Securities and markets regulatory news, 22 February 2021

FIG Bulletin

Recent regulatory developments of interest to financial institutions and markets. This edition reports on developments relating to EU EMIR and EU MiFID. Also check our Financial institutions general regulatory news of broader application in the Related Materials links.


EMIR: Delegated Regulations on clearing obligation and risk mitigation

The following Delegated Regulations made under the European Market Infrastructure Regulation (EMIR) have been published in the Official Journal of the European Union (OJ):

  • Commission Delegated Regulation (EU) 2021/236 amending regulatory technical standards (RTS) laid down in Commission Delegated Regulation (EU) 2016/2251 as regards to the timing of when certain risk management procedures will start to apply for the purpose of the exchange of collateral; and
  • Commission Delegated Regulation (EU) 2021/237 amending RTS laid down in Commission Delegated Regulations (EU) 2015/2205, (EU) 2016/592 and (EU) 2016/1178 as regards the date at which the clearing obligation takes effect for certain types of contracts.

The Delegated Regulations entered into force on 18 February 2021.

EU MiFID: Council of EU adopts proposed amending Directive

On 15 February 2021, the Council of the EU announced that it has adopted the proposed Directive amending the Markets in Financial Instruments Directive (MiFID) to make it easier for capital markets to support the EU's economic recovery from the COVID-19 pandemic.

The Council has also published the adopted text of the amending Directive.

The Directive is expected to be published in the OJ before the end of February 2021 and will enter into force on the day after its publication. Member states will be required to transpose the Directive into national law within nine months of that date. The measures will become applicable 12 months after the entry into force of the Directive.

The Council explains that the MiFID rules have been amended to simplify information requirements in a targeted manner, while safeguarding investor protection. The changes reduce, for instance, the information on costs and charges that must be provided to professional investors and eligible counterparties. Paper-based investment information will also be phased out, except for retail clients if they ask to continue to receive it.

The new rules will also allow banks and financial firms to bundle research and execution costs when it comes to research on small and mid-cap issuers. The Council states that this will help to increase research on such issuers and their access to funding.

Other changes include adaptations to the position limit regime for commodity derivatives to support the emergence and growth of euro-denominated commodity derivatives markets.

The Council of the EU has also adopted a proposal for a regulation amending the Prospectus Regulation as regards an EU recovery prospectus to make it easier for companies to raise capital to meet their funding needs, while ensuring adequate information is provided to investors.

EU MiFID: ESMA decision on non-controversial opinions on commodity derivatives position limits

The European Securities and Markets Authority (ESMA) has published a decision of its board of supervisors on delegating to the ESMA chair the task of issuing opinions relating to the submissions to ESMA by national competent authorities (NCAs) of the position limits they intend to set under Article 57 of MiFID.

Under the decision, the board of supervisors delegates to the ESMA chair the tasks of:

  • assessing the compatibility of position limits with the objectives of Article 57(1) of MiFID and with the methodology for calculation established in Commission Delegated Regulation (EU) 2017/591; and
  • issuing on behalf of ESMA any non-controversial opinion relating the intended position limits.

The board of supervisors retains the power to adopt controversial opinions for the purposes of Article 57(5) of MIFID.

The new procedure is designed to alleviate what the board of supervisors describe as a significant administrative burden on ESMA staff, NCAs and members of the board reviewing the opinions.

MiFID research unbundling: ESMA working paper

ESMA has published a working paper analysing the impact of the MiFID II research unbundling provisions on EU sell-side research, following their application on 3 January 2018. Concerns have been raised that the MiFID II research unbundling provisions could have had detrimental effects, particularly on SMEs, on the availability and quality of research on EU companies and on company financing conditions. In brief, ESMA does not find material evidence of these effects. It will present its findings at a webinar on 25 February 2021.

ESMA notes that the research unbundling rules are likely to evolve in the coming months.

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Authored by Yvonne Clapham


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