22 May – 26 May 2017

Regulatory and Legislative Developments from Across the Globe

Global

Global FX Code of Conduct Released
A global code of conduct for the wholesale foreign exchange (FX) market was released yesterday in London. The FX Global Code establishes a common set of guidelines for good practice in the FX market, a vital part of the global financial system with turnover of more than $5 trillion a day. The guidelines, developed by the central bank Foreign Exchange Working Group (FXWG) in partnership with a private sector Market Participants Group, aim for a robust, fair, liquid, open, and appropriately transparent global FX marketplace.

Commenting on its publication May 25, James Kemp, Managing Director of the GFMA's Global FX Division said, "From the outset, the GFMA’s FX Division has been fully supportive of this initiative to create a Global Code of Conduct for FX. Given that foreign exchange underpins international trade and investing, we believe a single, global code provides a common reference point to encourage good practice and re-build public confidence in the FX market."
Global Foreign Exchange Committee Press Release
GFMA Press Release

FSB and CGFS Publish Report on FinTech Credit Provision
The Financial Stability Board and the Committee Bank for International Settlements’ Committee on the Global Financial System have published a report, titled “FinTech Credit: Market Structure, Business Models and Financial Stability Implications,” which finds that FinTech platforms account for an increasing share of credit provision and policymakers have to consider the opportunities and risks such activity brings. The report analyses the nature of FinTech credit and finds wide variation in the business models of the electronic platforms involved.
Press Release

FSB Releases Report on Misconduct Risks
The Financial Stability Board released a report titled “Stocktake of Efforts to Strengthen Governance Frameworks to Mitigate Misconduct Risks.” The report describes the findings of a stocktake of efforts underway by international bodies, national authorities, industry associations and firms on the use of governance frameworks to address misconduct risk, and includes a literature review on the root causes of misconduct. Drawing on these findings, it sets out next steps for the FSB’s work in this area.
Press Release

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NORTH AMERICA

New York Fed Publishes Blog Post on Corporate Bond Liquidity
The Federal Reserve Bank of New York published a blog post entitled "Dealer Balance Sheets and Corporate Bond Liquidity Provision." The authors directly link the trading behavior of market participants to their balance sheet constraints and find that post-crisis regulation has had an adverse impact on bond-level liquidity.
Blog Post

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Europe

EBA Releases Final Draft Technical Standards on Valuation in Resolution
The European Banking Authority (EBA) has published its final draft Regulatory Technical Standards (RTS) on valuation in resolution. These draft RTS are a crucial piece of regulation for the resolution framework as they aim to provide the independent valuer with common criteria for the valuation, which will inform the decisions made by resolution authorities, thus promoting a consistent approach to such valuations across the EU.
Press Release

EBA Releases Updates List of CET1 Instruments
The European Banking Authority (EBA) has published its fifth updated list of capital instruments that Competent Supervisory Authorities (CAs) across the European Union (EU) have classified as Common Equity Tier 1 (CET1). The list is for the first time accompanied by a Report, which includes additional information on the underlying objectives of the monitoring update as well as on the consequences of including or excluding instruments in or from the list.  The EBA intends to update this report on a regular basis to give account of new developments in CET1 issuances and market practices.
Press Release

EBA Releases Opinion on Own Funds
The European Banking Authority (EBA) has published an opinion addressed to the EU institutions expressing its views on a number of aspects related to own funds in the context of the European Commission's proposal to amend the Capital Requirements Regulation (CRR) and Capital Requirements Directive (CRD). In the opinion, the EBA calls, in particular, for a possible strengthening of the Authority's role in assessing issuances of CET1 instruments. In addition, the opinion elaborates on restrictions on distributions in the context of capital conservation measures and suggests introducing a general anti-circumvention principle.
Press Release

EBA Announces Details of its 2017 EU-Wide Transparency Exercise
The European Banking Authority (EBA) announced that it will publish data for its fourth annual EU-wide transparency exercise in December 2017 together with the Risk Assessment Report (RAR). Nearly 600000 data points in total on more than 130 banks will be released, covering all key balance sheet items. The transparency exercise is part of the EBA's efforts to foster market discipline, improve the understanding of the EU banking system and ensures both a detailed snap shot and consistent time series.
Press Release

