Two delegated regulations on Regulatory Technical Standards under the Capital Requirements Regulation were published in the Official Journal of the European Union:

• The delegated regulation for the disclosure of information for the compliance of institutions with the requirement for a countercyclical capital buffer which sets out the specifications for the disclosures required by firms for compliance with their requirements for a countercyclical capital buffer; and

• The delegated regulation for the transitional treatment of equity exposures under the Internal Ratings-Based approach which states that national regulators may grant certain firms with exemptions from the IRB treatment where the categories of the firm's equity exposures were already benefiting from an exemption from the IRB treatment on December 31, 2013.

Both delegated regulations enter into force on October 9, 2015.

View the Delegated Regulation for Disclosure.

View the Delegated Regulation for Transitional Treatment of Equity Exposures.

The US Commodity Future Commission's Division of Market Oversight and Division of Clearing and Risk jointly published an interpretive letter stating that the use by a DCO of a "firm or forced trades" process to determine the price of certain swaps for which public market prices are not available, does not, by itself, trigger the requirement for the DCO to register as a swap execution facility.

In addition, the CFTC interpretive letter states that the DCO should be the reporting counterparty for swaps created by the firm or forced trades process for purposes of Part 45 of the CFTC's regulations.

View the CFTC Staff Letter.

The US Commodity Futures Trading Commission’s Division of Clearing and Risk released an interpretation clarifying the consistency of the CFTC’s Part 39 regulations pertinent to certain derivatives clearing organizations with the CPMI-IOSCO Principles for Financial Market Infrastructures. The clarification relates to certain risk management standards which, among other things, address risks associated with the following: exchange-of-value settlement services; link arrangements of DCOs; the requirement to use central bank services, where available and practicable; and requirements regarding the due diligence conducted with respect to custodian banks.

In the guidance, the CFTC interprets the relevant Part 39 regulations, which apply to systemically important DCOs and those DCOs that have opted into an enhanced regulatory framework (known as Subpart C DCOs), to incorporate all of the standards set forth in the PFMIs.

View the CFTC Staff Interpretation.

The European Securities and Markets Authority published a final report on draft Implementing Technical Standards on the procedures and forms for submitting information on penalties and measures under the UCITS V Directive. The draft ITS have been submitted to the European Commission for endorsement. National regulators will be required to provide ESMA with aggregated information on an annual basis of all penalties and measures that they have imposed on individuals and companies for breaches under UCITS V. Measures and penalties disclosed by national regulators to the general public must also be reported to ESMA simultaneously. The draft ITS include the relevant form that is to be submitted to ESMA. Member States must implement UCITS V into national law by March 18, 2016.

View ESMA's final report.

The Financial Conduct Authority and Prudential Regulation Authority published a joint consultation paper on proposed changes to certain forms used by firms and individuals under the incoming Senior Managers Regime and current Approved Persons Regime. The consultation seeks views on proposed changes to two forms for the new SMR and two forms for the current APR regime. The proposed changes would modify the required disclosures required by individuals relating to ongoing investigations and past convictions, according to whether the individual will be a senior manager under the SMR or an approved person under the APR and allow the regulators to assess fitness and propriety appropriately. Other forms for which the regulators have no duty to consult on have also been amended with immediate effect, including Long Form A forms and Notifications for Change in Controller. Comments are due by October 19, 2015. The regulators intend to publish the revised forms before the end of 2015 and guidance notes on completing the forms for the Senior Managers Regime are also expected.

View the consultation paper.

The Financial Conduct Authority published two guides which set out its new approach to classification of firms for conduct supervision. Firms will now be classified as either flexible or fixed portfolio firms according to their size, market presence and customer footprint. Fixed portfolio firms require the highest level of supervision and are the smaller of the population of firms. The guides summarize the FCA's approach that will apply to the two different kinds of firms. The revisions aim to help the FCA to take a more sector-based approach to identifying risk and engaging more widely with market representatives.

View the guide for fixed portfolio firms.

View the guide for flexible portfolio firms.

