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21/07/2016 2016/1131 BoS Decision on Fitch Ratings Limited 21 July 2016 , Decision PDF
108.21 KB
21/07/2016 2016/1157 Press release- ESMA fines Fitch Ratings Limited €1.38 million , Press Release PDF
282.37 KB
21/07/2016 2016/1159 Public notice- Infrigement by Fitch , Statement PDF
324.96 KB
13/07/2016 2016/1126 ESMA consults on proposed central clearing delay for small financial counterparties , Press Release PDF
132.06 KB
01/07/2016 2016/1066 ESMA appoints new Securities and Markets Stakeholder Group , Press Release PDF
156.76 KB

The European Securities and Markets Authority (ESMA) has published the new list of members of its Securities and Markets Stakeholder Group (SMSG) following its approval by its Board of Supervisors. The selected individuals begin a 2½ year term on 1 July 2016 and will replace the group whose mandate expired on 30 June 2016.

The new SMSG will be composed of 30 individuals drawn from across 13 Member States and representing ESMA’s key stakeholder constituencies – financial market participants (10), employee representatives (2), consumer representatives (6), users of financial services (3), small and medium sized enterprises (2) and academics (7). The new SMSG will feature 27 new members. A number of the incoming members have served in the previous SMSG.

The SMSG was established according to ESMA’s founding regulation and facilitates consultation between ESMA and its key financial market stakeholders on its work. The SMSG provides ESMA with opinions and advice on its policy work and must be consulted on technical standards and guidelines and recommendations. Additionally, it can inform ESMA of any inconsistent application of European Union law as well as inconsistent supervisory practices in Member States.

06/06/2016 2016/743 Multi-venue trading increases liquidity in EU equity markets despite duplicate orders , Report PDF
247 KB
02/06/2016 2016/743 ESMA assesses usefulness of distributed ledger technologies , , Press Release PDF
152.48 KB
30/05/2016 2016/742 ESMA issues opinion on MiFID II standards on ancillary activities , Press Release PDF
166.35 KB
02/05/2016 2016/566 Press release MiFID II RTS , Press Release PDF
131.33 KB
29/04/2016 2016/644 ESMA publishes results of EU central counterparties stress test , Press Release PDF
178.76 KB

The European Securities and Markets Authority (ESMA) has published today the results of its first EU-wide stress test exercise regarding Central Counterparties (CCPs). The exercise is aimed at assessing the resilience and safety of the European CCP sector as well as to identify possible vulnerabilities. The results of the test shows that the system of EU CCPs can overall be assessed as resilient to the stress scenarios used to model extreme but plausible market developments.

ESMA has also issued a Q&A document which explains in more detail the overall scope of the stress tests exercise, the different scenarios and methodologies applied.

 

14/04/2016 2016/625 ESMA announces EU-wide stress tests for CCPs , Press Release PDF
168.16 KB
07/04/2016 2016/582 ESMA finds room for improvement in national supervision of investment advice to retail clients , , Press Release PDF
107.49 KB
07/04/2016 JC/2016/21 PR Joint Press Release draft RTS on PRIIPs , , Press Release PDF
207.66 KB
04/04/2016 2016/566 ESMA not to exempt ETD under MiFID II , Press Release PDF
166 KB
31/03/2016 2016/472 ESMA publishes UCITS remuneration guidelines , Press Release PDF
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The European Securities and Markets Authority (ESMA) has published its final Guidelines on sound remuneration policies under the UCITS Directive and AIFMD. ESMA has also written to the European Commission, European Council and European Parliament on the proportionality principle and remuneration rules in the financial sector.

UCITS Remuneration Guidelines

The UCITS Remuneration Guidelines provide clarity on the requirements under the UCITS Directive for management companies when establishing and applying a remuneration policy for key staff. The Guidelines will ensure a convergent application of these provisions and provide guidance on the governance of remuneration, requirements on risk alignment and disclosure. The Guidelines will apply to UCITS management companies and national competent authorities from 1 January 2017.

Proportionality Issue

ESMA, while finalising its UCITS Remuneration Guidelines, had to balance the alignment with the AIFMD Remuneration Guidelines and the obligation to closely cooperate with the European Banking Authority (EBA) in order to ensure consistency with requirements developed for other financial services sectors, in particular credit institutions and investment firms.

