regulatory insights no. 14...irish funds mifid ii q&a 35 consultation paper 111 – consultation...

Issue No. 14

Regulatory Insights

State Street quarterly overview of important legislative and regulatory developments in

the European Union

FOREWORD 2

EUROPE 6

Review of the European Supervisory Authorities 7

Consultation on a Future EU Post‑Trade Strategy 10

Securitisation 11

Cross‑Border Derivatives 12

MiFID II 13

European Commission 2018 Work Programme 14

EBA Guidelines on Internal Governance 16

EBA Opinion on the Impact of Brexit 18

ESMA 2018 Work Programme 20

Risk Reduction Measures 22

European Commission Consultation on Sustainable Finance 23

EMIR: Variation Margin Requirements 25

EUROPEAN REGULATORY TIMELINE 26

EUROPE (CONTINUED) 28

Cybersecurity 28

GERMANY 30

Reform of the German Deposit Protection Fund 31

IRELAND 32

ETF Discussion Paper 33

Investment Firms, UCITS and AIFMD Q&As 34

Irish Funds MiFID II Q&A 35

Consultation Paper 111 – Consultation on the Second Edition of the Central Bank Investment

Firms Regulations 36

Central Bank Publishes Revised UCITS (Amendment) 2017 37

ITALY 38

Individual Savings Plans 39

LUXEMBOURG 40

CSSF Update on Money Laundering and Terrorist Finance Risks 41

CSSF Update on Assessment of Knowledge and Competence 42

CSSF Update on Prudential Assessment of Acquisition 43

CSSF Update on Remuneration Policies 44

CSSF Update on Trading Venues 44

CSSF Update on Out‑of‑Court Complaint Resolution 45

CSSF Update on Default Rules and Procedures 45

THE NETHERLANDS 46

Coalition Agreement with Tax Implications for Institutional Investors 47

UNITED KINGDOM 48

Amendments to the SORP for the Financial Statements of UK Authorised Funds 49

ABBREVIATIONS 50

Contents

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Foreword

Welcome to State Street’s Regulatory Insights’ newsletter, our quarterly overview of important legislative and regulatory developments in the European Union (EU).

As everyone prepares for the festive season, the industry is making its final push to meet critical January compliance deadlines for regulations such as Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation (together MiFID II) and the EU Benchmarks Regulation. With these regulations going live in January, we are all in for an interesting start to the New Year, as they take effect and change the way markets function and financial services are performed across the EU.

Ongoing Brexit negotiations have continued to be one of the most dominant issues in 2017. The selection process for the future homes for the European Banking Authority (EBA) and the European Medicine Agency (EMA) was interesting to follow. Following intense discussions and lobbying by Member States, Paris was chosen for the EBA and Amsterdam for the EMA.

The negotiations on Brexit continue to feel like a political thriller. Initially, it was hoped that sufficient progress would be made by October 2017 in Phase 1 of the negotiations on the issues of financial settlement and the Irish border. Agreement on the Irish border issue was reached only at the very last minute – just before the final deadline ahead of the December Council. At the time of writing, events are still unfolding, but it is important that Phase 2 negotiations start in the New Year and that an agreement is reached on a transition period and its relevant details. However, the decision on a transition period is expected to take some time. Nevertheless, the agreement to move to Phase 2 has caused a sigh of relief. The industry has welcomed the positive news and immediately emphasised the need for getting early clarity on a transition period.

2 REGULATORY INSIGHTS NO. 14

The United Kingdom’s (UK) EU (Withdrawal) Bill has also been delayed, although it is now going through the legislative process, with significant numbers of amendments proposed. It is crucial that the Bill and the relevant secondary legislation are completed in time, before Brexit becomes effective.

On the broader regulatory front, things have remained just as interesting. The European Commission published its proposal for the review of the European Supervisory Authorities (ESAs), which include the European Securities Market Authority (ESMA), the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) in September 2017. Aside from changes to the governance and funding of the ESAs, the European Commission is also proposing increased competences for them. These include direct supervisory powers for ESMA over, for example, data services providers or certain benchmark providers. Most importantly, it is proposed that in the context of asset management, ESMA would play a direct role in reviewing the delegation arrangements proposed by individual firms. ESMA would be in a position to make recommendations to national competent authorities (NCAs) on whether or not the arrangements comply with existing EU rules. The review is now going through the legislative process. It is expected to take some time, given the somewhat controversial nature of certain elements of the proposal.

The ESAs review is part of the broader ongoing considerations about the future structure and functioning of the EU, also triggered by Brexit. This has led to the European Commission publishing a roadmap for deepening Europe’s Economic and Monetary Union (EMU). The package presents initiatives on the deepening of EMU and the future of EU finances. Among these are proposals to turn the European Stability Mechanism (ESM) into a European Monetary Fund (EMF), as well as detailed proposals on the functions of a European Minister of Economy and Finance.

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In the context of the European Market Infrastructure Regulation (EMIR) and the phasing in of variation margin requirements, ESMA addressed a key industry concern by issuing a statement suggesting to NCAs that they should “generally apply their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in a proportionate manner”. In the UK, the Financial Conduct Authority (FCA) made it clear on 8 December 2017 that firms whose physically settled FX forwards are likely to be outside the scope of the amended requirements would not be required to continue putting processes in place to exchange variation margin.

Other important files such as the Risk Reduction (RRM) Package, the EMIR review and the Pan-European Personal Pension Product (PEPP) are making their way through the legislative process at different paces.

As we approach the end of 2017, it is important to look forward to developments in the New Year, especially as 2018 is the last full year to progress legislative and regulatory changes before the European Parliament elections on 2019. While we don’t expect the same flurry of new initiatives next year as there was during last couple of years of post-crisis regulatory reform work, there are still important new initiatives to be launched. These include European Commission proposals on removing barriers to cross-border fund distribution, on Sustainable Finance, and on Non-Performing Loans, to name just a few.

So overall, the regulatory environment continues to be interesting and requires firms’ full attention. As always, we hope that this publication is a helpful aid in navigating that environment and we look forward to providing you with these overviews in the New Year.

DR. SVEN S. KASPER

EMEA Head of Industry & Government Affairs State Street


FOREWORD

Europe

The European Commission published its legislative package on the review of the ESAs. The proposals aim to strengthen and enhance the role of all three ESAs, both in terms of their powers and their relationship with national competent authorities (NCAs), with a view to promoting supervisory convergence across the EU.

On 20 September 2017, the European Commission published its legislative proposal for the review of the three ESAs – the EBA, the EIOPA and the ESMA. The proposal built on the feedback received by the European Commission on their consultation, which concluded in May 2017.

The objective of the package of reforms is to enhance regulatory and supervisory convergence between the ESAs and national supervisors, in order to facilitate further market integration at the EU-level. Achieving further integration is a key component of the European Commission’s wider Capital Markets Union (CMU) agenda.

