EBF Position paper – ESMA Consultation TV perimeter
x
Brussels, 2 May 2022 – The European Banking Federation (EBF) welcomes the opportunity to comment on ESMA’s draft “Opinion on Trading Venues’ Perimeter”. In general terms, we understand that ESMA’s intention is to provide more clarity on the concept of “multilateral system” i.e. one of the most important definitions in the MiFID 2 framework upon which the EU capital markets is currently structured, and to further harmonise the understanding of such concepts across the Union. However, having carefully read the analysis and proposals presented in the Draft Opinion, EBF members fear that ESMA will in fact achieve the opposite result. Indeed, several of the examples and figures included in the draft Opinion have left our members with a large number of new questions, worries and a significant level of legal uncertainty.
In more details:
- ESMA makes a very extensive interpretation of the definition of multilateral system that substantially differs from the wording of the level 1 text, i.e. suggesting that it shall no longer be a criteria that multiple trading interests should be able to interact within the system.
- From a CMU perspective it is very important to ensure that the MiFID II framework allows different types of trading to co-exist on EU capital markets in order to serve different clients’ needs.
- We would welcome further guidance on the definition of “trading system” and “market operator”. We believe that a trading system must be understood as a common set of rules to negotiate and conclude transactions on financial instruments, imposed by the market operator, to which all the participants in the system adhere without negotiation.
- In our view, a more cautious approach would be to let the market participants focus on the implementation of the amendments to the MiFID II and MiFIR and delay the issuance of level 3 opinion(s) until the market has adjusted to new and amended binding rules and not until then will it be possible to fully understand the impact of the proposals.
x
For more information:
Pauline Guerin, Senior Policy Adviser, Financing Growth p.guerin@ebf.eu
x
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post EBF Position paper – ESMA Consultation TV perimeter appeared first on EBF.
]]>FROM THE EUROPEAN BANKING FEDERATION:
EBF Response: ESMA Call for Evidence on Market Characteristics for ESG Rating Providers in the EU
x
BRUSSELS, 11 March 2022 – While ESG providers remain largely unregulated, their influence is expected to grow considerably. There are a series of underlying challenges, including discrepancies in ESG measurements and ongoing data quality problems. In particular:
-
- Most users have difficulty understanding the underlying methodology for a specific ESG rating as ESG rating providers consider the methodologies proprietary information
- There is little coherence between methodologies amongst ESG rating providers, resulting in significantly diverging outcomes: the same company may be considered high risk, medium risk or low risk if rated by three different agencies
- ESG ratings do not always consider the impact and focus of an organization on the environment (double materiality) – hence there continues to be a gap between some investors’ expectations (e.g., of retail investors) and real impact
- A clear framework with consistent global principles and harmonized standards for ESG rating (EFRAG, IOSCO and International Sustainability Standards Board), which is currently lacking, would make it possible to have a clear and objective evaluation of financial market participants from an ESG perspective
You can read the EBF’s integral response to ESMA’s Call For Feedback on Market Characteristics for ESG Rating Providers in the EU below.
x
For more information:
Denisa Avermaete, Senior Policy Adviser, Susatinable Finance d.avermaete@ebf.eu
Alexia Femia, Policy Adviser, Sustainable Finance a.femia@ebf.eu
Marta Morellato, Financing Sustainable Growth trainee m.morellato@ebf.eu
x
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post EBF Response: ESMA Call for Evidence on Market Characteristics for ESG Rating Providers in the EU appeared first on EBF.
]]>Industry Approach to CSDR Settlement Discipline Regime
x
Brussels, 3 January 2022– The Joint Associations (1) welcome clarification from ESMA that national competent authorities are expected not to prioritise supervisory actions in relation to the application of the CSDR buy-in regime (2).
We support the political agreement by the EU legislators on changes to Regulation (EU) No 909/2014 (“CSDR”) that allow for a delay to the implementation of mandatory buy-ins. The Joint Associations advocated for a reassessment of this aspect of the settlement discipline regime as part of the broader CSDR Review. The Joint Associations support a result that achieves the regulatory objectives in an effective and proportionate way, and that avoids significant negative consequences for market liquidity and stability.
While further formal steps need to be taken for the changes in the political agreement to be put into effect and formally adopted and published as EU law, the political agreement reflects the intent of EU legislators that mandatory buy-in requirements in the current CSDR should not go live on 1 February 2022.
