Welcome to the UK Regulation Round Up, a regular bulletin
highlighting the latest developments in UK and EU financial
services regulation.
Key developments in March 2023:
31 March
SFTR: The European Securities and Markets
Authority (“ESMA“) published an updated version of its Q&As
(ESMA74-362-893) on complying with reporting requirements under the
Regulation on reporting and transparency of securities financing
transactions ((EU) 2015/2365)
(“SFTR“).
Benchmark Regulations: ESMA published an updated version of its Q&As
(ESMA70-145-114) on the Benchmarks Regulation ((EU) 2016/1011)
(“BMR“).
EMIR: ESMA published an updated version of its Q&As
(ESMA70-1861941480-52) on the implementation of the European Market
Infrastructure Regulation (648/2012/EU)
(“EMIR“).
Distributed Ledger Technology: ESMA published
an updated version of
itsQ&As(ESMA70-460-189) relating to the implementation of the
Regulation on a pilot regime for market infrastructures based on
distributed ledger technology (“DLT“)
((EU) 2022/858).
MiFID II / MiFIR: ESMA published an updated version of
itsQ&As(ESMA70-872942901-35) on transparency topics under the
MiFID II Directive (2014/65/EU)
(“MiFID II“) and the
Markets in Financial Instruments Regulation (600/2014)
(“MiFIR“).
MiFIR Data Reporting: ESMA published an updated version of its Q&As
(ESMA70-1861941480-56) on data reporting under MiFIR.
FCA Handbook: The Financial Conduct Authority
(“FCA“) published Handbook Notice 108, which sets
out changes to the FCA Handbook made by the FCA board.
Basel Framework: The Basel Committee on Banking
Supervision (“BCBS“) published document setting out various technical
amendments and FAQs to help promote consistent interpretation of
the Basel framework.
AML: The European Banking Authority
(“EBA“) published two final reports (here and here) on guidelines produced
under Articles 17 and 18(4) of the Fourth Money Laundering
Directive (2015/849) (“MLD4“)
to clarify regulatory expectations and tackle unwarranted
derisking.
30 March
MiFIR Derivatives Trading: ESMA published a statement (ESMA70-156-6473) on
the application of the derivatives trading obligation under Article
28 of MiFIR to certain credit default swaps.
ESG: The UK Government published its updated Green Finance Strategy, which
sets out the Government’s plans for action across a wide range
of areas.
Payments: The Payment Systems Regulator
(“PSR“) published its annual plan and budget for
2023/24, together with a related factsheet.
SMCR: The FCA and the Prudential Regulation
Authority (“PRA“) published a joint discussion paper (FCA DP23/3 /
PRA DP1/23) on reviewing operational aspects of the Senior Managers
and Certification Regime (“SMCR“).
Alongside this, HM Treasury has published a call for evidence on the
legislative aspects of the regime.
ESG: HM Treasury published a consultation paper on a
proposed future regulatory regime for ESG ratings providers under
the Financial Services and Markets Act 2000
(“FSMA“).
29 March
Artificial Intelligence: The Department for
Science, Innovation and Technology has published the artificial
intelligence (“AI“) white paper: a pro-innovation
approach to AI regulation, to guide the regulation of AI in the UK,
aiming to improve public trust and drive responsible
innovation.
AML: The EBA published a consultation paper
(EBA/CP/2023/05) on proposed changes to the guidelines on the
risk-based supervision of credit and financial institutions’
compliance with anti-money laundering
(“AML“) and counter-terrorist financing
(“CTF“) obligations, produced under
Article 48(10) of MLD4.
Financial Policy: The Bank of England published
the financial policy summary and
record of the meeting of its Financial Policy Committee.
ESG: The FCA published a press release providing an
update on its consultation paper (CP22/20) on sustainability
disclosure requirements (“SDR“) and
investment labels (please find our article on this here).
Capital Markets Reform: The FCA published a speech by Nikhil Rathi, FCA
Chief Executive, on reform of the capital markets ecosystem.
