Graham Bishop.com

SEPA regulation adopted in Plenary: Simple and efficient cross-border payments
Cross-border bank transfers should become faster, cheaper and safer for EU citizens, thanks to "single European payments area" legislation passed by the EP. The EU-wide rules aim to ensure that banks compete fairly, eliminate hidden national charges, and accelerate transfers. View Article

BCBS: Joint Forum Report on intra-group support measures
The objective of this report is to assist national supervisors in gaining a better understanding of the use of intra-group support measures in times of stress or unexpected loss by financial groups across the banking, insurance and securities sectors. View Article

BIS: Building a resilient financial system
Keynote speech by Jaime Caruana, General Manager of the Bank for International Settlements, at the 2012 ADB Financial Sector Forum in Manila on "Enhancing financial stability - issues and challenges", 7 February 2012. View Article

EBA's Board of Supervisors makes its first aggregate assessment of banks' capital plans
The European Banking Authority's Board of Supervisors made a preliminary assessment of banks' capital plans. Their review highlights that, in aggregate, the shortfalls are expected to be met primarily through direct capital measures. EBA said it would undertake its next EU-wide stress test in 2013. View Article

EBA publishes consultation paper on draft ITS on reporting of large exposures
The European Banking Authority published a consultation paper on a draft Implementing Technical Standard (ITS) on reporting of large exposures (CP51). The public consultation starts on 13 February 2012 and runs until 26 March 2012. View Article

BBA: Business Angels - a key source of finance
The British Bankers' Association reports that angel investors bring vital finance and investment to businesses; they also offer all-important guidance and mentoring to companies as they develop and grow. View Article

Summary record of the 76th meeting of the European Securities Committee
The agenda included the use of third countries' issuers of securities and the AIFM Level 2 implementing acts. View Article

Agreement on EMIR reached
The European Parliament and the Council have reached an agreement on EMIR. They have resolved the dispute about the national supervision and the role of ESMA. In line with G20 commitments, the new rules should be fully in place by the end of 2012. View Article

ISDA comments on the agreement reached on the European Markets Infrastructure Regulation (EMIR)
ISDA is hopeful that the adoption of EMIR will provide the opportunity for meaningful international convergence and full transparency to regulators, while forming the basis for stable and efficient central clearing for the benefit of governments, regulators and end-users. View Article

FN: ESMA secures EMIR extension
ESMA has been given an extra three months to finalise its technical standards for the region's vast programme of derivatives reform, following calls for the agency to be given longer deadlines to consult with industry participants. View Article

ECON Committee: EP-Council deal on rules for a safe and transparent derivatives market
A compromise deal on new EU legislation to regulate trade in over-the-counter (OTC) derivatives and make the derivatives market safer and more transparent was struck by Parliament and Council representatives. View Article

New rules to increase transparency and safety in derivatives trading
Agreement was reached today between the Council and the European Parliament over new rules for trading in financial derivatives. View Article

Reuters: How will the EU regulate derivatives trading?
Under the new law agreed by European Union diplomats and the European Parliament on Thursday, regulators will push for more standardisation, reducing the market for individually designed derivative instruments. (Includes quote from Graham Bishop.) View Article

Reuters: EU agrees rules to tame derivatives market
European Union diplomats and the European Parliament agreed to overhaul regulation of the roughly $700 trillion derivatives market, a move that will make it easier to control one of the most opaque areas of finance. (Includes quote from Graham Bishop.) View Article

New ICMA European Repo Council paper examines role of ‘haircuts’ in European repo market
ICMA's European Repo Council (ERC) has today published a paper entitled: "Haircuts and initial margins in the repo market", which calls for more detailed understanding of the precise impact of collateral haircuts in the repo market to inform the regulatory debate. View Article

FSMA modifies short selling rules
FSMA had decided to modify the rules on short selling shares in Belgian financial institutions as from 13 February 2012, by replacing the interim ban on the holding of net short positions with a reporting obligation for significant net short positions and with the 'locate rule'. View Article

ESMA launches a consultation on short selling and CDS, and announces an open hearing on 29 February
The purpose of this consultation is to seek comments on the technical advice that ESMA proposes to give to the European Commission on a number of possible delegated acts concerning the Regulation, as listed in the Commission request for advice. View Article

