MiFIR: FCA statement on trade reporting and position limit obligations
The UK Financial Conduct Authority (FCA) has published a statement on trade reporting and position limit obligations under the Markets in Financial Instruments Regulation (MiFIR). The FCA's statement is in response to the statement, published on 1 October 2020, by the European Securities and Markets Agency (ESMA) saying that it intends to assess UK trading venues in relation to its opinions on MiFIR trade reporting and commodity derivatives position limits. If positively assessed, they will be added to the list of venues with a positive or partially positive assessment for the purposes of those opinions, with effect from the end of the EU withdrawal transition period.
This means that EU investment firms trading on these UK venues would not need to publish details of those transactions through an Approved Publication Arrangement (APA) in the EU. Commodity derivatives traded on UK venues would also not be regarded as economically equivalent OTC contracts counting towards the EU commodity derivatives position limits regime.
In respect of UK requirements from the end of the EU withdrawal transition period, the FCA confirms its position as set out in its statements from 2019. The FCA does not require UK investment firms that transact on trading venues outside the UK, in the EU or elsewhere, to publish details of those transactions through a UK APA.
The FCA does not consider commodity derivative contracts traded on trading venues, whether in the EU or elsewhere, as economically equivalent OTC contracts and so they will not count towards the UK commodity derivatives position limits regime.
The FCA notes that it does not maintain a list of assessed overseas venues for these purposes.
MAR: Commission Implementing Regulation on ITS on forms and procedures for cooperation
Commission Implementing Regulation (EU) 2020/1406 laying down implementing technical standards (ITS) on forms and procedures for cooperation between competent authorities, ESMA, the Commission and other entities under Articles 24 and 25 of the Market Abuse Regulation (MAR) has been published in the Official Journal of the EU (OJ).
The Implementing Regulation, which was adopted on 2 October 2020, will enter into force on 27 October 2020.
European Parliament adopts Regulation and Directive on European crowdfunding service providers
The European Parliament has announced that it has adopted at second reading the Regulation on European crowdfunding service providers (ECSPs) for business and the Directive making amendments to the Market in Financial Instruments Directive (MiFID) relating to crowdfunding. Provisional editions of the adopted texts of the legislative resolutions for both the Regulation and the Directive have been published.
The press release highlights how the legislation aims to provide a single set of rules on crowdfunding services by:
- having a uniform set of criteria that will apply to all ECSPs for offers up to EUR5 million, calculated over a period of 12 months per project owner;
- having an authorisation and passporting process for ECSPs; and
- investors being provided with a key investment information sheet (KIIS) drafted by the project owner for each crowdfunding offer or at platform level.
The Regulation will enter into force 20 days following publication in the OJ. It is due to apply 12 months later. The Directive is also due to enter into force 20 days following publication in the OJ.
Securitisation Regulation: ESMA guidelines on portability of information between securitisation repositories
Following an earlier consultation, ESMA has published a final report containing feedback to the consultation and final guidelines on the portability of information between securitisation repositories under the Securitisation Regulation.
Article 10(2) of the Securitisation Regulation requires a securitisation repository to meet certain requirements for trade repositories as specified in the European Market Infrastructure Regulation (EMIR). In particular, it requires a securitisation repository from which registration has been withdrawn to ensure an orderly substitution, including the transfer of data to other securitisation repositories and the redirection of reporting flows to other securitisation repositories, reflecting obligations in Articles 78(9)(c) and 79(3) of EMIR.
The purpose of the guidelines is to set out ESMA's expectations on how securitisation repositories should comply with these requirements.
ESMA will consider the guidelines for the purpose of its supervision as of 1 January 2021, except for the guidelines relating to Article 78(9)(c) of EMIR, which ESMA will consider for the purpose of its supervision as of 18 June 2021. This is because Article 78(9)(c) of EMIR, as applied by the Securitisation Regulation, requires securitisation repositories to have policies for the orderly transfer of data to other securitisation repositories only from 18 June 2021.
MMF Regulation: ESMA updates reporting instructions
ESMA has announced that it has published updated reporting instructions under the Regulation on money market funds (MMF Regulation).
Article 37 of the MMF Regulation requires MMF managers to submit data to their national competent authorities who will then transmit the data to ESMA.
Following feedback received by market participants after publishing the validation rules, ESMA has decided to implement amendments on the validations. The proposed changes are not related to the published XML schemas. The changes only add new warning type validations or provide clarifications on existing validation rules to fix inconsistencies or ease the understanding of the rules.
As the updates in the validation rules have no effect on data processing, the deadline for reporting remains unchanged.
Securitisation Regulation: ESMA updates Q&As
ESMA has published an updated version of its Q&As on the Securitisation Regulation. As well as modifying some existing questions, the document addresses new questions relating to:
- COVID-19 related debt moratoria; and
- primary income in case of buy-to-let.
ESMA 2021 work programme
ESMA has published its work programme for 2021. ESMA continues to implement its strategic orientation for 2020-2022 by taking into account the legislative amendments completing the review of the European Supervisory Authorities. These increase the focus on supervisory convergence, and give a higher profile to investor protection and entrust the direct supervision of certain benchmarks and data service providers to ESMA. ESMA further details its key priorities for 2021 in the document.
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Authored by Yvonne Clapham