The European Commission also considers the impact of the UK’s decision to leave the EU. In light of Brexit, there is an emerging view that current supervisory arrangements amongst the 27 Members will need to be re-examined and strengthened.

The Review proposes changes to the ESAs in the following three broad areas:

• Supervisory powers

• Governance structures

• Funding structures.

Review of the European Supervisory Authorities

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The main elements of the proposal are presented as an “Omnibus Regulation”. This would see amendments made to nine separate pieces of existing EU legislation, including the three regulations establishing the ESAs.

The package also proposes several minor changes to other pieces of legislation, such as MiFID II, the Solvency II Directive and the European Systemic Risk Board (ESRB) Regulation.

The supervisory powers of the ESAs would be enhanced under this legislative proposal, particularly in relation to the day-to-day activities and supervisory objectives of national supervisors. The ESAs would be required to develop a Strategic Supervisory Plan, setting out strategic objectives and priorities. These would be communicated to NCAs in the form of a recommendation. The ESAs would then assess the work programmes of each NCA, on an annual basis, to ensure it is aligned with the Strategic Supervisory Plan.

One of the most notable provisions in the Review is the proposal to give the ESAs an enhanced role in the oversight of delegation and outsourcing arrangements. This would mean that an authority could recommend that an NCA either review or withdraw a firm’s authorisation, where a material part of the firm’s activities are being delegated or outsourced to a third-country. This could be important for industry in the context of Brexit.

ESMA is also given direct supervisory powers in the following areas:

• The authorisation and supervision of funds under the European Venture Capital Fund (EuVECA), European Social Entrepreneurship Manager, (EuSEF) and European Long-Term Investment Fund (ELTIF Regulations)

• Data reporting service providers under MiFIR

• Critical benchmarks and third-country benchmarks used in the EU

• The supervision and approval of certain types of prospectuses.

The European Commission has concluded that these areas are either of particular importance or they contain a significant cross-border element warranting supervision at EU level. ESMA already directly supervises Trade Repositories and Credit Ratings Agencies in the EU.

The European Commission has also proposed replacing the existing Management Board of the ESAs with a new Executive Board with full-time independent members and a chairperson.

Under this proposal, ESMA would have five members on its board – given its additional responsibilities. The EBA and EIOPA would have three independent members.


EUROPE

In addition, there would be a transfer of decision-making competences from the Board of Supervisors to the Executive Board in certain areas. These would include dispute resolution and breaches of Union law. The objective of these provisions is to encourage the ESAs to adopt a more European perspective in their decision-making.

The Review proposes a move to a joint-industry funded model. The current funding model, based on contributions from NCAs would be replaced by an industry levy. The contributions from industry would come from firms indirectly supervised by the ESAs. There would also be contributions from firms directly supervised by ESMA. The EU will continue to contribute from its budget, but the amount will be capped at 40%. The methodology to determine the size of contributions from relevant market participants should be finalised in Level 2 regulations.

The co-legislators have now started their scrutiny of the European Commission’s proposal. At the Member State level the Review was discussed by Finance Ministers in the Economic and Financial Affairs (ECOFIN) Council meeting in November 2017. The majority of Member States were critical of the proposal, although a handful of Member States, including France and the Netherlands, were supportive. This has been reflected in the Council Working Group, which consists of “experts” from Member States, who have already met twice.

Here a clear divide has emerged. The concerns relate to both the substance of the proposal, particularly around the proposed changes to governance of the ESAs and its legal basis. Discussions in the the Council of the EU representing Member States are set to resume under the Bulgarian Presidency in January 2018.

Progress in the European Parliament has been much slower. The Parliament only recently confirmed the lead negotiators on the proposal, with the German MEP Burkhard Balz (EPP Group) and the French MEP Pervenche Berès (S&D Group) assuming the roles of co-rapporteurs. The Parliament will prepare three separate reports. The main report will cover the Omnibus regulation, while the two smaller reports will deal with the proposed changes to MiFID II and Solvency II and the amendments to ESRB Regulation. The first exchange of views is expected at the European Parliament’s Economic and Monetary Affairs (ECON) Committee in January 2018.

Stakeholders have the opportunity to provide feedback to the European Commission on their proposal. The deadline for the feedback period has been extended several times – most recently to 23 January 2018.

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Consultation on a Future EU Post-Trade Strategy

The European Commission launched a public consultation on a future EU post-trade strategy. The consultation addressed the areas of clearing, settlement and collateral management, as part of the Capital Markets Union objective to facilitate cross-border investment.

The European Commission’s consultation was published on 23 August 2017 and is based on the final report of the European Post-Trade Forum (EPTF), released in May 2017.

The consultation is divided into two sections. The first section focuses on EU and global trends, new technologies and competition in post-trade markets. The European Commission notes the increasing role played by technology and automation in the EU post-trade environment as a key trend. The European Commission also notes the traditionally low levels of competition within the EU in the provision of settlement and clearing services, although provisions under EMIR and MiFID II are having a positive impact in this area. In the global context, the consultation considers the impact the departure of the UK from the Single Market is having on the attractiveness of the EU post-trade markets.

The second part of the consultation focuses on identifying and addressing the post-trade barriers that still remain, following previous initiatives (for example, the Giovannini Reports). This section draws heavily on the EPTF report which identified 12 existing barriers. These include barriers such as the lack of convergence and harmonisation in information messaging standards and the inconsistent application of asset segregation rules for securities accounts. The consultation is seeking more evidence, in order to quantify the impact of these barriers. The European Commission is also seeking feedback on whether the proposed solutions are sufficient.


EUROPE

On 26 October 2017, the European Parliament voted overwhelmingly in favour of the proposed Securitisation Regulation. The European Council formally approved it on 20 November 2017.

There were some last-minute concerns during the “jurists-linguists” process. These centred on the eligibility of securitisations containing self-certified mortgages for the “simple, transparent and standardised” label. Subsequently, preferential capital treatment had threatened to cause further delays to the proposal.

The proposed Securitisation Regulation was launched in September 2015, as part of the CMU agenda.

The Regulation is expected to be published in the Official Journal in December 2017.

Securitisation

The EPTF was established by the European Commission in early 2016 to support its work on post-trade issues, and in particular, to identify any outstanding or new barriers in the European post-trade environment. Its members are representatives from various associations, individual experts and representatives from ESMA and the European System of Central Banks (ESCB).

The deadline for responding to the consultation was 15 November 2017. The responses received by the European Commission will contribute to its communication on post-trade, planned for the end of 2017, and also to future legislative reviews.

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Cross-Border Derivatives

The EU and United States (US) have reached agreement on a common approach on derivatives trading venues, allowing European firms to trade derivatives on US platforms while continuing to be compliant with EU requirements and vice-versa.

