Financial Stability Board
FSB plenary - Summary of recent meeting published - 18 November 2021
The Financial Stability Board (FSB) has published a summary of its plenary meeting held in hybrid format in Basel, Switzerland, on 18 November 2021. Among other things, the group agreed the FSB’s work programme for 2022. The FSB intends, next year, to enhance the resilience of the non-bank financial intermediation (NBFI) sector; seek to address the potential risks associated with the use of crypto technologies, including stablecoins and decentralised finance (DeFi); and assess and address financial risks arising from climate change.
Klaas Knot will take over from Randal Quarles as FSB chair from 2 December 2021. A final version of the 2022 work programme will be published in the New Year.
Press release: FSB plenary meets in Basel
European Commission
CMU action plan - European Commission publishes Communication on progress - 25 November 2021
The European Commission (Commission) has published a Communication (COM(2021) 720) addressed to the European Parliament, the Council of the European Union, the European Economic and Social Committee, and the European Committee of the Regions, on the progress of its second action plan on the Capital Markets Union (CMU).
The annexes to the Communication set out the current state of play of the measures in the 2020 CMU action plan. The document also refers to plans for the Commission to accelerate its work to create an open finance framework to allow data to be shared and re-used by financial institutions for creating new services. The Commission also plans to propose a Directive by the third quarter of 2022 that will seek to harmonise targeted aspects of the corporate insolvency framework and procedures.
European Commission: Communication: Capital Markets Union – Delivering one year after the Action Plan
European Commission: Annexes
Council of the European Union
EU digital finance package - Council adopts position on MiCA and DORA - 24 November 2021
The Council of the European Union (Council) has adopted its position on the proposed Regulation on Markets in Crypto-Assets (MiCA) and the proposed Digital Operational Resilience Act (DORA).
The objective of MiCA is to create a regulatory framework for the cryptoassets market that supports innovation while preserving financial stability and protecting investors. DORA aims to establish a comprehensive regulatory framework on digital operational resilience with a view to ensuring that all firms within scope can withstand information and communication technology (ICT)-related disruptions and threats.
The proposed legislation forms part of the European Commission’s digital finance package, published on 24 September 2020 (as previously reported in this Bulletin; see also the item below on an agreement being reached between the European Parliament and the Council on a pilot regime for distributed ledger technology).
The Council and the European Parliament will now enter negotiations on the proposals, with a view to reaching agreement at first reading.
Council of the European Union: Press release: Digital finance package: Council reaches agreement on MiCA and DORA
Adoption of the Council negotiation mandate on the digital finance package (14066/21)
Council negotiation mandate for the regulation on markets in crypto-assets (14067/21)
Addendum to 14067/21
Council negotiation mandate for the regulation on the Digital Operational Resilience Act (14068/21)
Council partial negotiation mandate for the Amending Directive accompanying the Digital Finance package (14069/21)
Council of the European Union and European Parliament
Distributed ledger technology - European Parliament and European Council agree pilot regime - 25 November 2021
The European Parliament has agreed a pilot regime with the European Council on the use of distributed ledger technology (DLT) in the financial services industry.
The pilot will be established using a ‘sandbox’ approach, allowing for temporary derogations from certain requirements imposed by EU financial services legislation. The project aims to assist the financial sector to make use of innovative technological advancements while also protecting investors and preserving financial stability. The press release notes that there are currently no authorised financial market infrastructures using DLT to provide trading or settlement services for cryptoassets that qualify as financial instruments.
The pilot will introduce a DLT settlement system and a DLT trading and settlement system, incorporating a number of value thresholds. Operators must have in place appropriate safeguards to protect investors, including defined liability to clients in respect of losses resulting from operational failure. Development and investment in low-emissions DLT is being encouraged so as not to undermine the EU’s climate policies.
Press release on a DLT pilot regime
