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02 March 2016

Deepening EMU – Round-up of Key Events – February 2016

David Cameron secured a deal for reformed EU membership of the UK. The British PM presented the document to Parliament and made the case for remaining in the EU – this would launch the run-up to the referendum on 23rd June.

By Paula Martín Camargo, Editor


The European Council agreed a new settlement for the UK in the European Union which was presented by PM David Cameron to the British Parliament. Cameron announced that the Government would recommend voting to stay, and the date of the referendum -23rd June. He also warned that there wouldn’t be a second referendum – a majority against EU membership would begin the process to exit.

Graham Bishop analysed the results of the renegotiation of the UK's EU membership, and concluded that "there is now no serious impediment to the people of the United Kingdom voting decisively to stay in the European Union."  He also spoke at the London School of Economics on the implications of a Brexit for the UK.  

The deal was backed by TheCityUK, the Labour Party and the Financial Times, while business leaders such as the CEOs from HSBC Holdings Plc to Goldman Sachs International wrote a letter to The Times endorsing the PM’s IN campaign. Two polls – from the Institute of Directors (IoD) and manufacturers’ trade body EEF – each found that 60 % of their members support Britain remaining in the EU.  Meanwhile, a poll by the National Centre for Social Research found that a majority (60%) of the population would vote to stay.

Most of the reports and papers published showed how Brexit would affect negatively the UK’s economy. An overwhelming majority of economists polled by Reuters said that Britain's economy would be worse off if voters decide the country should leave the EU. City AM showed that Brexit would cause carnage for UK fund managers - leaving them without access to the UCITS passport regulation. CEPS issued a comprehensive paper showing that the specific ‘Plan’ to leave is completely unknown, and argued that Cameron’s deal marked an acknowledgement that EU integration is not a one-directional process of ‘ever closer union’. The PIIE described how disintegration of the UK itself after a Brexit, mounting international pressure, financial markets' fears and control of migration could sway the vote on the EU referendum.  

Despite all these warnings, firms and regulators might not been doing much to get ready for the possible repercussions of a Brexit: the FT published that British regulators were yet to ask banks to assess Brexit impact; City AM said that companies are being warned to include the cost of the UK quitting the EU in their financial statements by the Financial Reporting Council, and that 52% of lawyers are concerned about the legal implications a Brexit could have, but they are not doing very much in advance to prepare.



The EBA launched its 2016 EU wide stress test exercise and published its Guidelines on cooperation agreements between deposit guarantee schemes; the final draft ITS on the mapping of ECAIs credit assessments for securitisation positions; and an Opinion specifying the general principles and timelines for the implementation of the regulatory review of the IRB approach. The Banking Authority also expressed dissent over the Commission’s proposed amendments to the MREL technical standards.

ESMA updated the CRR standard on main indices and recognised exchanges and the EBF responded to the Basel Committee’s Consultation on TLAC Holdings.

Payments were very topical in February, with the ECB issuing its revised oversight framework for retail payment systems, the EPC holding a workshop on P2P mobile payments, and the FT talking about the growing preference for electronic means of payment and for issuing electronic money for use by individuals.  

The BBA showed why the bonus cap is counterproductive, whereas the US and EU participants in the Financial Markets Regulatory Dialogue exchanged views on bank capital and liquidity measures, approaches to cross-border bank supervision, bank structural reform, recent developments in bank resolution, CCP resolution, OTC derivatives reforms, alternative investment fund managers, among other matters. The Bank of England issued a consultation on establishing Shari’ah compliant liquidity facilities.

ECB’s supervisors warned about some euro zone banks that are taking more risk in search of yields, and cleared up misunderstandings regarding the relation between small and medium-sized banks and the SSM.  


The European Commission extended by one year the application date for the MiFID II package, and published a draft report on the delay of the date of application as well as another on the adaptation of the date of transposition. ICMA updated a briefing note on MiFID II/R trade transparency requirements in respect of bonds, while Hedgeweek reported that the drive towards unbundling research budgets from execution services under MiFID II will alter the fund industry landscape.