The Prudential Regulation Authority and Financial Conduct Authority both issued consultations on the implementation of Ring-Fencing Transfer Schemes under the UK's ring-fencing regime. Banks with core deposits over £25 billion over a period of three years must comply with ring-fencing requirements from January 1, 2019, separating the retail arms of banks from their riskier investment banking operations. RFTSs enable some or all of a bank's business to be transferred to another body so that the bank can restructure to comply with the ring-fencing rules. A scheme report, which must comment on whether the scheme could have any adverse effect on third parties, must be prepared by a skilled person approved by the PRA and FCA. The scheme report is intended to assist the court in its decision whether to sanction the scheme. Consent from all affected parties that is not required but third parties affected by the proposed scheme may make representations to the court. The PRA must also consult the FCA before approving a skilled person or a scheme report. The PRA will also issue two certificates: one providing its consent to the scheme and the second to verify that the transferee will have adequate financial resources. Where the transferee is only regulated by the FCA, the FCA must issue the financial resources certificate. The PRA seeks views on its draft Statement of Policy its approach to RFTSs and on its proposed approach for the approval of skilled persons and scheme reports. The FCA seeks views on its draft general guidance on RFTSs. Comments on both consultations are due by October 30, 2015.

View the PRA Consultation Paper.

View the FCA Consultation Paper.

The Federal Reserve Bank of New York announced that Sarah Dahlgren stepped down as head of the Financial Institution Supervision Group. James Hennessy was named interim head of the Financial Institution Supervision Group.

The International Swaps and Derivatives Association, Inc. announced the launch of a new industry data project which will develop an open-source standard derivatives product identification system that can be applied across different types of financial market infrastructure, such as trading venues, clearing houses and trade repositories. The initiative is in response to the derivatives reporting requirements which are imposed in various jurisdictions, including the US and EU. ISDA's new Symbology Governance Committee will provide oversight and governance to ensure that the product identification standard meets both industry and regulatory requirements. Eighteen entities (subject to finalization of contracts), have signed up to the project so far.

View ISDA's press release.

The International Organization of Securities Commissions published a final report on the cross-border regulation of the global securities markets. The report sets out the cross-border regulatory toolkit of regulatory options available to national securities regulators, including an analysis of the approaches taken to cross-border regulation and the impact that the use of such cross-border regulatory tools may have on investor protection, markets and systemic risk. The tools that are used are classified into national treatment, recognition, and passporting. IOSCO undertook a survey of member jurisdictions to identify the tools that members currently use to regulate financial activities in the global securities markets. The report also sets out next steps for IOSCO, including considering (i) how to be more explicit in incorporating cross-border issues into its policy work; (ii) organizing workshops for regulators on the process and considerations for assessing foreign regulatory regimes under unilateral and mutual recognition or otherwise develop better understanding of the complex aspects of cross-border regulation; (iii) setting up an information repository of its members supervisory cooperation agreements; and (iv) setting up an information repository for recognition decisions, including the analyses that informed such decisions.

View the IOSCO Report.

The US Securities and Exchange Commission adopted amendments pursuant to Section 939A of the Dodd-Frank Act Wall Street Reform and Consumer Protection Act to SEC rule 2a-7, related to the removal of credit rating references in the rule. Rule 2a-7 is the principal rule that governs money market funds and the form that money market funds use to report information to the SEC each month about their portfolio holdings.
 
The amendments to rule 2a-7 would eliminate provisions which currently require money market funds to invest only in securities that have received one of the two highest short-term credit ratings or, if they are not rated, securities that are of comparable quality. In addition, under the amended rule, money market funds would also no longer be required to invest at least 97 percent of their assets in securities that have received the highest short-term credit rating. Instead, the amended rule would limit money market funds to investing in a security only if the fund determines that the security presents minimal credit risks after analyzing certain prescribed factors, which factors are discussed in more detail in the adopting release.
 
The SEC adopted additional amendments to rule 2a-7 that would subject additional securities to issuer diversification provisions in the money market fund rule by eliminating a current exclusion for securities subject to a guarantee issued by a non-controlled person.
 
View the SEC press release here. 

View the final rule here. 
 