The Joint Associations therefore believe that EU legislators do not expect market participants to take further action towards implementation of the mandatory buy-in requirements, due to come into effect on 1 February 2022, including but not limited to the contractual obligations of Article 25 of RTS (EU) 2018/1229 on Settlement Discipline (“CSDR RTS”).
On this basis, those associations that were intending to publish industry standard documentation to facilitate compliance with the mandatory buy-in requirements, will no longer be proceeding with publication.
With respect to all other CSDR settlement discipline measures (i.e., Articles 1 – 20 and 39 – 42 of the CSDR RTS) it is expected that market participants will proceed with implementation in accordance with the relevant regulatory deadline of 1 February 2022. These requirements include rules relating to cash penalties for settlement fails, and requirements relating to the allocation and confirmation process.
The Joint Associations encourage all national competent authorities in the EU to follow the guidance provided by ESMA on 17 December 2021. We stress the importance of ensuring full consistency with ESMA’s guidance to avoid a risk of uncertainty for market participants in any EU jurisdiction.
The Joint Associations welcome the opportunity for further engagement with the regulatory authorities on the important topic of increasing settlement efficiency in European capital markets.
1) The Joint Associations are: AFME, AGC, EAPB, EBF, EDMA, EFAMA, FIA, ICMA, ISDA, ISLA
2) https://www.esma.europa.eu/sites/default/files/library/esma70-156-5153_public_statement_on_buy-in.pdf
x
For more information:
Jacopo Borgognone, Policy Advisor, j.borgognone@ebf.eu
x
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post Industry Approach to CSDR Settlement Discipline Regime: Joint trade association statement appeared first on EBF.
]]>FROM THE EUROPEAN BANKING FEDERATION:
EBF response to ESMAs Call for Evidence on certain aspects relating to retail investor protection
x
BRUSSELS, 20 December 2021 – The EBF welcomes the opportunity to respond to ESMAs Call for Evidence on the European Commission’s mandate on certain aspects relating to retail investor protection.
In the context of the CMU action plan, it is essential to ease retail investors’ access to financial markets while ensuring a high level of investor protection.
- Review of information requirements and technology neutral approach
The EBF welcomes a review of the information requirements since the current regime is too complex and not calibrated to clients’ needs. We support easing requirements for professional and eligible counterparties as well as knowledgeable retail investors through changing opt-up criteria. We agree with ESMA it is very important to ensure that the disclosure requirements are technology neutral so that it is easy for clients to understand and access the information also in an online environment.
- Horizontal alignment of requirements
Furthermore, there should be horizontal alignment between legislation to ensure transparency and comparability, especially uniform information for similar investment products and services.
- ESG related disclosure
Discrepancies in the sustainability regime in MiFID II and SFDR should be addressednotably regarding reporting frequency of individual portfolio management. There is also great concerns relating to the overlapping implementation period of the SFDR level 2 requirements (1 jan 2023) and MiFID II rules on suitability assessment (3 aug and 22 nov 2022). The EBF strongly support postponing the MiFID II level 2 requirements until 1 jan 2023.
- Open finance
The benefits of an open finance approach in the field of retail investment will strongly depend on how an open finance policy is implemented in the EU and whether the initiative is limited to data that is now held by banks instead of all the data that is useful in the financial ecosystem, including data from other sectors.
- Financial literacy
We would like to to underline that disclosures do not automatically lead to increased investor protection. Financial literacy remains a key feature to improve retail investors’ access to capital markets. x
x
For more information:
Pauline Guerin, Senior Policy Adviser, Financing Growth p.guerin@ebf.eu
Liga Semane, Policy Adviser, Innovation & Data l.semane@ebf.eu
x
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post EBF response to ESMAs Call for Evidence on certain aspects relating to retail investor protection. appeared first on EBF.
]]>EBF Response to the ESMA consultation on the proposal for a review of MiFID II best execution regime
x
Brussels, 16 December – The European Banking Federation (EBF) welcomes the ESMA consultation ESMA consultation on proposals to review MIFID II best execution reporting regime, as well as the EC legislative proposal dated 25th November 2021 to delete RTS 27 reporting.
The EBF considers that the RTS 27 and RTS 28 reports provide very little added value to investors and we believe these reporting requirements should be permanently removed from the level 1 text. We therefore fully support COMs recent proposal and consider that the temporary exemption introduced by MiFID Quick Fix is extended until the European Parliament and Council have adopted the MiFIR Review changes and they have been applied.