The UCITS Directive prescribes that proportionality shall apply to the full set of remuneration principles set out under this Directive. However, the Guidelines do not include guidance on the possibility of dis-applying certain specific requirements on the pay-out process. This follows recent work and legal analysis, including the EBA’s Guidelines under CRD IV, which have called into question the existing understanding that the proportionality provisions as set out under the UCITS Directive and AIFMD may lead to a result:

  1. where – under specific circumstances – the requirements on the pay-out process i.e. the requirements on variable remuneration in instruments, retention, deferral and ex post incorporation of risk for variable remuneration are not applied; or
  2. where it is possible to apply lower thresholds whenever minimum quantitative thresholds are set for the pay-out requirements e.g. the requirement to defer at least 40% of variable remuneration.

ESMA considers that these scenarios should remain possible in certain situations and, in its letter to the European institutions, suggests that further legal clarity on this possibility could be beneficial to all the interested parties. Legislative changes in the relevant asset management legislation could be one way to further clarify the applicable regulatory framework.

ESMA believes that it would be inappropriate for the following fund managers to be subject in all circumstances to the requirements on the pay-out process:

  1. smaller fund managers (in terms of balance sheet or size of assets under management);

 

  1. fund managers with simpler internal organisation or nature of activities; or

 

  1. fund managers whose scope and complexity of activities is more limited.

 

ESMA also considers that it would be disproportionate to apply the requirements to relatively small amounts of variable remuneration and to apply certain requirements to certain staff when this would not result in an effective alignment of interests between the staff and the investors in the funds.

AIFMD Remuneration Guidelines

The amended AIFMD guidelines will come into force on 1 January 2017. The amendment to the AIFMD guidelines relates to the section of these guidelines dealing with the application of the remuneration rules in a group context and is intended to acknowledge the potential outreach of the CRD rules in a banking group.

The current AIFMD Guidelines will not be amended to bring them into line with the UCITS Guidelines pending clarification on the application of the proportionality principle.

Next Steps

The Guidelines in Annexes III and IV will be translated into the official languages of the European Union and the final texts published on the ESMA website. The deadline for compliance notifications will be two months after the publication of the translations.

31/03/2016 2016/468 ESMA fines DTCC Derivatives Repository Limited €64,000 for data access failures , Press Release PDF
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ESMA fines DTCC Derivatives Repository Limited €64,000 for data access failures

The European Securities and Markets Authority (ESMA) has fined the trade repository DTCC Derivatives Repository Limited (DDRL) €64,000, and issued a public notice, for negligently failing to put in place systems capable of providing regulators with direct and immediate access to derivatives trading data. This is a key requirement under the European Markets and Infrastructure Regulation (EMIR) in order to improve transparency and facilitate the monitoring of systemic risks in derivatives markets.

This is the first time ESMA has taken enforcement action against a trade repository registered in the European Union (EU). DDRL is the largest EU registered trade repository.

ESMA found that DDRL failed to provide direct and immediate access to derivatives data from 21 March 2014 to 15 December 2014, a period of about nine months in which access delays increased from two days to 62 days after reporting and affected 2.6 billion reports. This was due to its negligence in:

  • failing to put in place data processing systems that were capable of providing regulators with direct and immediate access to reported data;
  • failing, once they became aware, to inform ESMA in a timely manner of the delays that were occurring; and
  • taking three months to establish an effective remedial action plan even while delays were worsening.

DDRL’s failures caused delays to regulators accessing data, revealed systemic weaknesses in its organisation particularly its procedures, management systems or internal controls and negatively impacted the quality of the data it maintained.

29/03/2016 2016/406 ESMA publishes report on EU accounting enforcement in 2015 , Press Release PDF
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The European Securities and Markets Authority (ESMA) has published its annual report on the enforcement and regulatory activities of accounting enforcers within the European Union (EU) in 2015. ESMA continued strengthening supervisory convergence in the area of financial reporting to improve the consistency and quality across the EU, notably by issuing guidelines, publishing statements on areas of focus and coordinating enforcement decisions.

