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29 March 2012

This week in "Brussels"
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European Council/Parliament Graham Bishop’s Articles About this email

Articles from 22 March 2012 - 29 March 2012

Banking

ECON Committee: Consideration of amendments on CRD IV/CRR
Rapporteur Othmar Karas announced that 2,195 amendments were tabled in total. Karas said that the ECON committee is already working on the compromise amendments. Karas wants to stick to the timetable and is sure that there is enough time for the negations on CRD IV/CRR.   View Article
ECB Consultation announcement - Oversight expectations for links between retail payment systems
The Eurosystem, as part of its payment system oversight task, established in 2003 the "Oversight standards for euro retail payment systems", and subsequently classified and assessed all retail payment systems operating in the euro area against these standards.  View Article
Updated classification system between the reporting frameworks of the ECB and the EBA
The European Central Bank (ECB) and the European Banking Authority (EBA) have today published a second version of the classification system between their respective reporting frameworks.  View Article
HM Treasury: Government launches consultation on Above the Line Research and Development credit
The Government has launched a consultation on an Above the Line (ATL) Research and Development (R&D) credit. The Government is committed to creating the most competitive tax system in the G20, and R&D tax incentives play an important role in this ambition and in supporting the strategy for growth.  View Article
FT: Hedge funds face higher trading costs
Leading prime brokerages are preparing to hit clients with across-the-board increases in the cost of trading, which could dry up liquidity and cause niche global markets to shut down.  View Article
BBA: How will the Financial Policy Committee work?
The Bank of England's new Financial Policy Committee (FPC) revealed more details of how it would carry out its responsibility to ensure financial stability in the UK economy.  View Article
FTAdviser: Bank committee restates need to limit bank distributions
The interim Financial Policy Committee has said that capital levels in UK banks remain below a level that would "ensure resilience" against potential eurozone defaults, as it restated the need for dividends and pay to be limited in order to build up reserves further.  View Article
Peter Sands: The dangers of our new regulation
The [UK] Financial Policy Committee's (FPC) approach to lending appears simultaneously interventionist and blinkered, comments Sands in the FT.  View Article
VoxEU: Determinants of banking system fragility - A regional perspective
This column looks at the effect of bank fragility and failure on other nearby countries, and outlines what can be done to mitigate the cross-border contagion.  View Article
MEP Othmar Karas: Bankers' bonuses should be capped at no more than twice the basic pay
Karas substantiates this proposal with earlier calls which he made in 2011 in his draft Report on capital requirements for European banks, where he said "top salaries must be proportionate to the average salary in a financial institution".  View Article
BBA: Libor Update
The British Bankers' Association, the contributing banks and users of the rate are committed to the continuing evolution of Libor so that it adapts to meet the changing market, user requirements and general expectations.   View Article