EU Stress Testing: The EBA published a speech by José Manuel
Campa, EBA Chair, on EU-wide stress testing.
AIFMD II: The Council of the EU published aninformation note containing a
table comparing the negotiating positions taken by the European
Commission, the Council of the EU and the European Parliament on
the proposed Directive amending the Alternative Investment Fund
Managers Directive (2011/61/EU)
(“AIFMD“) and the UCITS Directive
(2009/65/EC) relating to delegation arrangements, liquidity risk
management, supervisory reporting, provision of depositary and
custody services, and loan origination by alternative investment
funds (2021/0376 (COD)) (“AIFMD
II“).
28 March
ESG: The Taskforce on Nature-related Financial
Disclosures (“TNFD“) published the fourth and final beta version of its disclosure
framework.
AML/CTF: The European Parliament published a press release announcing that
its Committee on Economic and Monetary Affairs
(“ECON“) and its Committee on Civil
Liberties, Justice and Home Affairs
(“LIBE“) have adopted their position on
three pieces of draft legislation relating to strengthening and
modernising the EU AML and CTF. These include the proposed AML
Regulation and Sixth Money Laundering Directive
(“MLD6“).
EMIR Refit: ESMA published a consultation paper
(ESMA74-362-2724) on amendments to its guidelines on position
calculation.
Derivatives: ESMA published a statement
(ESMA35-43-3547)addressing investor protection concerns raised by
derivatives on fractions of shares.
27 March
MiFID II: ESMA published a final report (ESMA35-43-3448)
following its review of the guidelines on product governance
requirements under MiFID II.
Cryptoassets: A draft version of the Financial Services and Markets Act
2000 (Financial Promotion) Amendment) Order 2023 was published,
together with a draft explanatory memorandum. This
relates to the regulation of certain cryptoasset financial
promotions.
23 March
SVB: The House of Commons Treasury Committee
published letters from Andrew Griffith,
Economic Secretary to HM Treasury, and Andrew Bailey, Bank of
England Governor, concerning the resolution of Silicon Valley Bank
UK Ltd (and its supervision prior to its resolution).
21 March
EMIR 3 Framework: The European Systemic Risk
Board published a letter to each of the European
Parliament and the Council of the EU about the legislative proposal
amending EMIR (548/2012) intended to mitigate excessive exposures
to third-country central counterparties
(“CCPs“) and improve the efficiency of
EU clearing markets (“EMIR 3“).
Investment Fund Prudential Supervision: ESMA
published a speech by Verena Ross, ESMA
Chair, in which she focuses on the macroprudential supervision of
investment funds.
20 March
FCA Primary Market Bulletin: The FCA published
its Primary Market Bulletin No
44.
ESG: The FCA published a Dear CEO letter, sent to
benchmark administrators, setting out the findings of its
preliminary ESG benchmarks review.
MAR: ESMA published a letter (ESMA24-436-1547) it
sent to the European Parliament and the Council of the EU raising
concerns about proposed changes to the Market Abuse Regulation
(596/2014) (“MAR“).
ELTIF Regulation: Regulation (EU)
2023/606amending Regulation (EU) 2015/760 (“ELTIF
Regulation“) as regards the requirements pertaining
to the investment policies and operating conditions of European
long-term investment funds and the scope of eligible investment
assets, the portfolio composition and diversification requirements
and the borrowing of cash and other fund rules was published in
theOfficial Journal of the European Union.
17 March
AML/CTF: The Joint Money Laundering Steering
Group (JMLSG) published a press release announcing the
publication of revisions to Part II of its AML and CTF anti-money
laundering guidance for the financial services sector.
16 March
Payments: The FCA published a portfolio letter it has sent to
payments firms.
PRIIPS: A corrigendum to Commission
Delegated Regulation (EU) 2021/2268, which amends the regulatory
technical standards (“RTS“) laid down in
Commission Delegated Regulation (EU) 2017/653 (the
“PRIIPs KID Delegated Regulation“), was
published in theOfficial Journal of the European Union.
