U.K. – FCA MiFID Position Limits

On 25 January 2018, FCA updated list of position limits on commodity derivative contract.

  • Position limits on further commodity derivative contract which is traded on a UK venue.
  • Apply to positions held in spot month, other months’ periods for Swiss Baseload Power
    contract (Ch Phy BLSws), traded on the Organised Trading Facility, of GFI Brokers Ltd.
  • Above position limits will apply from 31 March 2018, to Swiss Baseload Power positions.

Netherlands – AFM Improvements for AIFM

On 23 January, AFM issued report on improvement by alternative funds.

  • In 2017, AFM conducted research into compliance with legal rules regarding sound
    business conduct, governance and separation of assets among 12 managers of AIF.
  • Research finding show that there is substantial room for improvement in this group.

Main Outcomes

  • Show 6 of investigated managers only manage firms falling outside AIFM Directive.
  • AIFM license of these managers is, or is expected to, expire, also shows that there
    is substantial room for improvement among the other managers in research group.
  • In respect of issues of sound business operation, governance and asset separation.

Key Findings of the Study

  • Risk management in many insufficient, outsourcing with large number of managers
    doesn’t comply with rules, no custodian was appointed by one of the administrators.
  • In some cases doubt about effectiveness and structure of the compliance functions.
  • Policy conflict of interest are often incomplete, MLTF compliance must be improved.

Best Practices

  • Report also contains best practices that AFM has drawn up as a result of the report.
  • Best practices can help managers further improve quality of operation, governance.
  • Individual results of the studies fed back to investigated managers and, where they
    didn’t comply with requirements, AFM applied formal, informal measures to ensure.
  • AFM expects other managers to take note of the findings of this research, and the
    best practice and, where necessary, implement improvements in their organization.

Next Steps

  • In view of findings, the AFM intend to carry out similar investigations in the coming
    years with other management companies holding a legally converted AIFM license.
  • It will also assess whether managers started working on findings and good practice.

AIFM Permit

  • AFM also calls on managers to assess whether they perform activities under AIFMD.
  • If this not the case for a period of 12 months or more, they are requested to hand
    in their permit on own initiative and the AFM will actively monitor this in the future.

E.U. – ESMA Transparency For MiFID

On 19 January 2018, ESMA issued updated transparency calculations (TTC) for MiFID.

  • Extended version of TTCs for equity, bond instruments, adding further instruments.
  • New instruments TTC alongside those issued on Dec. 22, 2017, remain unchanged.
  • TTC for equity instrument traded for first time between Sep. 13, 2017 Jan. 2, 2018.
  • Bond instruments (except ETCs, ETNs), for first time Nov. 1, 2017, to Jan. 2, 2018.
  • Calculations of newly added instruments, were provided by the national authorities.
  • Establish applicable transparency parameters for instrument listed pre Jan. 3, 2018.

E.U. – ESMA Issues Practical Guide for Transparency Directive

On 16 January, ESMA issued practical guide on transparency directive.

  • Summarises main rules, practices applicable across EEA in relation to notifications
    of major holding under national law in accordance with the Transparency Directive.
  • Intended as an aide to market participants and may be helpful to shareholder with
    notifying obligations under national law in accordance with Transparency Directive.
  • Part I of guide sets out summary of main rules and practices in relation to making,
    and publishing notifications of major holdings, under national law, under Directive.
  • Part II presents key data, information on notification thresholds, triggering events.
  • Also deadline for learning of triggering event, deadline for making a notification as
    well as permitted channels, format for filing of such, deadline for notification issue.

France – Funding Research MIFID

On 17 January 2018, AMF issued amended guide on research funding under MiFID II.

  • AMF made 2 amendments to the guide on investment providers research funding.
  • One clarifies conditions under which research in context of a primary market issue
    can be minor non-monetary benefit, here research must be available to investors.
  • Other taking into account the FAQ issued by the EC on 26 October 2017.
  • FAQs provide clarifications in case where research provider not subject to MiFID II.

Belgium – BFSMA Takeover Bids, MAR FAQs

On 15 January, BFSMA issued FAQs on takeover bids under MAR.

  • On disclosure of takeover bid, and specific market abuse rules that apply to offerors.
  • Press release information, notifications, inside information disclosure, stake-building.

Argentina – ACNV Stock Lending, Short Sale

On 15 January, ACNV authorized use of stock lending and short sales.

  • After process of public consultation where received suggestions and modifications.
  • Through RG 720 extended scope of the operations of lending negotiable securities.

Short Sales

  • Allowing use for conclusion of short selling operations and also regulated this area.
  • Operation of short sales has been incorporated into the regulations with the aim of
    providing Argentine capital market with the greater dynamism, liquidity and depth.
  • In this regard, and weighing prudential criteria relating to preventing systemic risk,
  • Regulations and conditions under which operation must be performed are specified.
  • As well as guidelines that markets must consider, when are regulated for approval.

Portugal – CMVM MIFID II Implementation

On 11 January, CMVM proposed rules to implement MIFID/MIFIR.

  • Follows December 2017, CMVM issued reference data for trading in MIFID.
  • Consultation on the draft CMVM regulations on collection of data, calculations and
    the dissemination of information to ensure pre-trade and post-trade transparency.


  • Comments to be received by 19 January 2018.

ISDA Post-Brexit Contract FAQ

On 10 January, ISDA issued FAQs on swap contract status, post-Brexit.

  • Covers topics including contractual points under ISDA documentation, choice of law,
    jurisdiction and recognition of judgments, insolvency, access to EU financial market.
  • European Markets Infrastructure Regulation, or EMIR, collateral, Settlement Finality
    Directive, amendments to ISDA Master Agreement and transfer of existing contract.

EU Financial Markets

  • Many member State rules do not allow third country firms without passport to enter
    into derivatives with local counterparty, unless reverse-solicitation, local exemption.
  • UK may request an equivalence decision per MiFID 2, which would permit UK firms
    to provide investment services either to eligible counterparties or professional client.
  • While UK regime should, objectively, be equivalent, no guarantee in practice that an
    equivalence decision will be granted or even when such a decision would be granted.

CRD IV Passport Options

  • In absence of agreement between UK and EU to extend CRD 4 passport for banking
    services to the UK, UK credit institution would have to do one of 2 things, as follows.
  • Either (i) provide banking services on a wholly unsolicited basis, or else on the basis
    of narrowly defined local law exemptions, or (ii) would need to establish a subsidiary.
  • And then obtain authorisation in an EU Member State to provide services in question.
  • EU firms without UK branch, may still be able to carry out derivatives business in UK.
  • If transitional period agreed, temporary permission grant overseas person exempted.