The US Federal Financial Institutions Examination Council’s Task Force on Consumer Compliance revised interagency examination procedures for Regulation P, which governs the privacy of consumer financial information. Under Regulation P, financial institutions are prohibited from disclosing nonpublic personal information about consumers to unaffiliated third parties, with certain exceptions if the institution meets various opt-out and notice requirements. Regulation P also requires financial institutions to inform customers of their privacy policies and practices.Among other things, the revised examination procedures reflect a rulemaking by the US Consumer Financial Protection Bureau from October 2014 that creates an alternate delivery method financial institutions can use in their annual disclosure of privacy practices to customers. The examination procedures also reflect the recodification of Regulation P by the CFPB in December 2011. The revised examination procedures supersede previous Regulation P interagency examination procedures issued by the FFIEC via CA 11-4.

View the Federal Reserve Board press release.

View the revised interagency examination procedures.

The European Securities and Markets Authority published its final Guidelines on Alternative Performance Measures for listed issuers. An APM is a financial measure of historical or future financial performance, position or cash flow and is usually derived from financial statements prepared by an issuer. The Guidelines aim to assist users in making investment decisions and encourage European issuers to publish comparable, transparent and reliable information on their financial performance so that users can obtain a comprehensive understanding of their performance. The Guidelines apply to issuers with securities traded on regulated markets who are required to publish regulated information under the EU Transparency Directive, any persons responsible for drawing up a prospectus under the EU Prospectus Directive and relevant EU national regulators. The guidelines will apply to APMs disclosed on or after July 3, 2016.

View the Guidelines.

The US Securities and Exchange Commission announced that Chyhe Becker has been named the Associate Director in the Division of Economic and Risk Analysis, responsible for the Office of Litigation Economics. The appointment is effective immediately.

View the press release.

The US Consumer Financial Protection Bureau sent a letter to mortgage industry trade groups specifying details regarding initial examinations for compliance with the Know Before You Owe mortgage disclosure rule (also known as the TILA-RESPA Integrated Disclosure regulation). The rule, which became effective October 3, 2015, requires institutions supervised by the CFPB to introduce more simplified mortgage disclosure forms. The CFPB intends to conduct initial examinations for compliance with the rule. Although the initial examinations will take into account the scale and scope of modifications necessary for each supervised institution, the CFPB letter re-stated the expectation that supervised institutions should make a good faith effort to comply with the rule. To that end, the letter detailed the various factors that CFPB examiners will take into consideration, which include: (i) the institution’s implementation plan, including actions taken to update policies, procedures and processes; (ii) its training of appropriate staff; and (iii) its handling of early technical problems.

View the press release.

The European Securities and Markets Authority published a final report on the possibility of establishing mappings of credit ratings published on the European Rating Platform (a public website to be launched by ESMA in 2016 which will allow comparability of all ratings given by rating agencies registered and authorized in the EU), as required under the amended Credit Rating Agencies Regulation. Credit rating mapping would assist users of credit ratings in comparing ratings given by different credit agencies for the same entities. ESMA recommends that the European Commission not take any action at this point in terms of mapping and that ESMA should instead focus on constantly updating its information and data which allows users of credit ratings to carry out their own research. ESMA also published two sets of technical advice to the European Commission. The first is on reducing sole and mechanistic reliance on external credit ratings which considers the measures in place to date to reduce reliance on credit ratings and recommends that efforts should focus on removing reliance on credit ratings instead of trying to remove references to credit ratings in all EU legislation. The second is on competition, choice and conflicts of interest in the credit rating industry which considers the impact of certain provisions of the CRA Regulation on competition, conflicts of interest and structured finance instruments which were introduced in 2013. The European Commission must report to the European Parliament and Council by December 31, 2016 on whether references to credit ratings in EU legislation should be removed when the latest provisions of the CRA are implemented. ESMA proposes to reassess the implementation of the CRA Regulation within the next three to five years.
 
View the report and technical advice.

The European Securities and Markets Authority sent a letter to Jonathan Hill, Commissioner for Financial Stability, Financial Services and Capital Markets Union at the European Commission on the Regulatory Technical Standards for indirect clearing for OTC derivatives under the European Market Infrastructure Regulation and the draft RTS on exchange-traded derivatives under the Markets in Financial Instruments Regulation. Both the final RTS under EMIR and the draft RTS under MiFIR aim to specify the types of indirect contractual arrangements that do not increase counterparty risk. Under MiFIR, the draft RTS on indirect clearing must be consistent with the RTS under EMIR. ESMA considers that the RTS under EMIR need to be revised to take into account the feedback received on the proposed draft RTS under MiFIR.  ESMA therefore intends to consult on the possible changes to the EMIR RTS to align them with the draft MiFIR RTS. ESMA will submit the draft MiFIR RTS and draft amended EMIR RTS to the European Commission together, following its consultation.