EBA Consults on Scope of its Draft Guidelines on Connected Clients
The European Banking Authority launched today a consultation focusing on the scope of its draft Guidelines on connected clients, on which it had already sought the stakeholders' views in July 2016. In the new consultation, the EBA is proposing to extend the scope of these draft Guidelines to the remaining aspects of the Capital Requirements Regulation (CRR), the EBA technical standards, and the EBA guidelines where the concept of group of connected client is relevant. The extension of the scope would ensure the consistent application of this concept throughout the CRR and the harmonisation of institutions' practices. The consultation runs until June 26, 2017.
Press Release

ESMA Releases Opinion on OTC Derivatives under MIFID II and MiFIR
The European Securities and Markets Authority (ESMA) has issued an opinion regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). The opinion clarifies the concept of “traded on a trading venue” (TOTV), which is relevant for a number of provisions under MIFID II and MiFIR.
Press Release

ESMA Releases Consultation Paper on Money Market Funds Regulation
The European Securities and Markets Authority (ESMA) has published a consultation paper (CP) on the Money Market Funds Regulation (MMFR). The CP contains proposals on draft technical advice (TA), draft implementing technical standards (ITS), and guidelines under the MMFR. The key proposals relate to asset liquidity and credit quality, the establishment of a reporting template and stress test scenarios.
Press Release

ECB Releases Report on Access to Finance
The European Central Bank (ECB) published its 16th report on the results of the “Survey on the Access to Finance of Enterprises”. The report provides evidence on changes in the financial situation, financing needs and access to financing of small and medium-sized enterprises (SMEs) in the euro area in the six months from October 2016 to March 2017, as well as comparing the situation of SMEs with that of large enterprises.
Press Release

Yves Mersch Speaks on Financial Market Integration
The Bank for International Settlements released European Central Bank Executive Board Member Yves Mersch's speech entitled "Advancing Financial Market Integration" delivered at the World Bank Government Borrowers Forum on May 18, 2017 in Luxembourg.
Speech

Andreas Dombret Speaks on Merits and Challenges of Global Cooperation
The Bank for International Settlements released Deutsche Bundesbank Executive Board Member Andreas Dombret's speech entitled "The Merits of and Challenges for Global Cooperation" delivered at the 30th Anniversary of the Bundesbank's Representative Office on May 22, 2017 in Tokyo, Japan.
Speech

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Asia-Pacific

ASIC Proposes Next Steps on RegTech
The Australian Securities & Investments Commission will establish a new regtech industry liaison network, conduct a number of new technology trials using regtech applications and establish a 'hackathon' later this year to help identify roadblocks to the successful and rapid take-up of the sector. The initiatives are among a range of proposals covered in a report titled “ASIC’s Innovation Hub and Our Approach to Regulatory Technology,” covering ASIC's approach to regtech and inviting feedback from the sector and wider industry.
Press Release

SFC Enhances the Position Limit Regime
Hong Kong’s Securities and Futures Commission (SFC) announced that enhancements to the position limit regime, including introducing various excess position limits and raising the statutory position limit for stock options contracts, will come into operation on 1 June 2017, the commencement date of amendments to the Securities and Futures (Contracts Limits and Reportable Positions) Rules.
Press Release

Securities Commission Malaysia Launches Mid and Small Cap Research Scheme
The Securities Commission Malaysia has announced the launch of its Mid and Small Cap (MidS) Research Scheme with the aim of elevating the profile of mid and small-cap companies, and further spur the vibrancy of this potentially high growth market segment. Under this Scheme, an inaugural batch of 100 mid and small-cap public listed companies (PLCs) will receive independent analyst coverage by licensed research houses.
Press Release

IFC and Monetary Authority of Singapore Collaborate to Advance FinTech Innovation in Asia
IFC, a member of the World Bank Group, and the Monetary Authority of Singapore (MAS) have signed a memorandum of cooperation, agreeing to work together to establish and develop the ASEAN Financial Innovation Network (AFIN). The network aims to facilitate broader adoption of financial technology (FinTech) innovation and development, and enhance economic integration within the ASEAN region.
Press Release

Haruhiko Kuroda Speaks on the Virtues of International Cooperation Among Central Banks
The Bank for International Settlements released Bank of Japan Governor Haruhiko Kuroda's speech entitled "The Virtues of International Cooperation Among Central Banks" delivered at the 30th Anniversary of the Bundesbank's Representative Office on May 22, 2017 in Tokyo, Japan.
Press Release

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GFMA & GFMA - Affiliate News & Events

Register Today: AFME’s Annual European Compliance and Legal Conference
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