ESMA and national enforcers examined 189 listed issuers’ compliance with International Financial Reporting Standards (IFRS), across 26 countries, in the areas identified by the 2014 European Common Enforcement Priorities. The examination resulted in enforcement action against 40 (21%) issuers with regulators finding shortcomings in the disclosure of assumptions and judgements related to the:

  • recognition, measurement and disclosures of deferred tax assets arising from tax losses;
  • assessment of control over an entity in the absence of majority equity interest or majority shareholding rights; and
  • classification of joint arrangements.

National enforcers also reviewed the interim or annual financial statements of around 1,200 issuers, representing approximately 20% of issuers of securities listed on EU regulated markets, which led to action against 273 (25%) of those issuers examined. Enforcers found the main deficiencies were related to the presentation of financial statements, impairment of non-financial assets and accounting for financial instruments.

17/03/2016 2016/366 ESMA maintains market risk indicator at highest level , Press Release PDF
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17/02/2016 2016/300 Warning- Unauthorised use of ESMA’s identity and logo , Press Release PDF
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Unauthorised use of ESMA’s identity and logo

The European Securities and Markets Authority (ESMA) has been informed that its identity and logo have been used in communications targeting company employees in order to request the transfer of company money.

In addition, ESMA has been informed that attempts were made to use the name of a senior member of ESMA staff also for the purpose of fraudulent scams targeting a savings bank and a listed issuer.

Please note that all references to ESMA or any ESMA employees in these communications, which do not originate from ESMA, are entirely false and have been made without ESMA’s knowledge or consent.

In order to protect yourself against these unauthorised communications, ESMA advises you:

  • To check whether the e-mail received is genuine;
  • To inform your superior in case of suspicious e-mails;
  • To contact ESMA if any suspicion arises;
  • To contact the police;

Be aware that fraudsters might use ESMA’s name, logo or the name of an ESMA staff member, a bogus website which appears to be that of ESMA, and/or make bogus references to people said to work in ESMA. Be aware of the following when making your checks:

  • ESMA is a European Supervisory Authority established by a Regulation of the European Parliament and of the Council;
  • ESMA is based in Paris, France and has no affiliates or branch offices elsewhere;
  • ESMA’s emails end with the address @esma.europa.eu;
  • ESMA’s telephone number begins with the prefix +33 for France, no other prefix is valid;
  • ESMA’s official website can be found at www.esma.europa.eu
15/02/2016 2016/291 ESMA consults on implementation of the Benchmarks Regulation , , Press Release PDF
118.88 KB

The European Securities and Markets Authority (ESMA) has today published a Discussion Paper (DP) regarding the technical implementation of the incoming Benchmarks Regulation (BR). ESMA is seeking stakeholder’s input to inform its future proposals on draft Regulatory Technical Standards (RTS) and Technical Advice (TA) to the European Commission.

Benchmarks are used in financial markets as a reference to price financial instruments and to measure performance of investment funds, as well as being an important element of many financial contracts and their integrity is critical to financial markets and to investors in particular. The BR’s objective is to improve the governance and control over the benchmark process, thereby ensuring their reliability and protecting users. The changes aim to:

  • improve the quality of the input data and methodologies used by benchmark administrators;
  • ensure that benchmark contributors provide adequate data and are subject to proper controls; and
  • ensure the supervision and viability of critical benchmarks.

Steven Maijoor, ESMA Chair, said:

“The Benchmark Regulation, once implemented, will ensure the accuracy, robustness and integrity of benchmarks and the benchmark setting process by clarifying the behaviours and standards expected of administrators and contributors. These requirements will ensure that benchmarks are produced in a transparent and reliable manner and so contribute to well-functioning and stable markets, and investor protection.

“ESMA, in preparing for its work on regulatory technical standards and technical advice, is keen to ensure that all affected stakeholders have their views heard on this important topic and we hope that all interested parties will take this opportunity to contribute.”

The DP is seeking stakeholder’s feedback in the following areas:

  • definition of benchmarks;
  • requirements for the benchmark oversight function;
  • requirements for the benchmark input data;
  • governance and control requirements for supervised benchmark contributors;
  • authorisation and registration of an administrator; and
  • transparency requirements regarding the benchmark methodology.

The exact date when the Benchmarks Regulation will enter into force is still unknown as it has not yet been published in the Official Journal of the EU.

Next steps

ESMA will hold an open hearing on the DP on 29 February 2016 in Paris. It will use the responses to its DP to develop detailed implementing measures on which it will publish a follow-up consultation in Q3 2016.

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