View the letter.

The European Securities and Markets Authority published its final report and final draft Regulatory Technical Standards on the clearing obligation for certain classes of credit derivatives. Under the European Market Infrastructure Regulation, ESMA is required to develop draft RTS setting out the OTC derivatives that should be subject to the clearing obligation, the date/s from which the obligation should apply and the minimum remaining maturity of OTC derivatives. The final draft RTS provide for the following two iTraxx Index CDS to be subject to the clearing obligation: (i) untranched iTraxx Index CDS (Main, EUR,5Y); and (ii) untranched iTraxx Index CDS (Crossover, EUR,5Y). ESMA has to a large extent adopted the same approach that it took for the RTS on the clearing obligation for IRS (which the European Commission adopted on August 6, 2015). The final draft RTS on the clearing obligation for CDS provide for the same categories of counterparties to be subject to the CDS clearing obligation as will be subject to the IRS clearing obligation. Similarly, the obligation for the different counterparties will be phased in according to counterparty type.  ESMA has submitted the final draft RTS on a clearing obligation for CDS to the European Commission for endorsement.

View the final draft RTS on a clearing obligation for CDS.

The SEC announced the launch of a new rulemaking database to provide for greater transparency into the SEC’s rulemaking process. Unlike the structure of the current SEC website, the new database allows users to sort rules by date, status (e.g., proposed, completed, etc.), and SEC division (e.g., Investment Management, Trading and Markets, etc.).

View the SEC announcement of the new database.

View the SEC rulemaking index.

The Basel Committee on Banking Supervision published a report relating to the regulatory consistency of Risk-Weighted Assets for counterparty credit risk. This report is part of the BCBS’s wider Regulatory Consistency Assessment Program, which is intended to ensure consistent implementation of the Basel III framework. The report examines variability in banks’ modeling of derivatives, specifically exposure modeling, by presenting findings from a hypothetical test portfolio exercise. The report concentrates on the internal models method and the advanced credit valuation adjustments risk capital charge for OTC derivative trades. This report completes the BCBS’s review, in respect of trading-related internal models, and follows two earlier exercises that focused on market risk RWAs that were published in January 2013 and December 2013. In the report, the BCBS presents key findings, lists a number of observed good practices, and highlights areas where banks and supervisors may seek to harmonize practices to reduce variability in outcomes.

View the report.

The Comptroller of the Currency, Thomas J. Curry, issued a statement recognizing October as National Cybersecurity Awareness Month, as designated by President Obama. Mr. Curry stated that the goal of the month is to “raise awareness of threats to the data systems that have become part of our everyday lives and to encourage each of us to take steps to safeguard those systems.” Mr. Curry’s statement noted the increasing prevalence of cybersecurity breaches and encouraged banks/thrifts and supervisory agencies to work together to prevent breaches and to ensure that institutions have a plan in place to effectively detect, assess, and respond to cyber-attacks.

View the press release.

The European Stability Mechanism announced that Françoise Blondeel has been promoted to its Management Board. Ms Blondeel was previously Head of Middle and Back Office at the ESM and will now also be in charge of the ESM’s internal coordination.

View the press release.

The Financial Stability Board published a report detailing its progress in implementing its September 2014 recommendations for reforms to Foreign Exchange benchmarks. Although the report states that progress has been made in implementing many of the recommendations, the FSB notes that there are still areas where progress has been mixed. Specifically, among other things, the report reiterates that the FSB recommendations are intended to apply to all FX benchmarks, not just the London 4pm fix benchmark. The FSB asserts that a more complete implementation of the recommendations, particularly regarding other FX benchmarks, is essential to building upon improvements already witnessed.

View the report.

William C. Dudley, President and Chief Executive Officer of the US Federal Reserve Bank of New York, delivered a speech at the SIFMA Liquidity Forum reiterating the need to strike a proper balance between sound regulation and liquidity in financial markets. Specifically, his remarks examined market liquidity in two important fixed-income markets: the US Treasury market and the US corporate bond market. He discussed, among other things, methods on how to measure liquidity, evidence of how liquidity has changed in recent years, factors that could influence liquidity provision, and costs associated with shifts in liquidity. Dudley expressed his support for the recommendations in the recently issued interagency report on the October 15, 2014 Treasury market flash rally, including the need to better understand the implications of the evolving Treasury market structure and liquidity and how changes in regulation and market structure influence liquidity conditions more generally. Specifically, he called for study and data analysis as to whether there is a decrease in liquidity and/or an increase in liquidity risk that is costly or poses a risk to financial stability and whether regulation can be altered to improve the balance between enhancing financial stability and the costs of such regulation, including adverse impacts on liquidity.