On 13 October 2017, the European Commission Vice-President, Valdis Dombrovskis, and the Commodity Futures Trading Commissioner (CFTC) , Christopher Giancarlo, released a joint announcement, in Washington DC, on an agreed common approach on equivalence of derivatives trading platforms. Both jurisdictions will recognise the relevant respective requirements of the other. This will allow EU counterparties to comply with the MiFIR trading obligation while ensuring that US counterparties are compliant with the trade execution rules under the US Commodity Exchange Act.

In addition, both the European Commission and CFTC adopted decisions recognising the equivalency and comparability of each-others’ regulatory frameworks on the margin requirements for “uncleared” over-the-counter (OTC) derivatives (or “swaps” in the US). This will help to prevent the disruptive scenario where cross-border market actors have to meet two sets of requirements and, potentially, post double the amount of margin required.

The European Commission’s equivalence decisions, which have been adopted as “implementing acts” will enter into force the day following that of its publication in the Official Journal. The implementing act relating to the margin requirements was published in the Official Journal on 14 October 2017.


EUROPE

MiFID II

As the all-important date of application of the Markets in Financial Instruments Directive and the Markets in Financial Instruments Regulation (together, MiFID II) approaches, the European Commission and the ESMA continue to finalise Level 2 Measures.

On 29 September 2017, ESMA submitted the final draft regulatory technical standards (RTS) on the trading obligation for derivatives, which is set out in MiFIR to the European Commission. In the final report, ESMA addressed the feedback on its June 2017 consultation paper, as well as the feedback on the earlier discussion paper, which was published in September 2016.

ESMA has largely decided to stick to its initial approach, although it has developed a more precise specification of derivative classes which will be subject to the trading obligation. The trading obligation is set to apply to “fixed-to-floating” interest rate swaps denominated in US Dollars, Euros or Sterling, as well as certain types of credit default swaps, from 3 January 2018. The implementation of the trading obligation will be phased-in, according to the different categories of counterparties.

The European Commission endorsed the draft RTS, without amendments, and published it on 17 November 2017.The European Council and European Parliament have both indicated their intention that they will not raise objections to the RTS. The final endorsement by Ministers is expected later in December 2017, with the RTS expected to be published in the Official Journal shortly thereafter.

In addition to the draft RTS on the trading obligation, ESMA provided a couple of further MiFID II-related updates. On 3 October 2017, ESMA updated its questions and answers (Q&A) document on investor protection and intermediaries topics. The updated document includes 13 new answers to questions, including responses on best execution, information on costs and charges and client categorisation. ESMA also published a briefing document on the legal entity identifier (LEI) on 9 October 2017. This is the 20-digit code enabling the clear and unique identification of legal entities participating in financial transactions. ESMA has reiterated the importance of the LEI for MiFID II compliance.

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On 24 October 2017, the European Commission published its annual work programme for 2018.

The European Commission document: An agenda for a more united, stronger and more democratic Europe is accompanied by various annexes, setting out the European Commission’s priorities over 2018. The European Commission had identified the proposal for a Pan-European Personal Pension Product (PEPP) and the review of EMIR as priority issues.

There are also a number of new initiatives identified. These include a legislative proposal on the development of a secondary market for non-performing loans, which is expected in Q1 2018. There will also be a non-legislative communication on the establishment of a permanent European Minister of Economy and Finance. We can expect this to generate political attention and debate.

Accompanying the 2018 work programme is a list of EU policy measures – both proposed and obsolete – which are likely to be withdrawn or repealed by April 2018. Most notably, the list includes the withdrawal of the EU Bank Structural Reform (BSR) proposal. The aim of this proposal was to separate risky trading activities from a bank’s retail operations, in order to safeguard consumer deposits.

As a result of the financial crisis, there has been a globally-driven push to end the concept of “too big to fail”. In 2012, the European Commission established a High Level Expert Group, led by the Governor of the Central Bank of Finland, Erkki Liikanen. The Group was tasked with examining possible structural reforms for the EU banking sector. Their policy recommendations were set out in the Liikanen Report, the genesis of the European Commission’s 2014 BSR proposal. The report makes five key recommendations and strongly recommends the mandatory separation of proprietary trading and other high-risk trading to protect retail deposits. This framework would be similar to the US “Volcker Rule” or the UK bank ring-fencing regime.

European Commission 2018 Work Programme


EUROPE

The European Commission took the recommendations on board and the BSR proposal prioritised mandatory separation, either by the legal separation of the ownership of entities for proprietary trading from those for deposit taking, or by the use of subsidiaries with tighter restrictions on intra-group connection. The BSR also proposed an outright ban on proprietary trading in the EU.

However, despite the apparent strong political will to reform “too-big-to-fail”, negotiations have been stalled in the European Parliament since 2015, with policymakers divided on whether mandatory structural separation could be avoided if banks increase their capital. Given the lack of political consensus, the European Commission took the decision to withdraw its proposal.

The European Commission commented that the financial stability vulnerabilities, which the BSR aimed to address, have been largely mitigated by the implementation of other regulatory measures in the banking sector, particularly those relating to the strengthening of supervisory and resolution measures in the Banking Union.

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EBA Guidelines on Internal Governance

On 26 September 2017, the EBA issued revised Internal Governance guidelines for financial institutions in the EU, placing more emphasis on the role and responsibilities of the “management body”.

According to the EBA, prevalent corporate governance weaknesses in the banking sector are believed to have contributed to excessive risk-taking which in turn led to the failure of individual institutions and caused systemic problems throughout the global economy. Also, in the aftermath of the financial crisis, there have been significant efforts by policy makers at an international level, to address poorly designed governance arrangements and mitigate their “potentially detrimental” effect on the banking system as a whole.

The EU’s response to this issue has most recently manifested itself through the EU Capital Requirements Directive (CRD) IV, which requires institutions to embed robust governance arrangements.

Those arrangements include:

• Establishing an organisational structure that delineates clear lines of responsibility

• Effective processes to identify and mitigate any exposures to actual and potential risks

• Adequate internal control mechanisms

• Remuneration policies that promote sound and effective risk management.

Following industry consultation, the EBA sought to revise its original 2011 set of Internal Governance guidelines in line with the new requirements laid out in CRD IV, in order to further harmonise existing internal governance arrangements across the EU, while also introducing an element of proportionality in their application to EU financial institutions.


EUROPE

The revised guidelines place greater emphasis on the responsibilities of the management body and the subordinate committees in risk oversight. In addition, they aim to improve the risk management function of financial institutions, primarily by instilling the importance of an escalation path between it and the management body, as well as ensuring that supervisors are able to effectively monitor risk governance. In light of the “Panama” scandals that emerged in 2016, the EBA have bolstered the “know-your-structure” provisions to ensure the management body can be kept abreast of the risks associated with complex and opaque structures.

