Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

FMSB Releases Draft Standard for Compensating Trade Errors

Posted in Financial Markets, UK Developments

On March 20, the Fixed Income, Commodities and Currency Markets Standards Board (FMSB) published a draft of its transparency standard on Secondary Market Trading Error Compensation, setting out expected behaviors for the payment of compensation for trading errors.

The transparency standard proposes three methods, subject to these complying with applicable local law, for paying compensation in the event of a trading error (e.g., following a miscommunication between investor and a firm or as a result of timing issues): Continue Reading

UK Government Launches Fintech Sector Strategy

Posted in Financial Markets, UK Developments

On March 22, the UK government held its second annual International Fintech Conference. The Conference forms part of the UK’s plans to maintain its world leading position in technology-enabled innovation in financial services (FinTech).

The Conference follows the launch of the European Commission’s FinTech Action Plan, further details of which are available in the Corporate & Financial Weekly Digest edition of March 9, 2018. Continue Reading

UK Government and EC Publish Draft UK/EU Withdrawal Agreement

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

On March 19, the UK government and the European Commission (EC) published a draft withdrawal agreement (Latest Draft Agreement) which includes the legal text agreed by negotiators on the transition period following the UK’s withdrawal from the European Union (EU). Continue Reading

ESMA Publishes Speech on Supervisory Convergence, Transaction Cost Transparency and Pan-European Regulators

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

Steven Maijoor, Chair of the European Securities and Markets Authority (ESMA) spoke on March 20, regarding ESMA’s work during the past year. In his speech, Mr. Maijoor commented on ESMA’s work in relation to:

  1. supervisory convergence to limit the scope for regulatory arbitrage in light of the United Kingdom’s upcoming withdrawal from the European Union and UK-based firms re-locating into the remaining EU member states—in particular, the steps to prevent firms from using “letterbox entities” (entities without the necessary substance to meet regulatory requirements) to comply with the requirement to locate within an EU member state and ESMA’s creation of the Supervisory Coordination Network;
  2. the changes to cost transparency focusing on the revised Markets in Financial Instruments Directive (MiFID II), the related Regulation and the Regulation on key information documents for packaged retail and insurance-based investment products or “PRIIPs;” and
  3. the review of the Pan-European European Supervisory Authorities (ESAs) and the potential expansion of ESMA’s supervisory convergence to promote the EU project for a Capital Markets Union.

The speech is available here.

SEC Proposes Transaction Fee Pilot Program

Posted in Broker-Dealer

On March 14, the Securities and Exchange Commission proposed new Rule 610T of Regulation National Market System (Reg NMS), which would create a Transaction Fee Pilot program for all NMS stocks. The pilot program is designed to produce data on the effect of transaction fees and rebates on order routing behavior, execution quality, and market quality of the equities exchanges, including taker-maker exchanges. Continue Reading

CFTC Seeks Market Risk Advisory Committee Membership Nominations and Public Comment on Committee Priorities

Posted in CFTC, Derivatives

On March 15, the Commodity Futures Trading Commission published in the Federal Register a request for nominees for the membership positions on the Market Risk Advisory Committee (MRAC). MRAC is a discretionary advisory committee that conducts public meetings and submits reports and recommendations to the CFTC on matters including systemic risk and changes in the market structure of the derivatives markets and other financial markets. In addition to requesting MRAC membership nominations, the Federal Register release also invited the public to recommend additional topics that should be prioritized by the committee.

The deadline for nominations and meeting topics is March 29.

A copy of the Federal Register release is available here.

FCA Launches Survey of Firms that Passport Into the UK

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

On March 9, the UK Financial Conduct Authority (FCA) launched a short online survey for firms providing cross-border services into the UK from other European Union/European Economic Area (EEA) jurisdictions (“passporting”), or marketing funds in the UK.

The survey follows the UK government’s December 2017 announcement that, if necessary, it will legislate to provide a temporary licensing/authorization regime for firms in the EEA and funds passporting into the UK (for more information please see the Corporate & Financial Weekly Digest edition of January 5, 2018). Continue Reading

FCA Publishes Webpage on Review of Closet Trackers

Posted in Financial Markets, UK Developments

On March 14, the UK Financial Conduct Authority (FCA) published a webpage in relation to its review of potential closet tracker funds and closet constrained funds. The review forms part of the FCA’s supervision to protect investors and maintain a competitive market.

On its webpage, the FCA explains that both types of funds look like and charge similar fees to funds that strive to beat a benchmark (active funds), but are managed in a way that is similar to funds that track a benchmark (passive funds). Continue Reading

EC Legislative Proposals on Cross-Border Distribution of Collective Investment Funds

Posted in EU Developments, Financial Markets

On March 12, as part of the development of the EU’s Capital Markets Union (CMU), the European Commission (EC) published two legislative proposals in relation to the cross-border distribution of collective investment funds within the EU:

  1. a Regulation (Proposed Regulation) facilitating the above and amending existing Regulations on European venture capital funds and European social entrepreneurship funds; and
  2. a Directive (Proposed Directive) amending the Undertakings for Collective Investment in Transferable Securities (UCITS) IV Directive and the Alternative Investment Fund Managers Directive (AIFMD).

Continue Reading