View the speech.

The European Commission published its Action Plan for building the Capital Markets Union which follows its earlier consultation. The Action Plan sets out the steps for the medium and long term that the Commission intends to take in five priority areas: (i) providing more funding choices to EU businesses; (ii) ensuring an appropriate regulatory framework for long term investment and financing of Europe's infrastructure; (iii) increasing investment and choices for retail and institutional investors; (iv) improving bank lending capacity; and (v) removing cross-border barriers and developing more harmonized capital markets for all Member States. The Action Plan includes a detailed action list and indicative timeline of steps that the Commission intends to take, including publishing proposals to amend the Prospectus Directive before the end of 2015. Several proposals and consultations were published with the Action Plan, including (i) a call for evidence on the impact of the EU regulatory framework for financial services which seeks feedback on unnecessary regulatory burdens, inconsistencies, gaps and unintended consequences; and (ii) a proposed Commission Delegated Regulation amending the regulatory capital requirements for several categories of assets held by insurance and reinsurance undertakings.

View the Action Plan.

View the Call for Evidence.

View the proposed Commission Delegated Regulation.

The European Commission launched a consultation into the review of the European Venture Capital Funds Regulation and the European Social Entrepreneurships Funds Regulation as part of its Capital Markets Union initiative. The Commission is seeking views on steps that could be taken to improve the take-up of EuVECA and EuSEF funds through amendments to the two Regulations. Proposals include: (i) allowing managers authorized under the Alternative Investment Fund Managers Directive to be able to offer EuVECA and EuSEF funds to clients; (ii) exempting managers of EuVECA and EuSEF funds from authorization under AIFMD once they exceed the EUR500 million threshold; (iii) reducing the minimum subscription threshold for non-professional investors to attract more private investors; (iv) harmonization of registration requirements, including related costs; (v) extending the EuVECA and EuSEF Regulations to third country managers; (vi) extending the range of eligible assets that a EuVECA fund can invest in; and (vii) harmonizing requirements for the marketing of funds and fees for cross-border notifications. The consultation closes on January 6, 2016.

View the consultation paper.

The European Commission launched a consultation on proposed action to address the legal and practical issues in the EU covered bond market to facilitate cross-border investment within the EU and from third countries. The consultation forms part of the Commission's Capital Markets Union initiative. The regulation of covered bonds is a matter of Member State national laws although the prudential treatment of covered bonds is provided for in a variety of EU legislative acts such as the Units for Collective Investment in Transferable Securities Directive, the Capital Requirements Regulation and the Bank Recovery and Resolution Directive. There are differences between the legal frameworks and supervisory practices of various EU Member States for covered bonds as highlighted by the European Banking Authority in its July 2014 report. The Commission is proposing a more integrated EU-wide covered bond framework that could be reflected in legislation and/or a set of recommendations and the consultation paper includes a discussion of the various approaches that might be taken in an effort to introduce harmonisation across the EU. The consultation closes on January 6, 2016. 

View the EU Covered Bond consultation paper. 

The US Board of Governors of the Federal Reserve System announced its approval of the applications by: (i) M&T Bank Corporation to acquire Hudson City Bancorp, Inc.; and (ii) by M&T’s subsidiary bank, Manufacturers and Traders Trust Company, to merge with Hudson City Savings Bank. Upon consummation of the transactions, M&T will have consolidated assets of approximately $132.5 billion, making it the 25th largest insured depository organization in the United States (currently it is 31st). M&T agreed to purchase Hudson City and submitted applications to the Federal Reserve Board in respect of the transaction in 2012. However, the Federal Reserve Board initially identified weaknesses in M&T’s risk management program, including issues in M&T’s Bank Secrecy Act/anti-money laundering compliance management program and its consumer compliance program and thus postponed consideration of the deal at M&T’s request until M&T was able to remediate these concerns.

View the press release.

View the Order.

