Financial Services Regulation and Compliance - Investment Firms Oct 2019

DOMESTIC

Brexit FAQ - Financial Services Firms (updated 3 October 2019)

The Central Bank has updated and published FAQ providing general information to financial services firms considering relocating their operations from the UK to Ireland. The Central Bank of Ireland updates the FAQ regularly as the Brexit negotiations progress and new issues emerge and are resolved to ensure that financial services firms are adequately prepared and resilient enough to cope with the possible effects of Brexit.

Dear CEO Letter - Compliance by Trust or Company Service Providers (TCSPs or Firms) with their obligations under the Criminal Justice (Money Laundering and Terrorist Financing) Act, 2010 (CJA 2010)

The Central Bank of Ireland has issued a letter to CEOs of trust or company service providers (TCSPs or firms) in relation to compliance with their obligations under the Criminal Justice (Money Laundering and Terrorist Financing) Act, 2010. While the Central Bank noted improvements in anti-money laundering and countering the financing of terrorism (AML/CFT) controls in some areas since its 2017 seminar, it noted many TCSPs still place over reliance on their parent company's AML/CFT controls, in areas such as risk policies to procedures not being appropriately tailored to reflect the TCSP's practices.

EUROPEAN

ESMA updates MiFID II Q&As on transparency and market structures issues

The European Securities and Markets Authority (ESMA) has updated its questions and answers (Q&As) regarding transparency and market structures issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). The updated Q&A for transparency issues clarifies that for ETFs there is only one average daily turnover (ADT) band from which to choose the highest threshold to be used to calculate the average value of transactions (AVT). The amended Q&A for market structures issues clarifies how to interpret the application of the tick size regime to periodic auctions.

ESMA adopts MAR standards on supervisory cooperation

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has issued its final report on a set of regulatory technical standards (RTS) on the application of the Market Abuse Regulation (MAR). ESMA’s RTS cover cooperation arrangements between national competent authorities and their counterparts in third-countries for the purpose of efficiently exchanging information and enforcing the obligations related to market abuse. ESMA has submitted these RTS for endorsement to the European Commission. Once fully implemented, these RTS will form part of the single rulebook for EU securities markets.

ESAs consult on changes to the key information document for PRIIPs

The European Supervisory Authorities (ESAs) have issued a consultation paper on amendments to existing rules underpinning the key information document (KID) for packaged retail and insurance-based investment products (PRIIPs).

The consultation paper proposes changes relating to the following topic areas:

  • illustrations of what the retail investor might receive in return from their investment (performance scenarios)
  • information on what the costs of the investment are
  • specific issues for different types of investment funds
  • specific issues for PRIIPs offering a range of options for investment (so-called “multi-option products")

The deadline for responses to the consultation is 13 January 2020.

ESMA consults on commercial terms for providing client clearing services under EMIR

The European Securities and Markets Authority (ESMA) has  published a consultation paper (CP) on draft technical advice to the European Commission on specifying the conditions under which commercial terms are to be considered fair, reasonable, non-discriminatory and transparent (FRANDT) where service providers offer clearing services to clients. The deadline for responses is 2 December 2019.

ESMA consults on aligning trading and clearing obligations for counterparties under MiFIR and EMIR Refit

The European Securities and Markets Authority (ESMA) has launched a consultation on possible amendments to the trading obligation under the Markets in Financial Instruments Regulation (MiFIR) following the introduction of EMIR Refit. The consultation paper examines the misalignment between the scope of counterparties subject to the clearing obligation (CO) and the derivatives trading obligation (DTO) under MiFIR and considers the possibility of amending MiFIR to bring in line with the EMIR Refit. The consultation closes on 22 November 2019.

ESMA consults on review of Market Abuse Regulation

The European Securities and Markets Authority (ESMA) has published a consultation paper on the provisions of the Market Abuse Regulation (MAR) as requested by the EU Commission. The consultation paper includes proposals affecting the investor community as a whole, but which are particularly relevant for issuers of financial instruments admitted to trading or traded on a trading venue and their management, investment firms and asset management companies. The consultation paper addresses a wide range of issues, including:

  • the possible inclusion of spot FX contracts within the scope of MAR
  • the definition and delayed disclosure of inside information in different cases
  • the appropriateness of the trading prohibition and insider lists for persons discharging managerial responsibilities (PDMRs)
  • the introduction of a possible cross-market order book surveillance framework

The consultation paper closes on 29 November 2019.

MiFIR: ESMA updates Q&As on data reporting

The European Securities and Markets Authority (ESMA) has updated its Questions and Answers on data reporting under MiFIR. Updates include a new Q&A on reporting of FX forward financial instruments under Article 26 and Article 27 of MiFIR.

MiFID II - New Publication Date for Systematic Internaliser and Bond Data

The European Securities and Markets Authority (ESMA) has stated that it will publish the systematic internaliser (SI) and bond market liquidity data on 8 November, this follows the latest developments around the departure of the United Kingdom (UK) from the European Union (EU). The requirements based on this publication will apply from 16 November 2019.

For more information on this topic please contact any member of A&L Goodbody's Financial Regulation team.

Date published: 15 November 2019