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27 March 2014

This week in "Brussels"

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Articles from 20 March 2014 - 27 March 2014


ECON Committee: Parliament and Council agree on basic bank accounts for all
Anyone legally residing in the EU should have the right to open a basic payment account, and this right should not be denied on grounds of nationality or place of residence, Parliament's negotiators and the Council representatives agreed. (Includes Commission/EBF/EP group comments.)  View Article
Statements/comments on SRM deal: Schäuble, ECB, EBF, BdB, FBF, EP groups, Fitch et al
The bank resolution accord broke a deadlock that had shown few signs of budging since December, when Parliament and finance ministers proposed competing visions of the law. However, further talks will be needed in the months ahead on implementing measures to flesh out certain aspects.  View Article
Bruegel/Merler & Wolff: The European Parliament improves Banking Union - But the SRM is still far from perfect
The authors' assessment is that the current deal on the SRF constitutes an improvement on the shortcomings identified in December. However, the resolution framework is still not perfect and in particular two central issues remain open.   View Article
Bloomberg: Silence on ECB bank review may break on legal blind spot
The ECB's plan to keep its health check on euro area lenders under wraps until the completion of a stress test in October could be undermined by national rules requiring disclosure far sooner.   View Article
EPC: Considerable scope for amendment on PSD2
Following a detailed analysis of the Commission's PSD2 proposal, the EPC has identified considerable scope for amendment of the proposed new set of rules related to the activity of so-called third party payment service providers offering payment initiation or payment account information services.  View Article


Bloomberg: EU seeks to boost asset-backed debt market to spur business
Commissioner Barnier will back international efforts to define "high quality" securitisations, with a view to "a possible preferential regulatory treatment for such products", according to a document obtained by Bloomberg News.  View Article
EC response to ESMA on classification of financial instruments
ESMA has published the letter received from Commissioner Barnier in response to ESMA's letter of 14 February regarding the classification of financial instruments as derivatives.  View Article
CFTC gives EU firms more time to meet rules
The CFTC has given European trading platforms more time to register and meet strict new rules to make the market more transparent, in anticipation of comparable rules abroad. However, there are fears that the changes could be extensive and leave some MTFs struggling to meet the revised May deadline.  View Article
FT: Europe's MTF problem
Agreeing how global derivatives should be policed across borders has been a difficult question for markets regulators. US rules mandated that swaps trading be conducted on SEFs but regulators have wrestled with how they monitor US markets participants trading with overseas counterparties.  View Article
The Trade: ESMA warned not to use tick sizes to control market
As part of MiFID II, ESMA is set to look at formalising a tick size regime for Europe, but some industry experts are concerned it could be pressured into using tick sizes as a way of controlling HFT flow.  View Article
ESMA launches Discussion Paper on CSD Regulation
ESMA is calling for public feedback on possible content to draft technical standards on matters such as settlement discipline, CSD registration and requirements. The closing date for comments is 22 May, 2014.  View Article
ESMA publishes Final Report and Q&A on revision of Guidelines ETFs and other UCITS issues
Annex I of this final report sets out ESMA's position on collateral management by UCITS. The guidelines in Annex I modify the rules on collateral diversification in paragraph 43(e) of the existing guidelines and introduce some further consequential changes.  View Article
ESMA consults on major shareholders disclosures
ESMA has launched a consultation on draft RTS under the revised Transparency Directive relating to the notification of major shareholdings and the indicative list of financial instruments subject to notification requirements. The consultation runs until 30 May, 2014.  View Article
ESMA publishes Guidelines on cooperation arrangements and information exchange
ESMA has published Guidelines aimed at facilitating cooperation arrangements and the exchange of information between individual national competent authorities, and between those authorities and ESMA. The new MMoU enters into force on 28 May, 2014.  View Article
Bundesbank: Shadow banking in the euro area
From an economic perspective, one of the financial system's key tasks is to provide the non-financial sector with suitable options for funding and acquiring financial assets. Increasingly, this role is also being fulfilled by the shadow banking system.  View Article

Insurance Cuts to securitisation capital charges too small, say experts
Proposed changes to the capital charges for securitisations under Solvency II are too limited, say experts. However, the amended charges should stop insurers becoming forced sellers of lower risk asset-backed bonds.  View Article Cap 'too high' on Solvency II credit risk adjustment
A proposed 35-basis point cap on the Solvency II credit risk adjustment is set too high to prevent volatility in insurers' balance sheets, actuaries warn, saying the limit will only take effect in times of severe market stress.  View Article Insurers urged to review data licence requirements
Firms need to engage with data providers well in advance of Solvency II implementation to ensure compliance by January 1, 2016. Insurers must start to negotiate with data vendors now if they want to keep the costs of data licensing for Solvency II under control, say experts.  View Article
The Trade: More clarity sought on CCP insurance offer
The uptake of insurance by clearing houses will come down to cost and robustness, says Marcus Zickwolff, head of trading and clearing at Eurex Group.  View Article
GFIA delegation to G20 stresses insurers' social and economic role
GFIA has called on the G20 to ensure that all international regulatory reform initiatives allow the insurance sector to continue to support the ambitious economic growth targets agreed last month by G20 finance ministers.  View Article