The Prudential Regulation Authority published an updated Supervisory Statement on reports provided by skilled persons under the Financial Services and Markets Act 2000. Under FSMA, the PRA may appoint, or may require a firm or a certain individual to appoint a skilled person to provide the PRA with a report giving an independent view of a firm's activity. This is part of the PRA's supervisory approach to firms, to identify, assess or prevent risks, track the development of previously identified risks or to use as part of possible remedial measures. The Supervisory Statement is to be read alongside the Use of Skilled Persons Part of the PRA Rulebook, which specifies the rules on contracts entered into with skilled persons. The updated Supervisory Statement provides greater clarity on the use of a skilled person as part of the PRA's supervisory approach and in particular as a discretionary supervisory tool. The Supervisory Statement includes: (i) the PRA's considerations when appointing a skilled person; (ii) the PRA's considerations when determining whether it should use its powers under FSMA to obtain a report by a skilled person or to appoint a skilled person to collect or update information; and (iii) the PRA's expectations of an appointed skilled person.

View the Supervisory Statement.

The European Banking Authority published its first analysis on asset encumbrance for EU banks, using data received from the 200 banks that provide it with such data. This first analysis initiates the regular monitoring of levels of asset encumbrance at EU level and future reports will be published annually. The analysis aims to assist supervisors in assessing how banks manage funding stress as well as the impact that switching from unsecured to secured funding might have on banks in conditions of stress. The report is based on data received for December 2014 and March 2015 further to a requirement under the Capital Requirements Regulation for banks to report levels of repurchase agreements, securities lending and all forms of asset encumbrance to national regulators. The analysis shows that the overall weighted average encumbrance ratio was 27% in March 2015, with ratios at country level that range from 0% for Estonia and 44% in Denmark and Greece. The report shows there has been no increase in levels of asset encumbrance over the past four years, based on a comparison with a similar report released by the European Systemic Risk Board in 2011. 

View the report.

The European Commission published two proposed Regulations as part of its Capital Markets Union initiative which aim to revive the EU securitization markets. The proposed Regulation on common rules on securitization and creating a European framework for simple, transparent and standardized securitization (referred to as STS Securitization) sets out the eligibility criteria for STS securitizations such as risk retention rules, due diligence and disclosure requirements. The proposed Regulation also includes requirements for supervisory requirements, amendments to other EU legislation to ensure consistency, an exemption, subject to certain criteria being met, from the clearing obligation for OTC derivative contracts entered into by covered bond entities and securitization special purpose entities and rules on third country securitizations. The second proposed Regulation would amend the Capital Requirements Regulation to revise capital requirements for banks and investment firms originating, sponsoring or investing in securitizations. The objective of the proposals is to align the CRR provisions with the revised Basel framework of 2014 as was recommended by the European Banking Authority in its report on qualifying securitizations in July. The proposed revisions to CRR seek to adopt a more risk-sensitive approach to STS securitization which is currently in the early stages of development at international level. Both legislative proposals are subject to the European legislative process. 

View the proposed STS Securitization Regulation.
 
View the proposed CRR Amendment Regulation.

The European Commission published a guide for small and medium enterprises on how to use crowdfunding. The guide describes the different types of crowdfunding available, such as peer-to-peer lending as well as equity, revenue-sharing, and debt-securities crowdfunding and includes details on how to plan and prepare for crowdfunding.

View the guide.

The European Securities and Markets Authority published a final report and final draft Regulatory and Implementing Technical Standards on the Market Abuse Regulation which replaces the Market Abuse Directive and applies from July 3, 2016. The report sets out the changes to the draft technical standards from those proposed in ESMA's initial consultation. The final draft technical standards cover: (i) detailed requirements for reporting of suspicious orders or transactions; (ii) the establishment, maintenance and termination of accepted market practices for certain behaviour not to be considered market manipulation; (iii) the arrangements, procedures and record keeping requirements that persons conducting market soundings must comply with for a market sounding not to be considered insider dealing, including the systems and notification templates and technical means for appropriate communication; (iv) the conditions that buy-back programmes and stabilisation of securities must meet not to be considered insider dealing or market abuse, including conditions for trading, restrictions on time and volume, price conditions and disclosure and reporting obligations; (v) notification requirements for trading venues of financial instruments for which a request for admission to trading is made, admitted to trading or traded for the first time; (vi) technical means and rules for public disclosure of insider information and rules on disclosure delays; (vii) arrangements for the objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflict of interest; (viii) the precise format of insider lists; and (ix) the format and template for notification of managers transactions. ESMA will submit the final report and final draft RTS and ITS to the European Commission for endorsement. 

View the final report and technical standards.