Securities

European Parliament adopts EMIR
Commissioner Barnier stressed that this vote is a key step in the EU effort to establish a safer and sounder regulatory framework for European financial markets.  View Article
ECON Committee: Clamping down on the derivatives trade
EU legislation to make trading over-the-counter derivatives safer and more transparent was approved by an overwhelming majority in Parliament.  View Article
MEP Werner Langen: Parliament adopts tough EU standards on derivatives
Langen said that the EU will see some major progress in terms of transparency and risk mitigation in the derivatives market. Any derivative transaction will have to be reported to a special transparency register and cleared.  View Article
EPP: Derivatives - regulating a €540 trillion market
A major cause for instability in the financial markets - derivatives - will finally be subject to strict EU transparency rules.  View Article
ALDE statement on EMIR’s adoption: EP ensured more choice and efficient services for consumers
Sharon Bowles stressed that ALDE has been fighting for an open approach which leads to better, more transparently regulated markets and reduces operational risks of all actors involved in the OTC contracts.  View Article
ECON Committee published draft report on MiFID II/MiFIR
Rapporteur Ferber supports the Commission's proposal to extend the scope of the MiFID rules and limit the exemptions, as he is in favour of closing all gaps in the regulatory framework in order not to have parts of the market left unregulated.  View Article
ECON Committee published draft report on MAD/MAR
Rapporteur McCarthy stressed that the new Market Abuse Framework must be future proof. For this reason, current abusive practices (i.e. quote stuffing) will be included in delegated acts. These acts will then be updated as a result of ESMA's recommendations on emerging abusive market practices.  View Article
EurActiv: EU lawmaker turns screw on ultra-fast trading
Banks should be banned from giving outside brokers direct access to markets as part of a sweeping crackdown on computerised high-frequency trading, reads a European Parliament report to be presented to the Economic and Monetary Committee.   View Article
ESMA reviews pre-trade transparency waivers to ensure consistent MiFID application
Pre-trade transparency is an integral feature of MiFID. However, in order to ensure the liquidity and efficiency of equity markets, waivers allow a limited number of cases to deviate from MiFID's trade transparency requirements.  View Article
ESMA issues a report on its first examinations of CRAs
The report provides an overview of ESMA's supervisory activity on credit rating agencies registered in the EU, and summarises the results of the first examinations ESMA conducted in December 2011 of three groups of registered CRAs, namely Fitch, Moody's and Standard and Poor's.  View Article
ESMA calls for candidates for the Consultative Working Group of its Secondary Markets Standing Committee
The CWG advises and assists the Standing Committee in all matters related to ESMA work on secondary markets, in particular in relation to issues in the context of the review of the Markets in Financial Instruments Directive.  View Article
EBF response to ESMA Consultation Paper – Considerations of materiality in financial reporting
The European Banking Federation provides its response to the ESMA Consultation Paper – Considerations of materiality in financial reporting.  View Article
NYSE Euronext statement regarding decision not to appeal European Commission prohibition of merger
NYSE Euronext announced that it would not pursue an appeal of the decision by the European Commission to prohibit its proposed combination with Deutsche Börse.  View Article
BaFin: Notification procedure for net short positions - Additional advice
On 26 March 2012, section 30i of the German Securities Trading Act and the Regulation on Net Short Positions entered into force. The provisions introduce expanded notification and publication requirements for net short positions, and among other things define the electronic reporting channel.  View Article
ISDA statement on CFTC final rule on Customer Clearing Documentation, Timing of Acceptance for Clearing, and Clearing Member Risk Management
The International Swaps and Derivatives Association fully endorses the use of central clearing to reduce systemic risk, and agrees with the Commission that open access to clearing by market participants is a fundamental element of Dodd-Frank.  View Article

Insurance

New measure to keep Omnibus II on track despite Plenary delay
The Plenary vote on Omnibus II in the European Parliament has been pushed back to 10 September 2012, according to the European Parliament website. The vote has been delayed for the second time this year.  View Article
Insurance Insight: Europe should prepare for the worst
European insurers should prepare for the worst but hope for the best, according to Chris Smith, global Europe director for RSA.  View Article
The role of the International Association of Insurance Supervisors (IAIS) in the future of global insurance regulation
Peter Braumüller, Chair of the Executive Committee of the IAIS, highlighted the critical role of the IAIS within the emerging global regulatory framework, and discussed IAIS work on systemic risk at the 28th PROGRES International Seminar hosted by the Geneva Association.   View Article
FSA News March 2012 (Solvency II)
The Financial Services Authority published questions and answers from its industry briefing.  View Article
Commercial Risk Europe: Solvency II closer with Omnibus II approval, but concerns remain
Solvency II moved a step closer as the Omnibus II Directive was approved by the European Parliament's Economic and Monetary Affairs Committee (ECON).  View Article
Reuters: UK life insurers sheltered from eurozone peripherals, says Fitch
Fitch Ratings says in a newly-published comment that UK life insurers have reported a strong set of 2011 results, confirming that most of the sector is sheltered from the sovereign debt crisis in the eurozone.   View Article