Finally, the framework for business conduct has been further developed with more emphasis given to the establishment of a risk culture, a code of conduct and the management of conflicts of interest.

The guidelines will apply to competent authorities and EU institutions (on a consolidated and individual basis) from 30 June 2018 onwards.

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EBA Opinion on the Impact of Brexit

On 12 October 2017, the EBA published an opinion which deals with some of the political issues around the UK’s departure from the EU.

The EBA released an opinion on the relocation of banking activities following Brexit. This is targeted at NCAs deliberating on relocation requests. Since existing third country provisions in EU legislation were not designed with Brexit in mind, the opinion includes a series of recommendations for the European Commission to consider. The opinion specifically covers:

• The authorisation process for financial institutions

• Internal governance, risk management and outsourcing

• Prudential requirements

• The approval of banking internal models.

The EBA emphasises that NCAs should apply existing authorisation processes, without exemptions, derogations, or “fast-track” procedures.

Financial institutions seeking to relocate activities must demonstrate the rationale for change and their organisational structure should be commensurate with the size, nature and complexity of their activities. NCAs are advised to refuse authorisations where factors such as the geographical distribution of activities indicate clearly that an applicant has opted for a particular Member State in order to evade stricter standards in another Member State within whose territory it carries out a greater portion of its activities. In addition, the EBA deems equivalence access under MiFIR/MiFiD II for third country firms to be “sub-optimal”.

The opinion also focuses on ensuring that there is a local sound and effective governance framework within the relocated institutions. The EBA states that: “outsourcing should not be allowed if it ends up with institutions operating as empty shell companies”.


EUROPE

With respect to market risk and credit risk, entities located in the EU27 domain post-Brexit may use back-to-back transactions or intra-group transactions to transfer some of the risks to a non-EU/European Economic Area (EEA) entity, in accordance with current legislation. However, these transactions must not threaten the continuity of the EU27 entity in the event of institutional failure to which the risks have been transferred. To mitigate this risk, the EBA suggests that the entity located in the EU27 must have enough capital in excess of the Pillar 1 minimum requirement, as well as in-house risk management and operational capabilities to cover any material risks stemming from the unhedged portfolio.

The EBA advises that, for internal model approvals, EU27 competent authorities can rely on assessments conducted by UK competent authorities when considering applications where the assessment was for a similar rating system in the same class of exposures.

It is now up to NCAs to take on board and implement the EBA’s recommendations.

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ESMA 2018 Work Programme

On 29 September 2017, ESMA published its 2018 work programme and identified four key areas central to its work in 2018.

The areas have been summarised as:

Supervisory convergenceESMA will continue its work to support the consistent and efficient implementation of new supervisory requirements particularly when it comes to the application of MiFID/MiFIR. In this context, ESMA will ensure that the necessary IT systems are in place and will finalise convergence tools, such as peer reviews and stress testing.

Risk assessmentESMA will seek to enhance the analytical input into its operational work, in areas such as product interventions and impact assessments and will establish stronger data management and statistics capabilities.

Completing the EU Single RulebookESMA will seek to complete outstanding technical standards and technical advice on a number of regulations.

Direct SupervisionESMA strengthens its approach to the supervision of Credit ratings Agencies (CRAs) and Trade Repositories (TRs), in order to ensure compliance with the relevant regulations. ESMA has also stated that it expects a small increase in the number of entities that falls under its supervision in 2018, particularly TRs.

While ESMA notes the European Commission’s recent proposal for a review of the European Supervisory Authorities (the ESAs Review) and the ongoing review of EMIR, the work programme does not include new tasks that may arise from these initiatives. This is particularly interesting in the context of the ESAs Review, considering the package of legislative proposals to give ESMA additional powers. In addition, ESMA refers to the UK’s decision to leave the EU, and considers how the subsequent preparatory work could have an impact on its other areas of work.


EUROPE

The work programme also sets out more specific areas of focus in 2018:

• Investment management including work convergence in stress testing, the establishment of a central database for authorised Money Market Funds and a peer review of guidelines on exchange-traded funds (ETFs) and other UCITS issues

• Investor protection including further guidelines, Q&As, opinions and statements on MiFID II/MiFIR

• Market integrity and market data including the consistent application of reporting rules under Securities Financing Transactions Regulation (SFTR), MiFIR, EMIR and the Benchmarks Regulation. ESMA will also seek to provide further guidance on the application of the Benchmarks Regulation (which applies from January 2018), as well as maintaining a register of administrators and third country benchmarks

• Post‑trading including further guidance on the application of the SFTR and EMIR and the annual stress tests for central counterparties (CCPs)

• Secondary markets including further guidelines and Q&As on the application of MiFID II

• Level 2 measures on the Prospectus Regulation and Securitisation Regulation.

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Risk Reduction Measures

EU reaches political agreement on elements of the Risk Reduction Measures (RRM) package being negotiated under the “fast-track” procedure.

On 25 October 2017, the EU Institutions (the European Commission, Parliament and Council) agreed on the three fast tracked elements of the package of reforms to the Capital Requirements Regulation (CRR)/Directive (CRD) IV and the Bank Recovery and Resolution Directive (BRRD) proposed in November 2016. The review aims to address outstanding gaps in EU rules on the capital, liquidity and resolvability of financial institutions. This is to align them with corresponding international standards.

The three proposals that were negotiated separately from the overall package of reforms include:

• A five year phase-in period to allow banks to adapt to the new Ninth International Financial Reporting Standard and its effect on capital

• The “grandfathering” of the large exposures exemption for EU sovereign debt, denominated in the currency of any other Member State. This includes a new capital base to calculate the large exposures limit and a hardened requirement for exposures between large systemically important banks

• A harmonised ranking of unsecured debt instruments in an insolvency hierarchy, which facilitates implementation of the total loss absorbing capacity standard in the EU

Negotiations on these issues were “fast-tracked” to avoid potential abrupt disruption or disharmony in the EU banking system.

The EBA will publish guidelines on disclosure requirements associated with IFRS 9 and Large Exposures by 30 June 2018. Technical discussions will now take place between EU Institutions on all fast-track elements to finalise the texts, before they can be published in the Official Journal. This is expected at the beginning of 2018 in line with international compliance deadlines.


EUROPE

On 29 November 2017, the European Commission published a consultation on the duties of Institutional Investors and Asset Managers regarding sustainability. This was accompanied by a separate consultative “inception impact assessment” on the same initiative.

