Europe News
The latest industry and regulatory news affecting the EU and the UK
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Presentations from InfoNet: MiFID II/R seminar on Investor Protection
The MiFID II/R Seminar investor protection included a presentation from speakers from Norton Rose Fulbright on the four aspects that will have the greatest effect on ETD markets. These are communication, information and analytics, systems and controls and product life cycle. David Dudeney from Trading Compliance then spoke about best execution, another subject high-up on the industry's list of concerns.
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Presentations from InfoNet: MiFID II/R seminar on Indirect Clearing
The MiFID II/R seminar on indirect clearing began with a presentation from Clifford Chance's Jeremy Walter, who explained the key issues with the requirements under MiFID II/R. A panel discussion followed, where participants representing legal, regulatory, infrastructure and practitioner views debated indirect clearing for ETD and OTC and the number of legal and operational complexities such as: territorial scope, account segregation options and longer chains as well as default management requirements which, for example, include porting and leapfrog payments.
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Presentations from InfoNet: MiFID II/R seminar on Transparency
The InfoNet MiFID II/R seminar on transparency focused on the final draft regulatory technical standards and the effect of the regulations on market participants and trading venues.
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Implementing Financial Reforms
On Sept. 28 the European Securities and Markets Authority published the final versions of its regulatory technical standards on three major pieces of financial reform legislation: MiFID II, the Market Abuse Regulation and the Central Securities Depositories Regulation. ESMA commented that the package of standards will implement many of the most important provisions in Europe’s post-crisis financial reforms.
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Moral Hazard
The European System of Central Banks issued a statement on Aug. 25 expressing opposition to any change in EU regulations that would give central counterparties an automatic right of access to central bank liquidity. The statement emphasized that the current legal framework allows each central bank to determine for itself which facilities it wishes to offer to CCPs and defines the conditions for such access. An automatic right to central bank liquidity “would create moral hazard on an extraordinary scale,” the ESCB warned. The statement was issued in response to a European Commission consultation on possible changes to EMIR.
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Preparing for Remit
On Sept. 24, FIA issued a notice summarizing the registration and reporting requirements of the EU Regulation on Wholesale Energy Markets Integrity and Transparency (REMIT). FIA drafted the notice to help clearing firms inform customers who may have to comply with the new reporting obligation, which enters into force on Oct. 7 for certain exchange-traded wholesale energy products and on April 7 for certain over-the-counter energy products. Those products include futures, options and swaps based on electricity or natural gas for delivery in the European Union as well as contracts relating to the transportation of electricity or natural gas in the EU.
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FIA issues guidance on EMIR reporting
The FIA Reporting Working group has pulled together some guidance on how to populate fields 33-40 and 45-46 (Table 2 Common data) for the EMIR reporting regime following the implementation of the Level 2 validation process that went live on 31 October 2015.
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InfoNet 2015 - Innovation
The latest edition of Infonet covers innovation in technology - start ups, Fintech and disruptive technology. It explores how innovation/ disruptive technology can improve process in the derivatives business throughout the transaction chain and how incumbent firms are facing up to the challenges alongside newcomers to the business. It also, looks at innovation in product and process - how derivatives product offerings are evolving.
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Global Derivatives Reform
On July 24 the Financial Stability Board, the international body that coordinates financial sector reforms under the authority of the Group of 20 nations, published its ninth progress report on the global implementation of derivatives market reforms.
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