The US Commodity Futures Trading Commission announced proposed amendments to the definition of “material terms” in connection with CFTC regulations relating to swap portfolio reconciliation.
 
CFTC regulations on swap portfolio reconciliation require swap dealers and major swap participants to reconcile swap terms with other SDs or MSPs daily, weekly, or quarterly, depending upon the size of the particular swap portfolio. These regulations also require SDs and MSPs provide non-SD and non-MSP counterparties with regular opportunities for portfolio reconciliation.
 
Under the new proposal, the CFTC would amend the definition of “material terms” to specifically exclude certain data fields from the periodic reconciliation requirements. If the proposed amendment to the definition of “material terms” is adopted, the proposed rule would supersede no-action relief provided pursuant to CFTC Letter 13-31 issued on June 26, 2013.  
 
In separate statements, CFTC Commissioner J. Christopher Giancarlo and CFTC Chairman Timothy Massad praised the proposal for eliminating unnecessary burdens in the swap portfolio reconciliation rules. In addition, Commissioner Giancarlo encouraged parties affected by the swap reconciliation rules to submit comments regarding the ongoing costs associated with the reconciliation of other data fields that may not be relevant to the ongoing rights and obligations of the parties to a swap.
 
The comment period ends 60 days after the proposal’s publication in the Federal Register.
 
View the CFTC proposed rule.
 

A Commission Delegated Regulation was published in the Official Journal of the European Union which extends the transitional exemption period under the European Market Infrastructure Regulation for pension funds to comply with the EU clearing obligation by two years. The European Commission announced on June 5, 2015, that the period would be extended from August 16, 2015 to August 16, 2017, noting that if pension funds were subject to the clearing obligation now, they would need to source cash for the margin requirements of CCPs. The Commission, and other EU regulators, have asked CCPs to develop a solution that would allow pension funds to clear derivatives without the obligation being too burdensome for pension funds but which will also allow CCPs to liquidate positions rapidly in the event of a default. To date, no solution has been confirmed.

View the Commission Delegated Regulation.

The European Banking Authority published translated versions, dated September 11, 2015, of its final guidelines on payment commitments under the EU Directive on Deposit Guarantee Schemes. The DGS Directive provides that banks must pre-finance the DGS in its home member state. One of the methods available for such pre-financing is a payment commitment, provided that the total share of payment commitments does not exceed 30 per cent of the total amount of available financial means raised. The EBA guidelines on payment commitments set out the terms to be included in the contractual or statutory arrangements for a bank to provide payment commitments to a DGS, as well as the criteria for eligibility (i.e. sufficiently low risk) and management of the collateral. According to the guidelines, a bank may make payment commitments by either a Payment Commitment Arrangement or a Financial Collateral Arrangement. DGSs, relevant designated authorities, resolution authorities  and national regulators should implement the guidelines by December 31, 2015 and confirm to the EBA, by November 11, 2015, the status of the guidelines.

The translated guidelines are available on the EBA's website.

The Board of Governors of the Federal Reserve System announced the appointment of Federal Reserve Bank of Chicago’s Senior Vice President, Todd Aadland, as its Payments Security Strategy Leader.  Mr. Aadland will lead the initiative to address fraud risk and improve the safety, security and resiliency of the payment system.

View the press release.

The US Commodity Futures Trading Commission issued a final rule requiring all registered introducing brokers and commodity pool operators, and certain commodity trading advisors, to become and remain members of a registered futures association.  Currently, the only registered futures association is the National Futures Association.  Certain commodity trading advisors who qualify for an exemption from registration as a commodity trading advisor under CFTC regulation 4.14(a)(9) are not subject to this requirement.  Compliance with the final rule is required by December 31, 2015.

View the press release.

View the final rule.

The US Commodity Futures Trading Commission Chairman Timothy Massad announced that Eric J. Pan will be the CFTC’s new Director of the Office of International Affairs. Mr. Pan was previously the Associate Director for Regulatory Policy in the US Securities and Exchange Commission’s Office of International Affairs.  At the SEC, he oversaw international regulatory policy and represented the SEC in IOSCO and the Financial Stability Board.  
 
