Being better informed: February 2017

January brought announcements on data services, corporate liability for economic crime and capital requirements for CCPs.

The EC indicated its continued commitment to the CMU with a consultation to strengthen the programme, ahead of a mid-term review later this year. It signals some shifts in prioritisation, with an increasing focus on FinTech and sustainable finance. The EC also highlights some of the agenda items likely to see progress over the coming months, such as a legislative proposal establishing a pan-European personal pension regime, expected in the summer.

The EC is also keen to progress the single market for data services. It consulted to build its understanding of barriers restricting dataflow across the EU, and plans to use the responses to develop policy supporting a single market for EU data services.

In the prudential space, the EBA and ESMA issued a joint report on the relationship between the CRR and EMIR. They focus on CCPs and any duplication of requirements for derivative transactions, calling for the EC to clarify the overlap of capital requirements for CCPs holding a banking licence.

Corporate and individual liability remain high on policymakers’ agendas with the MoJ calling for evidence on corporate liability for economic crime. This is currently governed by common law rules, but some argue these are not fit for purpose when applied to large, modern firms. The MoJ seeks views on a number of possible solutions to strengthen legislation in this area, and plans to consult on proposed reform in due course.

In the asset management sector, the FSB published its policy recommendations to address structural vulnerabilities from asset management activities. It encourages national authorities and IOSCO to take steps to address liquidity mismatches present in open-ended funds holding illiquid assets.

In our first feature article this month, we take a close look at what UK-EU access arrangements might look like for financial services firms post-Brexit. Following UK Prime Minister Theresa May’s speech and white paper, in which she said the UK will seek an ‘ambitious’ free trade agreement with the EU which could mean retaining aspects of the single market for certain sectors, we examine the options for such an arrangement.

Our second feature article looks at MREL and TLAC requirements for banks, following clarification from both UK and EU authorities on the proposals at the end of last year. The EU’s banking reform package, as well as the BoE’s MREL policy statement, provides sufficient certainty for banks to finalise and start executing their plans to ensure compliance with the requirements. We look at what steps firms need to take and the likely impact of the proposals. 

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