European Regulatory Summary – June 2017

The European Commission has set out proposals for a pan-European Pension Product (PEPP). A public consultation has been launched on the Payment Services Directive (PSD2). The European Securities and Markets Authority (ESMA) has issued several statements and consultation papers.

Pan-European Pension Product

PEPP is intended to be a simple and cost-effective retirement plan which will be portable across EU member states. Asset managers and insurers will have access to more than 240m retirement savers across the EU under proposals for the cross-border pension. It will give providers access to a European-wide single market for personal pensions estimated to grow to €2.1tn over the next decade.

ESMA News 

• ESMA issues statement on preparatory work in relation to CFDs, binary options and other speculative products

ESMA has issued a statement updating on its work in relation to the sale of contracts for difference (CFDs), binary options and other speculative products to retail investors. 

• Consultation on draft standards for trading obligation for derivatives under MIFIR

The Markets in Financial Instruments Regulation (MiFIR) trading obligation will move over-the-counter (OTC) trading in liquid derivatives onto organised venues, thus increasing market transparency and integrity alike. MiFIR, which implements parts of the MiFID II framework, outlines the process for determining which derivatives should be traded on-venue.

ESMA invites stakeholders to provide feedback on ESMA’s approach, which was revised following an earlier consultation in 2016. Click here to access the CP.

• ESMA issues standards on regulatory cooperation regarding market abuse

Click here to access the final Implementing Technical Standards (ITS). ESMA’s ITS clarify how national competent authorities (NCAs) should cooperate with each other under the Market Abuse Regulation (MAR).

MiFID II

• ESMA updates EU Parliament

ESMA has sent a letter to the European Parliament, Commission and Council updating them on the implementation of ESMA’s IT projects regarding the MiFID II.

• ESMA issues final guidelines on trading halts

MiFID II provides that member states shall require a regulated market to be able to temporarily halt or constrain trading if there is a significant price movement in a financial instrument on that market or a related market during a short period and, in exceptional cases, to be able to cancel, vary or correct any transaction. ESMA has issued final guidelines.

• ESMA publishes final report on product governance guidelines to safeguard investors

ESMA has published the final report on product governance guidelines under MiFID II regarding the target market assessment by manufacturers and distributors of financial products.

Click here to access the report.

Capital Markets Union (CMU)

• New initiatives by the CMU

Almost two years since the launch of the CMU Action Plan, the Commission has presented a number of important new initiatives to ensure that this reform programme remains fit for purpose. Click here to read the press release.

• Public Consultation on the CMU mid-term review

The aim of the consultation is to seek feedback on how the current Capital Markets Union (CMU) programme can be updated and completed so that it represents a strong policy framework for the development of capital markets, building on the initiatives that the Commission has presented so far. Click here to access the feedback statement.

• EU agrees to more support for venture capital and social enterprises

The revamped rules are part of the Commission's drive to stimulate venture capital investments in the EU, a core objective of its Capital Markets Union (CMU) project. Click here to access the press release.

EBA consults on central contact points under revised Payment Services Directive (PSD2)

The European Banking Authority has launched a public consultation on draft regulatory technical standards (RTS) that specify the criteria for determining when the appointment of a central contact point under the PSD2 is appropriate and the functions that these contact points should have. The consultation runs until 29 September 2017. Click here to access the CP.

Consultation on draft RTS on the implementation of group-wide AML-CFT policies in third countries

The joint committee of the European Supervisory Authorities (ESA) has launched a public consultation on draft Regulatory Technical Standards (RTS) specifying how credit and financial institutions should manage money laundering and terrorist financing (ML/TF) risks where a third country’s law prevents the implementation in their branches or majority-owned subsidiaries of group-wide policies and procedures on anti-money laundering and countering the financing of terrorism (AML/CFT).‎ These RTS are part of the ESAs' wider work on fostering a common approach to AML/CFT and will contribute to creating a level playing field across the Union’s financial sector. The consultation runs until 11 July 2017. Click here to access the CP.

EIOPA publishes an EU-wide thematic review of consumer protection issues in the unit-linked market

The Thematic Review assesses potential issues for consumers due to monetary incentives and remuneration payments from asset managers to insurance undertakings in the unit-linked market.

Click here to read the press release.

CP17/17: Handbook changes to reflect the application of the EU Benchmarks Regulation

The Financial Conduct Authority is consulting on the proposed changes to the handbook to accompany the application of the EU Benchmarks Regulation (BMR) from 1 January 2018. Click here to access the CP.