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.

Violations

  • 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.

Sanctions

  • 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.