Financial Services highlights - February 2020

Financial Services highlights - February 2020

 

Looking to stay up to date? An aspect of the lawyer's role that we hear is one of the most challenging, is staying abreast of what's going on while continuing with their client's work. 

Below we have listed key legal and regulatory news updates and stories to help you get ahead. 

See the full update here:  FS weekly highlights - 13 Febuary covering the topics listed below.

For further news, legal and regulatory updates and to sign up to alerts, see the Financial Services industry blog.

 

Brexit news

UK financial regulators to be questioned on Brexit impact on financial services

The House of Lords EU Financial Affairs Sub-Committee announced that it would hear evidence from the Bank of England (BoE) and the Financial Conduct Authority (FCA) about financial services after Brexit on 12 February 2020. It is expected that the committee would question the preparedness of the UK’s financial services industry for the end of the transition period, the possible future UK-EU relationship in financial services and new UK financial regulations after Brexit.

Source: Bank of England and Financial Conduct Authority questioned on financial services after Brexit.

HoL EU Financial Affairs Sub-Committee hears evidence on future of UK financial services

The House of Lords EU Financial Affairs Sub-Committee heard evidence from academics on the likely future of UK financial services after Brexit. The committee discussed issues including equivalence and potential divergence, the EU’s appetite to onshore UK financial services, and the potential shape of EU-UK institutional arrangements

Source: Uncorrected oral evidence: Financial Services after Brexit—Financial services after Brexit.

Carney to give evidence to HoL Economic Affairs Committee on 11 February 2020

The House of Lords Economic Affairs Committee heard evidence from the governor of the BoE, Mark Carney, on 11 February 2020, in his last annual session with the Committee. Carney was expected to discuss Brexit, sustainable finance and financial stability issues.

Source: Mark Carney on financial stability, Brexit and green finance.

BoE deputy governor considers the future UK/EU framework on the governance of the financial sector

The deputy governor for financial stability at the BoE, Jon Cunliffe, delivered a speech at the German Economic Council annual finance conference. He discusses, from the particular perspective of financial stability, how to build new arrangements for the governance of the financial sector between the EU and the UK. Cunliffe emphasises the EU’s need to access London’s global financial markets and sets out considerations for each side in agreeing a future framework.

Source: BoE speech Jon Cunliffe: Governance of financial globalisation.

AFME publishes wording for post-Brexit selling restrictions for equity (EEA and UK)

The Association for Financial Markets in Europe (AFME) published wording setting out the selling restrictions for equity transactions for use following the UK’s withdrawal from the EU until the end of the transitional period. The wording reflects the application of Regulation EU 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and repealing Directive 2003/71/EC (the Prospectus Regulation).

Source: AFME selling restrictions for equity (EEA and UK)—February 2020 version.

 

MiFID II

ESMA recommends aligning MiFIR derivatives trading obligation with EMIR REFIT

The European Securities and Markets Authority (ESMA) published a final report on alignment of the Markets in Financial Instruments Regulation (EU) 600/2014 (MiFIR) with the changes introduced by Regulation (EU) 2019/834 (EMIR REFIT), to the European Market Infrastructure Regulation (EU) 648/2012 (EMIR). Since the amendment of EMIR by EMIR REFIT there has been a misalignment between the counterparties subject to the clearing obligation under EMIR and the counterparties subject to the derivatives clearing obligation under MiFIR. ESMA recommends aligning MiFIR with EMIR as amended by EMIR REFIT.

Source: ESMA publishes the final report on MiFIR alignments following the introduction of EMIR REFIT.

ESMA statement on compliance with MIFIR pre-trade transparency for commodity derivatives

ESMA published a statement on implementation of its supervisory briefing relating to MiFIR pre-trade transparency requirements in commodity derivatives. ESMA said the FCA had not taken appropriate supervisory action with regards to LME and ICE Futures Europe and encourages the FCA to employ supervisory measures against these trading venues, which may include fines and sanctions.

Source: ESMA updates on progress on compliance with the MiFIR pre-trade transparency requirements in commodity derivatives.

ESMA publishes opinions on MiFID II/MIFIR position limits for commodity derivatives

ESMA published seven opinions on position limits regarding commodity derivatives under MiFID II/MIFIR.

Source: ESMA issues opinions on position limits under MiFID II.

EFAMA and AFME call for action over rising costs of market data

The European Fund and Asset Management Association (EFAMA) and AFME issued a joint statement on the negative effects of increased market data costs, saying the problems are widely recognised, including by supervisory authorities, but despite some attempts to solve the problems, such costs have continued to increase.

Sources: Joint statement: Reasonable market data costs benefits the real economy and  EFAMA statement.

 

UK, EU and international regulators and bodies

Council of the EU publishes progress update on financial services legislative files

The Council of the EU published an update on the state of play of legislative proposals in the field of financial services. It sets out the aim and stage of 11 pieces of legislation, including measures relating to crowdfunding, the European Deposit Insurance Scheme, central counterparties recovery and resolution, non-performing loans, motor vehicle insurance, sovereign bond-backed securities and the sustainable finance framework (SFF—Taxonomy).

Source: Progress on financial services legislative files.

MEPs outline priorities for future ECB policies

Members of the European Parliament (MEPs) approved a resolution setting out the Parliament’s priorities in relation to the European Central Bank (ECB)’s future policies. The resolution asks the ECB to improve its green credentials, address growing financial technology challenges, continue to expand the overall money supply, and continue with its preparations to ensure financial stability in the EU after Brexit.

Source: ECB policy is working, but new challenges need new responses.

FCA February 2020 policy development update

The FCA published its policy development update for February 2020, providing information on the its recent and upcoming publications.

Source: Policy development update.

Two new non-executive directors join the FCA board

HM Treasury announced the appointment of two new non-executive directors to the FCA board. Jeannette Lichner and Bernadette Conroy will each serve three-year terms beginning on 1 April 2020 and 1 August 2020 respectively. They will join the board as Amelia Fletcher OBE and Catherine Bradley CBE step down following the end of their terms as non-executive directors, having served since April 2013 and August 2014 respectively.

Source: New appointments to the FCA board announced.

 

Authorisation, approval and supervision

SM&CR: FCA updates Directory Persons webpage

The FCA updated its Directory Persons webpage, setting out information for submitting data for the Directory, a public register that enables consumers, firms and other stakeholders to find information on key individuals working in financial services. In the update, the FCA notes that banks, building societies, credit unions and insurance companies must submit their data by 9 March 2020. All other solo-regulated firms must submit their data by 9 December 2020.

Source: FCA webpage update.

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About the author:

Amy is an established writer and researcher, having contributed to publications, such as The Law Society, LPM, City A.M. and Financial IT. Her role at LexisNexis UK involved leading content and thought leadership, as well as writing research reports, including "The Bellwether Report 2020, Covid-19: The next chapter" and "Are medium-sized firms the change-makers in legal?"