ESMA Newsletter - Nº3
Welcome to the third edition of ESMA’s newsletter. This month we publish our first newsletter op-ed from ESMA's Head of Risk Analysis and Economics Department, Steffen Kern. We also catch up on the full list of publications from March and take a closer look at our latest UCITS Q&As.
We also look forward to the month ahead with details of speaking appearances by ESMA staff, consultation deadlines and key dates for your agenda.
Have you ever wondered what financial market regulators were doing with all the market data they started to collect in the wake of the crisis? The answer is, we do a lot, and here is a great example: First-time statistics on the EU’s Alternative Investment Fund market.
Collecting data on Alternative Investment Funds and making operational use of them has been one of the most important policy initiatives in response to the global financial crisis. In 2009 G20 leaders agreed that hedge funds or their managers should be registered and should be required to disclose appropriate information on an ongoing basis to supervisors or regulators. In the EU this commitment was translated into reporting requirements under the Alternative Investment Fund Managers Directive (AIFMD), so that since July 2014 Alternative Investment Fund Managers have reported detailed information on the Alternative Investment Funds they manage to national market regulators.
Five years later, we are now able to produce statistics from the highly sophisticated reporting system. What emerges is a picture of a very diverse market.
1 - Wide investor choice
Average fund size, however, stands at a low EUR 200mn, highlighting that for the Alternative universe, as for investment funds in general, EU funds may not be realising the full scale and efficiency potential in the Single Market.
2 - More than just hedge funds
While hedge funds were the focus of the crisis response, the EU Alternative Funds universe was subsequently designed by lawmakers to be broader, including private equity and real estate funds, but also a large residual of vehicles pursuing diverse strategies mainly in bonds and equity and taken up by insurance and pension funds as the main investors. In terms of assets, hedge funds, in fact, make up only 5% of the EUR 5trn EU Alternative Fund market, and 80% of EU hedge funds by assets are managed in the UK. Private equity accounts for 4%, real estate for 11% and funds-of-funds for 16%.
3 - Retail investors are exposed
Primarily targeted at professional investors, Alternative Funds can also be accessed by retail investors. The latter make up around one-fifth of the investor universe. Retail exposure to the more risky fund types, however, is more limited, with only 3% and 8% of hedge fund and private equity fund shares held by non-professionals, respectively.
Does all of this mean that Alternative Funds in the EU are safe? Nothing ever is, even if our first industry view may look encouraging (full report here). And this is exactly why our analysis – and the massive data collection on which it is based – is vitally important. Our statistics inform fund supervisors and help them prioritise their work, e.g. by identifying pockets of risks and individual outliers. Our analysis can help supervisors to work even more effectively – and make the EU investment funds market safer. This is why we need financial market data.
A closer look at fund disclosure for UCITS
ESMA published Q&As that clarifies the UCITS KIID benchmark and past performance obligations. Check out our explainer below.
The updated Q&A also looks at Past Performance:
ESMA consultations currently open
- The full list of consulations and reply forms can be found on the ESMA consulations page
ESMA closed days in April
- ESMA will be closed this month on the 18th, 19th and 22nd.
Missed any ESMA publications? Check out the full list of news items from our press office.