Governor Daniel K. Tarullo spoke on "Capital Regulation Across Financial Intermediaries" at the Banque de France Conference on Financial Regulation entitled "Stability versus Uniformity; A Focus on Non-bank Actors." In the speech, Governor Tarullo remarked on the importance of relying on more than quantitative measures when establishing regulatory requirements for non-bank financial institutions. He stated that "simply deciding that an intermediary provides mostly commercial banking services or insurance products does not fully answer the question of what its capital requirement should be." As an example of a rule in which a more nuanced approach was taken, he pointed to the use of short-term wholesale funding measures in the US G-SIB surcharge requirement.

View the speech.
 

The European Securities and Markets Authority published a final report and final draft Regulatory and Implementing Technical Standards on improving securities settlement in the European Union and on Central Securities Depositories requirements. This follows from ESMA’s previously published discussion paper and consultation paper which sought views on the proposed technical standards. The final report sets out the feedback received from the consultation paper and ESMA’s proposed changes to the RTS and ITS on CSD as well as the RTS and ITS on internalised settlement. The two final draft standards on CSDs cover: (i) the authorisation and identification requirements for applicant CSDs, including forms and templates for CSDs applying for authorisation; (ii) recognition of a third-country CSD; (iii) risk monitoring rules that a CSD must establish; (iv) record keeping; and (v) general requirements for cooperation arrangements between regulators in home and host member states. The two final draft standards on internalised settlement cover: (i) templates and procedures for the reporting and transmission of information on internalised settlements; and (ii) specifications for the content of reporting on internalised settlements. The RTS on settlement discipline will become available later in a separate report, as ESMA still needs to review responses received to its more recent consultation on the operation of the buy-in process. ESMA will submit the final draft RTS and ITS to the European Commission for endorsement.

View the final report and technical standards.

The US Commodity Futures Trading Commission’s Division of Market Oversight issued a no-action letter, CFTC Letter No. 15-52, that provides additional time for reporting parties to comply with certain reporting requirements of the ownership and control final rule (OCR Final Rule). The OCR Final Rule introduces to the CFTC’s transaction and reporting program certain new and updated forms for reporting trader identification and market participant data. CFTC Letter No. 15-52 supersedes previous no-action relief issued in February 2015, and extends relief until April 2016, September 2016, or February 2017, depending on the type of reporting requirement.

View the press release.

View CFTC Letter No. 15-52.

The Bank of England announced the timetable for publication of the results of the 2015 UK stress test, which aims to evaluate the resilience of the UK banking system. The stress test covers seven major UK banks and building societies, namely Barclays, HSBC, Lloyds Banking Group, Nationwide, Royal Bank of Scotland, Santander UK, and Standard Chartered. The Financial Policy Committee and Board of the Prudential Regulation Authority will make their final decisions on the results of the stress tests on November 30, 2015 and will revert to the relevant firms on the same day. The results will then be published on December 1, 2015.

View the press release.

The European Securities and Markets Authority published a final report and final draft Regulatory and Implementing Technical Standards under the new Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation, together known as MiFID II. MiFID II applies from January 3, 2017. The 28 final draft standards cover: (i) pre- and post-transparency requirements for debt and equity securities; (ii) rules for investment firms and trading venues relating to algorithmic trading; (iii) data publication and access; (iv) requirements applying on and to trading venues; (v) the methodology for the calculation and application of position limits for commodity derivatives; (vi) when an activity is to be considered ancillary to the main business for the purposes of the commodity derivatives exemption; (vii) market data reporting and the reporting obligation; (viii) the clearing obligation for derivatives and timing for acceptance for clearing (STP); (ix) information requirements for best execution; and (x) rules for on non-discriminatory access to CCPs, trading venues and benchmarks. 

View the final report and technical standards.

The European Banking Authority published final translations of its Guidelines on common procedures and methodologies for the Supervisory Review and Evaluation Process under the Capital Requirements Directive. The Guidelines include: (i) an overview of the common SREP framework; (ii) details on how regulators are to apply the principle of proportionality in their supervisory engagements with different types of firms; (iii) overall risk management and governance arrangements; and (iv) regular monitoring of key financial and non-financial indicators for changes in financial conditions and risk profiles of firms. National regulators must notify the EBA by February 20, 2016 as to whether they comply or intend to comply with the Guidelines.

View the Guidelines.

The US Federal Reserve Board, the US Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission (the "Agencies") released two new frequently asked questions on the Volcker Rule. FAQ 17 clarifies compliance requirements for market making and the identification of covered funds. FAQ 18 relates to CEO certification for prime brokerage transactions.

View the Volcker Rule FAQs.

The US Office of the Comptroller of the Currency released its bank supervision operating plan for fiscal year 2016. Generally, the operating plan identifies the OCC's bank supervision priorities and objectives for the year and guides the development of supervisory strategies for national banks and federal savings associations. According to the plan, supervisory strategies for fiscal year 2016 will focus on: (i) business model and strategy changes; (ii) compliance; (iii) credit risk and loan underwriting; (iv) cybersecurity and resiliency planning; and (v) interest rate risk.

