Joint Committee of the European Supervisory Authorities
PRIIPs Delegated Regulation - ESAs publish outcome of review - 20 July 2020
The Joint Committee of the European Supervisory Authorities (the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA)) (ESAs) have published a letter to John Berrigan (Director General for Financial Stability, Financial Services and the Capital Markets Union at the European Commission) setting out the outcome of the ESAs’ review of proposed amendments to Commission Delegated Regulation (EU) 2017/653 (PRIIPs Delegated Regulation) on key information documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs).
The ESAs published a consultation on draft regulatory technical standards (RTS) to amend the technical rules on the presentation, content, review and revision of PRIIPs KIDs in October 2019. In the letter the ESAs explain that the draft RTS did not receive a qualifying majority of votes by EIOPA and that they are therefore not in a position to formally submit to the European Commission.
Letter from ESAs to John Berrigan (Director General for Financial Stability, Financial Services and the Capital Markets Union at the European Commission) on the outcome of its review of the PRIIPs Delegated Regulation
Webpage
Press release
European Securities and Markets Authority
MiFIR - ESMA publishes Opinion on the assessment of pre-trade transparency waivers for equity and non-equity instruments - 17 July 2020
ESMA has published an Opinion on the assessment of pre-trade transparency waivers for equity and non-equity instruments under the Markets in Financial Instruments Regulation (600/2014/EU) (MiFIR). Before granting a waiver of the MiFIR pre-trade transparency obligations, national competent authorities (NCAs) must notify ESMA of the intended use of each individual waiver and provide an explanation of its functioning.
The Opinion sets out guidance on recurring issues that it has identified in assessing the compliance of notified waivers. The guidance covers several issues, including the following: (i) specific types of waivers, including large-in-scale (LIS), order management facility (OMF) and negotiated transactions (NT) waivers; (ii) combinations of waivers; and (iii) applying for pre-trade transparency waivers.
The Opinion is intended to clarify MiFIR requirements and does not create any new obligations for NCAs or market participants. ESMA will update the Opinion if further issues are encountered.
ESMA Opinion on the assessment of pre-trade transparency waivers for equity and non-equity instruments under MiFIR
Press release
MiFIR - ESMA publishes final report on the transparency regime for non-equity instruments - 23 July 2020
ESMA has published its final report on the transparency regime for non-equity instruments under MiFIR. This follows ESMA’s March 2020 consultation review of the transparency regime under Article 17 of Commission Delegated Regulation (EU) 2017/583, which details technical rules that set out how pre- and post-trade transparency apply to different asset classes in the EU.
The report suggests to the European Commission that it is appropriate to move to the next stage of transparency with regard to the average daily number of trades (ADNT) threshold used for the quarterly liquidity assessment of bonds, and the trade percentile used for determining the pre-trade size specific to the financial instrument (SSTI) thresholds. These measures are designed to increase the transparency available to market participants in the bond market. However, ESMA does not recommend moving to the next stage for the trade percentiles that determine the pre-trade SSTI thresholds for other non-equity financial instruments. It considers that such a move is premature as the first annual transparency calculation for these non-equity instruments is scheduled to be published later in 2020.
In the light of its assessment, ESMA has drafted an amended version of the applicable RTS under Commission Delegated Regulation (EU) 2017/583. Provided the European Commission endorses the amended RTS, the RTS will be subject to a non-objection procedure by the European Parliament and the Council of the European Union.
ESMA report on MiFIR transparency regime for non-equity instruments under Commission Delegated Regulation (EU) 2017/583
Press release
Financial Conduct Authority
FCA Consultation Paper CP20/12: Delay to the implementation of the European Single Electronic Format - July 2020
The FCA has published a Consultation Paper (CP20/12) setting out its proposals to postpone by one year the mandatory European Single Electronic Format (ESEF) requirements for annual financial reporting under the Transparency Directive (2004/109/EC) in light of the impact and disruption caused by COVID-19.
The ESEF introduces requirements for annual financial reporting in electronic format in order to improve the accessibility, analysis and comparability of annual financial reports. The ESEF aims to make capital markets more efficient and lower the cost of capital for issuers.
The FCA’s proposals include:
- postponing the requirement for all issuers to publish their annual financial reports in XHTML web browser format, replacing the current PDF format, from financial years starting on or after 1 January 2021, to 1 January 2022;
- postponing the requirement for issuers who prepare consolidated annual financial statements in accordance with International Financial Reporting Standards (IFRS) to tag basic financial information from financial years starting on or after 1 January 2021, to 1 January 2022; and
- postponing the requirement for issuers who prepare IFRS consolidated annual financial statements to tag notes to the financial statements from financial years starting on or after 1 January 2023, to 1 January 2024.
The consultation period closes on 28 August 2020.
FCA Consultation Paper CP20/12: Delay to the implementation of the European Single Electronic Format
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International Swaps and Derivatives Association
IBOR fallback rates - ISDA announces publication of adjusted rates by Bloomberg - 21 July 2020
The International Swaps and Derivatives Association (ISDA) has announced that Bloomberg Index Services Limited (BISL) has begun calculating and publishing adjusted versions of various risk-free rates (RFRs) which can be used in conjunction with revised fallback provisions for certain key interbank offered rates (IBORs) that ISDA intends to include in its derivatives documents.
The fallback provisions specify replacement rates that would apply for derivatives transactions referencing certain IBORs if such benchmarks were to become unavailable or subject to another trigger event. The adjusted versions of the relevant RFRs take into account that the RFR does not incorporate an element for term or credit risk that the corresponding IBOR does.
The calculations published by BISL include IBOR fallback rates for: (i) the Australian dollar Bank Bill Swap Rate (BBSW); (ii) the Canadian Dollar Offered Rate (CDOR); (iii) Swiss franc LIBOR; (iv) EURIBOR; (v) euro LIBOR; (vi) sterling LIBOR; (vii) HIBOR; (viii) euro yen TIBOR; (ix) yen LIBOR; (x) TIBOR; and (xi) US dollar LIBOR across various tenors.
Press release: ISDA announces that Bloomberg has begun publishing and calculating adjusted RFRs for use as IBOR fallback rates in derivatives contracts
ISDA factsheet on IBOR fallback rates
