal Brexit); EONIA to €STR transition (e.g. implementation of a legal action plan to ensure a smooth transition); and RTS on the mapping of External Credit Assessment Institutions (ECAIS) under the CRR.

MiFID II

(07/06/2019) ESMA – Update on Double Volume Cap (DVC) data
The ESMA has updated its public register with the latest set of double volume cap (DVC) data under MiFID II. In particular, this updated public register establishes 40 new breaches: 31 equities for the 8% cap, applicable to all trading venues; and 9 equities for the 4% cap, that applies to individual trading venues. Moreover, this register shows that a total of 275 instruments are suspended.

European single electronic format (ESEF)

(07/06/2019) ESMA – Final RTS amending Delegated Regulation (EU) 2018/815 on the updates of the taxonomy to be used for the ESEF
The ESMA has published a Final RTS on the European Single Electronic format (ESEF) to update the core taxonomy to be used for ESEF reporting. In particular, these RTS replace the last version with the most recent one published by the IFRS Foundation in March 2019 in order to promote electronic reporting which is up-to-date with the applicable reporting standards.

Deposit guarantee fund (FGD)

(07/06/2019) BdE – Consulta pública previa del proyecto de circular que modifica la Circular 8/2015, a entidades y sucursales adscritas al FGD, sobre información para determinar las bases de cálculo de las aportaciones
The Bank of Spain (BdE) has launched a Public consultation prior to the preparation of the Draft Circular amending Circular 8/2015, applicable to the branches and entities correspondent to the Deposit Guarantee Fund (FGD) for credit institutions on the information to establish the calculation basis of contributions to the FGD. In particular, this Draft Circular aims to clarify the information that must be submitted related to deposits, as well as to introduce additional information requirements that ensure the correct compliance of FGD cooperation obligations established in the EU.

Decentralised financial technologies

(06/06/2019) FSB – Report on financial stability, regulatory and governance implications of decentralised financial technologies
The FSB has published a Report on the financial stability, regulatory and governance implications of the use of decentralised financial technologies such as those involving distributed ledgers and online peer-to-peer, or user-matching, platforms. In particular, this Report focuses on technologies that may reduce or eliminate the need for intermediaries or centralised processes (i.e. decentralisation of decision-making, risk-taking and/or record-keeping) that have traditionally been involved in the provision of financial services; and notes that the application of these technologies could benefit financial stability in some ways (e.g. greater competition and diversity, and reduce systemic importance of some existing entities) although they may entail risks (e.g. concentration in the ownership and operation of key infrastructure and technology).

Climate risk

(05/06/2019) FSB – 2019 Status Report on Climate-related financial disclosures
The FSB has published a Status Report on Climate-related financial disclosures for 2019, in order to provide an overview of the extent to which companies in their 2018 reports included information aligned with the core Task Force on Climate-related Financial Disclosures (TCFD) recommendations. In particular, this Report highlights the increase of climate-related financial information disclosure since 2016, but still insufficient for investors; the need of more clarity on the potential financial impact of climate-related issues on companies; the non-disclosure of information on the resilience of companies using scenarios’ strategies; and the requirement of involvement of multiple functions by mainstreaming climate-related issues (e.g. risk management or finance).

Sustainable finance

(05/06/2019) IOSCO – Report on sustainable finance in emerging markets and the role of securities regulators
The International Organization of Securities Commissions (IOSCO) has published a Report on sustainable finance in emerging markets and the role of securities regulators which explores the trends and challenges that influence the development of sustainable finance in emerging capital markets and provides 10 recommendations for emerging market member jurisdictions to consider when issuing regulations or guidance. In particular, this Report provides recommendations related to: i) integration by issuers and regulated entities of environmental, social and governance (ESG) specific issues in their overall risk assessment; ii) integration by the institutional investors of ESG-specific issues into their investment analysis, strategies and overall governance; iii) ESG-specific disclosures, reporting and data quality; iv) definition and taxonomy of sustainable instruments; v) specific requirements regarding sustainable instruments; and vi) building capacity and expertise for ESG issues.

