General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
November 30, 2017

Verena Ross, the Executive Director of ESMA, gave a keynote address at the ASIFMA Annual Conference 2017 in Hong Kong. She focused her remarks on the EU regulatory framework and the role of ESMA; work of ESMA toward further strengthening the third-country frameworks; and implications of the EU regulation (for example, MiFID II/MiFIR) on Asian firms.

Ms. Ross discussed the role of ESMA in regard to dialog and cooperation with supervisors outside the EU. It develops contacts, enters into administrative arrangements and regulatory interactions with the supervisory authorities of "third countries" and with international organizations. She then discussed work of ESMA toward further strengthening the third-country frameworks and highlighted that there is no generic third-country framework. This framework is a set of arrangements varying across the different pieces of legislation such as European Market Infrastructure Regulation (EMIR), Markets in Financial Instruments Directive (MiFID), Alternative Investment Fund Managers Directive (AIFMD), CRA Regulation, and Benchmarks Regulation. "No arrangement is identical and they are mixtures of equivalence, endorsement, recognition, third-country passporting, or no arrangement at all." She mentioned, " ...it would be beneficial to create greater consistency." To ensure a common approach to third-country entities active across the EU financial markets, the supervisory and enforcement powers should be conducted at EU level by ESMA for third-country entities such as credit rating agencies (CRAs), trade repositories, central counterparties (CCPs) and benchmarks. In the context of CCPs, EC has put forward an extensive EU-wide third-country regime in a proposal to amend the EMIR legislation. ESMA should play such a central role also regarding third-country trading venues and potentially other important market players. A step to centralize the third-country supervision would not only bring a number of benefits for EU, but will also allow third-country firms to have a single point of reference in relation to the regulatory issues in the EU. 

She highlighted that Asian-headquartered firms with branches or subsidiaries providing investment services in the EU will be directly subject to the new MiFID requirements. From January 03, 2018, under MiFID II/MiFIR, no LEI means no trade. Thus, the Asia-based institutions will be asked to get a Legal Entity Identifier (LEI). She discussed ESMA guidance on MiFID II/MiFIR requirements with a third-country dimension, noting the publishing, in May, of the two opinions clarifying under which circumstances transactions on third country trading venues are subject to the post-trade transparency requirements for investment firms and/or are considered to be economically equivalent over-the-counter (EEOTC) contracts for the purpose of the position limit regime. She also informed, "We are now in the process of assessing more than 200 third-country trading venues for which we have received requests. ...I know that you’re particularly concerned about the application of the trading obligation for shares to shares which have their primary pool of liquidity outside the EU. I hope that our recently issued guidance together with the European Commission provided you with some comfort that, in the absence of an equivalence decision, transactions in shares would not be considered to be of a systematic, regular and frequent nature and therefore not subject to the trading obligation for shares. (sic)" In conclusion, she notes that international convergence is difficult, but absolutely necessary. In coordination with EC, but also in close cooperation with national regulators, ESMA will continue to play a central role in ensuring that "Europe speaks with one single voice vis-à-vis regulators outside the EU."

 

Related Link: Speech

Keywords: Europe, Banking, Securities, MiFID/MiFIR, LEI, Third-Country Regimes, ESMA

Related Articles
News

HKMA Decides to Maintain Countercyclical Capital Buffer at 2.5%

HKMA announced that, in accordance with the Banking (Capital) Rules, the countercyclical capital buffer (CCyB) ratio for Hong Kong remains at 2.5%.

April 16, 2019 WebPage Regulatory News
News

EP Approves Agreement on Package of CRD 5, CRR 2, BRRD 2, and SRMR 2

The European Parliament (EP) approved the final agreement on a package of reforms proposed by EC to strengthen the resilience and resolvability of European banks.

April 16, 2019 WebPage Regulatory News
News

FDIC Consults on Approach to Resolution Planning for IDIs

FDIC approved an Advance Notice of Proposed Rulemaking (ANPR) and is seeking comment on ways to tailor and improve its rule requiring certain insured depository institutions (IDIs) to submit resolution plans.

April 16, 2019 WebPage Regulatory News
News

EP Resolution on Proposal for Sovereign Bond Backed Securities

The European Parliament (EP) published adopted text on the proposal for a regulation of the European Parliament and of the Council on sovereign bond-backed securities (SBBS).

April 16, 2019 WebPage Regulatory News
News

PRA Seeks Input and Issues Specifications for Insurance Stress Tests

PRA announced that it will conduct an insurance stress test for the largest regulated life and general insurers from July to September 2019.

April 15, 2019 WebPage Regulatory News
News

PRA Finalizes Policy on Approach to Managing Climate Change Risks

PRA published the policy statement PS11/19, which contains final supervisory statement (SS3/19) on enhancing banks’ and insurers’ approaches to managing the financial risks from climate change (Appendix).

April 15, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for April 2019

EBA published answers to nine questions under the Single Rulebook question and answer (Q&A) updates for this week.

April 12, 2019 WebPage Regulatory News
News

EIOPA Statement on Application of Proportionality in SCR Supervision

EIOPA published a supervisory statement on the application of proportionality principle in the supervision of the Solvency Capital Requirement (SCR) calculated in accordance with the standard formula.

April 11, 2019 WebPage Regulatory News
News

FED Updates Form and Supplemental Instructions for FR Y-9C Reporting

FED updated the form and supplemental instructions for FR Y-9C reporting. FR Y-9C is used to collect data from domestic bank holding companies, savings and loan holding companies, U.S intermediate holding companies, and securities holding companies with total consolidated assets of USD 3 billion or more.

April 11, 2019 WebPage Regulatory News
News

OSFI Finalizes Guidelines on Liquidity Adequacy and NSFR Disclosures

OSFI published the final Liquidity Adequacy Requirements (LAR) guideline and the net stable funding ratio (NSFR) disclosure requirements guideline.

April 11, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2920