13 May – 17 May, 2013
State of play of MiFID 2/MiFIR
The presidency of the Council of the EU published a note to the Permanent Representatives Committee (COREPER) setting out the state of play of the proposed recast MiFID II package. The document refers to the most recent presidency compromise proposals for MiFID 2/MiFIR dated 15 April 2013. The Presidency remarks that significant progress has been made towards achieving agreement on a Council general approach, during the latest meeting of the Working Party on Financial Services (Attachés) on 11 April 2013. However, it notes that there was not yet a qualified majority supporting an overall compromise in particular. because of the following key outstanding issues: clearing access to central counterparties (CCPs); access of CCPs to trading venues; and access to licences of, and information relating to, benchmarks that are used to determine the value of financial instruments for CCPs and trading venues.
EU Council Note
Council Adopts New Rules on CRAs
The Council adopted a directive and a regulation amending the EU's rules on credit rating agencies (CRAs). The Directive and Regulation aim to reduce investors' over-reliance on external credit ratings, mitigate the risk of conflicts of interest in credit rating activities and increase transparency and competition in the sector.
European Commission Publishes Proposal and Working Paper on Bank Account Directive
The European Commission published a proposal for a directive and working paper on the comparability of fees relating to payment accounts, payment account switching and access to payment accounts with basic features (Bank Account Directive).
ESMA Publishes draft RTS on the cross-border application of EMIR
The European Securities and Markets Authority (ESMA) published a letter (dated 22 April 2013) European Commission’s letter setting the timing for the delivery of the draft technical standards on the cross border application of EMIR (Art. 4(4) and 11(14)). The letter addresses ESMA’s decision of June 2012 to postpone the development of the technical standards which deal with the application of EMIR to transactions between non-EU entities with a direct, substantial and foreseeable effect within the EU, pending on-going discussions with international regulators. The Commission requests ESMA to deliver the two draft RTS to the Commission by 25 September 2013.
IMF Issues Report on Volcker, Vickers and Liikanen Structural Measures
The IMF released a Staff Discussion Note, Creating a Safer Financial System: Will the Volcker, Vickers, and Liikanen Structural Measures Help?The paper looks into the structural constraints that countries have proposed to address too-important-to-fail and looks into its impacts on a global level.
EU Commission consults on reforming structure of EU banking sector
The EU Commission has published a consultation paper on the main building blocks of the Commission’s follow-up to the report of the high-level expert group on reforming the structure of the EU banking sector (Liikanen report).
The consultation period ends on 3 July 2013.
Parliment Publishes UK Financial Services (Banking Reform) Bill
The Financial Services Bill has been carried over to the 2013-14 session of Parliament. It makes a number of changes in relation to the banking and financial services sector. Among the others, the Bill contains provision to separate the banking activities on which households and small and medium-sized enterprises depend from wholesale or investment banking activities which may involve a greater degree of risk and expose an entity undertaking them to financial problems arising elsewhere in the global financial system. The Bill also gives the HM Treasury power to make regulations in connection with the pension liabilities of ring-fenced bodies which are employers in relation to multiemployer occupational pension schemes.
HM Treasury Publishes Responses to Consultation on AIFMD
HM Treasury has published its summary of responses to the consultation paper on the transposition of the Alternative Investment Fund Managers Directive (AIFMD), along with draft Alternative Investment Fund Managers Regulations 2013. The summary of responses explains the decisions the U.K. Government has taken in respect of different areas of the implementation of AIFMD.
HM Treasury Response to Consultation
Fed Issues Annual Performance Report
The Federal Reserve issued its Annual Performance Report for 2012 which summarizes the Board’s accomplishments in 2012 toward achieving the objectives identified in the Fed’s Strategic Framework.
Fed Annual Performance Report
U.S. Commodity Future Trading Commission (CFTC) Holds Open Meeting to Consider Trade Execution Rules
CFTC commissioners voted on to adopt final rules and an interpretive guidance relating trade execution and practices.
- Final Rule: Procedures to Establish Appropriate Minimum Block Sizes for Large Notional Off-Facility Swaps and Block Trades. (Approved by vote of 3-2)
- Final Rule: Process for a Designated Contract Market or Swap Execution Facility to Make a Swap Available to Trade under Section 2(h)(8) of the Commodity Exchange Act (CEA); Swap Transaction Compliance andImplementation Schedule; Trade Execution Requirement Under 2(h) of the CEA (Approved by voted of 3-2)
- Final Rule: Core Principles and Other Requirements for Swap Execution Facilities (Approved by voted of 4-1)
- Interpretive Guidance and Policy Statement: Anti-disruptive Practices Authority – (Approved by vote of 5-0)
Gary Gensler Testimony
Jill Sommers Testimony
Bart Chilton Testimony
Scott O’Malia Testimony
Michael Gibson Testifies on Cross-Border Resolution
Michael S. Gibson, Director, Division of Banking Supervision and Regulation, U.S. Board of Federal Reserve testified before the U.S. Senate Banking, Housing and Urban Affairs Subcommittee on National Security and International Trade on cross-border resolution. His testimony highlights the challenges to achieving an orderly cross-border resolution of a failed systemic financial firm.
Michael Gibson Testimony
GFMA Comments to IOSCO on Principles for Financial Benchmarks Consultation Report
GFMA responded to the International Organization of Securities Commissions (IOSCO) on IOSCO's Principles for Financial Benchmarks Consultation Report. While GFMA considers that benchmark innovation, production and distribution should remain industry-driven activities, it believes that an internationally-agreed set of best practice standards is critical to promoting both investor confidence and the integrity of global financial markets.
The Weeks Ahead
- 21 May—Deadline for comment on FCA guidance consultation on oversight of RIEs and MTFs
- 3 June—Deadline for comment on FINMA consultation on distribution of collective investment schemes
- 4 June—Deadline for comment on MAS consultation on recommendations of FAIR
- 11 June—Deadline for comment on EBA consultation on technical standards for recovery plans
- 11 June—Deadline for comment on EBA consultation on conditions for assessing materiality of extensions and changes of internal approaches for credit, market and operational risk
- 13 June—Deadline for comment on IOSCO consultation on regulation of retail structured products
- 14 June—Deadline for comment on ECON consultation on coherence of EU financial services legislation
- 14 June—Deadline for comment on ESMA consultation on draft RTS in relation to prospectus supplements
- 21 June—Deadline for comment on BCBS consultation on supervisory guidance on external audits of banks
- 21 June—Deadline for comment on BCBS consultation on recognising cost of credit protection purchased
- 24 June—Deadline for comment on EBA consultation on draft implementing ITS on asset encumbrance reporting
- 24 June—Deadline for comment on EBA consultation on supervisory reporting for forbearance and non-performance exposures
- 24 June—Deadline for comment on House of Lords call for evidence on inquiry into European Union
- 25 June—Deadline for comment on EC green paper on long-term financing of the European economy
- 26 June—Deadline for comment on HKEx consultations on connected transaction rules
- 28 June—Deadline for comment on BCBS consultation on measuring and controlling large exposures
- 1 July—Deadline for comment on Dutch Supervisory Authority vision document on criteria for good supervision
- 3 July – Deadline for comments on EU Commission consultation on reforming structure of EU banking sector
- 19 July—Deadline for comment on EU Commission consultation on ESFS