EMEA Centre for Regulatory Strategy in Financial Services UK

MiFID II delay | A reprieve for firms but no time to pause in implementation

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Following months of speculation, the European Commission published yesterday (10 February) legislative proposals to delay both the MiFID II and MiFIR implementation dates by a year to 3 January 2018. This is an important development. The delay will apply to the package in full, rather than in part, and is deemed necessary due to the “magnitude” of the data challenges.

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Posted on 11/02/2016 | 0 Comments

Fund distribution under MiFID II | Building the optimal model

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New investor protection rules under MiFID II are set to reshape investment managers’ product and distribution strategies in Europe. As the impact of the changes will vary across countries and distribution channels, there is no single optimal approach for firms to adopt. Investment managers distributing funds across the EU will need to think carefully about their strategy in each market. Innovative solutions around online platforms and robo-advice may offer some answers. While the final details of the rules are still pending, policymakers are considering a potential delay of the MiFID II go-live date until 2018. But firms still need to prepare now to be ready in time.

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Posted on 8/02/2016 | 0 Comments

Review of CRD IV for investment firms | A big win for the industry?

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Just in time for Christmas, the EBA published its long-awaited report setting out recommendations for a review of the current prudential regime for investment firms. Produced at the request of the European Commission, and in cooperation with ESMA, the report identified a number of issues in the current application of the CRD/CRR requirements to investment firms (including a lack of adequate risk sensitivity and the complexity of the framework stemming from the current categorisation of firms based on MiFID definitions) and suggested a new approach to their categorisation. The latter would distinguish between systemic and "bank-like" investment firms, to which full CRD/CRR requirements should apply, and other investment firms namely those that are not considered ‘systemic’ or ‘interconnected’. For the ‘non-systemic’ firms, the EBA recommended that requirements should be tailored to reflect the risks specific to their activities.

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Posted on 25/01/2016 | 0 Comments

All I want for Christmas is an MREL

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On 11 December the Bank of England (the Bank) laid out its plans for setting the minimum requirement for own funds and eligible liabilities (MREL) – loss absorbing capacity requirements introduced in the EU by the Bank Recovery & Resolution Directive (BRRD).

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Posted on 16/12/2015 | 0 Comments

The Single Resolution Board | New Year’s resolution

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From 2016, new regulation and a new resolution authority – the Single Resolution Board (SRB) – stand to reshape resolution planning in the Banking Union.

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Posted on 10/12/2015 | 0 Comments

Bank capital regulation | Where next for the good ship Basel?

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It is striking, and perhaps not entirely coincidental, that since the start of November two very senior regulators have each used examples from maritime history in their speeches about the future of bank capital regulation. Neither example is a happy one. Stefan Ingves, Governor of the Swedish Riksbank and Chair of the Basel Committee on Banking Supervision (BCBS), referred to the fate of the Vasa. The Vasa when it was completed in 1628 was the most impressive vessel in the Swedish navy. But it sank on its maiden voyage, a casualty of significant design flaws. Nobuchika Mori, Commissioner of the Japan Financial Services Agency, drew on another tragic tale. The SS Eastland sank on Lake Michigan in 1915, having overloaded itself with life rafts to meet a regulation that had been introduced after the sinking of the Titanic. 841 lives were lost, more than on the Titanic itself.

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Posted on 30/11/2015 | 0 Comments

FCA competition study seeks better value for money in the asset management industry

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The Financial Conduct Authority (FCA) published terms of reference on 18 November 2015 for its market study into asset management. The study will focus on: (i) how asset managers compete to deliver value for money; (ii) whether asset managers are willing and able to control costs and quality along the value chain; and (iii) the effect of investment consultants and other advisers on competition for institutional asset management. Across these topics, the FCA will also consider whether any barriers to innovation or technological improvements are preventing investors from getting better value for money.

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Posted on 19/11/2015 | 0 Comments

TLAC | Final standards are only the start of a longer journey

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Global systemically important banks (G-SIBs) will be required to meet a new prudential requirement – Total Loss-Absorbing Capacity (TLAC) – by 2019, in line with a new global standard published by the Financial Stability Board (FSB).

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Posted on 10/11/2015 | 0 Comments

The Single Supervisory Mechanism | One year on

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November 4, 2014 marked a turning point in European banking supervision. It was the day the Single Supervisory Mechanism (SSM) took over responsibility for banking supervision in the Eurozone. Compared to many other European endeavours, the SSM was set up quickly; the vision for the Banking Union, of which the SSM is a part, was created only in 2012. During this period a whole new organisation had to be made operational, with supervisory approaches and processes drawn from best practices across Europe, and staffing and governance adapted to the new arrangements. On its first birthday, how is the SSM getting on?

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Posted on 3/11/2015 | 0 Comments

The SSM and banking in the Eurozone | Looking to the future

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The first year of the Single Supervisory Mechanism (SSM) was a busy one for banks – and for supervisors. There is much still to do, but even as they continue to tackle the near-term challenges, many banks are asking what the SSM will look like in the future, and what the implications will be for their business models, and for the banking industry more broadly.

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Posted on 2/11/2015 | 0 Comments