View the press release.

View the operating plan.

The European Securities and Markets Authority published its Opinion on the application of the International Financial Reporting Standards requirements for the recognition of contributions to Deposit Guarantee Schemes in IFRS accounts. The opinion relates to the accounting of ex-ante non-refundable cash contributions to DGSs for which the obligating event takes place at a single point in time. The Opinion states that a contribution must be recognised as an expense in full once a non-refundable cash contribution to a DGS is identified. ESMA will expect national regulators to take remedial measures if any material mis-statements are identified in the requirements. 

View the Opinion.

The Financial Stability Board convened to discuss its ongoing workplan. The FSB discussed issues including ending too-big-to-fail, transforming shadow banking into resilient market-based finance, risks associated with market liquidity and asset management activities, reducing misconduct and the prospective policies that could mitigate potential risks. Further to the FSB's consultation last year which proposed a global standard for Total Loss-Absorbing Capacity to be applied to Global Systematically Important Banks, addressing the risks of bail-outs funded by taxpayers, the FSB has now agreed the draft final principles and supports the consistent implementation of this standard. Amongst other things, the FSB has also identified areas in which it aims to conduct further detailed analysis relating to structural vulnerabilities in asset management, such as the mismatch between liquidity of fund investment and redemption terms of conditions for fund units, leverage within investment funds and securities lending activities of asset managers and funds. 

View the press release.

The European Banking Authority published an opinion on the European Commission's proposal to amend the final draft Implementing Technical Standards on additional liquidity monitoring metrics under the Capital Requirements Regulation. The metrics aim to provide regulators with a more comprehensive liquidity risk profile of a firm according to the nature, scale and complexity of its activities. The Commission had proposed for the maturity ladder templates and instructions to be removed, due to these being based on the provisional approach to reporting requirements under the CRR and so that the ITS are adapted to the new and more detailed definition of liquid assets which becomes applicable from October 1, 2015. The EBA's opinion states that the benefits of having the maturity ladder as initially proposed rather than not having a harmonised tool at all for the next two years (which is the estimated time required to update the ITS and have them adopted by the Commission and implemented by institutions) are greater. If the maturity ladder is kept in the final ITS, the EBA will proceed promptly with an updated ITS, bringing them into line with the new liquidity provisions. The EBA also supports the Commission's suggestion to amend the date of application of the ITS from July 1, 2015 to January 1, 2016. A revised draft of the ITS is included in the annex to the Opinion.

View the Opinion.

The European Securities and Markets Authority published a consultation paper on proposals for draft Regulatory Technical Standards on the European Single Electronic Format, the new format for annual financial reports, required under the Transparency Directive. The Transparency Directive requires issuers listed on regulated markets to prepare their annual financial reports in a new format from January 1, 2020. The new format aims to improve comparability and analysis for investors and regulators as well as simplify annual report submissions for issuers. The consultation paper assesses current practices and formats of annual financial reports and considers the options for harmonising the format of reports required under the Transparency Directive. ESMA is seeking views on its proposals in order to finalise draft RTS for submission to the European Commission before the end of 2016.  Comments on the consultation are due by December 24, 2015.

View the consultation.

The US Commodity Futures Trading Commissioin issued an Order filing and settling charges against TeraExchange LLC, a provisionally registered Swap Execution Facility. TeraExchange was charged for failing to enforce a prohibition on wash trading and prearranged trading on the SEF platform in connection with the SEF's offering for trade of a non-deliverable forward contract based on the relative value of the US Dollar and Bitcoin. TeraExchange is required to cease and desist from future violations regarding trade practices.

View the CFTC press release.
 

On September 23, 2015, the US Federal Reserve Board approved enhancements to its automated clearing house service that will require its receiving depository institutions to process same-day payments. Morning settlements will now be cleared by 1pm, and afternoon settlements by 5pm, according to the approved plan. Originating banks will be required to pay a 5.2 cent interbank fee to receiving banks for each same-day electronic payment. The enhancements become effective September 23, 2016.

View the press release.

