ESMA Opinion on Draft RTS on Clearing Obligation for Swaps

On 29 January 2015, ESMA published an Opinion on the Draft RTS on the Clearing Obligation on Interest Rate Swaps. This is in response to the European Commission’s notification of its intention to endorse, with amendments, the draft RTS submitted by EMSA on 1 October 2014.

ESMA supports the Commission’s intention to extend the initial approach with the objective of postponing the start date of the frontloading obligation, as this should provide counterparties with sufficient time to determine whether their contracts are subject to the frontloading obligation. The opinion goes on to raise some concerns on the proposed process to exempt non-EU intragroup transactions from the clearing obligation. ESMA stands ready to provide technical advice on this particular issue, if requested, in order to find an alternative solution, both in the interest of an efficient implementation and to avoid any delays in the roll-out of the clearing obligation. The Opinion can be found here.

AIFMD - ESMA Publishes Updates to Q&As on the AIFMD

On 9 January 2015, ESMA published an updated version (ESMA/2015/11) of its Q&A paper on the application of the AIFMD. The Q&A were last updated in November 2014.

The new Q&A concern the content and method for information to be submitted to national competent authorities under the reporting obligations in Articles 3, 24 and 42, specifically: 

(i) subscription and redemption orders;

(ii) NAV changes;

(iii) monthly gross and net investment returns; and

(iv) aggregated information for AIFMs managing both funds and funds of funds.

The full Q&A are available here.

UCITS - ESMA Updates the Guidelines on ETFs and Other UCITS Issues

On 9 January 2015, ESMA published an updated version of its Q&A paper of its guidelines on exchange traded funds (ETFs) and other UCITS-related issues (ESMA/2015/12). The Q&A were last updated in March 2014.

New Q&A have been added dealing with the discretion a counterparty can have over a derivatives portfolio and the application of collateral management rules.

The full Q&A are available here.

Benchmark Reguation - New Proposal

On 22 January 2015, the Presidency of the Council of the EU published a compromise proposal (5453/15) (dated 21 January 2015) relating to the proposed Regulation on indices used as benchmarks in financial instruments and financial contracts (the “Benchmark Regulation”). No additional indices have been included as benchmarks.

The proposal is available here.

EMIR - Central Counterparties List, Hong Kong Cooperation, Non-EEA CCPs

The Athens Exchange Clearing House and CME Clearing Europe Ltd have obtained ESMA approval to act as CCPs.

The full list of approved CCPs is available here.

ESMA and the Hong Kong Securities and Futures Commission (SFC) have concluded a Memorandum of Understanding (MoU) establishing cooperation arrangements between the signatory authorities regarding CCPs that are established in Hong Kong and have applied for recognition under EMIR. The MoU is effective as of 19 December 2014.

On 26 January 2015, ESMA published all list of central counterparties (CCPs) established in non-EEA countries which have applied for recognition under Article 25 of EMIR.

The full list is available here.

MiFID II - ESMA Pushes for Twice-Monthly Dark Trading Reports

European trading venues and consolidated tape providers (CTPs) will have to send their regulators 'dark' trading data twice a month, rather than monthly, under ESMA proposals. National regulators need venues and (yet to be established) CTPs to send them the data so they can enforce the so-called 'double volume cap' on unlit equity trading that is enshrined in MiFID 2.

Money Market Funds - European Parliament to Consider MMF Regulation

The Parliament will consider the proposed MMF Regulation during its plenary session to be held from 27 to 30 April 2015.

The European Commission published its legislative proposal for the MMF Regulation in September 2013, with the European Council publishing a compromise proposal in December 2014.

A copy of the proposal for the MMF Regulation is available here.  

A copy of the compromise proposal for the MMF Regulation is available here.

Sovereign Debt - Delegated Regulation on Significant Net Short Positions

On 23 January 2015, Delegated Regulation (EU) 2015/97 of 17 October 2014 correcting Delegated Regulation (EU) No 918/2012 as regards the notification of significant net short positions in sovereign debt (Delegated Regulation) was published.

Delegated Regulation (EU) 2015/97) clarifies that the notification thresholds in Delegated Regulation (EU) No 918/2012 for significant net short positions in shares also apply to significant net short positions in sovereign debt.

The Delegated Regulation will come into force on 12 February 2015 and is available here.

EIOPA Consultation Paper on Solvency II Technical Standards (ITS)

The draft ITS for reporting under Solvency II in EIOPA’s consultation paper published on 3 December 2014 is of particular relevance to investment funds with insurance companies or pension funds as investors. It contains information on the planned reporting mechanism under Solvency II.

The consultation paper is available here.

EU Passes New Council Directive to Implement “EU-FATCA"

The Council Directive passed by the EU on 1 December 2014 implements the OECD’s Common Reporting Standard (CRS) in Europe. The Directive has to be implemented into national law by the end of 2015, introducing in Europe a mandatory exchange of information for tax purposes that is quite similar to U.S. FATCA.