On July 29, the European Commission (EC) published a communication on equivalence in the area of financial services (Communication). The EC states that, in light of recent policy developments, it is timely to take stock of the EU’s approach to equivalence.

The Communication discusses the purpose and importance of equivalence. The EC states that each new decision is looked at individually and in detail to ensure that the policies of third countries are compatible with those of the EU, and that any equivalence determination is beneficial to, and sustainable for, both parties.EU financial services law includes approximately 40 provisions that allow the EC to adopt equivalence decisions and as of July 29, the EC has adopted more than 280 equivalence decisions for more than 30 countries.
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On July 24, the European Commission (EC) published a suite of documents assessing the current anti-money laundering (AML) and counter-terrorist financing (CTF) framework in operation in the European Union (EU).

Although each document is addressed to the European Parliament and the Council of the EU, the EC states that it believes that these documents will support the EU and national authorities to better address money laundering and terrorist financing risks. It notes that some improvements can be made quickly at an operational level, and the EC will continue to support EU member states in this, while also reflecting on how to address the remaining structural challenges.
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Further to our various updates on the implementation of the Prospectus Regulation (the Regulation) in the UK and the European Union (EU) (which applies across the UK and the European Union from July 21, 2019), on July 12, 2019 the European Securities and Markets Authority (ESMA) published its guidance on the Regulation in the form of significantly revised and updated questions and answers (Q&As).

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On July 15, 2019, the European Securities and Markets Authority (ESMA) published a consultation paper (the Paper) setting out draft guidelines on aspects of UK and EU investment firms’ compliance functions under MiFID II (the Draft Guidelines).

ESMA describes the compliance function as “a crucial function within firms, responsible for identifying, assessing, monitoring and reporting on the firm’s compliance risk.”


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On July 3, the Financial Action Task Force (FATF) published an updated version (dated June 2019) of its anti-money laundering (AML) and counter-terrorist financing (CTF) standards.

This version includes a recently adopted interpretative note to recommendation 15 (new technologies), in which the FATF explains how its standards apply to virtual asset activities and virtual asset service providers (VASPs).
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On July 3, the UK Financial Conduct Authority (FCA) published a consultation paper (CP19/22) on prohibiting the sale, marketing and distribution to retail clients of derivatives and exchange traded notes (ETNs) referencing certain types of cryptoassets by firms acting in, or from, the UK.
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On July 1, the UK Financial Conduct Authority (FCA) published a policy statement (PS19/18) containing rules on restricting contract for difference (CFD) products and CFD-like options sold to retail clients.

The FCA consulted on the rules in December 2018 in CP18/38 (for more information, see the December 14, 2018 edition of Corporate & Financial Weekly Digest). In PS19/18, the FCA confirms that for CFDs and CFD-like options sold to retail clients, firms will be required to:
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On June 21, 2019, the European Securities and Markets Authority (ESMA) published a press release announcing that it has made available updated results of the annual transparency calculations for equity and equity-like instruments.

The results are published pursuant to delegated regulations under the revised Markets in Financial Instruments Directive and the Markets in Financial Instruments Regulation. The calculations include:

  • Liquidity assessments.
  • The determination of the most relevant market in terms of liquidity (MRM).
  • The determination of the average daily turnover (ADT) relevant for the determination of the pre-trade and post-trade large in scale (LIS) thresholds.
  • The determination of the average value of the transactions (AVT) and the related standard market size (SMS).
  • The determination of the average daily number of transactions on the most relevant market in terms of liquidity relevant for the determination of the tick-size regime.


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