On 10 November, ESMA added four questions to FAQs on MiFID II investor protection topics.
- The new question cover topics of post-sale reporting, record keeping and inducements.
- Clarifies that securities financing transactions are in scope of Art 16(6) record keeping.
- And that Art 62(1) Del Reg 2017/565 report applies to retail and professional clients.
On 8 November, UK FCA issued market watch on conduct, trade reporting.
- FCA issued market watch 54 newsletter on market conduct and trade reporting issues.
- Covers LEIs, ESMA instrument reference data, FCA transitional arrangements, trading
venue operator, MiFID II and market data obligations, authorizations and permissions.
Legal Entity Identifier (LEI)
- Firms with transaction reporting obligation must establish an LEI and keep it updated.
- Include investment firms authorized under MiFID, and credit institution under CRD IV.
- Also for operators of a trading venue, or UK branch of a third country investment firm.
- Such firms are also required to include eligible clients’ LEIs in their transaction reports.
- Clients who are legal entities or structure including companies, charities or trust must
obtain LEI code, if they want their executing firm to continue to act from 3 January 2018.
- FCA has produced leaflet which executing firms can use in communication with clients.
ESMA Instrument Reference Data
- ESMA has issued detail of reference data files, together with instructions downloading.
- Identified the financial instruments in scope for MAR, but noted ESMA statement that
it could not take responsibility for information being complete, accurate, or up to date.
FCA Transitional Arrangements
- On 12 January 2018, FCA is decommissioning MiFID I transaction reporting system (ZEN).
- Will use new FCA Market Data Processor (MDP) IT system to meet the new transaction
reporting requirements for MiFIR, which are due to come into effect from 3 January 2018.
- Set out approach to MiFID I transaction reporting obligation after the cut-over to MiFIR.
Trading Venue Operators
- Venue operators should not report the transaction of a UK branch of third country firm.
- As FCA to receive transaction report from these firms as if they were MiFID investment
firms trading venue operators should not report transactions on behalf of such persons.
- Will avoid FCA receiving duplicate report, which gives misleading impression of activity.
Market Data Obligations
- FCA has developed a new Market Data Reporting (MDP) system to enable management
of large changes in volumes, range of market data types, which entities need to submit.
- To meet new market data reporting obligations under MiFID II, MiFIR from 3 January 2018.
- Have now made MDP Industry Test Environment, ITE, available for entities who wish to
demonstrate they conform with technical specification and on-board to the MDP system.
Authorisations, Permissions for MiFID II
- Firms needing new permission who have not submitted an application must take action.
- Can only carry out MiFID II activity for which they have required regulatory permission.
- Firms may need to plan for the required permissions not being in place by 3 January 2018.
- If application already submitted FCA have subsequently informed that it is not complete
must provide the missing information as soon as possible, or cannot assess applications.
On 8 November, SFC issued updated FAQs and user guide to reflect HKEx’s new website.
On 10 January, HK SFC issued user guide for reporting short positions.
- Covered updates to user guide on short position reporting, under expanded scope.
- Included short position reporting process, accessing SPR services, and registration.
- Included registration acknowledgement, registration activation, completing forms.
- As well as system breakdown, browser specification, security tips and contact info.
- On reportable short positions, and those which are required to be notified to SFC.
- SFC designation of online communication system, publish reported short positions.
- Daily reporting requirements, reporting notice, specified shares and specified ATS.
- From 15 March 2017, reporting required for short positions in designated securities.
- Eligible for short selling specified by Stock Exchange of Hong Kong Limited (SEHK).
- List of designated securities eligible for short selling is published on SEHK website.
- From 15March 2017, SFC will cease publishing list of specified shares on its website.
On 4 November, ASX issued final listing rule on reverse takeover issues.
- Final rule regulates reverse takeovers, and voting exclusions in listing rule 14.11.
- Minor amendment to rules 1.2 and 1.3 on accounts to provide ASX at application.
No Shareholder Approval
- Current listing rule 7.1 requires a listed entity to obtain security holder approval,
for issues of securities over 15% of fully paid ordinary capital in 12 month period.
- Exception did not cover issues for a takeover bid to comply with Corporations Act.
or a merger scheme by way of scheme of arrangement under part 5.1 of that Act.
- Also excluded issues to fund the cash consideration payable under a takeover bid
or a merger, if the terms of the issue are disclosed in the bid/scheme documents.
- Thus, shareholder approval is not currently required for bidder to issue securities,
under a takeover bid or merger scheme, regardless of number of securities issued.
Changes for Reverse Takeover
- Above exceptions no longer apply to issues under, or to fund, a reverse takeover.
- Thus issues for reverse takeover, will now require approval under listing rule 7.1.
- Reverse takeover is where entity is proposing to acquire securities of other body,
and aggregate number of equities or to be issued by entity exceeded threshold.
- If issue equal to, or above, number of fully paid securities at announcement date.
- Aggregate separate issues if ASX believe are part of same commercial transaction.
- Followed ASX 10 November 2015 consultation, and 12 April 2017 feedback to responses.
- ASX does not propose revision to the rule amendments it had previously published.
- New listing rule amendments are scheduled, to come into effect from 1 December 2017.
On 27 October, AMF released statement on rules introduced by executive order 2017-1432.
- Notes overhaul of securitization vehicles and the creation of specialized financing vehicles.
- Changes exemption from banking monopoly rules to transfer claims to non-French entities.
- Makes it possible to supplement liquidity risk management tools, creation of FCPE funds.
- Rules changes terms and conditions for investment funds to provide loans to companies.
- Put specialized funding agencies (organismes de financement spécialisé), under AIFMD.
- Clarified rules applicable to depositories of securitization and highlights role of manager.
- Rewrites Monetary Code, Ch. IV, on financing, securitization bodies, specialized finance.
- Purpose to put specialized funding agencies under AIFMD but also rules for securitization.
- Clarified responsibilities of managers of depositories used in conjunction with transaction.
- Funds are able to acquire unmatured receivables from credit institutions per foreign law.