Both the consultation and impact assessment – precursors to the European Commission’s Action Plan – explore only specific aspects of that broader Plan. It is expected that the Plan containing possible legislative measures on sustainable finance will be launched in Q1 2018. The impact assessment seek to clarify if and how the duties of institutional investors and asset managers in relation to sustainability could contribute to a more efficient allocation of capital, as well as to sustainable and inclusive growth. The deadline for feedback was 11 December 2017. If the responses indicate that action at EU level would be more beneficial than at Member State level, the European Commission will propose targeted legislative and/or non-legislative measures in Q2 2018.

The possible policy options that the European Commission intend to evaluate include: disclosures on how institutional investors and asset managers are taking sustainability factors into account; enhancing the consideration of material sustainability factors in the investment strategy/asset allocation; factoring sustainability risks as part of risk management processes; and adapting governance arrangements to ensure appropriate decision-making capabilities.

The consultation seeks industry views from a range of market participants – such as asset managers, pension providers, index providers, beneficiaries and end clients – on possible legislative and non-legislative action to improve the assessment and integration of sustainability factors in institutional investors and asset manager’s decision-making processes.

European Commission Consultation on Sustainable Finance

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In particular, it explores industry appetite for embedding sustainability considerations into their governance, investment strategy, asset allocation and risk management, with an emphasis on proposing additional disclosures around existing and future sustainability-related practices. End-investors are also asked to provide comments on behaviours driving their investment decisions in relation to sustainability. Feedback is also sought on the extent to which institutional investors and asset managers provide information on sustainable factors that would inform their investment strategies. The deadline for responses to the consultation is 22 January 2017.

The consultation also draws upon an interim report, issued by the European Commission’s High Level Expert Group (HLEG) in July. The interim report recommended the development of a comprehensive EU strategy on sustainable finance. In addition, it recommended that Environmental, Social and Governance (ESG) factors, as well as long-term financial sustainability should be explicitly integrated into the fiduciary duties of institutional investors and asset managers. The HLEG final report should be published by the end of this year and will provide a full set of recommendations for developing a comprehensive strategy on embedding sustainable finance for the EU.


EUROPE

EMIR: Variation Margin Requirements

ESAs issue a joint statement signalling their intent to review Level 2 standards on the exchange of variation margin for physically-settled foreign exchange (FX) forwards.

On 24 November 2017, the ESAs issued a joint statement on the exchange of variation margin for physically-settled FX forwards under EMIR. The statement indicates that the Board of the ESAs is currently undertaking a review of the RTS on risk mitigation techniques for OTC derivatives not cleared by a central counterparty. The ESAs will look to develop draft amendments to ensure that the Level 2 rules on the treatment of variation margin for physically-settled FX forwards are aligned with international standards and consistent with the supervisory guidance applicable in other important jurisdictions. Once the review is finalised, any proposed amendments will be submitted to the European Commission, within one month of the joint statement.

The statement addresses the difficulties faced by certain end-users and sets out the ESA’s expectation that national competent authorities adopt a proportionate approach in their application of their supervisory powers and their day-to-day enforcement of applicable legislation.

The EMIR requirement to post variation margin for OTC derivative transactions that are not centrally cleared is being phased in from February 2017 and is set to apply to physically-settled FX forwards from 3 January 2018. While the rules are based on internationally agreed standards, various jurisdictions have adopted different approaches to implementation, resulting in differences in terms of the scope of the requirements, most notably with the US. Similarly, industry has faced operational difficulties, as many firms have typically traded physically-settled FX forwards on an un-collateralised basis.

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European Regulatory Timeline

2015/Q1 2016/Q1 2017/Q1 2018/Q1Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q42019/Q1

Publication in Official Journal


Text published in Official Journal

Political agreement on Level 1 text reached

Application date for settlementinternalisation reporting

Level 2 rules on settlement internalisation and CSD requirementsLevel 2 rules on prudential requirements for CSDs

Level 2 rules on settlement discipline Estimated application date forsettlement discipline rules

Application date extended to Jan 2018


Application date

Political agreement onLevel 1 text reached


Political agreementon Level 1 text

Application date

Application date

Level 2 technical standards published

Application date

Delegated Acts and RTS published

Member Statetransposition date

Consultation on Level 2 measures launched

Application date fornew funds

Application date forexisting funds

Consultation on draft rules on Key Information Document

Final Level 2 rules on the Key Information Document




Estimated application date for phase-in of reporting requirements

Application date for rules on reuse

Application date for transparency requirements

Discussion paper on draft Level 2 rules

Application date

Application date


Level 2 guidelines on stresstesting scenarios published

IORP II

MiFID II/MIFIR

MMFs

PRIIPs

SFTR

Risk Reduction Package(“Fast-Track Elements”)

Shareholders Rights Directive

GDPR/Data Protection

CSDR

Benchmarks

Completed milestones

Future milestones

Application date


2015/Q1 2016/Q1 2017/Q1 2018/Q1Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q42019/Q1



Text published in Official Journal


Application date for settlementinternalisation reporting

Level 2 rules on settlement internalisation and CSD requirementsLevel 2 rules on prudential requirements for CSDs

Level 2 rules on settlement discipline Estimated application date forsettlement discipline rules

Application date extended to Jan 2018


Application date



Political agreementon Level 1 text

Application date

Application date

Level 2 technical standards published

Application date

Delegated Acts and RTS published

Member Statetransposition date

Consultation on Level 2 measures launched

Application date fornew funds

Application date forexisting funds

Consultation on draft rules on Key Information Document

Final Level 2 rules on the Key Information Document




Estimated application date for phase-in of reporting requirements

Application date for rules on reuse

Application date for transparency requirements

Discussion paper on draft Level 2 rules

Application date

Application date


Level 2 guidelines on stresstesting scenarios published

IORP II

MiFID II/MIFIR

MMFs

PRIIPs

SFTR

Risk Reduction Package(“Fast-Track Elements”)

Shareholders Rights Directive

GDPR/Data Protection

CSDR

Benchmarks

Completed milestones

Future milestones

Application date

27

Cybersecurity

The European Council has approved the Cybersecurity Action Plan, while the proposed Regulation, which would give the European Network and Information Security Agency (ENISA) a permanent mandate, continues to be scrutinised by the co-legislators.

On 6 December 2017, the Cyber-security Action Plan was adopted by the Ambassadors from EU Member States (COREPER II). The Action Plan was formulated following the October “Council Conclusions”, which outlined the need for such a plan, in order to facilitate the holistic development of the European Commission’s cybersecurity proposals.

The European Commission launched its ‘EU Cyber Strategy’, which is designed to promote cyber resilience across the EU, in September 2017. The Action Plan was approved by Ministers in the General Affairs Council (GAC) meeting on 12 December 2017. In addition, the Cybersecurity Act continues its path through the EU legislative process. One of the most notable elements contained in the proposed Regulation is the enhanced mandate for ENISA. It is now effectively becoming the EU’s cybersecurity authority. At Parliament level, the German MEP, Angelika Niebler (EPP Group) was appointed Rapporteur, on 30 October 2017, with the Parliament’s Industry, Research and Energy (ITRE) Committee taking the lead in this process.