ESMA publishes the responses received to the consultation on short selling and CDS
In November 2011, the Council and the Parliament voted on a Regulation on short selling and certain aspects of credit default swaps. This is about to be published and should be applicable from 1 November, 2012. View Article

FESE response to ESMA’s consultation on short selling and certain aspects of credit default swaps
FESE supports efficient, fair, orderly and transparent financial markets that meet the needs of well-protected and informed investors, and which provide a source for companies to raise capital. View Article

End of the short selling ban regarding French securities of the financial sector
The provisions prohibiting any creation of a net short position and increase of an existing one in relation to French equity securities of the financial sector came to an end on Saturday, 11 February, 2012. View Article

IMA: Credit rating agencies need to be left to function independently
In its written submission to the Treasury Select Committee Inquiry into Credit Rating Agencies, the Investment Management Association (IMA) stresses the independent role of credit rating agencies (CRAs), concluding that they must be allowed to act free from political interference. View Article

Hedgeweek: Changes to the Market Abuse Regime for Irish-listed funds
Pursuant to the Market Abuse (Directive 2003/6/EC) Regulations 2005 (the "Market Abuse Regulations"), since 1 July 2005 the Central Bank of Ireland has delegated market monitoring and investigation tasks to the Irish Stock Exchange (ISE). View Article

CSA publishes findings and recommendations for the segregation and portability of customer positions
The CSA published for comment 'Derivatives: Segregation and Portability in OTC Derivatives Clearing'. The Consultation Paper sets out the CSA Derivatives Committee's proposals related to the segregation and portability of customer positions and related collateral in OTC derivatives transactions. View Article

FN: Deutsche Börse chief defends management record
Reto Francioni, chief executive of Deutsche Börse, has defended the German exchange's management record following the collapse of its proposed merger with NYSE Euronext. View Article

European insurers consider private equity and hedge funds for Solvency II liabilities
A new report has concluded that insurers expect their allocations to alternative asset classes to increase under Solvency II. The proposals within the new regulation will reshape the way in which the merits of various asset classes are assessed in the future. View Article

Barnier: Future European rules for pension funds
Barnier is aware that there is a lot of concern about the introduction of risk-based solvency rules for pension funds. The EC will inspire itself from these rules when appropriate but that does not mean it will 'copy and paste' Solvency II. View Article

IPE: Capital requirements 'disastrous' for pensions, growth, Commission warned
In a letter sent to José Manuel Barroso, NAPF, alongside CBI and the union umbrella organisation TUC, said that the revised Directive on occupational pensions would undermine the retirement prospects of Europeans and have a disastrous impact on long‐term growth and employment in the single market. View Article

IPE: Pension funds to enjoy temporary exemption from new derivatives rules
The European Parliament has adopted a 'soft' approach to pension funds on the new European Market Infrastructure Regulation (EMIR) Directive on over-the-counter (OTC) derivatives, confirming that they will be exempted from the legislation temporarily. View Article

EIOPA published final advice to the European Commission on the review of the IORP Directive
The approach proposed by EIOPA is to acknowledge the existing diversity of occupational pension systems in the EU Member States, while capturing all these systems into a single balance sheet. View Article

IPE: EU countries lament 'fundamental' lack of detail in IORP consultation
European governments have criticised the "fundamental" lack of detail provided by a recent consultation on changes to the IORP Directive, calling on the European Insurance and Occupational Pensions Authority (EIOPA) to provide more clarity on a number of issues. View Article

IPE: Solvency II heel-dragging 'potentially harmful' to EU credibility
The chairman of the European Insurance and Occupational Pensions Authority has urged that the European Commission must provide the pension industry with "certainty" over the implementation of Solvency II. View Article

IPE: EU has got it wrong on solvency levels for alternatives investment
According to Mathieu Vaissié, senior portfolio manager at Lyxor Asset Management, European policymakers have miscalculated solvency requirements for institutional investment in hedge funds and other alternatives assets. View Article

IMA: Volcker rule needs to recognise non-US regulated funds
The Investment Management Association (IMA) has submitted its response to the proposed Volcker Rule, part of the US Dodd Frank legislation due to be implemented in July this year. View Article

