• News

Legal Shorts 06.10.17 including FCA speech on investment and asset management regulation

Published: 06 Oct 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



FCA speech on investment and asset management regulation

The FCA has published a speech by its director of supervision, Megan Butler, on investment and asset management regulation. Points of interest in the speech include the following: (i) the FCA is currently reviewing the responses it received to its November 2016 to February 2017 asset management market study and is preparing a second consultation on transparency i.e. benchmarking, performance reporting, objectives and all-in-fee; (ii) the FCA is establishing an asset management hub to support new entrants to the market from this month; (iii) the FCA will take a sensible and proportionate approach to MiFID II’s application to the UK; and (iv) the FCA will provide support to asset managers to resolve significant MiFID II business planning issues, including the uncertainty surrounding firms registered as broker dealers in the US, which cannot accept payment for research without applying to become an investment adviser.

MiFID II: ESMA updates Q&As on investor protection

ESMA has updated its Q&As on investor protection topics under MiFID II. The new Q&As cover the following issues: (i) client categorisation; (ii) post-sale reporting; (iii) recording of telephone conversations and electronic communications; (iv) best execution; and (v) information on costs and charges. The Q&As were first published in October 2016.

MiFID II: ESMA updates Q&As on market structures and transparency

ESMA has also updated its MiFID II Q&As on market structures and transparency. ESMA has added new Q&As relating to the following: (i) Direct Electronic Access (DEA) and algorithmic trading; (ii) multilateral and bilateral systems; (iii) transparency requirements; (iv) non-equity transparency; and (v) the systematic internaliser (SI) regime. ESMA last updated the Q&As in May 2017.

EMIR: ESMA updates Q&As

ESMA has published an updated version of its Q&As on the implementation of EMIR. In the updated version of the Q&As, there is an amended answer to general question 1 on funds and counterparties (see pages 11 and 12). The amended answer applies from 1 November 2017. In addition, the Q&A on the definition of OTC derivatives (general 1) has been modified (see pages 15 and 16). There is also a new Q&A (CCP 22) on the ongoing monitoring of collateral requirements (see pages 67 and 68).

CSDR: ESMA updates Q&As

ESMA has also published an updated version of its Q&As on the implementation of the regulation on improving securities settlement and regulating central securities depositories (CSDR). The updated version features three new Q&As: (i) CSD 5(c) on the protection of securities of participants and those of their clients (see pages 13 and 14); (ii) CSD 7(b) and (c) on the provision of banking-type ancillary services (see pages 15 and 16); and (iii) CSD 10(a) - (c) on requirements for CSD links (see pages 17 and 18).

MAR: ESMA updates Q&As

Finally, ESMA has further updated its Q&As on the Market Abuse Regulation (MAR). ESMA has added a new question addressing how an issuer should deal with the situation where it has delayed a disclosure of inside information but subsequently the information loses the element of price-sensitivity and accordingly its inside nature (new Question 5.2). ESMA's view is that where information loses the element of price-sensitivity, it ceases to be inside information and falls out of scope; thus, the issuer is obliged neither to publicly disclose that information nor to inform the competent authority that disclosure of such information was delayed. However, in such circumstances, since the information had been inside information for a period of time, issuers must comply with all relevant obligations relating to the drawing up and updating of insider lists, and the maintenance of information relating to the delay of disclosure, stemming from MAR and its delegated and implementing regulations.

Benchmarks Regulation: EC adopts Delegated Regulation

The European Commission has adopted a Delegated Regulation with regard to the establishment of the conditions to assess the impact resulting from the cessation of or change to existing benchmarks under the Benchmarks Regulation. The Delegated Regulation sets out in detail under which conditions they can conclude that the cessation or changing of an existing benchmark could result in a force majeure event, or could frustrate or otherwise breach the terms of a financial contract or financial instrument, or the rules of an investment fund, referencing an existing benchmark. A draft version of the Delegated Regulation was published for consultation by the Commission in June 2017. The EU Council and the European Parliament will now consider the Delegated Regulation and, if neither of them object to it, it will enter into force twenty days after it is published in the Official Journal.

Benchmarks Regulation: FCA publishes new webpage for benchmark authorisation

The FCA has published a new webpage for benchmark administrators applying for authorisation or registration under the Benchmark Regulation. On the new webpage, the FCA notes that, although formal applications to become an authorised or registered benchmark administrator do not open until 1 January 2018 (the date on which the Benchmark Regulation comes into force), benchmark administrators can submit an early draft application to the FCA. Submitting an early application allows the FCA to review draft applications before the time limits under the Benchmark Regulation are triggered. Applications should be made through Connect, the FCA's online system.

FCA publishes new webpages for PSD2

The FCA has also published new webpages relating to the revised Payment Services Directive on payment services in the internal market (PSD2). The new webpages include: (i) a webpage to help firms identify the key relevant changes to them from PSD2; (ii) webpages for firms which are already authorised, including authorised payment institutions (APIs), small payment institutions and authorised electronic money institutions (EMIs); (iii) webpages on exclusions under PSD2 relating to limited networks, electronic communications and commercial agents; and (iv) webpages for firms that are not currently regulated but who intend to offer regulated payment services.


This week’s Guest Short is provided by Nancy King, partner at Portman Compliance Consulting LLP, as follows:

“With three months to go until MiFID II deadline day, Portman Compliance has prepared the suite of MiFID II documents for all firms which are impacted by MiFID II.  Firms will be required to update not only their Compliance Manual and Monitoring Program, but create brand new policies for the first time, examples include Governance, Complaints, Research to name a few.”

For further information, please contact Nancy King on 0207 205 2249 or at: Nancy@portmancompliance.com.


Tel: + 44 20 7585 1406

Mob: + 44 7734 057 327


6 October 2017

Firm: Addleshaw Goddard

Practice Area: Trade & Customs

  • 42 Brook Street
    W1K 5DB

Find a Global Law Expert


Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.

Sign up for the latest legal briefing and news within Global Law Experts community, as well as a whole host of features, editorial and conference updates direct to your email inbox.

Naturally you can unsubscribe at anytime.