The first public hearing took place in late November 2017 and the draft report is expected in February 2018.

At European Council level, the proposal has been discussed by the Council Working Party in three separate meetings throughout November 2017. One of the main concerns amongst Member States is the interaction between the new strengthened ENISA and existing national agencies. Member States had until 13 December 2017 to submit written comments to the Estonian Presidency, with further Working Party Meetings set to take place in January 2018, under the incoming Bulgarian Presidency.

Addressing concerns around cybersecurity was a key challenge identified in the mid-term review of the Digital Single Market.

Europe (continued)


EUROPE

Germany

Reform of the German Deposit Protection Fund

On 1 October 2017, new by-laws of the Deposit Protection Fund (Statut des Einlagensicherungsfonds) came into effect.

The by-laws affect the voluntary deposit protection regime in Germany, but not the mandatory protection applicable throughout the EU.

Key Elements HighlightedSince 1 October 2017, federal, regional and local government and “bank-like” clients (including certain investment firms and financial institutions) are no longer protected. As professional market participants, these clients are considered to have the knowledge needed to evaluate risks. Deposits made by these clients before 1 October 2017 and remaining with the bank after 1 October 2017; however, will be protected by grandfathering arrangements.

Protection will remain in place for companies, institutional investors and semi-governmental agencies, such as collective investment undertakings and pension schemes for certain professions, with the following conditions and adjustments:

• From 1 October 2017, promissory notes (Schuldscheindarlehen) and registered bonds (Namensschuldverschreibungen) will no longer be protected. However, notes and bonds purchased before that date will be protected by grandfathering arrangements

• From 1 January 2020, deposits with a term of over 18 months will no longer be protected. Grandfathering provisions will be in place for deposits made before then.

Nothing will change for retail customers and foundations after the reform. Demand, term and savings deposits will continue to be fully protected up to a ceiling of 20% of a bank’s own funds.

31

Ireland

ETF Discussion Paper

On 14 September 2017, the Central Bank of Ireland (CBI) published the responses to the Discussion Paper on ETFs, issued in May 2017. The period for comment closed on 11 August 2017. The purpose of the Discussion Paper was to garner further information on ETFs from interested stakeholders, in order to inform both domestic and global discussions on ETFs.

The CBI hosted a conference entitled “ETFs – Stability and Growth” on 29 November 2017 in the Convention Centre in Dublin. Together with keynote addresses, the panel sessions considered the following questions:

• Should ETFs be treated differently?

• ETF Strategies – what is appropriate?

• Can ETFs be bad for markets?

• What’s now for ETFs?

33

Investment Firms, UCITS and AIFMD Q&As

On 6 October 2017, the CBI issued updated Q&As relating to Investment Firms, UCITS and the Alternative Investment Fund Managers Directive (AIFMD).

The Q&As on investment firms replace the second edition and contain new questions (ID 1026-1031) relating to MiFID II to local firms while the UCITS Q&A contains a new question (ID 1085) on the maintenance of a designated email address for regulatory correspondence in respect of Irish UCITS. This replaces the nineteenth edition. Finally, there is a new question (ID 1124) on AIFMDs Q&A relating to the maintenance of a designated email address for regulatory correspondence in respect of Irish authorised alternative investment funds (AIFs). This replaces the twenty-fifth edition.

More information about the CBI publication can be found at the links below:

• Central Bank publishes Third Edition of its Investment Firms Q&A

• Central Bank publishes Twentieth Edition of Central Bank UCITS Q&A

• Central Bank publishes Twenty‑Sixth Edition of the Central Bank AIFMD Q&A


IRELAND

http://www.centralbank.ie/regulation/markets-update/article/markets-update-issue-8-2017/central-bank-of-ireland/central-bank-publishes-third-edition-of-its-investment-firms-q-a



http://www.centralbank.ie/regulation/markets-update/article/markets-update-issue-8-2017/central-bank-of-ireland/central-bank-publishes-twentieth-edition-of-cental-bank-ucits-q-a

http://www.centralbank.ie/regulation/markets-update/article/markets-update-issue-8-2017/central-bank-of-ireland/central-bank-publishes-twentieth-edition-of-cental-bank-ucits-q-a

http://www.centralbank.ie/regulation/markets-update/article/markets-update-issue-8-2017/central-bank-of-ireland/central-bank-publishes-twenty-sixth-edition-of-the-central-bank-aifmd-q-a



Irish Funds MiFID II Q&A

On 6 September 2017, Irish Funds published a Q&A document on MiFID II which addresses implications for the Irish funds industry.

Topics in scope for the Q&A include:

• General scoping matters

• Inducements, payments for research and disclosure of costs

• Product governance

• Investment Managers/Advisers of AIFs/UCITS.

The Q&A also sets out action points for UCITS management companies (ManCos) and alternative investment fund managers (AIFMs) to consider.

MiFID II does not apply directly to UCITS ManCos and AIFMs which are not authorised to carry out MiFID investment services. However, UCITS ManCos and AIFMs typically contract with service providers who provide MiFID investment services for Irish UCITS and AIFs, as part of a delegation model framework. The Q&A was prepared by the Irish Funds MiFID II Working Group to assist these UCITS ManCos and AIFMs with the implementation of MiFID II. As the implementation date of MiFID II draws closer, further Q&As may be published by Irish Funds as issues arise.

35

Consultation Paper 111 – Consultation on the Second Edition of the Central Bank Investment Firms Regulations

The CBI issued Consultation Paper 111 (CP111) on 27 July 2017.

The Paper addressed the following issues:

• Proposed changes to the Client Asset Regulations (CAR) arising from MiFID II, together with the integration of these regulations into the Central Bank Investment Firms Regulations, in line with the CBI’s single investment firm rulebook approach

• Integration into the Central Bank Investment Firms Regulations of both the Investor Money Regulations (IMR) and the CBI rules on the capital requirements applied to market operators, as set out in the CBI’s feedback statement on CP101

• Other consequential amendments to the Central Bank Investment Firms Regulations as a result of MiFID II and certain matters that have arisen since the application of the first edition of the Central Bank Investment Firms Regulations. These include certain technical amendments to the regulatory requirements applied to fund administrators.

The consultation period closed on 27 September 2017.


IRELAND

Central Bank Publishes Revised UCITS (Amendment) 2017

The Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2017, S.I. No. 344 of 2017, were signed into Irish law on 27 July 2017.