Asset Management

Commission roadmap to meet the long-term financing needs of the European economy
The Commission has adopted a package of measures to stimulate new and different ways of unlocking long-term financing and support Europe's return to sustainable economic growth.   View Article
Commission launches Green Paper on the long-term financing of the European economy
The Commission has adopted a Green Paper that launches a three-month public consultation on how to foster the supply of long-term financing and how to improve and diversify the system of financial intermediation for long-term investment in Europe.  View Article
Commissioner Barnier: Future of pensions - A major challenge for social cohesion and economic dynamism in Europe
Speaking at the European Commission conference on pensions, Barnier said that pension schemes all over Europe would have to adapt to meet the current challenges.  View Article
Bloomberg: Pension fund managers next in EU pay scrutiny firing line
Pension fund managers that handle company retirement programmes face tougher scrutiny of their pay, as the EU seeks to widen its clampdown on excessive compensation in the financial industry.  View Article
IOPS working paper: Stress-testing and scenario analysis of pension plans
This paper presents the results from a survey of stress-testing practices among IOPS member countries and provides some reflections on whether and how stress-testing could be applied in DC plans.   View Article

Corporate Governance/Accounting

FEE publishes paper on European Public Sector Accounting Standards
The EC's initiative has triggered a policy debate where a number of issues should be considered. With this paper, FEE would like to share the issues for discussion emerging in this public interest debate.  View Article
Comments on IAASB's Proposed Strategy for 2015–2019 / Proposed Work Programme for 2015–2016: EBA, FEE
The letters from EBA and FEE include responses to the questions posed in the Consultation Paper, together with suggestions on potential further enhancements of the proposed Strategy and Programme.  View Article
Fitch: EBA's draft encumbrance reporting falls short when most needed
The EBA's draft guidelines for encumbrance reporting miss vital disclosure as liquidity risk rises, Fitch Ratings says. A shortfall in the proposed requirements means that unencumbered assets disclosed might not actually be available for funding purposes.  View Article
EFRAG publishes draft comment letter on ESMA's guidelines on alternative performance measures
EFRAG published its Draft Comment Letter on ESMA's Consultation Paper Guidelines on Alternative Performance Measures. Comments are requested by 25 April, 2014.  View Article
IASB publishes proposals as part of Disclosure Initiative
The IASB published for public comment an ED outlining proposed amendments to IAS 1, 'Presentation of Financial Statements'. The ED is open for comments until 23 July, 2014.  View Article

Financial Services Policy

Council adopts new rules on the taxation of savings income
Commissioner Šemeta said it marked a major breakthrough in EU tax policy and a major step forward in the common fight against tax evasion. The OECD's Gurría also welcomed the 'international progress'.  View Article
Comments on new Savings Tax Directive rules: EBF, Insurance Europe, BdB, ABBL
"There is a crucial need for this regime to be based on a single, consistent and coherent model, as banks and tax administrations are investing substantially in the development of systems that will enable them to comply with the new requirements", said ECB chief executive Guido Ravoet.  View Article
ECON chair reviews past five years of financial services regulation/economic governance
Sharon Bowles looked at the different 'waves' of new regulation that had come into being - against the tense backdrop of an existential crisis for the euro - during her five years as ECON chair. She praised the EP's work, saying it had "left its mark more than ever before".  View Article
ESMA issues good practices for structured retail product governance
ESMA has published an opinion on structured retail products, setting out good practices for firms when manufacturing and distributing these products. ESMA considers these good practices will bridge the gap until the MiFID II product governance requirements are further developed and in place.  View Article
MoneyMarketing: PRIPs rules look set to be delayed to next EU parliament
New European rules which would see the introduction of a key information document are unlikely to be voted through before the end of this European Parliament, according to trade bodies.  View Article


EU–US Summit (TTIP)
The EU was represented by Presidents Van Rompuy and Barroso; the US was represented by President Barack Obama. Prior to the summit, multiple US/EU financial services trade associations issued a statement in support of a TTIP that includes financial services regulatory coordination. (Includes comments.)  View Article
Commission launches public online consultation on investor protection in TTIP
As part of its ongoing efforts to make its negotiations with the US the most open and transparent trade talks to date, the Commission launched a public consultation on investor protection and investor-to-state dispute settlement (ISDS) in the TTIP. (Includes link to Commissioner De Gucht statement.)  View Article

European Council/Parliament

European Council Conclusions: European Semester / Savings taxation
The European Council concluded the first phase of the European Semester and had a first discussion on the implementation of the Europe 2020 Strategy ahead of the mid-term review at the Spring 2015 European Council. It cleared the way for the adoption of the Directive on taxation of savings income.  View Article

© Graham Bishop

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