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Legal Shorts 20.10.17 including FCA launches asset management authorisation hub and ESMA launches MiFID II and MAR data system

Published: 20 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 launches asset management authorisation hub

The FCA has launched a new asset management authorisation hub with the aim of supporting new firms by assisting them when they apply for authorisation, throughout the authorisation process, and afterwards. The hub will offer new firms pre-application meetings, dedicated case officers and access to a new website portal. This is designed to make it easier for firms to understand how the FCA works, make a complete submission and transition from the FCA's authorisation to supervision regime. The launch of the hub follows a September 2017 speech by Megan Butler, FCA executive director of supervision: investment, wholesale and specialists, on asset management regulation. Future phases of the hub will feature open days and surgeries for firms and will be rolled out throughout 2018.


ESMA launches MiFID II and MAR data system

ESMA has launched its Financial Instruments Reference Data System (FIRDS) database. The purpose of the database is to provide market participants with reference data to enable them to identify instruments subject to reference data reporting requirements under MAR and MiFIR. ESMA has also published instructions for market participants on how to access the data and download the relevant machine-readable files. ESMA warns that the data released at the launch are subject to quality limitations, in particular regarding their completeness. It states that it will continue to monitor and improve the quality and completeness of the published information.


LSE publishes AIM notice on LEI under MiFID II and MAR

The London Stock Exchange has published AIM Notice 47 on the requirement for AIM companies to have a Legal Entity Identifier (LEI) code so as to ensure compliance with the obligations under MiFID II and the Market Abuse Regulation, which require market operators, such as the Exchange, to collate LEI codes for each issuer with securities admitted to trading. The notice includes a link to a help sheet on LEIs which sets out the steps that an AIM company should follow in order to obtain an LEI from the Exchange. Existing AIM companies are required to register for an LEI by 30 November 2017. The Exchange also notes that it is an AIM company’s responsibility to ensure that its LEI is renewed according to the terms of any of the accredited Local Operating Units of the Global LEI Foundation (which includes the Exchange).


MiFID II: ESMA updates Q&As on transitional transparency calculations

ESMA has updated its Q&As on transitional transparency calculations (TTC) for non-equity instruments under MiFID II. ESMA first published the FAQs in July 2017 and published an updated version in September 2017.


EMIR: ECB opinion on proposed amending Regulation

The European Central Bank has published an opinion on the proposed Regulation amending EMIR as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivatives contracts not cleared by a CCP, the registration and supervision of trade repositories and the requirements for trade repositories. The European Commission adopted the legislative proposal, which aims to introduce a number of targeted modifications to EMIR with a view to simplifying the applicable rules and eliminating disproportionate burdens, in May 2017. The ECB sets out specific proposals to amend the drafting of the proposed Regulation in a technical working document, which is attached to the opinion.


FCA publishes commodity position limits exemption application

The FCA has published a new commodity derivatives position limits exemption application form on its Connect webpage. Any exemption approved will be an uncapped exemption for risk-reducing positions in the specific contract. However, the FCA clarifies that it will still monitor the reported positions against the basis of the information provided in the application form. If there is a significant change in the nature or value of the NFE's commercial or trading activities the NFE is required to submit a new application. An exemption application should also list each Venue Product Code on a trading venue that is to be included in the exemption.


EC and CFTC common approach to certain derivatives trading venues

The European Commission has published a joint statement with the CFTC announcing a common approach to certain derivatives trading venues. Under the approach, both EU and US firms will be able to trade certain derivatives on their respective trading venues while complying with their trading obligations. The Commission and the CFTC will work towards adopting the legislation required to put the approach into action. In particular, the Commission intends to adopt an equivalence decision to recognise CFTC-authorised SEFs and DCMs that operate in the US as eligible venues for the execution of those derivatives transactions that will be subject to the EU trading obligation. This is provided that the requirements of MiFID II and MAR are met. The CFTC intends to propose the exemption of EU authorised swap trading venues from the requirement to register with the CFTC as SEFs, provided that they satisfy the standard in section 5h(g) of the CEA. This will render the exempt EU venues operating in the EU as eligible venues for the purposes of complying with the CFTC trade execution requirement.


ESMA speech on state of European financial markets

ESMA has published a speech by Steven Maijoor, ESMA Chair, on the state of European financial markets. Key points of interest include the following: (i) Mr Maijoor welcomes the European Commission's legislative proposal for a Regulation amending EMIR as regards the procedures and authorities involved for the authorisation of CCPs and requirements for the recognition of third-country CCPs, which was published in June 2017, but stated that the complexity of some of the proposed arrangements should be reduced to reduce the risk of delayed decision-making and stalemate; and (ii) Mr Maijoor believes that a common EU financial data strategy is needed among EU and national authorities to pave the way to a more streamlined approach to the collection, transfer and usage of data in the EU. In the first instance, this would help ESMA to harmonise data reporting between different sets of legislation. In the longer term, such a strategy should follow the principle that market participants should only have to report the relevant information once, and to one authority, in one format.


BoE confirms implementation of SONIA reform in April 2018

The Bank of England has confirmed that its reforms to the SONIA interest rate benchmark will take effect on 23 April 2018. The final day for which SONIA will be calculated and published by the Wholesale Market Brokers' Association will be 20 April 2018. For the rate pertaining to 23 April 2018, SONIA will be calculated by the Bank using the reformed methodology, which will be published at 9:00 on 24 April 2018. Following implementation of the reforms, the Bank will publish an assessment of its compliance with the IOSCO Principles for Financial Benchmarks.


ESMA updates benchmarks webpage

ESMA has updated its webpage on benchmarks in relation to the register of administrators and third country benchmarks that is required under Article 36 of the Benchmarks Regulation. ESMA will start publishing the information on its registers and data webpage as of 1 January 2018, which is the date from which the Benchmarks Regulation applies. It will initially be published through an excel file. The final register will be available in the third quarter of 2018.


FSB report on cyber-security regulations, guidance and supervisory practices

The Financial Stability Board has published a report with the results of its stocktake of publicly released cyber-security regulations, guidance and supervisory practices in the financial services sector. The G20 had asked the FSB to perform the stocktake as a first step with the aim of enhancing cyber-security cross-border co-operation. The report is based on the results from two surveys and a workshop, which was held by the FSB in September 2017, and brought together public and private sector participants to discuss cyber-security in the financial sector. The FSB's conclusions include the following: (i) the number of schemes of regulations and guidance addressing cyber-security for the financial sector varied widely across jurisdictions; (ii) there are a number of similarities across international guidance, with many of the same topics addressed, even though there are considerable differences in the scope of entities covered and date guidance was issued; and (iii) all FSB member jurisdictions report drawing on a small body of previously developed national or international guidance, or standards of public authorities or private bodies, in developing their cyber-security regulatory and supervisory schemes for the financial sector.



Tel: + 44 20 7585 1406

Mob: + 44 7734 057 327


19 October 2017

Firm: Addleshaw Goddard

Practice Area: Trade & Customs

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