May 24, 2019

ESMA is consulting on amendments to the main indices and recognized exchanges under the Capital Requirements Regulation (CRR). ESMA considers it necessary to introduce amendments to the Commission Implementing Regulation (EU) 2016/1646 to ensure that the most updated list of main indices and recognized exchanges is incorporated into the legislative text. The comment period on the consultation ends on July 05, 2019. Based on the responses received, ESMA will finalize draft implementing technical standard amending the Regulation (EU) 2016/1646 and submit the final report to EC for endorsement.

The Implementing Regulation (EU) 2016/1646 sets the criteria to identify the main indices and recognized exchanges for the purposes of the CRR. As there is no legislative procedure, other than amending the implementing technical standard, ESMA is now proposing to update the legislative text to take into account relevant amendments to the list of main indices and recognized exchanges since the publication of the original implementing technical standard.

ESMA, to identify the main indices, is proposing to use a new methodology that can be homogeneously applied to EU and non-EU indices. Under this new methodology, an index would qualify as a main index if it passes one of following two tests:

  • The first test aims to capture indices composed predominantly by medium and large cap stocks.
  • The second test ensures that indices composed predominantly of small cap stocks are also eligible to be included in the list of main indices, provided that all components of the index are sufficiently liquid.

 

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Comment Due Date: July 05, 2019

Keywords: Europe, EU, Securities, Banking, CRR, Regulation 2016/1646, Recognized Exchanges, Implementing Technical Standards, Indices, ESMA

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