According to the experiences of our members with respect to RTS 27 and RTS 28 report we see that these reports are very rarely used by clients. We take the view that – based on our experiences – there is no demand on the investors’ side for such reportswhich are not fit for the purpose as too complex.
If the reports are kept, the EBF considers that it is very important to simplify the rules, to limit the scope of the reports and to make certain clarifications in order to increase legal certainty. Indeed, any amendments to best execution reporting rules require IT changes that are costly and administrative burdensome to implement. It is therefore important to focus on changes that can be clearly justified from a cost/benefit perspective. In addition, it is very important to avoid the creation of a “gap” between the expiration of the temporary exemption introduced by MiFID Quick Fix and the implementation of the amended RTS 27 and 28. The EBF therefore proposes that the temporary exemption is extended until any amended rule starts to apply.
Finally, the EBF deems appropriate to underline the importance to continue working on data quality improvement, in order to make the reports useful.
X
For more information:
Pauline Guerin, Senior Policy Adviser, Financing Growth p.guerin@ebf.eu
x
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post EBF Response to the ESMA consultation on proposal for a review of MIFID II best execution regime appeared first on EBF.
]]>EBF Response to the joint call for evidence on the European Commission mandate regarding the PRIIPS regulation
x
Brussels, 16 December – The EBF welcomes the opportunity to respond to the ESAs Call for evidence regarding PRIIPs Call for evidence regarding PRIIPs and would like to make the following general comments:
Regarding scope: The EBF does not support an extension of the scope of PRIIPS. Some precisions should rather be given on the current scope, notably making the point that b Derivatives which are used for mitigating risk (hedging) are actually out of scope.
Regarding the creation of a taxonomy in PRIIPS: EBF does not support the creation of a taxonomy as we believe in practice there is a risk exists that, for example, a specific new product does not properly fit the prescribed categories and may generating confusion for manufacturers as well as preventing them from offering products in the market at all.
Regarding format: Though the aim of comparability of the PRIIP KID documents is admirable – the comparability should only be a priority for de-facto comparable products, and it should be possible to adjust the KID accordingly.
Regarding MOP: We would like to underline that the market structure in Member States differ e.g. depending on the tax legislation, pension and insurance systems and cultural behaviour. It is important not to make changes that could harm well-functioning local markets. For this reason, we object to the proposed amendments regarding MOP.
Regarding costs: Retail investors in general are not interested in receiving granular information on costs and calculation methodologies but are mostly interested in price and total costs. In EBF members’ experience, retail investors find the reduction in yield (RIY) concept too difficult to understand. The EBF supports a closer alignment between MiFID II and PRIIPs as regards the calculation methodology for product costs as it is confusing for clients to receive different cost information for the same instrument.
x
For more information:
Pauline Guérin, Senior Policy Advisor, p.guerin@ebf.eu
x
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post EBF Response to the joint call for evidence on the European Commission mandate regarding the PRIIPS regulation appeared first on EBF.
]]>EBF adviser: Pauline Guérin
Publication date: 28 April 2021
General Comments:
The EBF welcomes ESMA’s effort to give guidelines on how to best apply the appropriateness test requirements.
Below a few points, the EBF and its members underline:
- The appropriateness guidelines as proposed by ESMA are going further than the original idea behind level 1 requirements.
- Information provided to investors should be proportionate as far as the extent of information, means of communication and timing are concerned. one may fear that if too much information and too many details are required from clients, they may be desensitized to invest which would be contrary to CMU overarching objectives.
Click the button below for the full response.
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post ESMA consultation on Appropriateness Guidelines Under MIFID II: EBF response appeared first on EBF.
]]>CONSULTATION RESPONSE
x
Guidelines on Outsourcing to Cloud Service Providers – EBF responds to ESMA consultation
BRUSSELS, 1 September 2020 – The European Banking Federation has responded to the European Securities and Markets Authority (ESMA) consultation on Guidelines on Outsourcing to Cloud Service Providers and has called for a strong alignment of the ESMA guidelines with the existing guidelines of the European Banking Authority (EBA) in order to prevent a disproportionate burden for financial institutions covered by both regimes.
Looking at the already published EBA Guidelines on outsourcing arrangements from 25 February 2019, European banks already face a dedicated set of requirements for outsourcing, including cloud computing services.
Implementation of the guidelines by the national competent authorities in European member states provides the framework for banks’ cloud adoption. The EBF considers it of utmost importance to provide banks with a consistent supervisory framework, avoiding diverging requirements across the EBA and ESMA guidelines.