Chairman Massad also announced the retirement of CFTC employee Phyllis Dietz who served as Acting Director of the Division of Clearing and Risk and named Jeffrey Bandman as Acting Director of the Division of Clearing and Risk.

View the press release.

The US Commodity Futures Trading Commission announced the approval of the application of LedgerX LLC for temporary registration as a swap execution facility.  LedgerX is a Delaware limited liability company and wholly-owned subsidiary of NYBX Inc., a corporation based in Delaware.  Following the approval for temporary registration, the CFTC will undertake a further substantive review of the company’s application for full registration. If approved, LedgerX would be the first federally regulated bitcoin options exchange and clearing house that would list and clear fully-collateralized, physically-settled bitcoin options for the institutional market.

View the press release.

The US Securities and Exchange Commission announced the designation of Robert Cohen and Joseph Sansone as co-chiefs of the Division of Enforcement’s Market Abuse Unit.  The Market Abuse Unit is a national specialized unit that focuses on complex insider trading issues as well as other market trading misconduct and abuse.

View the press release.

The UK Payment Systems Regulator has announced the full membership of the new Payments Strategy Forum. Ruth Evans was appointed chair of the Forum in July this year. The 21 new members, apointed for an initial period of two years, are comprised of individuals who are advocates for consumers, retailers, small and medium-sized businesses, corporations and government, as well as individuals from credit unions, e-money firms and high street banks that are experienced providers of payment services. The Forum has been established to set strategic priorities for the development of innovative payment systems.
 
View the PSR announcement.

The European Banking Authority published the new taxonomy for national regulators to provide data to the EBA under the Implementing Technical Standards on supervisory reporting. The new taxonomy will be used for the first reports under the revised Liquidity and Leverage Ratio requirements and includes revised reporting structures for leverage ratio, and new parallel reporting structures for liquidity ratio for banks.
 
View the EBA announcement and taxonomy.

The European Banking Authority published a revised list of validation rules for submitting supervisory reporting data. The rules detail the standards and formats that are to be used for submissions of data by national regulators under the Capital Requirements Directive IV. The revised list displays the rules that have been deactivated due to technical issues or incorrectness.
 
View the EBA announcement and revised rules.

The Board of Supervisors of the European Banking Authority announced that Andrea Enria and Adam Farkas, Chairperson and Executive Director of the EBA respectively, would continue in their positions for a further five-year term from 2016 to 2021.  
 
View the EBA announcement.

The Financial Conduct Authority announced the launch of the new Financial Services Register, which aims to make it easier to locate a firm, individual or collective investment scheme or exchange that is regulated by the FCA or Prudential Regulation Authority. Firms that the regulators believe are providing regulated products or services without the necessary authorization are also included in the register for the first time, flagged in red. The Mutuals Public Register and Regulated Covered Bonds Register do not form part of the new register and can be searched separately.

View the new Financial Services Register.
 

The Legal Entity Identifier Regulatory Oversight Committee published proposals for a process for collecting data on parents of legal entities within the Global Legal Entity Identifier System. The LEI ROC is proposing to require entities that have or obtain an LEI to report their ultimate accounting consolidating parent and direct accounting consolidating parent, with the information to be published on the Global LEI System. LEIs are principally used by trade repositories to record derivatives transactions against particular legal entities. This initiative should therefore assist regulators in understanding the overall exposures of corporate groups. It is intended that the process would be phased in, according to priorities yet to be identified, with implementation starting near the end of 2015. The consultation closes on October 19, 2015.
 
View the consultation paper.

The G20 Finance Ministers and Central Bank Governors issued a communiqué highlighting the actions required to achieve the goals of the G20 for this year. The group endorses the Organisation for Economic Cooperation and Development Principles on Corporate Governance, welcomes the progress made on the principles on SME financing and aims to finalize remaining elements of the global financial reform agenda this year. In addition, the OECD published a report prepared by the Financial Stability Board on corporate funding structures and incentives. The report sets out: (i) the growth and differences across countries and regions in nonfinancial corporate debt since the financial crisis; (ii) insights into the incentives that are influencing these trends; (iii) associated financial stability concerns; (iv) the role of macroprudential policies; and (v) potential action and next steps that could be taken, such as the use of macro prudential tools to moderate the risks of corporate leverage growth.