AFME published new research showing that EU insolvency reform – a key plank of the CMU - could boost GDP output and create jobs across Europe. Insurance Europe published its response to the Commission’s call for evidence on CMU. The European Capital Markets Expert Group, formed by ECMI and CEPS, published a final report that aims to rethink financial integration policies in the EU. ESMA updated its EMIR Q&A, including new answers regarding CCP’s default management, competent authorities’ access to trade repository data and reporting of notional in position reports.  

ESMA issued a consultation on implementation of the Benchmarks Regulation and another CP on MAR guidelines regarding market soundings and delayed disclosure of inside information, and published its technical standards on settlement discipline under CSDR.

The Parliament’s Research Service launched a briefing on common rules and new framework for securitisation, while EuropeanIssuers welcomed the revision of the EU Prospectus rules. Three institutions were the first European bond issuers to implement the Covered Bond Label HTT. ICMA commented on the RTS for CSDR, in particular mandatory buy-ins.

The Commission and the US CFTC announced a common approach for transatlantic CCPs, and IOSCO board met and endorsed intensifying work on technological change.


The European Commission adopted the Implementing Act on the risk-free rate under Solvency II, and welcomed the entry into force of the Insurance Distribution Directive. The Commission issued a joint statement on US - EU negotiations for a bilateral agreement on insurance and reinsurance measures.

Reuters reported the Bank of England cautioned insurers over higher life expectancy reinsurance. Insurance Europe delivered its response on preparatory product oversight and governance (POG) guidelines, urging the EIOPA not to pre-empt the outcome of EU law.

Asset Management

The European Parliament agreed a reformed draft report on Institutions for Occupational Retirement Provision.  EIOPA consulted on the development of an EU Single Market for personal pension products that was responded to by InsuranceEurope.

The key information document for PRIIPs, proposed by the ESAs, was commented on by EFAMA, Insurance Europe, ABBL and ALFI.

Hedgeweek published the results of a research that reveals the AIFMD is having little impact on US manager attitudes towards Europe.

On Money Market Funds, the Parliament’s Research Service published a report on the reaction of MMF stakeholders to the Commission proposed regulation. ESMA issued a follow-up review on money market fund guidelines.

The Financial Times reported that European asset managers have been able to step into the funding frame after intense regulatory pressure to shore up their balance sheets has forced many banks to reduce their direct lending.

IMA outlined its support for the majority of existing EU financial services regulation and commended that it has mostly set high quality and appropriate standards for the way the sector operates.

Corporate Governance/Accounting

EFRAG; EBA, Deloitte and FRC; FEE and ESMA issued their comment letters in response to the IASB’s ED Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts, while EBA launched an impact assessment of IFRS 9 on banks in the EU.

Financial Services Policy

Several institutions contributed to the Commission’s call for evidence on the EU regulatory framework for financial services: ECB, BBA, AIMA, EFAMA, AFME, EuropeanIssuers, ABBL’s and EBF, FEE, ALFI and IMA.

The European Commission presented its Action Plan for strengthening the fight against terrorist financing. The Council issued its conclusions on the Plan and called on the Commission to submit amendments to the 4th Anti-Money Laundering Directive, to the 2nd Payment Services Directive and to the Cash Controls Regulation. The BCBS expanded its guidelines on anti-money laundering and countering terrorist financing with a "General guide to account opening".


The European Commission presented the Winter 2016 Economic Forecast, saying the European economy is now entering its fourth year of recovery and growth continues at a moderate rate, and the ECON issued its Annual Growth Survey 2016.

The Commission proposed new measures against corporate tax avoidance, aiming for a coordinated EU wide response, following global standards developed by the OECD. The EBF published its statement on the EU implementation of the BEPS Action Plan.


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