European Parliament
COVID-19 – European Parliament adopts proposed instruments amending MiFID II and Prospectus Regulation – 11 February 2021
The European Parliament has adopted the proposed Directive amending the MiFID II Directive (2014/65/EU) (MiFID II) and the proposed Regulation amending the Prospectus Regulation ((EU) 2017/1129) (Prospectus Regulation). Both amendments are aimed at helping the EU’s economic recovery from COVID-19. Both legislative instruments have been published.
The amendments to MiFID II will remove administrative burdens while striking a balance between protecting investors and keeping compliance costs low. The proposed Directive was adopted with 339 votes in favour, 394 against and 57 abstentions. The proposed Regulation amends the Prospectus Regulation in relation to the EU recovery prospectus and requirements applying to financial intermediaries. These amendments were adopted 585 votes to 50 with 55 abstentions.
Both of these legislative instruments form part of the Capital Markets Recovery Package which is part of the EU’s overall recovery strategy.
Provisional edition of the text of the proposed Directive
Provisions edition of the text of the proposed Regulation
Press release
Working Group on Sterling Risk-Free Reference Rates
LIBOR transition – UK Working Group publishes Consultation Paper on successor rate in legacy bonds – 11 February 2021
The UK Working Group on Sterling Risk-Free Reference Rates has published a Consultation Paper on the successor rate to GBP LIBOR in legacy bonds. The Working Group is seeking views on whether it would be helpful for it to make a recommendation on a successor rate to GPB LIBOR for bonds in connection with the operation of a fallback provision following the occurrence of a permanent cessation or a pre-cessation event. If this would be helpful, the Working Group is also seeking feedback on the preferred successor rate to be recommended.
The Working Group has proposed that successor rates for legacy bonds referencing GBP LIBOR should be overnight SONIA compounded in arears and term SONIA. The consultation paper sets out several factors that should be considered when assessing the appropriate successor rate, including the stages of development of each rate, their current usage and expected use cases, and their alignment with the existing SONIA-linked bond, derivatives and loan markets.
The consultation closes on 16 March 2021.
Working Group consultation paper on successor rate to GBP LIBOR in legacy bonds
Updated webpage
