Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

FINRA Issues Guidance on FOCUS Reporting for Operating Leases

Posted in Broker-Dealer

On March 19, the Financial Industry Regulatory Authority, Inc. (FINRA) released Regulatory Notice 19-08 to provide guidance to members for reporting lease assets and liabilities on their FOCUS reports. FINRA’s notice follows an October 2018 No-Action Letter (the No-Action Letter) in which the staff of the Securities and Exchange Commission’s Division of Trading and Markets (the Staff) addressed the treatment of operating leases under Securities Exchange Act Rule 15c3-1 in connection with the Financial Accounting Standards Board’s Accounting Standards Update for Leases. Continue Reading

FINRA Reminds Firms of Obligations Under Rule 15c2-11(a)(4)

Posted in Broker-Dealer

On March 20, the Financial Industry Regulatory Authority, Inc. (FINRA) released Regulatory Notice 19-09, which reminds members of their obligations under Securities Exchange Act Rule 15c2-11 and FINRA Rule 6432 (Compliance with the Information Requirements of Rule 15c2-11). Rule 15c2-11 prohibits a broker-dealer from publishing (or submitting for publication) a quotation in an unlisted security on a quotation medium unless the broker-dealer has reviewed current information regarding the issuer of the security. With respect to quotes in the security of a foreign private issuer, Rule 15c2-11(a)(4) requires a broker-dealer to review and make reasonably available upon request certain information published by the issuer since the beginning of its last fiscal year. In Regulatory Notice 19-09, FINRA informed members that linking to an issuer’s website that requires the investor to attest that he or she is a resident of a non-US jurisdiction or that prohibits US persons from accessing the website will not satisfy the Rule 15c2-11(a)(4) requirements (or the related FINRA Rule 6432 requirements) as such information is not considered to be “reasonably available” to US persons.

More information is available in Regulatory Notice 19-09.

Banking Regulators Adopt Swap Margin Safe Harbor

Posted in Brexit, Derivatives

On March 15, the five US regulators (the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Farm Credit Administration, the Federal Housing Finance Agency and the Federal Deposit Insurance Corporation) that are responsible for the margin rules for uncleared swaps that apply to prudentially regulated swap dealers adopted an interim final rule designed to ensure that qualifying swaps may be transferred from a UK entity to an affiliate in the European Union or the United States without triggering new margin requirements. Continue Reading

CFTC Announces Global Markets Advisory Committee Meeting

Posted in CFTC, Derivatives

The Commodity Futures Trading Commission has announced that its Global Markets Advisory Committee (GMAC) will hold a meeting on April 15. The GMAC will hear presentations on how regulators are fulfilling the 2009 G20 directive regarding the OTC derivatives market. Specifically, the GMAC will examine the status of the four key pillars of the original G20 directive:

  • trading on exchanges or electronic trading platforms;
  • clearing through central counterparties;
  • margin requirements for non-centrally cleared derivatives; and
  • data reporting to trade repositories.

The meeting is open to the public and will take place at the CFTC headquarters. A live webcast also will be offered. More information is available here.

CFTC Announces Energy and Environmental Markets Advisory Committee Meeting

Posted in CFTC, Derivatives

The Commodity Futures Trading Commission has announced that its Energy and Environmental Markets Advisory Committee (EEMAC) will hold a meeting on April 17. The meeting will focus on the following three topics:

  • derivatives markets’ responses to physical markets’ developments;
  • exchange-traded energy derivatives markets; and
  • the availability of clearing and other services in the energy derivatives markets.

The meeting is open to the public and will take place at the CFTC headquarters. A live webcast will also be offered. More information is available here.

House of Lords Bribery Act 2010 Committee Publishes Post-Legislative Scrutiny

Posted in Financial Markets, UK Developments

On March 14, the House of Lords Select Committee (Select Committee) on the Bribery Act 2010 (Bribery Act) published its report, “Bribery Act 2010: post-legislative scrutiny,” to establish whether the Bribery Act is achieving its intended purposes.

In its report, the Select Committee concludes that the Bribery Act is an excellent piece of legislation, creating offenses that are “clear and all-embracing.” In particular, the offense of corporate failure to prevent bribery is regarded as effective and enables those in positions of influence in a company to ensure that the company operates ethically. Continue Reading

ECB Announces Euro Short-Term Rate Start Date and Recommendations on Transition From EONIA

Posted in EU Developments, Financial Markets

On March 14, the European Central Bank (ECB) working group on euro risk-free rates published recommendations on transitioning from the euro overnight index average (EONIA) to the euro short-term rate (€STR). The ECB’s recommendations include the following: Continue Reading

ESMA Extends Its Register of Derivatives to be Traded On-Venue Under MiFIR

Posted in Derivatives, EU Developments, Financial Markets

On March 21, the European Securities and Markets Authority (ESMA) updated its public register of derivative contracts that are subject to the trading obligation under the Markets in Financial Instruments Regulation (MiFIR).

ESMA’s update follows the authorization, on the same date, of additional trading venues where the classes of derivatives subject to the trading obligation are available for trading. The recently authorized trading venues are located in France and the Netherlands.

ESMA’s public register is available here.

ESMA Publishes Statement on the Impact on the MiFIR Trading Obligation for Shares; the FCA Responds

Posted in Brexit, Brexit/UK Developments, EU Developments, Financial Markets, UK Developments

On March 19, the European Securities and Markets Authority (ESMA) published a statement on the impact on the Markets in Financial Instruments Regulation (MiFIR) trading obligation for shares (TO) if the United Kingdom left the European Union on March 29 (Brexit) without a withdrawal agreement (no-deal Brexit) and without an equivalence decision for the United Kingdom made by the European Commission. Continue Reading

ESMA Announces Results of MiFID II Annual Calculations of LIS and SSTI Thresholds for Bonds

Posted in Brexit, Brexit/UK Developments, EU Developments, Financial Markets, UK Developments

On March 19, the European Securities and Markets Authority (ESMA) published a press release announcing the results of the annual transparency calculations of the large in scale (LIS) and size specific to the instruments (SSTI) thresholds for bonds. ESMA’s publication had originally been planned for March 1, but was postponed as its IT systems required more time than anticipated to complete the calculations, as reported in the Corporate & Financial Weekly Digest edition of March 8, 2019. Continue Reading