14 March
CCP Resolution: The European Commission adopted
Delegated Regulations (here and here) containing RTS
supplementing the Regulation on the recovery and resolution of
central counterparties (“CCPs“) ((EU)
2021/23).
CSDR: ESMA published an updated version of its
Q&As (ESMA70-156-4448) on
implementation of the Central Securities Depositories Regulation
(909/2014) (“CSDR“).
SVB: The Amendments of the Law (Resolution
of Silicon Valley Bank UK Limited) Order 2023 (SI 2023/319) was
published, together with an explanatory memorandum.
Regulatory Capital: The PRA published a consultation paper (CP6/23) on
the non-performing exposures capital deduction. The Appendices to CP6/23 have been
published separately.
13 March
SVB: The Bank of England published astatementon the resolution of
Silicon Valley Bank UK Ltd.
10 March
FCA Multi-Firm Review: The FCA published a webpagesetting out the findings
of its multi-firm review of fast-growing firms carried out during
2021 and 2022.
Regulatory Perimeter: The FCA published an updated versionof its webpage
on the perimeter report.
AIFMD: ESMA published an updated version of its
Q&As (ESMA34-32-352) on the
application of the AIFMD.
EuSEF / EuVECA: ESMA published an updated
version of its Q&As (ESMA34-32-352) on the
application of the European Social Entrepreneurship Funds
Regulation (Regulation 346/2013) (“EuSEF
Regulation“) and the European Venture Capital Funds
Regulation (Regulation 345/2013) (“EuVECA
Regulation“).
9 March
LTAFs: The FCA published a press release announcing the
authorisation of the first long-term asset fund
(“LTAF“).
Investment Research: HM Treasury published the
terms of reference for the
Investment Research Review.
ESG: The Treasury Sub-Committee on Financial
Services Regulations published a letter it sent to Nikhil Rathi,
FCA Chief Executive, on aspects of the FCA’s consultation paper
on SDR and investment labels (CP22/20).
UK Short Selling Regulations: The Financial
Markets Law Committee published a response to HM Treasury’s
call for evidence on the review of the UK Short Selling Regulation
(2012/236).
CSDR Refit: ECON published the report (A9-0047/2023) it has
adopted on the European Commission’s legislative proposal for a
Regulation amending CSDR (“CSDR Refit“)
(2022/0074(COD)).
CRR: Commission Delegated Regulation
(EU) 2023/511on RTS on the calculation of risk-weighted
exposure amounts of collective investment undertakings under
Article 132a(4) of the Capital Requirements Regulation (575/2013)
(“CRR“) was published in theOfficial
Journal of the European Union.
8 March
MiFIR: ECON published the report (A9-0040/2023) it has
adopted on the proposed Regulation MiFIR.
7 March
ELTIF Regulation: The Council of the EU
published a press release announcing it has
adopted the proposed regulation amending the ELTIF Regulation
(2021/0377(COD)), designed to make these types of investment funds
more attractive.
3 March
MiFID II: ECON published the report it has adopted on the
European Commission’s legislative proposal for a Directive
amending MiFID II.
FCA Quarterly Consultation: The FCA has
published its 39th quarterly consultation
paper (CP23/6).
Nickel Trading: The FCA and Bank of England
published statements (here and here) concerning supervisory
actions taken in relation to the London Metal Exchange
(“LME“), following LME’s decision to
suspend trading on its nickel market in March 2022.
CCP Recovery: Two Delegated Regulations (here and here) containing RTS
supplementing the Regulation on the recovery and resolution of CCPs
((EU) 2021/23) were published in the Official Journal of the
European Union.
2 March
Ring-Fencing/Resolution: HM Treasury published
a call for evidence on aligning
the bank ring-fencing and resolution regimes.
Benchmark Regulations: The European Commission
published a call for evidence on the scope
and third-country regime of the BMR.
Trade Data Review: The FCA published a report
on its review of trade data and announced the launch
of its wholesale data market study, publishing the terms of
reference for the market study.
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