Disclosure

(05/06/2019) EC – Implementing Regulation (EU) 2019/912 amending Implementing Regulation (EU) No 650/2014 laying down implementing technical standards with regard to the format, structure, contents list and annual publication date of the information to be disclosed by competent authorities in accordance with Directive 2013/36/EU of the European Parliament and of the Council
The European Commission (EC) has published the Implementing Regulation (EU) 2019/912 on the ITS with regard to the format, structure, contents list and annual publication date of the information to be disclosed by competent authorities (CA). In particular, this Implementing Regulation introduces amendments regarding the general remarks on filling templates regarding rules and guidance, options and discretions, supervisory review and evaluation process (SREP), and aggregate statistical data.

Quarterly review

(04/06/2019 BCBS – Quarterly Review. June 2019
The BCBS has published its Quarterly Review of June 2019 which provides information on international banking and financial market developments. In particular, this Review contains information related to concentration in cross-border banking, distribution of cross-border banking relationships, and concentration and the fall in cross-border interbank credit. Moreover, it also provides statistics on, among others, locational banking, consolidates banking, debt securities, derivatives, global liquidity indicators, and total credit to the non-financial sector.

Risk-free rates (RFRs)

(04/06/2019) FSB – User Guide on overnight risk-free rates
The FSB has published a User Guide on overnight risk-free rates (RFRs) in order to encourage adoption of these rates where appropriate (e.g. in business where exposure to bank credit risk is not necessary or desirable). In particular, this Guide provides an overview of RFRs, details on how RFRs are calculated to clarify how overnight RFRs can be used in cash products.

Market fragmentation

(04/06/2019) FSB – Report on market fragmentation
The FSB has published a Report on market fragmentation that explores issues around market fragmentation and considers tools to address them, where appropriate; focusing on instances where reducing market fragmentation might have a positive impact on financial stability or improve market efficiency without any detrimental effect on financial stability. In particular, this Report looks at some examples of financial activities where supervisory practices and regulatory policies may give rise to market fragmentation (e.g. trading and clearing of over-the-counter (OTC) derivatives across borders; banks’ cross-border management of capital and liquidity; and the sharing of data and other information internationally).
(04/06/2019) IOSCO – Report on market fragmentation & cross-border regulation
The IOSCO has published a Report on market fragmentation and cross-border regulation in order to identify remaining challenges that can restrict cross-border activities as well as market fragmentation that arises as an unintended consequence of financial regulation. In particular, this Report provides examples of market fragmentation that IOSCO members consider to be significant and potentially harmful to the oversight and supervision of financial markets (i.e. trading and clearing of derivatives); as well as findings from survey respondents, lessons learned and potential ways forward that could assist IOSCO members in reducing and any adverse effects of harmful or unintended regulatory-driven market fragmentation.

UCITS / AIFMD

(04/06/2019) ESMA – Updated Q&As on the application of the UCITS Directive / Updated Q&As on the application of the AIFMD
The European Securities and Markets Authority (ESMA) has updated its Q&As on the application of the Undertakings for the Collective Investment in Transferable Securities (UCITS) Directive and the Alternative Investment Fund Managers Directive (AIFMD) in order to promote common supervisory approaches and practices in the application of AIFMD and the UCITS. In particular, the new Q&As cover the distinction between depositary functions and mere supporting tasks that are not subject to the delegation requirements; the delegation of safekeeping functions; and the performance of depositary functions where there are branches in other Member States; among others.

