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Legal Shorts 15.06.17 including MiFID II: Pre- and post-trade transparency requirements update

Published: 16 Jun 2017

Welcome to Legal Shorts, a short briefing on some of the week’s developments in the financial services industry.

If you would like to discuss any of the points we raise below, please contact me or one of our other lawyers.  

Claire Cummings

020 7585 1406



MiFID II: Pre- and post-trade transparency requirements update

The European Commission has published a report to the European Parliament and the EU Council on exemptions from pre- and post-trade transparency rules for third-country central banks and other entities under MiFIR. The report covers Australia, Brazil, Canada, Hong Kong SAR, India, Japan, Mexico, Singapore, the Republic of Korea, Switzerland, Turkey and the United States. The Commission has concluded that, in the light of their market and operational transparency frameworks, the jurisdictions covered have legal frameworks in place that allow for a sufficient level of transparency. In addition, the trading activity in the EU emanating from these jurisdictions is substantial enough to justify an extension of the exemption from MiFIR pre- and post-trade transparency requirements. The Commission adopted a Delegated Regulation supplementing MiFIR with regard to the exemption of certain third countries' central banks from pre- and post-trade transparency requirements in April 2017.

MiFID II: EC adopts Delegated Regulation on pre- and post-trade transparency requirements

Further to the above, the European Commission has also adopted a Delegated Regulation supplementing MiFIR as regards the exemption of those third countries' central banks in their performance of monetary, FX and financial stability policies from pre- and post-trade transparency requirements. The next step is for the Council of the EU and the European Parliament to consider the Delegated Regulation. If neither of them objects, it will enter into force 20 days after it is published in the Official Journal.

New prudential regime for MiFID firms to be considered

The EBA has announced that it will hold a public hearing on the possibility of developing a new prudential regime for MiFID investment firms. The public hearing follows the EBA's November 2016 discussion paper, which responded to the European Commission's June 2016 call for advice relating to the prudential requirements applicable to investment firms under CRDIV. The public hearing will be held on 3 July 2017 in London. The EBA aims to use the public hearing to gather additional feedback, which it will take into account in finalising its response to the Commission. It expects to submit its final advice to the Commission in the course of September 2017.

EMIR: EC proposed Regulation amending EMIR supervisory regime  

The European Commission has published a proposed Regulation amending EMIR as regards the procedures and authorities involved for the authorisation of CCPs and requirements for the recognition of third-country CCPs. The proposed Regulation focuses on targeted amendments to the supervisory regime for EU and third-country CCPs with the aim of seeking to introduce a more pan-European approach to the supervision of EU CCPs, to ensure further supervisory convergence and accelerate certain procedures, and to make the process to recognise and supervise third-country CCPs more rigorous for those that are of key systemic importance for the EU. The proposed Regulation complements another proposed Regulation amending EMIR, which was adopted by the Commission in May 2017. It also complements the Commission's proposed Regulation establishing a framework for CCP recovery and resolution, which was adopted in November 2016.

FCA quarterly consultation  

The FCA has published its 17th quarterly consultation seeking views on the following changes to its rules and guidance: (i) clarifying the application of the requirement to have a client assets report to loan-based crowdfunding platforms; (ii) changes to the Training and Competence sourcebook (TC) list of appropriate qualifications; and (iii) changes to reporting requirements in SUP. Comments on (i) and (ii) are invited by 12 July 2017 and by 12 August 2017 for (iii).

BoE speech on new financial markets codes of practice 

The Bank of England has published a speech by Sarah John, Head of the Bank’s Sterling Markets Division, on the new financial markets codes of practice. The focus of the speech is on embedding and adhering to the recently launched UK money markets code, FX global code and global precious metals code. The three new codes are aligned along the same fundamental principles and are intended to promote robust, fair, liquid, open and appropriately transparent markets, supported by effective infrastructures. The codes establish reformed guidance on conduct and market practice for participants active in the relevant markets and also provide mechanisms to encourage and increase adherence to those standards. A tailored statement of commitment has been developed for each code and the BoE encourages all market participants to use them.

CMU mid-term review

The European Commission has published a communication on the mid-term review of the CMU action plan. The purpose of the mid-term review is to set out an additional set of actions that complement the initiatives set out in the Commission's original action plan for the CMU that have not yet been completed. Among other things, the Commission intends to: (i) give ESMA additional powers to promote the effectiveness of consistent supervision across the EU; (ii) adopt a legislative proposal on a new prudential framework for investment firms; (iii) assess the case for an EU licensing and passporting framework for FinTech activities; and (iv) publish an impact assessment on a possible legislative proposal to facilitate the cross-border distribution and supervision of UCITS and AIFs. The Commission intends to establish the foundations of the CMU by 2019.

IOSCO report on misconduct in the wholesale financial markets

IOSCO has published a report produced by its task force on wholesale market conduct. The task force's review focused on examining regulatory approaches and tools that are relevant to address market conduct by traders and other professionals engaging in trading with, advising or providing other investment services to, professional counterparties in wholesale markets, and the managers who are responsible for supervising these professionals. The aim of the report is to raise a broader awareness about the tools and approaches that IOSCO members use to regulate conduct in wholesale markets, and highlight examples of market conduct tools and approaches that are particularly relevant in the context of wholesale markets.

EU Council adopts proposed Eurocrime Directive on countering money laundering by criminal law 

The EU Council has adopted its position on the proposed Directive on countering money laundering by criminal law, reported in more detail in last week’s Legal Shorts.  The aim of the proposed Directive is to ensure a harmonised and comprehensive criminalisation of money laundering offences across the EU and also to ensure harmonisation in the level of sanctions for committing money laundering offences. The Council and the Parliament will enter into negotiations on the final text as soon as the latter has decided on its position. This position is unlikely to have much impact on England and Wales, as the law is already advanced.

Electronic money guidance updated 

The Joint Money Laundering Steering Group (JMLSG) has published for consultation a revised version of its sectoral guidance on electronic money, which is contained in Part II of the JMLSG's AML and CTF guidance. The JMLSG has revised the guidance in line with the proposed Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (known as the Money Laundering Regulations 2017). The proposed 2017 Regulations are designed to transpose MLD4 and the revised WTR in the UK.

Key dates for June and July

Key developments expected in June and early July 2017 include the following: (i) 26 June 2017 - date by which Member States are required to have transposed MLD4 and date on which the revised Wire Transfer Regulation applies; (ii) 26 June 2017 - date by which the Money Laundering Regulations 2017 are expected to come into force, transposing MLD4 and the revised WTR in the UK; and (iii) 3 July 2017 - date from which the rules in the FCA's Code of Conduct sourcebook (COCON), and the rules in the Conduct Rules Part of the PRA Rulebook, apply to all non-executive directors within the scope of the senior managers and certification regime (SM&CR) and the senior insurance managers regime.


Tel: + 44 20 7585 1406

Mob: + 44 7734 057 327


15 June 2017

Firm: Addleshaw Goddard

Practice Area: Trade & Customs

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