On January 27, Allison Herren Lee, the acting chair of the Securities and Exchange Commission, announced the European Commission’s (EC) adoption of an equivalence decision, stating that the SEC’s regulatory framework applicable to central counterparties (CCPs) that are “covered clearing agencies” under SEC rules is equivalent to relevant European legal and regulatory requirements.
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FCA Publishes SEC MoU on Financial Services Supervision Post-Brexit
On January 22, the UK’s Financial Conduct Authority (FCA) published an amended and restated memorandum of understanding (MoU) between itself and the US Securities and Exchange Commission (SEC) in light of the UK’s withdrawal from the EU.
The key understandings discussed by the FCA and SEC in the MoU include:
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HM Treasury Responds to House of Lords EU Financial Affairs Committee Recommendations on Financial Services Post-Brexit
On June 11, the House of Lords EU Financial Affairs Sub-Committee (the Committee) published a letter dated May 27 from HM Treasury to the Committee in relation to the Committee’s review of the financial services sector after Brexit (the Letter).
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ESMA Consults on Third-Country Reporting Under MiFID II and MiFIR
Posted in EU Developments, Financial Markets
On January 31, the European Securities and Markets Authority (ESMA) published a consultation paper (the CP) containing draft technical standards on the reporting requirements for third-country firms who provide investment services and activities in the European Union (EU) under the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Directive (MiFIR).
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European Commission Publishes Communication on Its Equivalence Policy With Non-EU Countries
Posted in EU Developments, Financial Markets
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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Equivalence for UK CCPs and CSDs Extended
On April 4, two Commission Implementing Decisions (Amending Decisions) were published in the Official Journal of the European Union, amending the following December 20, 2018 equivalence decisions (Equivalence Decisions):
- Implementing Decision (EU) 2018/2031, on the temporary equivalence of the UK’s regulatory framework for central counterparties (CCPs); and
- Implementing Decision (EU) 2018/2030, on the temporary equivalence of the UK’s regulatory framework for central securities depositories (CSDs).
ESMA Publishes Statement on Preparations Regarding Clearing and Settlement for a No-Deal Brexit
On March 28, the European Securities and Markets Association (ESMA) published a statement updating market participants on its preparations for the United Kingdom’s withdrawal from the European Union, in the event of an agreement on transitional arrangements (Withdrawal Agreement) not being in place (No-Deal Brexit). ESMA’s update follows the European Council’s (EC’s) agreement to the UK government’s request to extend the United Kingdom’s withdrawal from the European Union (Brexit) to either April 12 if the House of Commons does not approve a Withdrawal Agreement by March 29, or to May 22 if it does.
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UK and EU Publish Draft Brexit Withdrawal Agreement
On November 14, a technical agreement was reached between the negotiators of the UK and the EU in relation to the terms of the withdrawal of the UK from the EU (the Withdrawal Agreement). Published alongside the Withdrawal Agreement was a non-binding Political Declaration, providing an overview of the intended future relationship between the UK and EU.
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Chief Brexit Negotiators Discuss Post-Brexit Treatment of UK Financial Regulations
On January 9, Michel Barnier, the European Union’s (EU’s) chief Brexit negotiator, delivered a speech at the “Trends Manager of the Year 2017” event in Brussels, and on January 10, the UK’s Chancellor of the Exchequer, Philip Hammond, and the UK’s Secretary of State for Exiting the EU, David Davis, published a joint article that originally appeared in Frankfurter Allgemeine Zeitung, a German newspaper. Both the speech and the article commented on future economic ties between the EU and the UK, covering a broad range of services industries, focusing in particular on financial services.
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