Asset Management

ESMA published responses received to the consultation on key concepts of the AIFMD and types of AIFM
ESMA published its key concepts of the Alternative Investment Fund Managers Directive (AIFMD) and types of AIFM. Responses to this discussion paper will help ESMA in finalising its policy approach.   View Article
IMA urges ESMA not to constrain AIFMs
The ESMA consultation on types of alternative investment funds (AIFs) and their managers is unnecessarily prescriptive in some areas. The draft guidelines do not have sufficient flexibility to accommodate the very wide range of investment vehicles covered by the Directive.  View Article
ALFI comments on the ESMA Discussion Paper Draft Technical Standards for the Regulation on OTC Derivatives, CCPs and Trade Repositories
ALFI welcomes the ESMA discussion paper, 'Draft Technical Standards for the Regulation on OTC Derivatives, CCPs and Trade Repositories', as very positive, and fully supports the initiatives aimed at enhancing safety and transparency in the over-the-counter derivatives market.  View Article
IOSCO publishes updated systemic risk data requirements for hedge funds
The Technical Committee of the International Organisation of Securities Commissions (IOSCO) has published an updated list of categories of data for the global collection of hedge fund information, which it believes will assist in assessing possible systemic risks arising from the sector.  View Article
Hedgeweek: NYSE Euronext outlines European clearing strategy and implementation plan
NYSE Euronext has outlined its European clearing strategy and implementation plan, detailing the steps that will be taken to leverage its NYSE Liffe derivatives clearing platform to consolidate all of its European derivatives into a single derivatives clearing house.  View Article
FN: Hedge fund managers fear AIFM Directive U-turn
Hedge fund managers have expressed alarm that the European Commission has given Member States only two weeks to respond to a new text on the implementation of the Alternative Investment Fund Managers' Directive.  View Article
Hedgeweek: Reducing risk dynamically need not negatively impact long-term fund performance, says senior portfolio manager
Managing risk more dynamically is becoming an increasingly vital function of the investment management process. Those that can demonstrate their effectiveness at reacting quickly to volatility are held in high regard. Performance is still vital, that's why investors pay inordinate fees.  View Article
ABI commits to continuing dialogue with Europe over pensions
Giving evidence to the House of Commons Work and Pensions Select Committee, the Association of British Insurers committed to continuing dialogue with Europe on pension initiatives, but cautioned against making changes at a European level that could impact UK pension reform.   View Article
EFRP submission to the Work and Pensions Committee on EU Pensions Policy
This paper from the European Federation for Retirement Provision aims to discuss both the White Paper on Pensions and the proposal to revise the IORP Directive, following an overview of pension systems in Europe.  View Article
IPE: European Commission deems Swedish pensions tax law discriminatory
The European Commission has asked Sweden to amend its tax rule on pension funds, arguing that the current legislation puts foreign schemes at a disadvantage when dividends are distributed within the country.   View Article
NAPF: DWP Select Committee told that EU rules based on Solvency II are the single biggest threat to UK DB pensions
In her evidence to the DWP Select Committee yesterday, the NAPF Chief Executive, Joanne Segars, highlighted the full-scale impact of an EU Pensions Directive based on Solvency II on UK pensions.  View Article
SIFMA submits comments to SEC on financial literacy among investors
The Private Client Legal Committee of SIFMA provides comments to the Securities and Exchange Commission (SEC) on the SEC's study regarding financial literacy among investors.  View Article
SIFMA submits comments to the MSRB recommending priorities for MSRB's FY2013 agenda
SIFMA provides comments to the Municipal Securities Rulemaking Board (MSRB), recommending priorities for the MSRB for their FY2013 agenda, MSRB Notice 2012-09.   View Article
SIFMA comments to SEC on NYSE’s Retail Liquidity Programme for NYSE-Listed Securities and NYSE AMEX Equities Traded Securities
SIFMA provides comments to the Securities and Exchange Commission on its order instituting proceedings to determine whether to disapprove proposed rule changes related to the New York Stock Exchange LLC and NYSE Amex LLC proposed Retail Liquidity Programme.  View Article

