Category Archives: News

On 19 July, FCA issued guide on MIFID II ancillary activity exemption.

On 18 July, AMF offered guidance for asset managers, UCITS

Update to address High Risk Countries

On 11 July, the EC issued a letter on the AMLD assessment of high risk third countries.

• Proposes four stage approach focusing on priority third countries first based on exposure.
• First stage is develop methodology for assessment, international list to be added to by EC.

Previously reported, on 20 April, the EU Council adopted a position on AML directive, regulation.

Brief highlights of Beneficial Ownership

• EU States to maintain central registers listing information on beneficial owners and trusts.
• States may allow public access, can be subject to registration of person, payment of fee.
• Make accessible without restriction to obliged entity, e.g on bank customer due diligence.
• To access register, person must demonstrate they have legitimate interest e.g. journalist.
• Access owner name, month and year of birth, nationality, country of residence, ownership.
• Central register information on trusts is accessible only to authorities and obliged entities.

On 13 July, ESMA proposed guidelines on MiFID II suitability provisions.

On 12 July, the CNMV extended its short selling ban in shares of Liberbank S.A.

• Extension remains for two (2) months
• Enters into force on 12 July 2017 at 23:59 CET and applies until Sep 12.
• Ban applies to net short positions of Liberbank SA shares under the Short Selling Reg.
• The measure does not apply to market-making activities, hedging or trading in indices.
• Short selling measure applies to any person, irrespective of their country of residence.
• ISIN: ES0168675090
• CNMV Statement

ESMA Opinion

• ESMA opinion that circumstances of Liberbank constitute adverse scenario for Spain.
  

FCA Statement

• On 13 July, the FCA issued statement supporting CNMV decision to extend short selling ban.

On 10 July, ESMA issued rules on the aggregation of derivatives data.

On 10 July, the SFC  and the AMF have signed a Memorandum of Understanding  on Hong Kong-France Mutual Recognition of Funds (MRF).

The MOU will allow eligible Hong Kong public funds and French UCITS funds to be distributed to retail investors in each other’s market through a streamlined authorization process.

The MoU is the first agreement between Hong Kong and a member of the European Union which establishes the regulatory framework for distribution of eligible Hong Kong and French funds, which currently include general equity funds, bond funds and mixed funds.

It also stipulates a mechanism for regular dialogue and regulatory cooperation thus enabling the SFC and the AMF to fulfil their respective supervisory and regulatory mandates.

Further details can be found in the issued Circular and in the FAQs.

On 7 July, ESMA proposed technical advice on short selling regulation.

• Covers advice on exemption from short selling restriction for market making activities.
• Notes the difference between MiFID market maker and SSR market making activities.
• Asks market participants on their views on the absence of alignment of the definitions.
• Of view that membership requirement should be better clarified on Art 2(1)(k) of SSR.
• Asks if membership requirement should not apply to pure OTC instruments and reasons.
• Scope of financial instruments eligible for market making exemption to be re-analyzed.
• Considers whether market maker should be able to notify list of instruments by index.

Effectiveness

• Comments are due by 4 September 2017.

On 30 June, AMF proposed rules on trade transparency for MiFID II.

• Covers application of pre- and post-trade transparency mechanisms under MiFID II.
• Apply to operators of trading venues (MTFs, OTFs etc) and to systemic internalizers.
• Investment firms trading OTC are subject to post-trade transparency obligations only.
• Seeks comment on how it should apply waivers for equity and non-equity instruments.

Waiver Proposals

• Proposes keeping system introduced under MiFID ie to allow options under MiFIR.
• And to grant waivers requested on a case-by-case basis through AMF rule approval.
• Plans to take same approach for publication deferrals as with pre-trade transparency.
• And to offer all the options provided under MiFID for post-trade OTC transparency.

Effectiveness

• Comments are due by 31 August 2017.

On 4 July, PBOC raised HK foreign institution investment (RQFII) quota.