Welcome to our Gold Friends weekly e-mail.
My highlights this week: Finally --- the Next Generation EU package was approved by the Parliament (complete with rule of law provisions). Making directors responsible for the corporate governance implications of the Non-Financial Reporting Directive (NFRD) sounds obvious but Vox points out that it may rebound by focussing attention on short-term deliverables – at the expense of longer term objectives? Insurance Europe continues to blast the new PRIIPS rules.
But the main news is that Brexit chickens are quickly coming home to roost after only a month. Quelle surprise! Amsterdam has overtaken London in share trading and will be the new home for trading the ICE carbon contract. SEFs are seeing a rising share of derivatives trading and the City of London conveniently reminded the UK that financial services provided more than 10% of the UK Government’s tax revenue last year – as normal.
Graham Bishop
Articles from 5 - 11 February 2021
General Financial Policy
European Parlaiment: Parliament gives go-ahead to €672.5 billion Recovery and Resilience Facility : Biggest building block of the Next Generation EU stimulus package; €672.5 billion in grants and loans;Funds will support green transition, digital transformation, crisis preparedness as well as children and youth; Respect for rule of law/EU fundamental values to receive funding View Article
Commission welcomes European Parliament's approval of Recovery and Resilience Facility : The European Commission welcomes the European Parliament's vote today, confirming the political agreement reached on the RRF Regulation in December 2020. This marks an important step towards making €672.5 billion in loans and grants available to Member States to support reforms and investments. View Article
Capital Markets Union
Insurance Europe: EIOPA's approval of flawed PRIIPs changes seriously bad news for consumers buying insurance-based products : It is deeply regretful that the EIOPA BoS has chosen to push forward with these flawed changes. View Article
EIOPA: Risk Dashboard: European insurers’ macro risk exposures decreased, while concerns remain : The results show that insurers’ exposures to macro risks decreased from very high to high level, while all other risk categories remain at medium level. View Article
Environmental, Social, Governance (ESG)
The three European Supervisory Authorities publish Final Report and draft RTS on disclosures under SFDR : The proposed RTS aim to strengthen protection for end-investors by improving Environmental, Social and Governance (ESG) disclosures to end-investors on the principal adverse impacts of investment decisions and on the sustainability features of a wide range of financial products. View Article
Insurance Europe: EC corporate governance proposals must account for existing EU sustainability rules : Insurance Europe has today published its response to a consultation by the European Commission on sustainable corporate governance, including matters regarding social and human rights, climate change and the environment. View Article
Accountancy Europe: EC’s Consultation document proposal for an initiative on sustainable corporate governance : We have responded to the European Commission’s Consultation document proposal for an initiative on sustainable corporate governance. View Article
EFAMA responds to Consultation for an initiative on Sustainable Corporate Governance : EFAMA supports the European Commission’s initiative to ensure environmental and social interests are fully embedded into business strategies. View Article
GRI: EU needs mandatory reporting system with global reach : GRI perspective on proposed European sustainability standards. The importance of the changes by the European Commission to strengthen the non-financial reporting – including how the European Financial Reporting Group (EFRAG) might develop EU sustainability reporting standards – has been highlighted by GRI. View Article
BETTER FINANCE response to the EC Consultation on Sustainable Corporate Governance : BETTER FINANCE considers the aim of the EC Commission to establish a European framework on Sustainable Corporate governance in order to better hold directors accountable to long-term oriented stakeholders praiseworthy. View Article
Management and supervision of ESG risks for credit institutions and investment firms: EBF response to EBA consultation : The European Banking Federation has responded to the European Banking Authority’s consultation on incorporating ESG risks into the governance, risk management and supervision of credit institutions and investment firms. View Article
Vox: The dangers of sustainability metrics : Policymakers, investors, and stakeholders are demanding that companies report sustainability metrics so that they can be held accountable .. real decisions depend on not the total amount of information, but the balance between ‘hard’ (quantitative) and ‘soft’ (qualitative) information. View Article
WBCSD: Accountants creating long-term value through ESG : In the Chartered Accountants Ireland’s February magazine, Rodney Irwin, Managing Director, Redefining Value and Education, dives into how Chartered Accountants can fulfil their professional duties by strengthening company value through environmental, social and governance (ESG) criteria. View Article
GRI: Help for companies on circular economy progress : Enhanced corporate reporting using the GRI Standards and Circulytics. Organizations can now link the world’s leading sustainability reporting standards with an innovative tool for measuring their progress towards the circular economy. View Article
