16 February - 20 February 2015

Regulatory and Legislative Developments from Across the Globe


north America

Jerome Powell Speaks on Financial Stability Within Credit Markets
Federal Reserve Governor Jerome H. Powell delivered a speech entitled "Financial Institutions, Financial Markets, and Financial Stability" at New York University's Stern School of Business in New York City. Powell said financial stability “need not seek to eliminate all risks” and that there should be a high bar for “leaning against the credit cycle.”

Nathan Sheets Speaks on the Global Economy
Treasury Under Secretary for International Affairs Nathan Sheets delivered a speech on adopting structural reforms to enhance the productive capacity of the global economy at the Peterson Institute for International Economics in Washington, D.C. Sheets stressed that efforts are needed to address shortcomings on both the supply side and the demand side.



EC Announces Council Backing Against the Manipulation of Financial Benchmarks
In a move welcomed by the European Commission, the Council has given its backing to new proposed rules to enhance the robustness and reliability of benchmarks, which are used in financial instruments (e.g. bonds, shares, futures or swaps) and financial contracts (e.g. mortgages or consumer contracts) in the EU. The Commission proposed new standards in September 2013 after it emerged that some benchmarks had been manipulated, resulting in multi-million euro fines on several banks in Europe and in the US.
Press Release

EC Releases Draft Consultations and Green Paper on the Capital Markets Union
The European Commission released consultation documents titled “Review of the Prospectus Directive,” and “An EU Framework for Simple, Transparent and Standardized Securitization.” Comments are due by May 13, 2015. The European Commission also released a Green Paper titled “Building a Capital Markets Union.” With the CMU, the Commission wants to clear obstacles that are preventing those who need financing from reaching investors and make the system for channeling those funds – the investment chain – as efficient as possible.
Consultation Documents: Prospectus Directive; Standardized Securitization | Green Paper | Press Release

EBA Releases Opinion on the Definition of Eligible Capital
The European Banking Authority (EBA) published its opinion on the review of the appropriateness of the definition of ‘eligible capital', in response to a call for advice received from the European Commission in December 2013. On the basis of information gathered during the first year of application of the Capital Requirements Regulation (CRR), the EBA provides its preliminary views which are relevant for the large exposures framework, as well as for investment firms and qualifying holdings.
Opinion | Press Release

ESMA Releases Annual Report on Supervisory Focus for CRAs and TRs
The European Securities and Markets Authority released its Annual Report 2014 and Work Plan on ESMA Supervision of Credit Rating Agencies and Trade Repositories.  The report summarizes the key actions taken during 2014 and outlines ESMA’s supervisory work plans for both sectors for 2015.
Report | Press Release

ESMA Releases Report on Regulations on Social Entrepreneurship and Venture Capital Funds
The European Securities and Markets Authority released a final report on ESMA's technical advice to the European Commission on the delegated acts of the regulations on European social entrepreneurship funds and European venture capital funds.
Report | Press Release

ESMA Releases Addendum to Draft Consultation Paper on MiFID II
The European Securities and Markets Authority (ESMA) has published today a consultation paper which complements the transparency section of the paper on MiFID II/MiFIR published on 19 December 2014. This CP covers the following non-equity asset classes: (1) foreign exchange derivatives; (2) credit derivatives; (3) other derivatives; and (4) contracts for difference (CFDs).
Addendum | Press Release

Bank of England Releases Financial Stability Paper on Analyzing the Impact of Too Big to Fail
The Bank of England released a Financial Stability Paper entitled "Estimating the Extent of the 'Too Big to Fail' Problem — a Review of Existing Approaches." The paper reviews three approaches to estimating the funding advantages gained from an institution’s perception as being “too big to fail.”
Financial Stability Paper | Press Release

FCA Releases Review on Asset Management Firms and Market Abuse
The Financial Conduct Authority released a thematic review titled “Asset Management Firms and the Risk of Market Abuse.” The review considered how firms control the risks of insider dealing, improper disclosure and market manipulation, with a primary focus on equities and insider dealing.
Review | Press Release

FCA to Investigate Competition in Investment and Corporate Banking Services
The Financial Conduct Authority (FCA) today announced plans to launch its first wholesale market study into investment and corporate banking to assess whether competition in the sector is working properly. This follows the publication of its review into competition in the wholesale sector, which found that limited clarity over price and quality of services may make it difficult for clients to assess whether they are getting value for money, and that the bundling and cross selling of services could make it difficult for new entrants or smaller established firms to challenge established large players in the market.
Press Release

PRA Releases Draft Consultation on Solvency II
The Prudential Regulation Authority released a consultation paper titled “Solvency II: Applying EIOPA's Set 1 Guidelines to PRA-Authorized Firms.” Comments are due by March 19, 2015.  This consultation paper includes a draft supervisory statement which is relevant to all UK firms within the scope of Solvency II and to the Society of Lloyd’s. The statement sets out the PRA’s expectations of firms in relation to the EIOPA Set 1 Guidelines.
Consultation Paper | Press Release

Vitor Constancio Speaks on the Role of Macro-Prudential Policy in Safeguarding Financial Stability
European Central Bank Vice President Vítor Constâncio delivered a speech entitled "Financial Stability Risks, Monetary Policy and the Need for Macro-Prudential Policy" at the Warwick Economics Summit in Warwick, England. Constâncio said financial stability objectives can only be achieved with an effective macro-prudential policy.



