7 April - 11 April 2014
The GFMA Weekly will not publish next Friday, 18 April. The newsletter will resume publication on 25 April 2014. Should events or news warrant, we will send a special update to our readers.
BCBS Releases Progress Basel Regulatory Framework Implementation
The Basel Committee on Banking Supervision (BCBS) updated the Progress report on implementation of the Basel regulatory framework, which provides a high-level view of Basel Committee members' progress in adopting Basel II, Basel 2.5 and Basel III, as of end March 2014. The report focuses on the status of domestic rule-making processes to ensure that the Committee's capital standards are transformed into national law or regulation according to the internationally agreed timeframes. The Committee believes that disclosure will provide additional incentive for members to fully comply with the international agreements.
BCBS Progress Report
BCBS Finalises Capital Standard for Bank Exposures to CCPs
The Basel Committee on Banking Supervision (BCBS) published a final standard for calculating regulatory capital for banks' exposures to central counterparties (CCPs). The final standard will replace the interim capital requirements that were published in July 2012. When developing the final standard, in close cooperation with the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO), the Basel Committee sought to simplify the underlying policy framework and to complement relevant initiatives undertaken by other supervisory bodies, including the CPSS-IOSCO Principles for financial market infrastructures. The Committee also aimed to support broader policy efforts advanced by the G20 leaders and the Financial Stability Board, particularly those relating to central clearing of standardised OTC derivative contracts.
FSB Publishes Reports on OTC Derivatives Market Reforms
The Financial Stability Board (FSB) has published its seventh progress report on the implementation of OTC derivatives market reforms. These reforms, agreed to in 2009 by G20 leaders, are aimed at improving transparency, mitigating systemic risk and protecting against market abuse. The report observes that significant progress has been made in fulfilling the G20 commitments through global policy development, adoption of legislation and expanded use of market infrastructure. However, the report identifies that further work by authorities is needed in some specific areas. Deadline for comments is 8 May 2014.
OTC Derivatives Market Reforms: Seventh Progress Report on Implementation
FSB on assessing risk culture and on enhanced supervision
The Financial Stability Board (FSB) has published two papers:
- Framework for Assessing Risk Culture: sets out that a sound risk culture should emphasise throughout an institution the importance of ensuring that: (i) an appropriate risk-reward balance consistent with the institution’s risk appetite is achieved when taking on risks; (ii) an effective system of controls commensurate with the scale and complexity of the financial institution is properly put in place; (iii) the quality of risk models, data accuracy, capability of available tools to accurately measure risks and justifications for risk taking can be challenged, and (iv) all limit breaches, deviations from established policies and operational incidents are thoroughly followed up with proportionate disciplinary actions when necessary; and
- Progress Report on Enhanced Supervision: describes the changes in supervisory practices since the financial crisis and identifies areas where further work is necessary.
Framework for Assessing Risk Culture
Progress Report on Enhanced Supervision
FSB Releases Peer Review of German Financial Reforms
The Financial Stability Board (FSB) published its peer review of Germany. The peer review examined two topics that are important for financial stability: the macroprudential policy framework and microprudential supervision. These topics are relevant across the FSB membership and are also being covered in other FSB peer reviews. This review focused on the steps taken by the German authorities to implement reforms in these two areas, including by following up on relevant recommendations in the 2011 Financial Sector Assessment Program (FSAP) report by the International Monetary Fund (IMF).
AMCC Members Continue to Deepen Contribution to IOSCO Work
The Affiliate Member Consultative Committee (AMCC) met in Tokyo this week to further its work on emerging risks, investment funds data, cyber threats and other initiatives in support of the International Organization of Securities Commissions (IOSCO). The AMCC is comprised of IOSCO affiliate members, which include self-regulatory organizations (SROs), securities exchanges, financial market infrastructures, investor protection funds, and other securities markets regulatory organizations. Last year, it adopted a new strategic direction to strengthen its role as a consultative committee to the securities regulators who account for most of IOSCO´s membership. It also changed its name from the SRO Consultative Committee to the AMCC to reflect the diversity of its growing membership.
ESMA Releases Updated List of CCPs under EMIR
The European Securities and Markets Authority (ESMA) has updated its list of Central Counterparties (CCPs) that have been authorised to offer services and activities in the Union in accordance with the European Markets Infrastructure Regulation EMIR (EMIR). There are now three CCPs authorised under EMIR, the European Central Counterparty N.V. (EuroCCP - NL), authorised on 1 April 2014, NasdaqOMX Clearing AB (SE), authorised on 18 March 2014, and KDPW_CCP, authorised on 8 April 2014. ESMA’s list of authorised CCPs also details the classes of financial instruments covered by each CCP’s authorisation.