Publication period: 1 - 31 March 2019
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29 March |
ESMA has updated its Questions & Answers document regarding the implementation of the Market Abuse Regulation (MAR). |
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29 March |
ESMA has updated its Questions and Answers on the application of the Alternative Investment Fund Managers Directive (AIFMD). |
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29 March ESMA Q&AS CLARIFY BENCHMARK DISCLOSURE OBLIGATIONS FOR UCITS |
ESMA has updated its Questions and Answers regarding the application of the Undertakings in Collective Investments in Transferable Securities (UCITS) Directive. |
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29 March ESMA ADVISES COMMISSION ON INFORMATION DOCUMENT FOR TAKEOVER, MERGER AND DIVISIONS |
ESMA has published its technical advice on the minimum information content of documents describing a takeover, merger or division. |
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29 March ESMA CLARIFIES FORMAT FOR DISCLOSURE OF RISK FACTORS IN PROSPECTUSES |
ESMA has published its final guidelines on how national competent authorities (NCAs) should review risk factors, as required by the new Prospectus Regulation (PR). |
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28 March ESMA UPDATES ITS Q&AS ON MIFID II AND MIFIR INVESTOR PROTECTION AND INTERMEDIARIES |
ESMA has added new Questions and Answers and updates on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR). |
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28 March ESMA PUBLISHES OFFICIAL TRANSLATIONS OF GUIDELINES ON POSITION CALCULATION BY TRS UNDER EMIR |
ESMA has issued the official translations of its Guidelines on position calculation by Trade Repositories under EMIR. |
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28 March |
ESMA has opened a public consultation regarding draft supervisory technical standards (RTS) under the European Long-Term Investment Fund (ELTIF) Regulation. |
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28 March ESMA PROVIDES GUIDANCE ON THE NEW EMIR REFIT REGIME FOR THE CLEARING OBLIGATION |
ESMA has published a statement on the Implementation of the new EMIR Refit regime for the clearing obligation for financial and non-financial counterparties. |
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28 March ESMA UPDATES ON ITS PREPARATIONS FOR A POSSIBLE NO-DEAL BREXIT SCENARIO ON 12 APRIL |
ESMA has published a statement updating on its preparations for a no-deal Brexit scenario in view of recent developments on timing. |
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28 March ESMA UPDATES ITS Q&AS ON MIFID II AND MIFIR INVESTOR PROTECTION AND INTERMEDIARIES |
ESMA has added new Questions and Answers and updates on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR). |
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27 March ESMA WRITES TO EUROPEAN COMMISSION ON MIFID II/MIFIR REVIEW REPORTS |
ESMA has written to the European Commission (EC) regarding its contribution to a range of MiFID II/MiFIR Review reports, setting out ESMA’s proposed timetable for their delivery. |
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27 March NOTICE OF ESMA’S PRODUCT INTERVENTION RENEWAL DECISION IN RELATION TO BINARY OPTIONS |
On 22 March 2019, ESMA adopted a Decision under Article 40 of Regulation (EU) No 600/2014 to renew the prohibition on the marketing, distribution or sale of binary options to retail clients. The Decision renews ESMA Decision (EU) 2018/795 on the same terms as the previous renewal decision, ESMA Decision (EU) 2018/2064. |
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27 March ESMA UPDATES ITS Q&AS ON MIFID II AND MIFIR COMMODITY DERIVATIVES TOPICS |
ESMA has updated its Questions and Answers on MiFID II and MiFIR commodity derivatives topics. These Q&As provide clarification on issues related to the MiFID II/MiFIR regime for commodity derivatives, including on position limits, position reporting and ancillary activity. |
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27 March ESMA PUBLISHES THE FIRST Q&AS RELATING TO THE PROSPECTUS REGULATION |
ESMA has published a new document containing nine Q&As relating to Regulation (EU) 2017/1129 (Prospectus Regulation). |
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27 March EU ENFORCERS FOCUS ON NEW IFRS STANDARDS AND NON-FINANCIAL INFORMATION |
ESMA has published its Annual Report on the enforcement and regulatory activities of accounting enforcers within the EU. |
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27 March ESMA TO RENEW RESTRICTIONS ON CFDS FOR A FURTHER THREE MONTHS FROM 1 MAY 2019
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ESMA has agreed to renew the restrictions on the marketing, distribution or sale of contracts for differences (CFDs) to retail clients, in effect since 1 August, from 1 May 2019 for a further three-month period. |
