U.K. – FCA Investment Regulation

On 28 September, FCA Megan Butler spoke on investment advisor priorities.

  • Butler is FCA executive director supervision – investment, wholesale and specialist.
  • Follows 28 June, FCA issued findings on asset management, remedies.

Asset Management Hub

  • FCA has created an asset management authorization hub to support new entrants.
  • Hub will assist start-ups as they move from pre-authorization to full authorization.
  • Phase one of Hub starts in October 2017, offering new firms’ pre-application meetings.
  • In 2018, hoped to expand this support with quarterly surgeries and online booking.


  • SMR and MiFID countdowns well and truly on, and they are fundamental priorities.
  • Sought SMR to apply to almost every FCA regulated firm offering financial services.
  • SMR is divided into core regime for all firms and enhanced regime for the complex.
  • Range/depth of data reported per MiFID, to improve FCA ability to monitor market.
  • Important to realize that all legal entities trading under MiFID II will require an LEI.
  • FCA is working closely with EU/US on question of firms registered as broker dealer,
    who can’t accept payment for research, without applying as an investment advisor.

New Zealand – Guidance on Subtantial Shareholding

On 27 September, NZFiMA issued guidance on substantial shareholdings.

  • Following consultation in June, this guidance updates prior version from 2014.
  • To assist substantial product holders in understanding obligation, consistency.


  • Inform market participants about findings from the review of disclosure notices.
  • Submitted by people with substantial holdings in listed issuers, stated concerns.
  • Remind SPHs of statutory disclosure obligations per FMC Act and the regulation.
  • Clarify what’s expected of market participants in relation to product disclosures.
  • Provide guidance in areas of possible confusion, about how regulation is applied.

India – SEBI Amends Commodity Derivatives Rules

On 26 September, SEBI amended rules on commodity derivative investment.

  • Foreign Portfolio Investors allowed to invest in exchange-traded commodity derivatives.
  • However, are limited to the derivatives contracts in non-agricultural commodities only.
  • The contracts are cash settled on settlement price determined on overseas exchanges.
  • Additionally, all the transactions must also be denominated in the foreign currency only.

U.K. – FCA Commodity Issue Limit Guide

On 26 September, FCA issued guide on commodity position limit exemption.

  • Covers exemption for non-financial entities from commodity derivatives position limit.
  • The form is used to understand how NFE is using commodity derivative to reduce risks.
  • NFE should only apply for exemption when it trades derivative as part of its business.
  • Cannot apply for the exemption on behalf of another legal entity or hold on their behalf.
  • Only required to apply for exemption where the net position would be over MiFID limit.
  • NFE to inform FCA if a significant change occurs to nature or value of business activity.
  • The applicant completing the form should provide a legal entity identify (LEI) in form.

U.S. – CFTC Ownership and Control

On 25 September, CFTC issued relief from ownership and control report.

  • Extended current relief and provided additional relief to reporting in OCR rule.

2017 Relief

  • Rules, forms enhanced identification of futures and swap market participants.
  • Required electronic submission of trader identification and of participant data.
  • Relief addressed compliance difficulties associated with certain OCR reporting.
  • Responded to August 2017 requests by FIA, Commodity Markets Council (CMC).
  • September 2017 letter gave similar relief to letter 16-33, in Apil 2016.
  • However, relief originally given in letter 16-33, had expired on 18 November 2015.

Extension of 2016 Relief

  • Two more days to report owner of trading or volume threshold accounts (VTA).
  • Relief from reporting trading account controller (TAC) or VTAC identifying info.
  • Quality of information given a reporting party, by customers or counterparties.
  • Replace 50 contract threshold for reporting data with a 250 contract threshold.
  • Relief on Form 102S omnibus originator and consolidated account (CA) owner,
    (conditional on electronic reporting instead of the CA counterparty information.

New Relief

  • Relief reporting additional TAC and VTAC identifying information, conditional on
    DMO able to obtain TAC-identifying information from special account controller,
    and of VTAC-identifying information, from the VTA owner or the reporting firm).
  • Refresh updates Forms 102A, 102B and 102S (on filing timely, change update).
  • Relief using same contact information on all 10% owners and parent companies.
    if communication is monitored by person who provide CFTC contact information.
  • Answering Q 12 on Forms 40/40S re those with influence on the party’s trading.
  • Filing change update for Forms 40/40S, except special call per S.18.04 20.5(b).

Effective Date

  • 2017 stays in effect until earlier of effective date of CFTC rule or 28 September 2020.
  • Use relief period to consider need for CFTC to pursue changes to OCR Final Rule.


E.U. – EC MiFIR Indirect Clearing

On 22 September, EC issued rules on MiFIR indirect clearing arrangements.

  • Covers regulatory technical standards on indirect clearing arrangements under MiFIR.
  • Under Art 30 MiFIR, indirect clearing arrangements permitted if do not increase risk.
  • Current delegated act 149/2013 specifies the types of indirect clearing used for ETDs.