The European Central Bank published a revised version of its Eurosystem Oversight Policy Framework which describes the role of the Eurosystem in oversight of payment systems. The Framework has been amended to remove the references to the Eurosystem location policy for CCPs. The revision follows the judgment of the General Court of March 4, 2015 on the UK Government's challenge of the Framework (as it then stood) and which annulled the Framework in so far as it set a requirement for CCPs to be located within the Eurozone. The Framework aimed to prevent CCPs in the European Union but outside the Eurozone from being able to have access to ECB Euro settlement facilities. Following that judgment, the ECB and the Bank of England announced that they had agreed to enhanced information exchange and cooperation arrangements for UK CCPs with significant euro-denominated business and that both central banks would extend the scope of their standing swap line order to aid the provision of multi-currency liquidity support by both central banks to CCPs established in the UK and the euro area. The ECB has also published Standards for the use of CCPs in Eurosystem foreign reserve management operations, which had been the subject of a separate legal challenge by the UK Government. The Standards would govern the use of CCPs for Interest Rate Swaps denominated in foreign currencies, aiming to limit the risks that would arise when these types of IRSs are cleared through a CCP.
 
View the revised Eurosystem Oversight Policy Framework.
 
View the ECB Standards for use of CCPs. 

The European Central Bank announced that Pedro Gustavo Teixeira will become the new Secretary to the ECB's decision-making bodies and Director General Secretariat from January 1, 2016. Petra Senkovic will become Secretary to the Supervisory Board and Director in Directorate Secretariat to the Supervisory Board from January 1, 2016.

View the press release.

The European Securities and Markets Authority announced the extension of the terms of office for its Chair, Steven Maijoor, and Executive Director, Verena Ross by five years.  ESMA also announced the appointments of David Lawton, Misu Negritoiu and Edwin Schooling Latter as chairs of its standing committees, for a period of two years, from October 1, 2015.

View the press release.

View the press release.

The European Banking Authority published final translations of its Guidelines on methods for calculating contributions to Deposit Guarantee Schemes under the Deposit Guarantee Schemes Directive. The Guidelines include: (i) the principles that should be used for developing or approving methods for calculating contributions to DGSs; (ii) the mandatory elements of calculation methods; and (iii) the optional elements of calculation methods. National regulators must notify the EBA within two months of the publication of the translated guidelines whether they comply or intend to comply with those Guidelines.

View the Guidelines.

Participants of the US-EU Financial Market Regulatory Dialogue met to discuss key regulatory topics including recent developments in bank resolution, derivatives reforms, securitization and the creation of the a new Capital Markets Union, cybersecurity and plans to review the Prospectus Directive. Amongst other things, EU participants outlined the efforts that have been made to assist access to market-based funds through the creation of a CMU, and reported, together with participants from the US Securities and Exchange Commission and Commodity Futures Trading Commission that constructive bilateral discussions were continuing on derivatives reform and in particular on recognition under the European Market Infrastructure Regulation. Emphasis was placed on the importance of clear and well-designed recovery and resolution frameworks for CCPs and well-governed benchmark frameworks. The participants included representatives of the European Commission, European Securities and Markets Authority, European Banking Authority, US Treasury, Board of Governors of the Federal Reserve System and Federal Deposit Insurance Corporation. The next meeting will take place in Washington DC in February 2016.

View the joint statement.

The US Securities and Exchange Commission announced that Lara Shalov Mehraban has been named Associate Regional Director for Enforcement in the New York Regional Office. Mehraban has been with the SEC since 2007 and has been an Assistant Regional Director in the office since 2012. Amelia Cottrell previously filled the position and left the agency in July 2015.

View the SEC press release.

Anthony J. Albanese, Acting Superintendent of Financial Services, announced that the New York State Department of Financial Services approved Circle Internet Financial's BitLicense application. This would make Circle Internet Financial the first company to receive a BitLicense from the NYDFS. The NYDFS finalized its BitLicense rules in June 2015 after receiving public comments on the proposed framework, making New York's BitLicense the first comprehensive regulatory framework for firms dealing in virtual currency. The rules include guidelines on consumer protection, anti-money laundering compliance and cybersecurity. The NYDFS has received 25 BitLicense applications to date.

View the press release.
 

The US Commodity Futures Trading Commission approved for public comment a supplement to its November 2013 proposed rulemaking to modify the policy for aggregation under the CFTC's position limits regime for futures and option contracts in Part 150 of its regulations. The supplemental notice of proposed rulemaking revises how the CFTC proposes to address situations when an exemption from the aggregation requirement is available for owners of greater than 50 percent interest in another entity. Under the November 2013 proposal, owners of a greater than 50 percent interest would have to provide specified information and certifications in an application to the CFTC, and obtain CFTC approval before disaggregating their positions. Under the supplement, owners of a greater than 50 percent interest would follow the same procedures that were proposed for owners of an interest between 10 and 50 percent, which procedures would permit such owners to disaggregate an owned entity's positions upon filing a notice with the CFTC stating that certain specified standards have been met. All other aspects of the November 2013 proposal remain the same. The CFTC continues to consider the November 2013 proposal and the comments submitted during the earlier comment periods.