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26 March ESMA REAPPOINTS THE CHAIR OF ITS SUPERVISORY CONVERGENCE STANDING COMMITTEE
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ESMA has reappointed the current chair João Sousa Gião, who is a Member of the Board of Directors of the Comissão do mercado de valores mobiliários (CMVM) of Portugal, of its Supervisory Convergence Standing Committee (SCSC). |
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26 March |
ESMA welcomes the European Commission’s proposal to update the non-binding Guidelines on non-financial reporting with the introduction of a specific supplement addressing climate-related disclosures. ESMA takes the opportunity to make some recommendations on how the Guidelines can be further developed to promote higher quality disclosures. |
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25 March ESMA REGISTERS UNAVISTA TRADECHO B.V. AS TRADE REPOSITORY
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ESMA, the EU supervisor of trade repositories (TRs), has registered today UnaVista TRADEcho B.V. as a TR under the European Market Infrastructure Regulation (EMIR), with effect from 25 March 2019. |
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21 March ESMA PUBLISHES TAXONOMY FILES TO FACILITATE IMPLEMENTATION OF THE ESEF REGULATION
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ESMA has published taxonomy files to facilitate implementation of the requirements set out by the draft RTS on ESEF. Preparers can access the taxonomy in the form of a set of electronic XBRL files (‘ESEF XBRL taxonomy files’) that are available in a machine-readable and freely downloadable format. |
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21 March ESMA ADDS NEW VENUES TO REGISTER OF DERIVATIVES TO BE TRADED ON-VENUE UNDER MIFIR |
ESMA has updated the public register of those derivative contracts that are subject to the trading obligation under the Markets in Financial Instruments Regulation (MiFIR). |
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20 March ESMA AGREES POSITION LIMITS UNDER MIFID II
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ESMA has published seven opinions on position limits regarding commodity derivatives under the Markets in Financial Instruments Directive and Regulation (MiFID II/MIFIR). |
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19 March ESMA PUBLISHES ITS DATA OPERATIONAL PLAN UNDER A NO-DEAL BREXIT SCENARIO
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ESMA has published a statement in relation to the impact on ESMA’s databases and IT systems of a no-deal Brexit scenario on 29 March 2019. |
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19 March ESMA’S APPLICATION OF THE TRADING OBLIGATION FOR SHARES FOLLOWING A NO-DEAL BREXIT
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ESMA has published a statement on the impact on the MiFIR trading obligation for shares (TO) of the United Kingdom (UK) leaving the European Union (EU) on 29 March 2019 without a withdrawal agreement (no-deal Brexit), and without an equivalence decision for the UK by the European Commission (EC). |
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18 March |
ESMA has today made available the results of the annual transparency calculations of the large in scale (LIS) and size specific to the instruments (SSTI) thresholds for bonds. |
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18 March |
ESMA, the EU’s direct supervisor of credit rating agencies (CRAs), has registered today Beyond Ratings SAS as a CRA under the CRA Regulation. |
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15 March ESMA CLARIFIES ENDORSEMENT OF UK CREDIT RATINGS IN CASE OF A NO-DEAL BREXIT |
ESMA has issued a statement which sets out the implications for credit rating agencies (CRAs) based in the United Kingdom (UK), including the endorsement of UK credit ratings, should the UK withdraw from the European Union (EU) without a withdrawal agreement (no-deal Brexit). |
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14 March |
ESMA has carried out an analysis of the regulatory and supervisory technologies currently being developed in response to various demand and supply drivers. The results of this analysis are presented in an article in the latest Trends, Risks and Vulnerabilities (TRV) Report. |
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14 March ESMA INCLUDES MIFID II/ MIFIR IN ITS INTERACTIVE SINGLE RULEBOOK |
ESMA has updated its Interactive Single Rulebook, an online tool allowing a comprehensive overview of and an easy access to all level 2 and level 3 measures adopted in relation to a given level 1 text. |
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13 March ESAS’ JOINT BOARD OF APPEAL DECIDES ON FOUR APPEALS UNDER THE CREDIT RATING AGENCIES REGULATION |