View the communiqué.

View the principles of corporate governance.

View the progress report on principles on SME financing.

View the report on corporate funding structures and incentives.

The US Board of Governors of the Federal Reserve System and the US Office of the Comptroller of the Currency announced their approval of Bank of America and its subsidiary national banks to use the “advanced approaches” capital framework. The advanced approaches framework requires banks to meet certain criteria for risk-measurement and risk-management when calculating risk-based capital standards as developed by the Basel Committee on Banking Supervision. In order to use the advanced approaches framework, banks are required to conduct a satisfactory “parallel run” under the framework in order to show the relevant regulators that the bank is able to comply with the framework for at least four consecutive calendar quarters. Bank of America, along with its subsidiary national banks, fulfilled the parallel run requirement and will begin using the advanced approaches framework to calculate and disclose their risk-based capital measures beginning in the fourth quarter of 2015.

View the FRB press release.

View the OCC press release. 

The Financial Conduct Authority issued a consultation paper on the implementation of the Undertaking for Collective Investment in Transferable Securities V Directive and other changes to the FCA Handbook that affect investment funds. The consultation deals with three sets of proposals for the regulation of authorized investment funds and seeks views on: (i) the rules and guidance that will give effect to the most recent changes made to the UCITS V Directive; (ii) changes that are to be made to the Handbook to ensure that these work well in conjunction with the European Long Term Investment Funds Regulation, a new kind of fund vehicle which aims to contribute to financing the sustainable growth of the EU’s economy through targeting long term investment, which becomes applicable on December 9, 2015; and (iii) other changes to the Handbook relating to authorized investment funds, including clarification for some of the FCA’s reporting requirements and ambiguities to certain rules, so that the Handbook is kept up to date generally. The FCA is required to transpose the most recent changes to the UCITS V Directive by March 18, 2016. Comments are due by November 9, 2015 for Part I of the consultation, October 5, 2015 for Part II and December 7, 2015 for Part III.

View the consultation.
 

The International Organization of Securities Commissions published its final report on the peer review of implementation of incentive alignment recommendations for securitization. The report sets out the implementation progress of its recommendations, which were published in 2012, on incentive alignment in securitization. The recommendations relate to, amongst other things: (i) achieving global harmonization of incentives of investors and securitizers along the securitization value chain; (ii) jurisdictions evaluating and formulating approaches for such alignment; and (iii) minimizing any adverse effects of cross border securitization transactions that may arise due to different approaches in incentive alignment and risk retention. The review states that only five jurisdictions of the 25 jurisdictions have reported to have completed implementation of all the recommended measures: China, India, Indonesia, Japan and Turkey. Eleven jurisdictions have taken steps to implement all measures but those steps were either not all complete or were not yet in force across the whole securitization market: Argentina, Brazil, France, Germany, Ireland, Italy, the Netherlands, Russia, Spain, the United Kingdom and the United States. The report also states that EU jurisdictions and the US were further progressed in implementation than other jurisdictions with smaller securitization markets. IOSCO aims to conduct a further adoption monitoring and implementation review in 2016.

View the report.
 

The ​International Organization of Securities Commissions published its final report on the peer review of the regulation of Money Market Funds. The report sets out the implementation progress of 31 jurisdictions in adopting legislation, regulation and policies relating to MMFs. The review covers eight areas of reform: (i) the scope of regulatory reform, including a definition of MMFs in regulation and other investment products that have similar features and investment objectives to MMFs; (ii) limitations to the types of risks and assets that are taken by MMFs; (iii) valuation practices of MMFs; (iv) liquidity management for MMFs; (v) possible risks that may arise that could affect the stability of MMFs offering a stable net asset value; (vi) use of credit ratings by the MMF industry; (vii) disclosure to investors; and (viii) practices related to repurchase agreement transactions. The review found that all participating jurisdictions had progressed in the implementation of measures across the areas of reform, that progress varied between different jurisdictions and that the global MMF market was dominated by five jurisdictions, being the US, France, Luxembourg, Ireland and China. The US, Brazil, India, Italy and Thailand are the only jurisdictions that have fully implemented measures across all eight reform areas.