View the press release.
View the CFTC proposed rule.
 

The US Securities and Exchange Commission announced that R.T. Jones Capital Equities Management, an investment adviser, agreed to settle charges regarding its failure to follow guidelines for cybersecurity policies and procedures, which resulted in a breach which compromised the personally identifiable information of approximately 100,000 individuals. Federal securities laws require registered investment advisers to adopt written policies and procedures reasonably designed to protect customer records and information. The SEC investigation found that R.T. Jones Capital Equities Management violated this "safeguards rule" for approximately four years before the breach by failing to adopt any written policies and procedures to ensure the security and confidentiality of personally identifiable information. The SEC's order found that R.T. Jones violated Rule 30(a) of Regulation S-P under the Securities Act of 1933. In the settlement, R.T. Jones agreed to cease and desist from future violations of Rule 30(a) as well as pay a $75,000 penalty.

View the SEC press release.

The European Banking Authority published a consultation paper on its draft Guidelines specifying the application of the definition of default in relation to the Internal Ratings Based Approach and the Standardized Approach under the Capital Requirements Regulation. The draft Guidelines aim to harmonise the definition of default across the EU framework so that EU banks apply regulatory requirements to their capital positions in a more consistent, comparable and uniform way. The draft Guidelines provide clarification for the definition of default, also covering issues such as indications of unlikeliness to pay, the days past due criterion for default identification and the conditions for a return to non-default status. Comments are due by January 22, 2016.

View the consultation paper.

The Financial Stability Board, together with the Basel Committee on Banking Supervision, the Committee on Payments and Markets Infrastructures and the International Organization of Securities Commissions jointly published a CCP workplan, dated April 2015.  The workplan focuses on the resilience, recovery planning and resolvability of CCPs and coordinating the roles of each organisation in achieving these goals. A progress report on such work was published simultaneously, providing an update on work that has been done so far and listing an action plan with expected dates of delivery. The progress report states amongst other things that: (i) work on stress testing policies and practices have advanced and guidance will be developed after further analysis of other resilience topics such as CCP recovery and risk management has been carried out; (ii) a report on all CCP resilience and recovery issues will be published by mid-2016 for consultation; and (iii) a report analyzing the interdependencies between CCPs and major clearing members and any resulting systemic implications on global financial stability will be published by end-2016.

View the workplan.

View the progress report.

The Financial Conduct Authority announced Georgina Phillippou's appointment to the FCA's Executive Committee as the new Chief Operating Officer.

View the press release.

The Financial Stability Board published three reports provided to the G20 Finance Ministers and Central Bank Governors ahead of their meetings in September this year. The reports are: 1. The Sixth Progress Report by the FSB and the International Monetary Fund on the Implementation of the G20 Data Gaps Initiative which states that the set of 20 recommendations to close the data gaps identified following the global financial crisis, known as the first phase, should be completed by end 2015/early 2016. 2. A Joint Progress Report by the FSB, IMF and Bank for International Settlements on foreign currency exposures. The work seeks to address data gaps involving FX exposures so as to prepare for improved assessments of cross-border risks and analyze the vulnerabilities arising from such exposures. The work requires building on existing data initiatives and heavy coordination between the FSB, IMF and BIS. 3. The FSB Final Report on Corporate Funding Structures and Incentives, which examines the factors that shape the liability structure of corporates focusing on the implications for financial stability

View the Sixth Progress Report on the G20 Data Gaps Initiative.

View the Joint Progress Report on FX Exposures.

View the Report on Corporate Funding Structures.

The Financial Conduct Authority published a press release announcing that the FCA and Payment Systems Regulator has appointed new members to its decision making committees. The FCA's Regulatory Decisions Committee will welcome Tim Parkes as Chair, Elizabeth France and John Hull as Deputy Chairs and Kevin Brown, Caroline Ramsay and Chris Cummings as members. The PSR's Enforcement Decisions Committee will also welcome Tim Parkes as Chair, Elizabeth France as Deputy Chair and Kevin Brown, Chris Cummings, Stuart McIntosh, Professor Robin Mason, Malcolm Nicholson, Caroline Ramsay and Jonathan Haskel as members. The FCA and PSR Competition Decisions Committee will welcome Jonathan Haskel, Stuart McIntosh, Professor Robin Mason and Malcolm Nicholson as members.

View the FCA announcement.