Financial Services Regulation & Compliance - Investment Firms March 2018

DOMESTIC

Transaction Reporting under Regulation 600/2014 ('MiFIR')

The Central Bank published Version 7.0 of its Operational and Technical Arrangements for submitting transaction reports to the Central Bank under MiFIR on 8 March 2018. It also published an updated version of its MiFIR Transaction Reporting User Procedure Document in March 2018.

Markets Update Issue 5 2018

The Central Bank published Issue 5 of its Markets Update 2018. The Markets Update includes a Central Bank communication in relation to ESMA Opinions concerning the relocation of entities, activities and functions from the UK, the publication of a revised Central Bank AIF Rulebook and AIFMD Q&A, and the notification to ESMA of the intention to comply with guidelines on the management body of market operators and data reporting service providers. The Markets Update also includes a number of ESMA publications.

Central Bank warns against Binary Options and CFDs

The Central Bank of Ireland today warned consumers against binary options and welcomed the decision by the European Supervisory and Market Authority (ESMA) to prohibit the sale of binary options. 

The Central Bank of Ireland also welcomed the temporary measures imposed on CFDs by ESMA, which include a limitation on leverage and the introduction of measures to ensure retail investors cannot lose more money that they put in.

Updated Central Bank authorisation requirements for UCITS ManCos, UCITS SMICs, AIFMs and MiFID Firms

The Central Bank updated its authorisation requirements for UCITS ManCos, UCITS SMICs, AIFMs and MiFID Firms. These changes are aimed at ensuring that authorisation processes are aligned with the ESMA Brexit opinions and that the relevant facts underpinning outcomes are formally documented.

EUROPEAN

ESMA updates Q&A on EMIR implementation

ESMA has issued an update to its Q&A on practical questions regarding EMIR. The updated Q&A includes new answers in relation to the application of Article 16 to supervised contributors.

MiFID II: ESMA publishes double volume cap data

ESMA has published trading volumes and calculations regarding the double volume cap (DVC) under the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). The purpose of the DVC mechanism is to limit the amount of trading under certain equity waivers to ensure the use of such waivers does not harm price formation for equity instruments. Based on the data published two caps will limit dark trading in equity and equity-like instruments, namely:

  • 17 instruments for January 2018 and 10 instruments for February 2018 for which their percentage of trading on a single trading venue under the waivers goes beyond 4% of the total volume of trading in those financial instruments across all EU trading venues over the previous twelve months.
  • 727 instruments for January 2018 and 633 instruments for February 2018 for which their percentage of trading across all trading venues under the waivers goes beyond 8% of the total volume of trading in that financial instrument across all EU trading venues over the previous twelve months.

Proposal for a Directive of the European Parliament and of the Council amending MiFID II

This proposal seeks to modify the scope of MiFID II on markets in financial by adding crowdfunding service providers to the list of exempted entities to which the scope of MiFID II does not apply.

ESMA clarifies treatment of packages under MiFIR's trading obligation for derivatives

ESMA has issued an opinion providing further guidance on the treatment of packages under the trading obligation for derivatives which the Markets in Financial Instruments Regulation (MiFIR). The opinion clarifies, through a positive list, the categories of packages for which the derivative components subject to the trading obligation are always required to be traded on a trading venue.

ESMA updates Benchmarks Regulation Q&As

ESMA has updated its Questions and Answers (Q&As) regarding the implementation of the Benchmarks Regulation (BMR). The Q&As include one new answer regarding the following topic:

  • Requirements applicable to supervised contributors during the transitional period.

ESMA updates MiFID/MiFIR investor protection Q&As

ESMA has updated its Q&As on the implementation of investor protection topics under MiFID II/ MiFIR. The updated Q&As include updated Q&As on the topics of inducements (research) and information on costs and charges, new Q&As on the topics of inducements, post-sale reporting and other issues, and clarifications on a number of other topics.

List of trading venues and CCPs benefiting from a transitional exemption from the access provisions of MiFIR

ESMA has published the lists of trading venues and CCPs benefiting from a transitional exemption from the access provisions under Article 54(2) and Article 36(5) of MiFIR.

Guidelines compliance table

ESMA has published a table of the competent authorities that comply or intend to comply with ESMA Guidelines on the management body of market operators and DRSPs under MiFID II.

ESMA clarifies MiFIR quoting obligations for systematic internalisers

The European Securities and Markets Authority (ESMA) has published its final report on proposed amendments to the Commission Delegated Regulation (EU) 2017/587 (RTS 1). 

RTS 1 provides further details on transparency requirements for equity instruments, including the quoting obligations for Systematic Internalisers (SI's).

Consultation Paper - Draft technical standards on the application for registration as a securitisation repository under the Securitisation Regulation (ESMA33-128-109)

ESMA has issued its draft technical standards on the application for registration as a securitisation repository under the Securitisation Regulation ( ESMA33-128-109).

Opening remarks by Vice-President Dombrovskis on the Capital Markets Union

The Vice-President of the European Commission discussed the positives of the Capital Markets Union and the possibilities that exist for investors to take full advantage of the single market for capital with new EU wide labels and passports for financial products.

Consultation Report - ESMA's technical advice to the Commission on fees for securitisation Repositories under the Securitisation Regulation (ESMA33-128-212)

ESMA received a formal request from the European Commission (Commission) to provide technical advice to assist the Commission in formulating a Regulation on fees for Securitisation Repositories (SRs) under the Securitisation Regulation. This report contains ESMA's proposed technical advice on supervisory fees.

ESMA updates its Q&A on MiFID II commodity derivatives topics

ESMA has updated its Questions and Answers (Q&As) on the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR) regarding commodity derivatives topics.

Proposal for a Directive amending Directive 2014/65/EU on markets in financial instruments

This month the commission has adopted a range of measures to deepen the Capital Markets Union, together with the Communication "Completing Capital Markets Union by 2019 – time to accelerate delivery". The package includes a proposal for an enabling an EU framework on covered bonds, a proposal to facilitate the cross-border distribution of investment funds, a proposal on the law applicable to the third-party effects of assignments of claims and a Communication on the applicable law to the proprietary effects of transactions in securities.

Additional information on the agreed product intervention measures relating to contracts for differences and binary options (ESMA35-43-1000)

The European Securities and Markets Authority (ESMA) has agreed on temporary product intervention measures on the provision of contracts for differences (CFDs) and binary options to retail investors in the European Union (EU).

This document provides additional information on the measures that have been agreed pursuant to ESMA’s new product intervention power under Article 40 of Regulation (EU) No 600/2014 (MiFIR).

ESMA updates its Q&A on MiFID II and MiFIR market structures topics (ESMA70-872942901-38) in March 2018.

The purpose of this document is to promote common supervisory approaches and practices in the application of MiFID II and MiFIR in relation to market structures topics. It also provides responses to questions posed by the general public, market participants and competent authorities in relation to the practical application of MiFID II and MiFIR.

The Q&As provide clarification on the following topics:

  • the scope of the trading obligation for derivatives
  • the default tick size regime
  • fee structures
  • SI and matched principal trading
  • DEA provider’s controls and suitability checks

ESMA harmonises position calculation for trade repositories

The European Securities and Markets Authority (ESMA) has published guidelines on how trade repositories (TRs) should calculate derivative positions under the European Market Infrastructure Regulation (EMIR). The guidelines will be translated into the official languages of the EU and become applicable by 3 December 2018.

For further information please contact a member of the Financial Regulation team.

Date Published: 9 April 2018