13 February 2017

Financial Markets in brief – new regulation and other developments

There have been many developments in national and European financial markets regulation during the past month. A Fintech report, common principles for share classes in UCITS funds, and a consultation on the Capital Markets Union were published. In this article, we provide a brief overview of these and other developments.

Highlighted publications

 

European Parliament reports on influence of technology on future of financial sector
The EP has published a draft report calling on the European Commission to draw up a Fintech Action Plan and to deploy a cross-sectoral, holistic approach to its work on Fintech. The EP does not propose specific legislative actions, but initiates an investigation of current legislation which causes uncertainties or barriers. It also identifies where additional action is required. The EP’s three core priorities in this context are consumer protection, stability of the financial system and competitiveness of the European economy. For more details, go to this In context article.

Common principles for setting up share classes in UCITS funds
Having found diverging approaches in different EU countries, the ESMA has issued an opinion on the extent to which different types of units or shares (share classes) of the same UCITS fund may differ from one another. In its opinion the ESMA sets out four principles which UCITS must follow when setting up different share classes in order to ensure a harmonised approach across the EU:

  • Common investment objective
  • Non-contagion
  • Pre-determination
  • Transparency

ESMA to advance data collection under MiFID II
From 3 January 2018, the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR) will apply in all EU Member States. To ensure a smooth transition from the current reporting regime under MIFID I to the new regime, ESMA will begin data collection in advance of the date of application of MIFID II and MIFIR. In a briefing note, ESMA has provided further details regarding start dates and instructions.

Basel III reforms delayed
The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, has indicated that more time is needed to finalise its work on the Basel III reforms package before it can review the package of proposals. A meeting of the GHOS planned for early January 2017 has therefore been postponed.

Euronext updates Rule Book II
Euronext Amsterdam has published a new version of its General rules for the Euronext Amsterdam Stock Market (Rule Book II). The amendments relate to the conditions of administration.

Consultation on the Capital Markets Union
The European Commission has launched a consultation on the Capital Markets Union. The aim of the consultation is to obtain feedback on how the Capital Markets Union can be updated and completed. The Commission asks contributors to propose complementary policy measures that foster:

  • financing for innovation, start-ups and non-listed companies
  • long-term investment, financing of the EU’s infrastructure and sustainable investment
  • retail investment and innovation

The Commission also gives an overview of the proposals on which it has worked so far: the new venture capital framework, securitisation and the new Prospectus Regulation.

The European Commission will use the input from the consultation to prepare its mid-term review of the Capital Markets Union, which will be presented in June 2017. The consultation runs until 17 March.

ESMA publications on market abuse

  • ESMA has updated its Questions and Answers on the Market Abuse Regulation. The Q&A now includes five new questions relating to investment recommendations and the rules for calculating the price of options granted for free to managers and employees for the purpose of notification and disclosure of managers’ transactions.
  • ESMA has published guidelines on delaying the disclosure of inside information. In this document, ESMA provides a non-exhaustive and indicative list of legitimate issuers’ interests that are likely to be prejudiced by immediate disclosure of inside information and situations in which delay of disclosure is likely to mislead the public.
  • ESMA has published translations in all EU languages of its MAR Guidelines on Commodity Derivatives.

 

Other publications

EC

EP

EBA

ESMA

EIOPA

ECB

Official Journal EU

MinFin

MinSZW

AFM

DNB

Other