Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

ESMA Updates Statement on the Impact of Brexit on the MiFIR Trading Obligation for Shares

Posted in Brexit, EU Developments, Financial Markets

On May 29, the European Securities and Markets Authority (ESMA) published a revised statement outlining its approach relating to the trading obligation for shares (TO) under Article 23 of the Markets in Financial Instruments Regulation (MiFIR), if the United Kingdom were to leave the European Union (Brexit) without a withdrawal agreement (no-deal Brexit) and without an equivalence decision made by the European Commission. Continue Reading

EMIR REFIT Published in the Official Journal of the European Union

Posted in EU Developments, Financial Markets

On May 28, the regulation amending the European Market Infrastructure Regulation (EMIR), or EMIR REFIT, was published in the Official Journal of the European Union. A handful of provisions are subject to delayed implementation (per Article 2, thereof), but the majority will go into effect on June 17, being 20 days after publication. Continue Reading

ESMA Updates Its Opinion on Ancillary Activity Calculations

Posted in EU Developments, Financial Markets

On May 27, the European Securities and Markets Authority (ESMA) published an updated opinion on the ancillary activities calculation under the revised Markets in Financial Instruments Directive (MiFID II).

Article 2(1)(j) of MiFID II provides an exemption for persons dealing on their own account or providing investment services relating to commodity derivatives, provided that their activity is an ancillary activity to their main business. Market participants are required to measure their own activity against total market sizes in commodity derivatives based on historical data. In the opinion, ESMA provides the estimation of the market size of various commodity derivatives, including metals, oil and coal, as well as emission allowances.

The updated opinion provides the estimation of the market size of commodity derivatives and emission allowances for the year 2018.

The updated opinion is available here.

 

ESMA Launches Call for Evidence on Position Limits in Commodity Derivatives Under MiFID II

Posted in EU Developments, Financial Markets

On May 24, the European Securities and Markets Authority (ESMA) published a call for evidence on position limits and position management in commodity derivatives.

The call for evidence has been launched so that ESMA can provide advice to the European Commission for its report on the impact of position limits and position management on commodity derivatives markets by March 31, 2020 (in accordance with a revised timeline agreed with the European Commission and Article 90(1) of the revised Markets in Financial Instruments Directive (MiFID II)). Continue Reading

European Commission Adopts Fifth Communication Regarding Preparations for a No-Deal Brexit

Posted in Brexit, EU Developments

On June 12, and ahead of the European Council meeting on June 20 and 21, the European Commission (EC) adopted a fifth Brexit Preparedness Communication, taking stock of the European Union’s preparations and contingency measures if the United Kingdom exits the European Union without a deal or an implementation period (No-Deal Brexit). Continue Reading

SEC Adopts Rules and Interpretations To Enhance Protections and Preserve Choice for Retail Investors

Posted in Broker-Dealer

On June 5, the Securities and Exchange Commission voted to adopt a package of rules and interpretations designed to enhance the quality and transparency of retail investors’ relationships with investment advisers and broker-dealers. Specifically, the SEC approved Regulation Best Interest. Continue Reading

SEC Approves Amendments to FINRA’s Codes of Arbitration Procedure for Customer and Industry Disputes

Posted in Broker-Dealer

On May 30, the Securities Exchange Commission approved amendments to the Financial Industry Regulatory Authority’s customer and industry arbitration rules to expand the time period for non-parties to respond to arbitration subpoenas and orders of appearance of witnesses or production of documents. Continue Reading

NASAA, SEC and FINRA Issue Senior Safe Act Fact Sheet

Posted in Broker-Dealer

On May 23, the North American Securities Administrators Association (NASAA), Securities Exchange Commission and the Financial Industry Regulatory Authority issued a fact sheet on the Senior Safe Act to help raise awareness among broker-dealers, investment advisers and transfer agents. Continue Reading

ISDA Publishes Initial Margin Implementation Guidance for Financial End Users

Posted in Derivatives

On May 29, the International Swaps and Derivatives Association (ISDA) issued calculation guidance for swap market participants seeking to determine if they might become subject in 2020 to mandatory initial margin requirements for swaps executed with swap dealers registered with the Commodity Futures Trading Commission. Under both the CFTC margin rules and the margin rules adopted by the prudential regulators for bank swap dealers, any “financial end user” (as defined in the margin rules) that is not already subject to mandatory initial margin for trades with swap dealers will become so on September 1, 2020, if it has “material swaps exposure.” An entity will have “material swaps exposure” for 2020 if the entity and its margin affiliates have a daily average aggregate notional amount (DAANA) of uncleared swaps, uncleared security-based swaps, foreign exchange forwards and foreign exchange swaps with all counterparties for June, July and August of this year that exceeds $8 billion, where such amount is calculated only for business days. Continue Reading

CFTC Issues Margin Relief for Changes to Legacy Swaps

Posted in Derivatives

On June 6, the Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission issued no action letter 19-13 to permit swap dealers and their counterparties to make certain changes to current swaps without subjecting the swaps to the CFTC swap margin rule. The need for the relief stems from the anti-avoidance position taken by the CFTC when the swap margin rule was enacted that any change made after the margin rule compliance date applicable to swap dealer and its counterparty to an uncleared swap (a Legacy Swap) in existence on the compliance date will cause the Legacy Swap to be brought into scope for margin.

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