Executive summary
Welcome to this edition of "Being better informed", our monthly FS regulatory, accounting and audit bulletin, which aims to keep you up to speed with significant developments and their implications across all the financial services sectors.
We are now into the second quarter of 2013 and the pace of new regulatory developments continues relentlessly. In April the Basel Committee published a progress report on how countries are implementing Basel II and Basel III. The report is positive, noting many countries have either implemented Basel III or are close to adopting final requirements (e.g. CRD IV in Europe).
The FSB also published a progress report in April, looking at how countries are reforming the global OTC market. All countries missed the G20's deadline for implementing changes by the end of 2012, however key derivatives markets are now close to finalising their requirements. The FSB requests that more work is carried out by September 2013 to identify the extraterritorial impacts of the changes that countries are making to the OTC market.
IOSCO published a consultation looking at how retail structured products are regulated. The consultation follows global concerns about how these products protect consumers and whether consumers understand their complexity.
Money market funds (MMFs) were a focus of ESMA's peer review in April, which focuses on how Member States have implemented CESR's guidelines on MMFs and how they supervise MMFs. The peer review is timely, given the EC will soon be publishing its proposals on MMFs, which are expected to propose a 3% capital requirement for constant net asset value funds.
In April ESMA also published its final draft RTS on determining types of AIFM. The RTS are now passed to the EC which may make its own changes before adopting them. In particular, the RTS clarify when an AIF is open-ended and when it should be considered closed-ended. These RTS help asset managers identifying whether some AIFMD requirements will apply to their funds.
IOSCO published a consultation to align the principles for benchmark across the globe. Given the recent focus on benchmarks and benchmark manipulation it is clear that this topic will continue to take interest for some time yet.
The ESAs published a Joint Committee report looking at risks and vulnerabilities in the EU financial system. The report highlights a number of daunting and interrelated risks that we still face in the EU.
Finally, the Regulations creating European Venture Capital Funds and European Social Entrepreneurship Funds were published in the Official Journal in April. These new types of funds will be available for asset managers soon, creating a marketing passport for a wider range of funds in Europe now.
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