Corporate Governance/Accounting

IOSCO Public consultation Monitoring Group governance review: Public interest oversight board work programme
The purpose of the Consultation Papers is to seek separate input from any party interested regarding (i) the Monitoring Group's preliminary proposals resulting from its assessment of the current governance structure, and (ii) the Public Interest Oversight Board's work programme for 2012 and beyond.  View Article
IMA: Audit reforms are needed but there should be a measured approach
IMA has told a European Parliament committee that certain of the European Commission's proposals on audit reform go a step too far. While the IMA believes that a number of the proposals are welcome, there is concern that others will not address the issues identified.   View Article
IFAC: Revised IAASB's standard dealing with the work of internal auditors
The IAASB published revised ISA 610 'Using the Work of Internal Auditors', which addresses the external auditor's responsibilities if using the work of an internal audit function in obtaining audit evidence.  View Article
Deloitte commented on ESMA Considerations of Materiality in Financial Reporting
Deloitte Touche Tohmatsu Ltd responded to the ESMA's Consultation Paper, 'Considerations of materiality in financial reporting'.  View Article
EFRAG: Final comment letter on ESMA considerations of materiality in financial reporting
EFRAG published its final comment letter on ESMA Consultation Paper, 'Considerations of Materiality in Financial Reporting'.  View Article
EBF: EBA consultation paper on draft I.T.S. on supervisory reporting requirements for institutions (CP 50)
The European Banking Federation supports the European Commission's intention to achieve a single rulebook and therefore strongly welcomes this Consultation Paper.  View Article
EFRAG commented on the IASB's ED Transition Guidance (Proposed amendments to IFRS 10)
EFRAG published its final comment letter to the IASB on Exposure Draft Transition Guidance (Proposed amendments to IFRS 10).  View Article
EFRAG: Invitation to participate in a supplementary study on how IFRS 10 will affect the consolidation of Special Purpose Entities
This supplementary study is intended to serve as input to the impact assessment of IFRS 10 by the EC, in addition to, and separately from, EFRAG endorsement advice. It is meant to illustrate the impacts of IFRS 10 on the scope of consolidation in relation to Special Purpose Entities (SPEs).  View Article

Financial Services Policy

Barnier: Making financial regulation serve society through civil society and consumer participation
Barnier presented the steps being taken in order to involve civil society better in the new financial regulation. Barnier stressed that 2012 will be full of initiatives that will have a strong impact on consumers of financial services.   View Article
European Parliament weighs up cost and benefits of taxing financial transactions
The Commission claims the tax will deter risky trading and ensure the financial sector pays it fair share to get the EU out of the crisis. However, critics fear it could lead to firms taking their trade elsewhere.  View Article
Statement by President Barroso following the opening session of the second high-level conference on the Multiannual Financial Framework
Barroso stressed that according to some preliminary estimations, the Financial Transaction Tax could reduce the Member States' contribution to the EU budget by 50 per cent.  View Article
EU finance and economy ministers and central bank governors will discuss the economic crisis and financial regulation in Copenhagen
On the agenda is the economic and financial stability outlook, the strategy for dealing with the economic crisis, the strengthening of financial sector regulation, and the EU multiannual budgetary framework.  View Article
S&D Swoboda sends letter to Danish Finance Minister: We need urgent action on the Financial Transaction Tax
Ahead of the informal meeting of the Ministers for Economic and Financial Affairs on 30 and 31 March, S&D Group Leader, Hannes Swoboda, urges EU Finance Ministers "to take swift and decisive action on the introduction of a financial transaction tax (FTT) and the fight against tax fraud and tax evasion".   View Article
Reuters: Germany says eurozone transaction tax won't work
Finance Minister, Wolfgang Schäuble, conceded for the first time on Monday that efforts to get a financial transaction tax implemented in the eurozone were doomed.  View Article
FT: PM urged to defend City over EU rules
David Cameron is being urged by Conservative MPs to consider a range of measures to prevent Britain's financial services sector being hobbled by EU legislation, including possibly seeking an outright exemption from Brussels rules.  View Article
Cofunds: FSA's platform confusion could create second RDR
The Financial Services Authority (FSA)'s lack of clarity on platforms and cash rebates could create a second retail distribution review (RDR), according to fund supermarket Cofunds.  View Article

Graham Bishop’s Articles

Financial World: Barnier's date with destiny (Graham Bishop article)
Commissioner Barnier has already made clear that consumer protection and shadow banking are on his list. But there is an even bigger piece in the financial jigsaw – the banks themselves. Hence the appointment of the Liikanen "High-level Expert Group"!  View Article
Graham Bishop's blog: Fresh Start Tories seek Dead End for Britain by unwinding key Thatcher achievements in Europe
Just as the dust seemed to be settling from the infamous Cameron "veto" of December 9th, the Fresh Start group of allegedly "more than 100 Tory MPs" has attempted to throw another grenade into Britain's relations with the EU.   View Article




© Graham Bishop

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