ASIC Amends Rules on Trade Reporting Obligations for OTC Derivatives
The Australian Securities and Investments Commission has amended its derivative transaction reporting rules follow industry consultation and feedback on its consultation paper titled” TC Derivatives Reform: Proposed amendments to the ASIC Derivative Transaction Rules (Reporting) 2013.” ASIC has decided, after consultation with other financial regulators, not to proceed with the proposal to require larger foreign subsidiaries of Australian authorized deposit-taking institutions (ADIs) and Australian financial services license (AFS) license holders to report OTC derivative transactions.
Press Release

ASEAN Exchanges Meet with Malaysian Prime Minister on Integrating Capital Markets
The ASEAN Exchanges CEOs met with the Prime Minister of Malaysia, Najib Razak, for a dialogue on how to further harmonise and integrate ASEAN capital markets in order to better support the growth of all ASEAN economies. Malaysia took over the Chairmanship of ASEAN in January 2015 and the meeting showed the support for the ASEAN Economic Community agenda.
Press Release

CBRC Issues Amended Leverage Ratio Measures
The China Banking Regulatory Commission (CBRC) has promulgated the amended 'Administrative Measures for the Leverage Ratio of Commercial Banks', which will take effect on April 1, 2015. The measures were amended by the CBRC to keep domestic rules in line with the leverage ratio rules under Basel III.
Amended Measures (Chinese Only)

Fund Management Activities Survey 2014 Conducted by the Securities and Futures Commission
Institutions are invited to participate in the SFC's annual Fund Management Activities Survey for the year ended 31 December 2014. The purpose of the survey is to collect information about fund management activities in Hong Kong for regulatory and market facilitation purposes and to develop a better understanding of the state of the fund management industry in Hong Kong.

MAS Proposes Legislative Amendments to Strengthen Regulation of Derivatives Trading and the Securities Market
The Monetary Authority of Singapore (MAS) issued for consultation proposed legislative amendments to the Securities and Futures Act (SFA) to effect reforms to the regulation of over-the-counter (OTC) derivatives trading and the securities market. This consultation follows the feedback MAS received on these reforms. 
Press Release

Guy Debelle Speaks on Benchmark Rates in the FX Market
Reserve Bank of Australia Assistant Governor of Financial Markets Guy Debelle delivered a speech entitled "FX Benchmarks" at the FX Week Australia Conference in Sydney, Australia. Debelle said that if recommendations from the FX Benchmark Group are not implemented, then the likelihood of a regulatory response will increase.



GFMA & GFMA - Affiliate News & Events

Complimentary Event: EU Commissioner Hill on Role of Financial Markets, Feb. 27 in NYC
On February 18, Commissioner Hill announced the European Commission's Capital Markets Union initiative. The Commissioner will discuss these highly anticipated proposals and more when he speaks on February 27 at the SIFMA Conference Center in NYC. His first visit to New York as the EC's Commissioner for financial services will be a unique opportunity to learn first-hand about this plan for the Capital Markets Union, the EU's investment and growth strategy and structural reform as well as its objectives for transatlantic policy coordination.
Reserve your seat – sign up today.

Last Chance to Register! SIFMA’s AML Conference - Feb. 24-25, NYC
Now in its 15th year, this is the only conference in the AML and financial crime space tailored to broker-dealers and other members of the securities industry. This year’s program features a robust line-up of experts from the industry, regulatory agencies and law enforcement who will explore the latest trends and emerging issues relating to anti-money laundering, economic sanctions and anti-bribery/anti-corruption compliance. 
Register Today

Full Program Available: Future of the ILS Market - SIFMA IRLS Conference, March 3-4, NYC
The SIFMA Insurance- and Risk-Linked Securities Conference will bring together industry experts, sponsors and institutional investors to examine the expanding opportunities of this market, discuss risk management strategies, and explore how regulatory changes and other related factors will affect the industry. The opening panel will discuss a number of core factors affecting the trajectory of the ILS market including: permanency of ILS capital, ILS capital impact on the reinsurance industry, next stage of growth: broader or deeper, and ILS interaction with other reinsurance innovations. Hear expert perspectives on the next 20 years and what it means for the (Re)insurance sector.
View the Full Program | Register Today

Preview the Professional Development Opportunities at this Year's C&L Annual Seminar
In addition to providing more than 65 informative panels as part of our robust program, SIFMA’s C&L Annual Seminar also offers professional development opportunities.  On Monday, March 16, join featured speaker Michelle Oroschakoff, Managing Director and Chief Risk Management Officer at LPL Financial, for a Women’s Luncheon.  On Tuesday, March 17, the C&L Diversity Subcommittee will host a Diversity Breakfast with featured speaker Theodore Wells, Jr., Partner at Paul, Weiss, Rifkind, Wharton & Garrison.  Pre-registration is required for both activities and availability is on a first come, first served basis.
Register Today

Publication of Interest: AFME Members’ Update
SIFMA’s European affiliate, the Association for Financial Markets in Europe (AFME), recently published its Members’ Update. Topics of interest in this February edition include a policy paper on a European Capital Markets Union, the Fair and Effective Markets Review, a new report titled “Post Trade Explained: The Role of Post-Trade Services in the Financial Sector” and a Bank Structural Reforms (BSR) study. Click to read more about AFME’s work across the pond. AFME in London and Brussels, ASIFMA in Hong Kong and SIFMA in New York and Washington are, respectively, the European, Asian and North American members of the Global Financial Markets Association (GFMA). GFMA brings together these three leading financial trade associations to address the increasingly important global regulatory agenda and to promote coordinated advocacy efforts.



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