The amendments effected by the UCITS (Amendment) Regulations 2017 are comprised of amendments and clarifications, following the implementation of UCITS V. They also give legislative effect to the four regulatory rules arising from the CBI’s review of Management Company Effectiveness (CP86) over the course of the last number of years. These rules address the following:

• Record retrievability

• Organisational effectiveness

• Location of Directors and Designated Persons

• Streamlining of managerial functions.

These regulatory rules are further supported by six chapters of guidance, issued by the CBI.

37

Individual Savings Plans

On 4 October 2017, the Italian Ministry of Finance published guidelines for Individual Savings Plans (PIR or Piani Individuali di Risparmio) introduced by the 2017 Budget Law – Law No. 232 of 11 December 2016 (see Regulatory Insights No. 11).

The Italian Ministry of Finance provided guidelines on the following topics:

• PIRs can also be subscribed by individuals under the age of 18

• Describing the way in which a PIR can be constituted. Specifically, PIRs are made up of “Custody or Administration of Securities or Portfolio Management” agreements, including those involving trusteeship or the subscription of a “PIR compliant” UCITS, a “PIR compliant” Life Insurance or Capitalisation agreement

• The identification of the cases where tax-recapture is not carried out, which includes, death of the PIR subscriber, reinvestment trades and changes of an investor’s residence.

– Tax-recaptured is not carried out even if the holding period has not been concluded

– In the case that the PIR financial instruments are sold before the holding period, which is five years, and the amounts received are reinvested in other qualified financial instruments (PIR Compliant) within 90 days, tax cannot be re-captured

– If the PIR investment is maintained for at least five years regardless of the investor’s country of residence, taxes are not paid on the PIR investment.

In addition, the Italian Income Revenue Authority (Agenzia delle Entrate) will publish a circular with detailed instructions regarding the offices responsible for control and assessment activities by 31 December 2017.

39

Luxembourg

There have been updates to Circular Commission de Surveillance du Secteur Financier (CSSF) 17/661 – Adoption of the joint guidelines, issued by the three ESAs on money laundering and terrorist financing risk factors.

This Circular covers the ESAs’ joint Guidelines under Articles 17 and 18(4) of Directive (EU) 2015/849 on simplified and enhanced customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions. The objective is to identify and assess the various risks, relating to, for example customers, countries, products, services, transactions and delivery channels and then to apply the corresponding customer due diligence.

The second part of the guidelines identify more specific risk factors to be taken into consideration within specific sectors or areas. They also provide helpful information on enhanced and simplified customer due diligence.

The guidelines will enter into force on 26 June 2018. The CSSF clearly states that “based on these guidelines, professionals should be able to make informed decisions, based on risks, to effectively manage their business relationships and occasional transactions”.

CSSF Update on Money Laundering and Terrorist Finance Risks

41

CSSF Update on Assessment of Knowledge and Competence

There have been updates to Circular CSSF 17/665 – ESMA guidelines for the assessment of knowledge and competence.

On 31 July 2017, as a follow up to this circular, the CSSF published Circular CSSF 17/665 (ESMA guidelines for the assessment of knowledge and competence). This provides details on:

• The minimum criteria for the provision of external training as per CSSF Circular 17/665

• What organisations need to submit when registering as providers of professional external training on the list published on the CSSF website.

The purpose of this Circular is to incorporate the ESMA guidelines on the criteria for the assessment of knowledge and competence required under Art. 25(1) of MIFID II, in accordance with Art. 25(9) of the same Directive.

Minimum standards are outlined for the assessment of knowledge and competence of staff providing relevant services under the scope of MIFID II.

Professionals must comply with the requirements of this Circular from 3 January 2018.


LUXEMBOURG

CSSF Update on Prudential Assessment of Acquisition

There have been updates to Circular CSSF 17/669: Adoption by ESMA, EBA and EIOPA of the joint guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector (JC/GL/2016/01 of 20 December 2016) and repeal of Circular CSSF 09/392.

The main objective of the guidelines is to provide the necessary clarity, predictability and legal certainty on the assessment process stipulated in the sectoral directives and regulations. The guidelines update and enhance the 2008 Committee of European Banking Supervisors (CEBS), Committee on European Securities Regulators (CESR) and Committee on European Insurance and Occupational Supervisors (CEIOPS)* joint guidelines and address the following in more detail:

• Certain general concepts, such as those of “parties acting in concert”, “indirect acquisitions of qualifying holdings”, “significant influence”, “decision to acquire” and the “proportionality principle”

• The assessment period and the information to be provided to the target supervisor

• Incomplete notification and the acknowledgment of receipt. For example, the assessment period does not start until the target supervisor specifies the missing information in the receipt, acknowledgment, or referral to a separate letter

• The assessment criteria for a proposed acquisition.

The guidelines also provide a recommended list of information required by the competent authorities assessing the acquisition of a qualifying holding. The list has been extended and modified since it was published as an annex to the 2008 guidelines. The guidelines also give practical examples of the determination of acquisitions of indirect holdings.

The guidelines on the assessment of qualifying holdings in credit institutions, investments firms and central counterparties will be applied by the CSSF, regardless of who the acquirer is from the date of their entry into force (1 October 2017).

*CEBS, CESR and CEIOPS were the authorities prior to today’s ESAs.

43

There have been updates to Circular CSSF 17/666: ESMA guidelines on access by a Central Security Depositary (CSD) to the transaction feeds of CCPs and trading venues.

These guidelines specify the risks to be taken into account by a CCP or a trading venue when carrying out a comprehensive risk assessment, following a request for access to the transaction feed of the CCP or of the trading venue.

CSSF Update on Trading Venues

CSSF Update on Remuneration Policies

There have been updates to Circular CSSF 17/658 – Adoption of the EBA guidelines on sound remuneration policies under Articles 74(3) and 75(2) of Directive 2013/36/EU and disclosures under Article 450 of Regulation (EU) No 575/2013.

The EBA guidelines, which came into force on 1 January 2017, set out the requirements for remuneration policies, including criteria for the allocation of remuneration as fixed and variable, group application and proportionality as well as required disclosures.

The main objective of this circular is to clarify the CSSF’s expectations on remuneration requirements for credit institutions and investment firms.

The circular confirms that the CSSF will continue to apply the proportionality principle as per Circular 11/505.


LUXEMBOURG

CSSF Update on Out-of-Court Complaint Resolution

CSSF Update on Default Rules and Procedures

There have been updates to Circular CSSF 17/671: Specifications regarding CSSF Regulation No. 16-07 of 26 October 2016 relating to out-of-court complaint resolution.

This Circular clarifies the following elements of CSSF Regulation 16-07:

• Procedures on the handling of customer complaints

• The individuals on the management team who are responsible for the handling of customer complaints and their obligations towards each plaintiff

• The communication of information to the CSSF.

There have been updates to Circular CSSF 17/667: ESMA guidelines on default rules and procedures for CSD participants.