MiFID II / MiFIR

(03/06/2019) ESMA – Supervisory Briefing ensuring compliance with the MiFIR pre-trade transparency requirements in commodity derivatives
The ESMA has published an updated version of its supervisory briefing on MiFIR pre-trade transparency requirements in commodity derivatives in order to increase supervisory convergence among national competent authorities (NCAs), in their implementation of the requirements, and to provide a common timetable for the enforcement of the commodity derivatives pre-trade transparency regime. In particular, this document sets a three-step timetable: i) NCAs should gather information on the plans of each relevant trading venue to comply with the pre-trade transparency requirements, and ESMA should assess those plans; ii) NCAs should make sure that all the relevant trading venues either operate under a compliant pre-trade waiver or are pre-trade transparent; and iii) NCAs should take supervisory measures in case of non-compliance.
(03/06/2019) ESMA – Updated Q&As on MiFID II and MiFIR transparency topics
The ESMA has updated its Q&As on the transparency issues under MiFID II and MiFIR in order to promote common supervisory approaches and practices in the application of both rules. In particular, this update includes new Q&As on the mandatory systematic internaliser (SI) regime; the voluntary SI regime; and the quoting obligation for SI in non-trading on a traded venue (TOTV) instruments.

Sustainable finance

(03/06/2019) EIOPA – Consultation Paper on an Opinion on sustainability within Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) has published a CP on an Opinion on sustainability within Solvency II as part of the strategic activities on sustainable finance that is carrying out, and with the objective of integrating sustainability risks, especially those related to climate change, in the investment and underwriting practices of (re)insurers. In particular, this CP addresses the valuation of assets and liabilities, assesses current investment and underwriting practices and seeks to contribute to the integration of sustainability risks in market risks and natural catastrophe underwriting risks for the solvency capital requirements.

Crypto-assets

(31/05/2019) FSB – Report on crypto-assets. Work underway, regulatory approaches and potential gaps
The FSB has published a Report on crypto-assets which considers the work underway, regulatory approaches and potential gaps. In particular, this Report concludes that differences in regulation between jurisdictions reflect different national market developments and differences in underlying legal and regulatory frameworks for the respective financial systems; and that gaps may arise from cases where crypto-assets are outside the perimeter of market regulator and payment system oversight, or from the absence of international standards or recommendations.

EONIA / €STR

(31/05/2019) ECB – Calculation of the spread between €STR and EONIA
The ECB has calculated the spread between new euro short-term rate (€STR) and current euro overnight index average (EONIA) based on the methodology on euro risk-free rates which was adopted by the European Money Market Institute (EMMI) for the recalibration of the EONIA methodology. In particular, the spread has been calculated at 0.085% on the basis of daily EONIA and pre-€STR data for the most recent year of publicly available pre-€STR data.

AnaCredit

(31/05/2019) ECB – AnaCredit Reporting Manual Part I – General Methodology, second edition / AnaCredit Reporting Manual Part II – Datasets and data attributes, second edition
The ECB has updated the AnaCredit Reporting Manual in order to acknowledge and incorporate the additional explanations provided by the ECB and adjustments to address previous inconsistencies. In particular, the Manual Part 1 covers, among others, the reporting and observed agents; the counterparties in AnaCredit; the instruments covered in AnaCredit; the criteria triggering the reporting obligation; and the concept of credit. In addition, the Manual Part II on Datasets and data attributes covers, among others, financial and accounting datasets as well as counterpart-instrument data.

Real estate loans

(31/05/2019) BdE – Procedimiento para acreditar los conocimientos y competencia del personal que comercialice préstamos inmobiliarios
The Bank of Spain (BdE) has published the procedure to certify the knowledge and competence of the staff trading real estate loans. In particular, this document covers and establishes the requirements to request the BdE’s recognition by certification bodies or institutions; and the requirements to request the integration of titles or certificates for the recognition of knowledge and competence requirements into the list of the BdE. Further, it also includes information on the publication of the relationship between relevant certification firms or institutions and the list of titles and certifications; as well as on the procedure for submitting the information required.

 

© GMS Management Solutions, S.L., 2019. All rights reserved. The information contained on this publication is of a general nature and does not constitute a professional opinion or an advisory service. The data used in this publication come from public sources. GMS Management Solutions, SL assumes no liability for the veracity or accuracy of such data.