EFAMA comments on US proposals to implement Volcker rule
The European Fund and Asset Management Association (EFAMA) has published its response to the US financial regulatory authorities' consultation on draft implementing measures of the so‐called Volcker rule. View Article

EDHEC-Risk Institute research provides insights into optimal hedge fund allocation
EDHEC-Risk Institute has provided insights into optimal portfolio decisions involving hedge funds. View Article

FASB: Biannual meeting of the FASB and the ASBJ
Representatives of the FASB and the ASBJ met on February 6 and 7, 2012, in Connecticut. This meeting was the twelfth in a series of discussions between the FASB and the ASBJ. Representatives discussed updates on the respective convergence activities with the IASB. View Article

EFRAG's request for comments on its draft endorsement advice(s) and draft effects study report(s) on five standards
EFRAG issued initial assessments of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IAS 27 (amended 2011) Separate Financial Statements, and IAS 28 (amended 2011) Investments in Associates and Joint Ventures (the Standards). View Article

FRC: Actuarial standards for pension incentive exercises
The FRC's Board for Actuarial Standards (BAS) announced that the FRC will consult on bringing actuarial work on pension incentive exercises into the scope of its technical actuarial standards (TASs). View Article

FRC's paper on its comply-or-explain approach to corporate governance
The FRC has taken steps to promote a better understanding of explanations under its comply-or-explain approach to corporate governance, in its report of discussions between companies and investors entitled: 'What constitutes an explanation under comply-or-explain?' View Article

FEE commented on the PCAOB Rulemaking Docket Matter No 030 on Proposed Auditing Standard related to Communications with Audit Committees
FEE published its comment letter on the PCAOB Rulemaking Docket Matter No 030 on Proposed Auditing Standard related to Communications with Audit Committees, Related Amendments to PCAOB Standards and Transitional Amendments to AU Sec 380. View Article

Barnier wants all the financial reforms to be in place by the end of his mandate
Barnier stressed that the EC hopes to see prompt final adoption of the dossiers on OTC derivatives and on bank deposit guarantees at the beginning of this year. Work on other areas will be launched in 2012, in particular to strengthen consumer protection and confidence in financial services View Article

Commissioner Šemeta: Rebalancing the financial transactions tax debate
In an op-ed in the Telegraph, EU Taxation Commissioner, Algirdas Šemeta, defended the idea of an EU-wide financial transactions tax (FTT), saying "it is time to banish the myths". View Article

S&D: EU regulation on derivatives crucial to implement financial transaction tax
The transparency and risk management of the $600 trillion over-the-counter (OTC) derivatives market will soon be regulated, after a deal was struck yesterday evening between negotiators of the European Parliament, the EU Council of ministers and the European Commission. View Article

ECON Committee draft report on the FTT
Rapporteur Anni Podimata argues in her report that the FTT can shift the burden to activities with negative externalities, such as HFT and extremely speculative financial transactions, ensuring thus a more fair distribution of the tax burden. View Article

House of Lords/EUC letter to DBIS regarding proposed revision of the Professional Qualifications Directive (PQD)
The European Union Committee (EUC) of the House of Lords wrote to the Department for Business, Innovation & Skills (DBIS) welcoming the Commission's proposed revision of the PQD, subject to a number of points. View Article

RDR 'driving offshore bond providers to EU'
Offshore bond providers are shifting their focus away from jurisdictions such as the Isle of Man and towards European jurisdictions, Epoch Wealth Management has said. View Article

FSA publishes RDR guide for advisers
The guide, entitled 'RDR: Is your firm on track?', is designed to help advisers implement the requirements of the Retail Distribution Review (RDR). It asks some key questions that can be used to check progress, identify any gaps, and prioritise and plan next steps. View Article

Nine European countries sent letter supporting FTT to Danish Presidency
The letter states that the tax is a "crucial instrument to secure a fair contribution from the financial sector to the costs of the financial crisis and to better regulate European financial markets". View Article

CNN: Greece after the vote - a country still on the brink (Graham Bishop article)
The Greek Parliament has voted, protesters have protested, buildings are burning: What next? The tranche of funding Greece needs will probably be disbursed and default -- at least in March -- will be avoided. View Article

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This week in "Brussels"

16 February 2012

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