From the EMA Financial Services Regulatory Centre of Excellence.
MiFID II continues to feature in the headlines as regulators and firms alike grapple with implementation issues following go-live on 3 January 2018. The general consensus is that go-live went relatively well despite regulators experiencing some difficulties around receiving data reports. There continues to be a range of readiness across the market and it is uncertain in which areas – or for how long – regulators will accept on-going implementation.
FinTech continues to be a policy priority of the Commission. This month we have seen the launch of the EU Blockchain Observatory and Forum (BOF) and a report on the implementation and impact of the Electronic Money Directive (EMD) – both key developments in the FinTech space. One area of focus for the BOF will be to highlight key developments of distributed ledger technology – an area considered to be a game changer, with the potential to be truly transformative for financial services and markets. As the Commission is working on a FinTech Action Plan – which will be presented in the spring – expect a lot more to come around the evolving regulatory approach to digitalisation.
Other key developments this month include a continued focus on financial stability as the EBA publishes further details on its 2018 stress test; ESMA the results of its second (2017) stress test of central counterparties; and the IOSCO and ESRB reports on liquidity risk management for investment funds – see articles below.
In the asset management space, the industry eagerly awaits the Commission’s response and ESMA’s reaction to a recent implementation flaw around the topic of “share cancellation” by money market funds. It is another incident in a series of disputes between the European Parliament and the Commission (or the ESAs) about opinions and guidance going beyond the intentions or coverage of Level 1 legislation – causing further uncertainty for funds and their investors.
Also this month, we look at the implications for firms following the European Commission’s guidance on upcoming new data protection rules; and the final report published by the Commission in relation to a sustainable finance strategy. See detailed articles below.