CPSS-IOSCO Post Responses to Consultation
The International Organization of Securities Commissions (IOSCO) published today the comment letters to the CPSS- IOSCO consultative document on the Assessment methodology for the oversight expectations applicable to critical service providers, which was published on 18 December 2013. Twelve comment letters were posted.
Consultation & Comments Received
European Parliament Releasae Final Plenary Session Draft Agenda
The European Parliament (EP) has published the draft Agenda for its final plenary session that will be hold on 15 and 16 April 2014. The EP will vote the following financial services legislative proposals, before the elections in May 2014:
the revised Markets in Financial Instruments Directive (consisting of a Directive (MiFID 2) and Regulation (MiFIR)) (15 April 2014);
Bank Recovery and Resolution Directive (RRD) (15 April 2014);
Deposit Guarantee Schemes Directive (15 April 2014);
Single Resolution Mechanism (SRM) Regulation (15 April 2014);
Directive to amend Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS V) (15 April 2014);
Directive on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features (Bank Account Directive) (15 April 2014);
Regulation on improving securities settlement in the EU and on central securities depositories (CSD Regulation) (15 April 2014);
Regulation on the pre-contractual information that should be provided to small investors to help them to understand and compare packaged retail and insurance-based investment products (PRIPs KID Regulation) (15 April 2014); and
Regulation on European long-term investment funds (ELTIFs Regulation) (16 April 2014).
EP Draft Agenda
Council Publishes Revised Texts of MAD 2 and MAR
The Council of the EU has published the revised texts, dated 4 April 2014, of the Market Abuse Directive (MAD 2) and Regulation (MAR).
Updated MAD 2
Joint Announcement of China Securities Regulatory Commission and Securities and Futures Commission
The China Securities Regulatory Commission and the Securities and Futures Commission have approved, in principle, the development of a pilot programme (Shanghai-Hong Kong Stock Connect) for establishing mutual stock market access between Mainland China and Hong Kong. When launched, the pilot programme will operate between the Shanghai Stock Exchange (SSE), the Stock Exchange of Hong Kong Limited (SEHK), China Securities Depository and Clearing Corporation Limited (ChinaClear) and Hong Kong Securities Clearing Company Limited (HKSCC). This announcement describes the principles under which it is expected that Shanghai-Hong Kong Stock Connect will operate.
GFMA and GFMA-Affiliate News
SIFMA, GFMA's North American Affiliate, Calls on Regulators to Adopt LEI
SIFMA sent a letter to the U.S. Financial Stability Oversight Council (FSOC) encouraging a more fulsome adoption and use by the US regulatory community of the Legal Entity Identifier (LEI). From the letter, "Critically, this standard will help support the shared objective of a more stable financial system. The global industry and regulatory community are strongly supportive of the Global LEI System (GLEIS) initiative and the benefits to operational efficiencies, systemic risk management and financial stability that it would provide."
SIFMA LEI Letter to FSOC
AFME 7th Annual European Post-Trade Conference: 7 May, London
AFME, GFMA’s European-affiliate, is hosting its 7th Annual European Post-Trade Conference, which will explore crucial developments in the post-trade arena and their impact on the industry. Scheduled on 7 May at the Rosewood London hotel, the conference is expected to attract more than 200 senior post-trade professionals. It will feature updates from European speakers and offer many opportunities to network with delegates.
Program Now Available: SIFMA-TCH Prudential Bank Regulation Conference- 10 June, DC
Join SIFMA and The Clearing House (TCH) for their Prudential Bank Regulation Conference, in Washington, DC. Leading industry experts from regulatory agencies, banks, and prominent academic institutions as well as private practitioners will examine prudential policy issues and the role of regulation in today's banking system including: Regulating Activities and Imposing Organizational Structure Requirements, Regulating Capital and Liquidity, Enhanced Prudential Standards and Heightened Expectations, and Recovery & Resolution Planning. Featured speakers: Patrick Parkinson, Managing Director, Promontory Financial Group; John Dugan, Partner, Covington & Burling; Mark Van Der Weide, Deputy Director, Federal Reserve System; Molly Sherf, Deputy Comptroller, Office of the Comptroller of the Currency; and more. CLE credits will be available. Register Today.