The aim of these guidelines is to ensure that CSDs define and apply clear and effective rules and procedures to manage the default of any of their participants.

45

The Netherlands

Coalition Agreement with Tax Implications for Institutional Investors

After lengthy negotiations, the coalition of People’s Party for Freedome ‘Volkspartij voor Vrijheid en Democratie’ (VVD), Christian Democratic Appeal ‘Christen-Democratisch Appèl’ (CDA), Democrats 66 ‘Democraten66’ (D66) and Christian Union ‘Christen-Unie’ (CU) announced their agreement for government policy for the next three and a half years.

On 10 October 2017, the prospective Dutch government of four centre-right political parties announced their plans to abolish the 15% dividend tax. The aim of this policy, coupled with a reduction in corporation tax is to make it easier for companies to attract foreign capital and to make Dutch companies less vulnerable to hostile take-overs.

At the same time, the coalition declared that direct investment in real estate by investment institutions (beleggingsinstellingen) will no longer be allowed.

With scarce detail on how this policy will be implemented, the industry is assessing the consequences, intended or unintended.

Fiscal experts, on the other hand, assert that the ban on direct real estate investment for fiscal institutions will impact not only on Dutch real estate investors, but also on pension funds and, by extension, their pension scheme members. These investment institutions may have to either stop investing in real estate, or transform into a corporation subject to the new 21% corporation tax rate from 2020. Currently, these investment funds are exempt from dividend tax if they pay out dividends in full.

The impact of this measure on domestic and foreign institutional investments will depend on the detail of the implementation and any adjustments that may be made to the myriad of tax treaties that the Netherlands has concluded with countries around the world.

47

United Kingdom

Amendments to the SORP for the Financial Statements of UK Authorised Funds

In June 2017 the Investment Management Association (IMA) issued an update to the Statement of Recommended Practice (SORP) for Authorised Funds. In line with the Financial Reporting Council’s (FRC) policy, the SORP was updated to reflect FRC amendments with immediate effect.

In March 2016, the FRC also issued a revised policy on developing SORP. This includes a new shortened administrative procedure for amending SORP to reflect changes in FRC standards or in legislative or regulatory requirements and dispenses with the need to publish a consultation draft.

In March 2016, the FRC issued further amendments to FRS 102 on the fair value hierarchy disclosures. These amendments now apply for accounting periods beginning on or after 1 January 2017, with early adoption permitted. The definition of the tiers within the fair value hierarchy has been changed.

In July 2015, the (FRC) issued amendments to the Financial Reporting Standard applicable in the UK and the Republic of Ireland (FRS 102). These amendments now apply for accounting periods beginning on or after 1 January 2016 and include a change to the definition of a related party and, as a consequence, the authorised fund manager who can be regarded as a related party.

49

ACDD Additional Customer Due Diligence AIFMD Alternative Investment Fund Managers Directive AIFMs Alternative Investment Fund Managers AIFs Alternative Investment Funds AML/CTF Anti-Money Laundering and Counter Terrorism Financing BaFin German Financial Supervisory Authority BRRD European Bank Recovery and Resolution DirectiveBSR Bank Structural ReformCAR Client Asset RegulationsCBI Central Bank of Ireland CCPs Counterparties CDA Dutch Christian Democratic Appeal PartyCEBS Committee of European Banking Supervisors CEIOPS European Insurance and Occupational Pensions AuthorityCESR Committee of European Securities RegulatorsCFTC Commodities and Futures Trading CommissionCMU Capital Markets Union ESAs European Supervisory Authorities, comprised of

EBA, ESMA and EIOPACRD Capital Requirements Directive CRR Capital Requirements Regulation CSDR Central Securities Depository Regulation CSDs Central Securities Depositories CSSF Commission de Surveillance du Secteur Financier

(Luxembourg Regulator)CU Dutch Christian Union PartyEBA European Banking Authority ECDD Enhanced Customer Due Diligence ECOFIN Economic and Financial Affairs Council ECON European Parliament’s Economic and Monetary Affairs EEA European Economic AreaELTIF European Long Term Investment FundEMF European Monetary FundEMIR European Market Infrastructure Regulation EMU European Monetary UnionENISA European Network and Information Security AgencyEPTF European Post Trade ForumESCB European System of Central BanksESM European Stability MechanismESMA European Securities Market Authority

Abbreviations


ESRB European Systemic Risk BoardETFs Exchange Traded FundsEU European Union EuSEF European Social Entrepreneurship FundEuVECA European Venture Capital FundFCA Financial Conduct Authority FRC Financial Reporting CouncilFSB Financial Stability Board GAC General Affairs CouncilHLEG High Level Expert GroupIAS 39 Financial Instruments: Recognition and Measurement IFRS 9 Ninth International Financial Reporting Standard 9 IMA Investment Management AssociationIMR Investor Money RegulationsITRE European Parliament’s Research and Energy CommitteeITS Implementing Technical Standards KIID Key Investor Information Document LEI Legal Entity IdentifierManCos Management CompaniesMiFID Markets in Financial Instruments Directive MiFIR Markets in Financial Instrument Regulation MMF Money Market Fund MMFR Money Market Funds Regulation NCAs National Competent Authorities OTC Over the CounterPEPP Pan-European Pension PlanPIR Italian Individual Savings Plans PRA UK Prudential Regulation Authority’s PRIIPs Package Retail and Insurance-Based Investment Products RRM Risk Reduction Measures RTS Regulatory Technical Standards SFTR Securities Financing Transaction RegulationSMEs Small and Medium Sized Enterprises SORP Statement of Recommended PracticeSSM Single Supervisory Mechanism CRD IV Capital Requirements Directive IV UCITS Undertakings for Collective investment in Transferable Securities UK United KingdomUS United States WD Dutch People’s Party for Freedom

51

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EuropeSven Kasper +44 20 3395 3723 [email protected]

Rayhan Oddud +44 20 3395 3395 [email protected]

Francis Wood +44 20 3395 3437 [email protected]

Channel IslandsRussell Turner +44 1534 609508 [email protected]

FranceAngdy Ma +33 44 45 43 37 [email protected]

GermanyInes Cieslok +49 69 667745 104 [email protected]

IrelandMary McCarthy +353 1 776 8411 [email protected]

Simon Firbank +353 1 776 8726 [email protected]

ItalyAlberta Castoldi +39 02 3211 7135 [email protected]

Stefano Scribanis +39 02 3211 7347 [email protected]

LuxembourgAngdy Ma +33 44 45 43 37 [email protected]

SwitzerlandSchabo Hanno +41 44 560 5400 [email protected]

The NetherlandsMerijn Boender +31 20 718 1060 [email protected]

United KingdomJeanette Harper +44 131 315 5186 [email protected]

Tom Pool +44 20 3395 3587 [email protected]

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