View the report.
 

The Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions published a consultative report on the harmonization of a first batch of key OTC derivatives data elements, focusing on key data considered to be important for consistent and meaningful aggregation on a global basis, as OTC derivatives become required to be reported to trade repositories in many jurisdictions globally. The consultation seeks views on matters including: (i) proposed definitions of key data elements; (ii) whether the proposed definitions cover different market practices globally; and (iii) whether any alternative approaches to those mentioned in the report would better achieve the goals of the report. Comments are due by October 9, 2015.

View the report.
 

The US Office of the Comptroller of the Currency Deputy Comptroller for Compliance Operations and Policy, Grovetta Gardineer, discussed the cybersecurity assessment tool issued by the Federal Financial Institutions Examination Council in June 2015. According to Gardineer, the tool provides a common framework for assessment across institutions and represents a step forward in terms of supervision of banks and thrifts in cybersecurity. While the use of the cybersecurity tool is optional for financial institutions, it will be used by OCC examiners to supplement their exam work and to obtain a stronger and more complete understanding of the cybersecurity risks faced by financial institutions.

View press release.

View the speech.
 

The European Securities and Markets Authority published a consultation paper on the three remaining draft Implementing Technical Standards under the Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation (together known as MiFID II) that it has not yet consulted upon. These draft ITS concern: (i) the format and timing of communications and publications in case of removal and suspension of financial instruments from trading on a trading venue; (ii) the standard forms, templates and procedures for authorization of Data Reporting Services Providers, covering DRSP applications for authorization, as well as notifications to changes of membership; and (iii) the format and timing of position reports by investment firms and market operators of trading venues for commodity derivatives, emission allowances and derivatives thereof. Comments to the consultation paper are due by October 31, 2015.

View the consultation.
 

The Financial Conduct Authority launched a new website for its Handbook of rules and guidance. The Prudential Regulation Authority launched its new website for the new PRA Rulebook. 

View the new FCA website.

View the new PRA website.

View the FCA announcement.

View the PRA announcement.

On August 27, 2015, the US Commodity Futures Trading Commission approved rule amendments and a new interpretive notice filed by the National Futures Association heightening protections for retail customers of NFA Forex Dealer Members. Among other things, the rule amendments (i) impose additional capital requirements on FDMs; (ii) require FDMs to collect security deposits for off-exchange foreign currency transactions from both eligible contract participant counterparties as well as retail counterparties; (iii) require FDMs to adopt and implement more stringent risk management programs; and (iv) require FDMs to provide additional market disclosures and firm-specific information on their websites.

Statements issued by Chairman Timothy Massad and Commissioner Sharon Bowen emphasized the heightened risks faced by retail customers investing in the foreign exchange markets, including the losses retail investors face as a result of minor price movements in the foreign exchange market. In her statement, Commissioner Bowen further stated that the CFTC should consider imposing additional regulations on retail forex dealers, including, but not limited to: (i) imposing concentration charges on RFEDs if they are overly exposed to a particular currency pair or liquidity provider to incentivize RFEDs to balance their, and their retail counterparties’ positions; (ii) requiring that RFEDs get the best possible prices for their retail counterparties; and (iii) requiring or incentivizing RFEDs to clear in order to lower the credit risks that retail foreign exchange investors face.

View the press release.

The European Securities and Markets Authority published a discussion paper on a review of the Regulatory Technical Standards for CCPs on the time horizons for the liquidation period for margin held by CCPs. The RTS currently specify a two-day time horizon as the liquidation period which should be sufficient for a CCP to transfer or liquidate the positions of a defaulting clearing member for exchange-traded derivatives.  Margins are modeled to cover the exposures arising from this time horizon. The original RTS use this two-day liquidation period but based on net margin models, where offsetting positions of different customers cancel one another out.  A key economic difference has been noted between the US and EU regimes for CCP margins, in that the US only requires a one day liquidation period but is calculated on a gross basis across all customer positions. A degree of harmonization of the two regimes is proposed to assist the EU in adopting a long-awaited equivalence decision for US CCPs under EMIR, with proposed adoption of a “one day gross” model for European CCP customer accounts.  The two-day standard for clearing members' house accounts and the five-day liquidation period for OTC products would be retained. Responses to the discussion paper are due by September 30, 2015. On the basis of feedback, ESMA may prepare revised draft RTS for public consultation. 