The Joint Board of Appeal (BoA) of the European Supervisory Authorities (ESAs – ESMA, EIOPA and EBA) issued decisions regarding four appeals it received by Svenska Handelsbanken AB, Skandinaviska Enskilda Banken (SEB) AB, Swedbank AB, and Nordea Bank Abp against decisions by the European Securities and Markets Authority (ESMA) regarding infringements of the Credit Rating Agencies Regulation (CRAR). |
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11 March |
ESMA staff recently participated in Global Financial Markets Association (GFMA) webinar on Legal Entity Identifier (LEI) |
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8 March ESAS PROPOSE AMENDMENT TO PRIIPS KEY INFORMATION DOCUMENT TO CLARIFY APPLICATION TO INVESTMENT FUNDS |
The European Supervisory Authorities (ESAs) submitted to the European Commission, draft regulatory technical standards to amend the Delegated Regulation covering the rules for the Key Information Document (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs). |
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8 March ESMA PUBLISHES RESPONSES TO ITS CONSULTATIONS ON CSDR GUIDELINES |
ESMA has published the responses received to its Consultations on CSDR Guidelines. |
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7 March |
ESMA has updated today its public register with the latest set of double volume cap (DVC) data under the Markets in Financial Instruments Directive (MiFID II). |
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7 March ESMA REPORT VALUES EU ALTERNATIVE INVESTMENT FUNDS AT €4.9 TRILLION |
ESMA published its first statistical report on European Union (EU) Alternative Investment Funds (AIF). The study finds that the EU AIF sector in 2017, as measured by Net Asset Value (NAV), amounted to €4.9tn or nearly one third of the total EU fund industry. The report is based on data from 26,378 AIFs, or 80% of the market, and will be published annually. |
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7 March ESMA SETS OUT ITS APPROACH TO SEVERAL MIFID II/MIFIR AND BMR PROVISIONS UNDER A NO-DEAL BREXIT |
ESMA has today published a statement on its approach to the application of some key MiFID II/MiFIR and Benchmark (BMR) provisions should the United Kingdom (UK) leave the European Union (EU) under a no-deal Brexit. |
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6 March |
ESMA has today made available the results of the annual transparency calculations for equity and equity-like instruments. |
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6 March |
ESMA Chair Maijoor delivered a keynote speech at the ALFI 2019 Conference in Luxemburg on ESMA’s priorities for the asset management community. |
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4 March |
This month we catch up on the full list of publications from February, highlight a new call for experts and look back at some keynote addresses by Steven Maijoor, ESMA Chair. |
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1 March ESMA WITHDRAWS THE REGISTRATION OF BLOOMBERG TRADE REPOSITORY LTD |
ESMA, the EU supervisor of trade repositories (TRs), has today withdrawn the registration of Bloomberg Trade Repository Ltd (UK). |
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1 March ESMA REGISTERS DTCC DATA REPOSITORY (IRELAND) PLC AS TRADE REPOSITORY |
ESMA, the EU supervisor of trade repositories (TRs), has registered today DTCC Data Repository (Ireland) PLC as a TR under the European Market Infrastructure Regulation (EMIR), with effect from 1 March 2019. |
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1 March ESMA TO RECOGNISE THE UK CENTRAL SECURITIES DEPOSITORY IN THE EVENT OF A NO-DEAL BREXIT |
ESMA has announced that, in the event of a no-deal Brexit, the Central Securities Depository (CSD) established in the United Kingdom (UK) – Euroclear UK and Ireland Limited – will be recognised as a third country CSD to provide its services in the European Union (EU). |
- March's keynote speeches
| Date | ESMA Speaker | Event | Read more |
| 6 March | Steven MAIJOOR | ALFI 2019 Conference - Luxembourg | Read the full speech |
- Speaking appearances by ESMA staff this month: The full list of ESMA's planned speaking appearances for this month can be found here
GFMA Webinar Global Legal Entity Identifier LEI Update
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ESMA staff presented on the topic of LEI requirements under the Markets in Financial Instruments Directive (MiFID II) and the upcoming LEI requirements under other sectoral legislation such as EMIR and SFTR. |
ESMA's LinkedIn page keeps growing
This month we passed the 20,000 followers mark on our LinkedIn page. We hope ESMA stakeholders will continue to use the page as a useful resource for updates and publications.
Thanks to all for liking and sharing our content and don't forget you can also follow ESMA on Twitter @ESMAComms
Vacancy Notices
| Traineeship notice – Transversal profile (F/M) | 31/12/2019 |
| Traineeship notice – Legal profile (F/M) | 31/12/2019 |
| Traineeship notice - Financial Markets Profile (F/M) | 31/12/2019 |
All open vacancies can be found on ESMA's recruitment portal