Indirect Clearing

  • Delegated act seeks to simplify and clarify requirements for management of default.
  • Adapts the account structures to rationalize the offering of indirect clearing services.
  • Allows indirect clearing services to be provided in chains beyond client of direct client.
  • Sets out homogeneous requirements for indirect clearing arrangements for OTC/ETD.

Netherlands – AFM Fine Bank Trade Report

On 20 September, AFM fined ABM Amro Bank, Clearing for trade reports.

  • In July 2017, imposed 2 administrative fines of €400k and €500k on ABN Amro.
  • Fines were imposed because banks failed to notify transactions to AFM in time.
  • Constituted violation of S, 4:90e(3) of the Financial Supervision Act, that firms
    performing transactions in listed financial instruments notify the AFM of details.
  • Report should be done as quickly as possible, latest at end of next working day.
  • FM uses transactions reported, to identify market abuse and promote efficiency.


  • From 2010 – 2015, failed to notify AFM in time of details of 86,796 transactions.
  • Violations from January 2013, as should have had trade reporting in order by then.
  • With aid of instruction issued by AFM during an audit it carried out end of 2010.
  • AFM had advised ABN Amro to create a better overview of transaction reporting.
  • From September 2014 -April 2016, ABN Amro Clearing also failed to report to AFM in
    time, concerning 11,911 transactions, mainly conducted on Stuttgart Exchange.
  • AMRO Clearing had received a constructive letter on compliance with standards.


  • Basic fine for violating obligation to report transactions, is normally at €500,000.
  • Reduced fine to ABN Amro to €400,000, as discovered violation, notified to AFM.
  • Took account of improvements ABN Amro implemented in transaction reporting.
  • AFM considers a fine as per the basic amount appropriate for ABN Amro Clearing.
  • ABN Amro and ABN Amro Clearing have not lodged objection to decision on fine.

U.K. – FCA Change in Control

On 20 September, UK FCA issued rules on ESA guideline on qualifying holding.

  • Followed EC July 2017 regulation on information for qualifying holding.

UK Implementation

  • The joint ESA guidelines on prudential assessment of acquisitions and increases of
    qualifying holdings in the financial sector, will come into force on 1 October 2017.
  • FCA and PRA have notified the ESAs they will comply with guideline except on the
    provision relating to the identification of acquirers for indirect qualifying holdings.
  • Firms should use existing methodology, under Part XII FSMA, to identify controllers.
  • Cited reference guide on identifying controllers and web page on change in control.

U.S. – CFTC Large Trader Reporting

On 19 September, CFTC issued online portal of large trader reporting form.

  • CFTC operate large trader reporting program to collect information of participants.
  • Used the information to help ensure the integrity of the futures and swaps market.
  • Has trader-identifying information in CFTC Form 40, statement of reporting trader.
  • Based on trader reporting thresholds in Parts 15 and 20 of the CFTC’s regulations.
  • From traders which hold or control a reportable futures, options or swaps position.

Online Portal

  • Updated online filing portal of submission of CFTC Form 40 improves functionality.
  • Added more user-friendly features, while collecting very same type of information.
  • Wizard-style, allows user to better navigate through the different sections of form.
  • Faster completion, replaced prior version of form that appeared as one long page.
  • Auto-save feature allows users to disconnect from portal, without information loss.
  • PDF version give users option to generate PDF versions of the final submitted form.
  • May generate XML version of submitted form, if needed to later update submission.

U.K. – FCA Market Watch MiFID

On 18 September, FCA issued market watch on conduct and trade reports.

  • FCA market watch 53 newsletter on market conduct, and trade reporting issues.
  • MiFID II legal entity identifiers, data obligations, MDP entity portal, outsourcing.


  • Firms subjected to MiFID II reporting, must obtain a Legal Entity Identifier (LEI).
  • LEI is identifier for persons that are legal entity or structure (companies, trusts).
  • Keep LEI updated, ensure eligible clients have LEI, before acting on their behalf.

Market Data Obligations

  • Launch market data processor (MDP) for firms to meet MiFID II data obligations.
  • MiFID II data submitted to the MDP as transaction reports, instrument reference
    data transparency, double volume cap reports and commodity derivative position.

MDP Entity Portal

  • Available web application for external users, provides access to the MDP system.
  • On requests for transaction reporting sample data, access to ITE for connectivity,
    conformance testing, enable entities to monitor completeness of file submission.
  • From 3 January 2018, firms need to use MDP entity portal to request report extract.

Outsourcing Market Data

  • Firms are responsible for completeness, accuracy, and timeliness of data reports.
  • Different sorts of outsourcing for transaction reporting instrument reference data,
    transparency calculation data, double volume cap and derivative position reports.

Instrument Reference Data

  • Systematic internalizer (SI) submit financial instrument reference data, in cases.
  • such as where underlying instrument is financial instrument is traded on a venue
    or index, or basket composed of financial instruments traded on a trading venue.


  • Firms subject to MiFID II and eligible clients must comply LEI from 3 January 2018.
  • MDP entity portal already available for ITE, and will be live as from 3 January 2018.