View the discussion paper and response form. 
 

The European Securities and Markets Authority published a document setting out examples of waivers for pre-trade transparency requirements under the current Markets in Financial Instruments Directive and its implementing legislation, known as MiFID I. The document includes positions adopted by ESMA’s predecessor, the Committee of European Securities Regulators as well as opinions issued by ESMA. The document is intended to assist national regulators in ensuring that their supervisory practices are in line with ESMA’s opinions and to assist firms in determining the extent of the MiFID I requirements. Under MiFID I, operators of regulated markets and multilateral trading facilities must publish current bid and offer prices and the depth of trading interests in shares admitted to trading on a regulated market unless an exemption applies. Exemptions are available from national regulators for shares based on the market model or the type and size of orders. ESMA intends to update the document on an ongoing basis.

View the ESMA document.

The European Central Bank published a report of the European System of Central Banks, which is comprised of the ECB and the national central banks of all EU Member States, on whether a measure should be included in the European Market Infrastructure Regulation which would facilitate the access of CCPs to central bank liquidity facilities. The report is required as part of the European Commission’s Review of EMIR. Under EMIR, there are no requirements for the provision of central bank liquidity facilities to CCPs.  The decision whether to offer such facilities is left to each central bank’s discretion. This framework is in line with the Treaty on the Functioning of the European Union and the Statute of the ESCB. The ESCB does not consider that introducing requirements in EMIR for CCP access to central bank facilities is appropriate to address any potential weaknesses and concludes that the current legal framework is sufficient to ensure access for CCPs to liquidity facilities offered by central banks.

View the report.

On August 24, 2015, the US Federal Deposit Insurance Corporation released the Summer 2015 issue of Supervisory Insights. The current issue includes papers on strategic planning and corporate governance. The journal also includes an article titled "Bank Investment in Securitizations: The New Regulatory Landscape in Brief" which explains how banks can structure their investment decision process in order to comply with these new rules resulting from the enactment of the Dodd-Frank Act.

View the Supervisory Insight.

On August 24, 2015, the US Federal Deposit Insurance Corporation released the Summer 2015 issue of Supervisory Insights. The current issue includes papers on strategic planning and corporate governance. The journal also includes an article titled "Bank Investment in Securitizations: The New Regulatory Landscape in Brief" which explains how banks can structure their investment decision process in order to comply with these new rules resulting from the enactment of the Dodd-Frank Act.

View the letter.

On August 19, 2015, the US Commodity Futures Trading Commission proposed amendments to existing regulations in order to provide further clarity to swap counterparties and registered entities concerning their reporting obligations for cleared swap transactions. In addition, the proposed amendments are intended to improve the efficiency of data collection and maintenance associated with the reporting of the swaps involved in a cleared swap transaction.

Among other things, the proposed rules are intended to provide clarity as to which counterparty to a swap is responsible for reporting creation and continuation data for certain swap transactions, including clarification as to whose obligation it is to report the extinguishment of a swap upon its acceptance by a derivatives clearing organization for clearing. The CFTC believes the proposed rules will reduce the probability of double-counting notional exposures and improve the capability to trace the history of a cleared swap transaction from execution between the original counterparties to clearing.

The proposed rule would modify Part 45 of the CFTC’s regulations, which the CFTC adopted on December 20, 2011. The comment period ends 60 days after the publication in the Federal Register.

View the press release.

On August 19, 2015, the SEC named Shelly Luisi the Associate Director in the Division of Corporation Finance. In her new role, Ms. Luisi will oversee the Disclosure Standards Office, which conducts research and assesses the Division of Corporation Finance program created to selectively review public-company filings. She begins her new role in September.

View the press release.

