Posted in News

U.K. – FCA Change in Control

Comments:

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.
Posted in News

U.S. – CFTC Large Trader Reporting

Comments:

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.
Posted in News

U.K. – FCA Market Watch MiFID

Comments:

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.

MiFID II LEI

  • 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.

Effectiveness

  • 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.
Posted in News

U.K. – FCA MiFID Authorizations

Comments:

On 18 September, FCA issued statement on remaining MiFID authorizations.

  • Highlighted that MiFID II widened the scope of firms that require FCA authorization.
  • Unregulated proprietary traders using direct electronic access now need to register.
  • If firms have not submitted application already then firms urgently need to submit.
  • Firms who have submitted but not completed process to submit information ASAP.
  • If unsure of whether new permissions are required then should consult FCA’s guide.
Posted in News

India – SEBI Position Limits

Comments:

On 13 Septemebr,  SEBI clarified position limit on OTC currency derivative.

  • Brokers to ensure that positions created in FCY-INR pairs are within position limit.
  • Following currencies are involved: USD-INR, EUR – INR, GBP – INR and JPY – INR.
  • Single INR position limit for bank brokers higher of 15% total OI pairs, or $200m.
  • For non-bank brokers, limit is higher of 15% of total OI across all pairs or $100m.
  • Exchanges shall implement a uniform methodology for computing positions limits.
Posted in News

Poland – PFSA Alternative Funds

Comments:

The PFSA issued guidance on alternative asset management funds.

  • Guidance followed extensive amendments in 2016, to Polish investment fund act.
  • Rule effective, guidance is applied to fund managers, alternative asset managers.
  • PFSA reminded companies of permissions, registration requirements, supervision.

Investments

  • Must keep in mind thresholds for asset management and composition of portfolio.
  • Executives, boards must ensure activities examined and analyzed for compliance.
  • Special rules regarding gold, precious metal related alternative investments apply.
  • Cited consequence of violating rules, including fines and potential criminal results.
Posted in News

Spain – CNMV MiFID Trade Reports

Comments:

On 12 September, CNMV issued guide to transaction reporting under MiFIR.

  • Covers updates to CNMV operational guide for transaction reporting under MiFIR.
  • The revised version includes technical specifications for XML file headers, response.
  • And supplements 8 August, ESMA’s updated guidelines to correct typos.
  • Guide mainly aimed at IT units and regulatory compliance on transaction reporting.
  • Aims to facilitate the understanding of transaction reporting system used by CNMV.
  • It includes description of the different communication channels provided by CNMV.
  • And reporting transaction data files, file flow with the entity with obligation to notify.
  • As well as naming convention defined by CNMV for every file exchanged and errors.
Posted in News

Spain – CNMV Extends Short Sale Ban

Comments:

On 12 September 2017, CNMV extended the restriction on short position in Liberbank, SA.

  • Agreement extended restriction on short positions by two months, to Nov. 30, 2017.
  • On 12 September 2017, ESMA extended short selling ban per Spanish CNMV, for Liberbank.
  • On 13 Septemebr 2017, FCA extended short selling ban per Spanish CNMV, for Liberbank.
  • Measure will enter into force on 12 September and be applicable until 30 November 2017.
Posted in News

E.U. – ESMA MiFID Bond Transparency

Comments:

On 11 September, ESMA revised transitional transparency, FAQs for bonds.

  • Transitional transparency of bonds, update calculation of two other asset classes.
  • Follows EC March 2017 transparency rules for bonds in official journal.
  • Used to waive the obligation to make public pre-trade information for larger size.
  • Applied for market operators, and to investment firms operating a trading venue.

Transitional Calculation

  • MiFID II requires EU State NCAs, to publish information on liquidity classifications.
  • On sizes large in scale (LIS) vs. normal market, size specific to instrument (SSTI).
  • Publish six months prior to date of application of MiFIR, schedule on 3 January 2018.
  • All EEA NCAs, except for Poland, have delegated to ESMA, the compilation of TTC.
  • ESMA compiled transitional calculation using data provided by EEA trading venues.
  • Results of calculations by Poland were included in files published on ESMA website.

Revision of July 2017 Data

  • On 3 July 2017, ESMA published TTC on all non-equities except bonds.
  • September 2017 data is revising ESMA July 2017 transparency calculation for non-equity,
  • Publication delay as ESMA detected data quality problem, requested resubmission.
  • Final calculations incorporated data on OTC market information provided by TRAX.
  • After TTC publication in July 2017, some venues notified ESMA of problems in data.
  • The problem affected the calculations for credit derivatives and equity derivatives.
  • Thus, ESMA has corrected and recalculated TTC, for both asset classes accordingly.
  • ESMA said performed the calculations with great care, and to the best of its ability.
  • However, given complexity of calculations, further changes can’t fully be ruled out.
  • ESMA expected to continuously supplement and update data provided as necessary.
  • Any future update will be published on ESMA site with information in news section.

Data by Asset Class

Legal Entity Identifiers (LEIs)

  • ESMA noted LEIs were not provided for some reference entities for single name CDS,
    and issuers of underlying bond on rate derivativeS, but will be mandatory January 2018.
Posted in News

Sweden – SFI Commodity Position Limit

Comments:

On 5 September, SFI proposed rules on commodity position limits under MiFID.

  • Proposed new regulations which establish position limits on commodity derivatives.

MiFID Limits

  • Regulations put into effect the legislative changes brought about by MiFID II/MiFIR.
  • MiFID II require competent authorities to establish position limits for commodities.
  • Restrict net position that natural or legal person may hold in commodity derivative.
  • If traded in a trading venue in Sweden, and economically equivalent OTC contracts.

Effectiveness

  • Consultation period on the proposed regulations comes to an end on 22 September 2017.
  • Proposed to come into effect alongside the legislative amendments, on 3 January 2018.