CDSB welcomes move by IFRS Trustees to continue exploration for a Sustainability Standards Board : Through extensive global stakeholder engagement and 576 comment letters submitted, the IFRS Foundation’s Trustees have seen broad demand for the IFRS Foundation to play a role in creating a globally consistent sustainability reporting landscape. View Article
Accountancy Europe: Fraud: recommendations to strengthen the financial reporting ecosystem : Corporate fraud is a serious issue that affects us all. Its consequences can weaken the public’s confidence in markets and have long lasting damaging effects on society. View Article
Accountancy Europe: Going concern: recommendations to strengthen the financial reporting ecosystem : When a company collapses, all stakeholders are affected, from employees to investors, and it eventually erodes the public’s trust in financial markets View Article
Protecting Customers
Insurance Europe: Insurers welcome overall EC objective of developing EU single market for data; call for clarifications on scope : Insurance Europe response to a consultation by the European Commission on Data Governance Act. Insurance Europe welcomed the overall objective of creating a single market for data, where data from public bodies, business and citizens can be used safely and fairly for the common good. View Article
Fin Tech Regulation
ESMA: Steven Maijoor delivers keynote speech at Conference on FinTech and Regulation : His speech touched upon: digitalisation: risks and opportunities; accelerating trends; and safe navigation. View Article
Bloomberg: ECB’s Panetta Says Digital Euro May Come With a Penalty Clause : Negative rates could discourage CBDC hoarding, official says; Central bank money for public may undermine banks’ stability View Article
Brexit
City AM: Brexit crowns Amsterdam Europe's top trading hub, ousting The City : Some €9.2bn shares a day were traded on Euronext Amsterdam and the Dutch arms of CBOE and Turquoise, the London Stock Exchange’s platform, last month – a more than fourfold increase from December, the Financial Times reported. View Article
IHS Markit: 2021: Brexit, no equivalence and the day of the SEF : In the absence of such an equivalence agreement, it was inevitable that some activity would move from MTFs / OTFs to SEFs and EU and UK firms would have less access to global liquidity - due to STO and DTO requirements View Article
Bloomberg: London Finance Takes Another Hit as Carbon Market Goes to EU : ICE says EU contracts will shift from U.K. to Netherlands; Traders had warned of cost and risk in post-Brexit London View Article
EURACTIV: Don’t wage battle against the City, UK bank governor urges EU : The Governor of the Bank of England, Andrew Bailey urged the EU not to wage a regulatory battle against the UK on financial services, warning that “a world in which the EU dictates and determines what rules and standards we have in the UK is not going to work.” View Article
City of London: Total tax contribution of UK financial services. : The thirteenth edition of our annual survey of the total tax contribution made by UK financial services finds that the finance sector’s firms, employees and customers contributed £75.6bn to public finances in tax, in the year to March 2020. View Article
Bloomberg: BOE’s Bailey Says U.K. Won’t Slash Regulation After Brexit : Bank of England Governor Andrew Bailey said it’s not in the U.K.’s interest to dramatically ease banking rules following Brexit. View Article
Speech by Andrea Enria, Chair of the Supervisory Board of the ECB, at the 20th LSE German Symposium : From the European perspective, after Brexit the United Kingdom has become a third country.... Brexit has itself been a fragmenting force. The equivalence framework ...does not foresee to grant market access similar to the freedom to provide services within the Single Market. View Article
InvestEurope: Private equity and venture capital associations welcome UK and EU regulatory cooperation agreements : The European Securities Markets Authority (ESMA) and the UK Financial Conduct Authority (FCA) published a Multilateral Memorandum of Understanding (MMoU) on the consultation, cooperation and the exchange of information between each of the EEA competent authorities and the FCA. View Article
CRE: Two thirds of Airmic members fear additional insurance costs from Brexit : The association’s latest Pulse Survey, carried out among its members in January, finds that UK insurance buyers are worried they will have to fork out for issuing additional local polices and fronting costs. View Article
EURACTIV: EU rejects most UK demands on Northern Ireland trade, concedes on steel : The EU rejected calls for more time, until 1 January 2023, for British supermarkets and their suppliers to adjust to the new customs border on the Irish Sea for goods shipped to the province, including chilled meat, parcels and medicines. View Article
Fondation Robert Schuman: Brexit and the Irish Question : When thinking of the Irish question, it calls to mind the partition of the island of Ireland, ratified by the Government of Ireland Act of 23 December 1920, which was intended to satisfy the aspirations of the Protestant majority in Ulster, who were in favour of keeping the province under the authority of the Crown. View Article
Bloomberg: U.K. Won’t Publish Assessment of EU Trade Deal as Red Tape Hits : The U.K. government won’t publish an impact assessment of its trade accord with the European Union despite producing similar reviews of other major trade deals it has signed. View Article
Bloomberg: EU Seeks to Delay Formal Ratification of Post-Brexit Trade Deal : Bloc seeks extra two months for lawmakers to scrutinize accord; Any postponement will still require approval from London View Article
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