Financial Regulatory Developments (FReD) - 21 September 2012

Profession:SNR Denton


ESMA consults on investment firm remuneration guidelines Parliament Commission to review Banking Reform Bill FSA speaks on fair deal for consumers Basel publishes revised Core Principles EUROPEAN UNION AND INTERNATIONAL

European Parliament (EP)

EP calls for role in banking rules: EP says the proposed EU banking supervision rules must be of good quality and provide for accountability. Some MEPs are worried that Member States want to impose a decision-making process on the new legislation which will exclude EP from participating in making decisions on one of the texts. (Source: EP Calls for Role in Banking Rules)

Contact: Rosali Pretorius or Andrew Barber.

EP publishes new voting dates: EP's Legislative Observatory has published amended voting dates for key regulatory initiatives. Among the key dates are:

Committee referral of the Packaged Investment Products (PRIPs) proposal and on changes to the Insurance Mediation Directive (IMD2) happened on 11 September; votes on the changes to the UCITS Directive (UCITS V), also referred on 11 September, are scheduled for 21 January 2013 (Committee) and 12 March 2013 (Plenary); the final Act for changes to Solvency 2 deadlines was adopted on 12 September and appeared in the Official Journal on 14 September; texts were adopted by Parliament on a partial vote on the European Social Entrepreneurship Funds (EuSEF) proposal and the European Venture Capital Funds (EuVCF) proposal on 13 September; and the framework for recovery and resolution of investment firms and credit institutions will be debated in Committee on 20 March 2013 with an indicative Plenary sitting date of 10 June 2013. (Source: OEIL reference for PRIPs, OEIL reference for UCITS V, OEIL reference for IMD 2, OEIL reference for Solvency 2 amendments, OEIL reference for EuSEF, OEIL reference for EuVCF and OEIL reference for recovery and resolution framework)

Contact: Emma Radmore or Juan Jose Manchado.

European Commission (Commission)

Commission publishes newsletter on post-trading: The Commission has published an "info-letter" summarising recent developments and focusing on regulatory changes needed in relation to post-trading. (Source: Info-letter on Post Trading)

Contact: Rosali Pretorius or Madeleine de Remusat.

Short Selling Measures in OJ: Two key measures which the Commission made at the end of June under the Short Selling Regulation (SSR) have been published in the Official Journal (OJ):

the Commission Delegated Regulation on technical standards on: notification and disclosure requirements with regard to net short positions; details of the information ESMA should have in relation to net short positions; and the method for calculating turnover to determine exempted shares; and the Commission Implementing Regulation implementing technical standards on: the means for public disclosure of net positions in shares; the format of the information ESMA should have in relation to net short positions; the types of agreements, arrangements and measures to adequately ensure that shares or sovereign debt instruments are available for settlement; and the dates and period for the determination of the principal venue for a share. (Source: SSR Measures in OJ)

Contact: Rosali Pretorius or Matthew Sapte.

European Securities and Markets Authority (ESMA)

ESMA consults on investment firm remuneration guidelines: ESMA is consulting on guidelines for investment firms under the Markets in Financial Instruments Directive (MiFID). The guidelines aim to address the risks that investment firm staff have a financial incentive to promote, recommend and sell unsuitable investments. The guidelines will, among other things, require firms to:

ensure the way in which they remunerate is not aimed at circumventing MiFID or the ESMA guidelines; design, monitor and control procedures to take account of their specific business and to ensure they deliver the intended outcome; and apply the guidelines to all staff involved in the provision of investment or ancillary services, and in relation to all forms of payments or benefits the firm provides to them. ESMA asks for comment by 7 December. (Source: ESMA Consults on Investment Firm Remuneration Guidance)

Contact: Emma Radmore or Andrew Barber.

ESMA consults on short selling: ESMA is consulting on draft guidelines under the SSR for market making and the application of the exemptions for market making activities and primary market operations. ESMA says regulators should use the draft guidelines as the interim benchmark for notification and application of the exemption, since the notification period is already open. The draft guidelines explain:


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