In this newsletter, we provide a snapshot of the principal European, US and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.
Derivatives
Regulators Request FSB to Assist in Removing Obstacles to Effective Derivatives Trade Reporting
On August 21, 2014, the European Securities and Markets Authority ("ESMA") published a letter from the OTC Derivatives Regulators Group ("ODRG") to the Financial Stability Board ("FSB") requesting the FSB to take steps to resolve the barriers to trade reporting that exist in many jurisdictions where market participants are subject to OTC derivative reporting obligations. The ODRG is made up of regulators from numerous jurisdictions including Europe, the US, Brazil, Australia, Hong Kong, Japan, Singapore, Ontario and Switzerland. The impediments to reporting relate to data protection laws, blocking statutes, state secrecy laws and bank secrecy laws. The ODRG considers that the barriers are impeding effective supervision of reporting entities as well as the effectiveness of the reporting itself. Amendments to legislation may be needed in certain jurisdictions for the barriers to be properly removed. The ODRG believes that measures by the FSB, and possibly the G20, will be needed to ensure that the obstacles to reporting to trade repositories are removed timeously.
FCA Reviews Industry for Reporting Compliance under EMIR
On August 21, 2014, the Financial Conduct Authority ("FCA") published the outcome of its second review into how the industry has dealt with the derivatives reporting obligation under the European Market Infrastructure Regulation. The FCA found that most firms had begun reporting on February 12, 2014 but that there were still some issues with the quality of reports as well as a degree of uncertainty about reporting.
The FCA review is available at: http://www.fca.org.uk/firms/markets/international-markets/emir/implementation-reviews/is-the-industry-ready.
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