The Federal Reserve Bank of Richmond published an August Economic Brief titled "Living Wills for Systemically Important Financial Institutions: Some Expected Benefits and Challenges." The brief considers challenges faced by regulators who must oversee the transition of systemically important financial institutions to resolvability, and some possible approaches to managing them.

Challenges include ascertaining short-term financing needs, organizational complexity of SIFIs and cross-border resolution hurdles. However, regulators may find that their authority under Dodd-Frank to impose changes in firm structures, together with market forces that may incentivize more streamlined organizational structures, may offer means to address some of these challenges.

View the Economic Brief.

The UK Payment Systems Regulator announced that it is conducting a survey aimed at payment service providers who access payment systems indirectly. The survey is intended to inform the PSR’s consideration of whether action is required in the context of its two market reviews, which are on: (i) the supply of indirect access to payment systems, launched in May 2015; and (ii) the ownership and competitiveness of infrastructure provision (the hardware, software, secure telecommunications network and operating environments that are used to manage and operate payment systems), first announced in November 2014. Responses to the survey are due by September 23, 2015.

View the survey form.

The European Banking Authority issued a press release stating that it will conduct an analysis on the Net Stable Funding Requirements and Leverage Ratio under the Capital Requirements Regulation. This analysis is further to a recent call for advice issued by the European Commission to the EBA, seeking the EBA’s guidance so that it can prepare legislative proposals, if necessary, on technical issues that are not explicitly mentioned in the CRR. The Commission is seeking the EBA’s analysis on whether it is adequate to establish different NSFR and LR requirements for different types of institutions. This analysis would consider whether different firms could have, depending on their risk profile, size and business model: (i) different NSFR calibrations; (ii) simplified NSFR and LR requirements; or (iii) exemptions from the NSFR and LR requirements. The Commission also seeks analysis on other issues including: (i) the costs and benefits of excluding certain types of firms from the NSFR and LR requirements; (ii) the effects of the NSFR requirements on bank lending in the EU; and (iii) the impact of the NSFR on clearing, settlement and custody activities, on underwriting and market making, on business models and financing structures of institutions as well as on its interaction with risk-based capital requirements. The EBA must submit the reports on the NSFR and LR to the Commission by December 31, 2015 and October 31, 2016 respectively, although it plans to submit the LR report by July 2016.
 

View the EBA's press release.

View the European Commission's Call for Advice.

The Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions launched a consultation aimed at developing guidance for a uniform global unique transaction identifier. The development of a UTI was identified in September 2014 by the Financial Stability Board as one of the critical elements for a mechanism to produce and share global aggregated derivatives reporting data, along with the development a unique product identifier and the harmonization of certain other key data elements. Numerous countries have implemented legislative and regulatory requirements for the reporting of OTC derivatives aimed at improving transparency, mitigating systemic risk and preventing market abuse. To date 26 trade repositories have been established in 16 jurisdictions. The aggregation of data from those trade repositories is key to giving authorities a comprehensive view of the OTC derivatives market and activity and the purpose of the global UTI would be to uniquely identify each OTC derivative transaction required by authorities to be reported to trade repositories. The CPMI and IOSCO are seeking feedback that will assist in developing guidance on a UTI definition, the structure and format of a UTI and responsibility for generating a UTI. Implementation of the final guidance will be the subject of further work by the FSB. The consultation closes on September 30, 2015.

View the consultation paper.

The Single Resolution Board published a decision from its plenary and executive sessions of April 29, 2015 adopting its rules of procedure. The SRB works closely with the resolution authorities of EU member states that participate in the Single Supervisory Mechanism, the European Central Bank and the European Commission to ensure the orderly resolution of banks that are failing or likely to fail and to prevent any negative impact on the economy that could arise from such failings. The SRB has been operational in developing resolution plans for banks since January 1, 2015 and will be fully operational with a comprehensive set of resolution powers from January 2016. The SRB’s rules of procedure supplement the Singe Resolution Mechanism Resolution and include details on the SRB’s chairmanship, attendance of members at meetings, decision-making and voting.

View the Plenary decision.

View the Executive decision.