There should be one single set of rules. To avoid an excessive unnecessary burden and disproportionate effects on dual regulated firms under both sets of guidelines, European banks encourage an explicit reference in the ESMA guidelines stating that banks which are compliant with the EBA requirements should also be considered compliant by the national competent authority in regard to the ESMA rules. The EBF invites ESMA to consider the respective example of a reference such as paragraph 4 in the introduction of the EIOPA guidelines on outsourcing to cloud service provides, as issued in February 2020.
The EBF welcomes ESMA’s understanding that the main risks associated with cloud outsourcing are similar across sectors. ESMA has considered the recent guidelines published by EBA and EIOPA. However, EBF has identified a number of details within the ESMA guidelines where presentation and/or details of the requirements in question deviate from the established EBA guidelines. EBF invites ESMA to reconsider the identified deviations and to stronger align with existing EBA requirements. Where considered helpful, further exploratory guidance – in turn required to be aligned with EBA guidelines – is suggested. Such alignment will prevent detrimental burdens for banks – in terms of time, work effort and respective costs – by enabling streamlined compliance with both EBA and ESMA supervisory framework. A fragmented approach will otherwise make it difficult for firms who are regulated by both the EBA and ESMA, ultimately impairing on the ability to adopt cloud banking at scale.
Click here for the EBF response submitted in the ESMA consultation
x
For more information:
Julian Schmücker, Policy Adviser Digital Innovation, j.schmucker@ebf.eu
For more about the EBF Cloud Banking Forum:
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post Outsourcing to Cloud Service Providers – EBF responds to consultation on ESMA guidelines appeared first on EBF.
]]>EBF advisor: Daniel Bouzas
Publication date: 19 February 2019
We would like to clarify the scope of the proposal, as the mandate of the Commission is clear, focusing on firms offering portfolio management and investment advice services, while ESMA seems to go beyond. As to avoid uncertainty or negative impacts, ESG principles shall be included in MiFID after the legislative proposals are finalised, all definitions adopted and fully operational.
Organisational requirements
- We are not convinced that amending general organisational requirements for investment firms is the most appropriate way to integrate sustainability risks in their advisory process. If included, it is important to clearly identify the specific organisational requirements and provide further guidance on how they should be applied by firms.
- We support the high-level principle-based approach for the integration of sustainability risks within the MiFID II requirements, similar to that one already followed for all other relevant risks.
- We would also like to remark the need of coordination with the EU proposed regulations on Sustainable Finance in order for terms and expressions to be given the same meaning.
- We would like to see further clarifications on specific aspects of conflicts of interest.
Product Governance
- Regarding market standards and “labels”, we advocate for a positive yet gradual approach while warning against their, sometimes, national character, and concerns with possible greenwashing.
- We urge supervisors and legislators to embrace, as much as possible, pro-active market initiatives already set up. And to not interfere with them until the EU harmonised framework and regulation is in place.
- Clients that have expressed ESG considerations may be offered “non-ESG” products if appropriately informed about this in the suitability report.
Suitability
- It is essential to provide as much flexibility as possible for the methods used by firms for integrating ESG preferences within their suitability model.
- Two-step approach towards clients’ preferences: Only asking detailed ESG questions when clients indicate a positive interest in ESG considerations.
Find the EBF response in this consultation by clicking the ‘full document’ link below:
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post MiFID II integrating sustainability risks and factors: EBF response appeared first on EBF.
]]>EBF adviser: Pauline Guérin
Publication date: 12 September 2019
General Comments:
EBF share the view that the costs for market data have increased since the entry into application of MIFID 2.
Despite the directive stressing that the costs of market data should be provided on a reasonable commercial basis, explicitly specified as being based on cost with a reasonable margin, the new requirement hasn’t reached its objective. Overall market data costs and complexity have continued to increase whereas market data transparency and data quality have decreased. The main cost driver for market data users is not so much increase in already existing fees but the introduction of new fees related to multiple display-terminal, non-display applications, reporting and distribution licences, systematic internalisers market data fee, connectivity fees etc. – in combination with unclear and complex market data policies and definitions and unreasonable audit procedures. Additionally, regulatory requirements contribute to the increasing cost of market data. E.g. the Market Abuse Regulation require access to realtime data to ensure proper surveillance.
Thus, the EBF members call for further action from ESMA.
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post ESMA consultation cost of Data – EBF response appeared first on EBF.
]]>