European Securities and Markets Authority

ESMA launches Call for Evidence on sustainability in suitability and product governance

Retrieved on: 
Monday, June 19, 2023

ESMA launches Call for Evidence on sustainability in suitability and product governance

Key Points: 
  • ESMA launches Call for Evidence on sustainability in suitability and product governance
    The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, launched today a Call for Evidence (CfE) on integrating sustainability preferences into suitability assessment and product governance arrangements under the Markets in Financial Instruments Directive (MiFID) II.
  • The objective of this Call for Evidence (CfE) is to gather industry feedback that will help better understand the evolution of the market and provide answers as to how firms apply the new MiFID rules on sustainability.
  • ESMA has previously updated its Guidelines on suitability and product governance requirements following the inclusion of sustainability-related requirements for investment firms into MiFID II.
  • Next steps
    ESMA, together with the National Competent Authorities (NCAs), will assess the responses to this Call for evidence and continue monitoring the application by firms of the MiFID II requirements on suitability and product governance, including the related ESMA Guidelines.

Amended rules for transparency calculations to start applying on 5 June 2023

Retrieved on: 
Sunday, June 11, 2023

Amended rules for transparency calculations to start applying on 5 June 2023

Key Points: 
  • Amended rules for transparency calculations to start applying on 5 June 2023
    The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today informs stakeholders that the amended RTS 1 and RTS 2, under MiFIR, will start applying on 5 June 2023.
  • Some of the amendments will have an impact on the transparency calculations for equity, equity-like and non-equity instruments.
  • The Financial Instruments Transparency System (FITRS) system provides in the results only the pre-trade LIS value since different thresholds are possible on the post-trade side.
  • Due to IT constraints, the publication of the new applicable value can only be done on the application date.

Money market funds stress tests – overall resilience whilst LVNAVs exceed threshold in liquidity and credit risk scenarios

Retrieved on: 
Sunday, June 11, 2023

Money market funds stress tests – overall resilience whilst LVNAVs exceed threshold in liquidity and credit risk scenarios

Key Points: 
  • Money market funds stress tests – overall resilience whilst LVNAVs exceed threshold in liquidity and credit risk scenarios
    The European Securities and Markets Authority (ESMA), the EU’s financial markets and securities regulator, has published an article on the results of the Money Market Funds (MMFs) stress tests reported to ESMA.
  • The results show that liquidity and credit risks would be the most impactful for MMFs, in the context of the adverse scenario.
  • The different redemption scenarios tested however show the capability of MMFs to meet redemption requests under adverse circumstances, despite a calibration reflecting the intensity of the March 2020 stress episode.
  • In the article ESMA also highlights the relative proximity of the LVNAV 20 bps threshold, which would be exceeded in the liquidity and credit risk scenarios.

ESMA publishes follow-up report to the peer review on the Guidelines on ETFs and other UCITS issues

Retrieved on: 
Sunday, June 11, 2023

ESMA publishes follow-up report to the peer review on the Guidelines on ETFs and other UCITS issues

Key Points: 
  • ESMA publishes follow-up report to the peer review on the Guidelines on ETFs and other UCITS issues
    The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has today published its follow-up report to the peer review on the Guidelines on ETFs and other UCITS issues.
  • At the same time, ESMA notes that there are still concerns in relation to the level of costs for some UCITS using Efficient Portfolio Management techniques.
  • The report assessed if BaFin (DE), EFSA (EE), and CSSF (LU) improved their practices based on the 2018 peer review findings and recommendations.
  • Next steps
    NCAs are expected to continue monitoring the effective application of the Guidelines and the effectiveness of the supervisory practices implemented taking supervisory action when needed.

Fannie Mae Prices $765 Million Connecticut Avenue Securities (CAS) REMIC Deal

Retrieved on: 
Thursday, May 25, 2023

Co-managers are Citigroup Global Markets Inc. ("Citigroup"), Morgan Stanley & Co, LLC ("Morgan Stanley"), Santander US Capital Markets LLC ("Santander"), and Wells Fargo Securities, LLC ("Wells Fargo").

Key Points: 
  • Co-managers are Citigroup Global Markets Inc. ("Citigroup"), Morgan Stanley & Co, LLC ("Morgan Stanley"), Santander US Capital Markets LLC ("Santander"), and Wells Fargo Securities, LLC ("Wells Fargo").
  • To promote transparency and to help credit investors evaluate our securities and the CAS program, Fannie Mae provides ongoing, robust disclosure data, as well as access to news, resources, and analytics through its credit risk transfer webpages .
  • Beginning today, Fannie Mae now provides monthly loan-level and deal-level data in European Securities and Markets Authority (ESMA) Annex 2 and Annex 12 template formats directly in Data Dynamics.
  • In addition to our flagship CAS program, Fannie Mae continues to transfer mortgage credit risk through its Credit Insurance Risk Transfer™ (CIRT™) reinsurance program.

ESMA calls for legislative amendments to prevent undue costs in funds

Retrieved on: 
Thursday, May 18, 2023

ESMA calls for legislative amendments to prevent undue costs in funds

Key Points: 
  • ESMA calls for legislative amendments to prevent undue costs in funds
    The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published an Opinion to the European Commission with suggested clarifications of the legislative provisions under the UCITS Directive and the AIFMD relating to the notion of “undue costs”.
  • Verena Ross, Chair of ESMA, said:
    “If we want to enhance retail investors’ participation in capital markets, we should ensure that the expected return of investment products isn’t impacted by undue costs.
  • With its Opinion to the European Commission on undue costs in funds, ESMA calls for legislative amendments to the UCITS Directive and the AIFMD.
  • By further harmonising the notion of undue costs among Member States, the proposal aims at preventing investors from being charged with undue costs and ensuring appropriate compensation for investors."

Clarity AI: Only 4% of “Sustainable” Investment Funds Would Automatically Comply with Requirements of US, UK and EU Regulatory Investment Fund Label and Naming Rules

Retrieved on: 
Monday, May 15, 2023

Clarity AI , the leading sustainability tech platform, released a new analysis on funds with sustainability or ESG-related terms in their name.

Key Points: 
  • Clarity AI , the leading sustainability tech platform, released a new analysis on funds with sustainability or ESG-related terms in their name.
  • The report found that regulatory regimes for sustainability disclosures and labels differ significantly across the US, UK and EU, leaving both issuers and investors confused.
  • 80% of the assets it invests in are used to meet the ESG-related characteristics that it promotes (i.e.
  • However, understanding the challenges and pitfalls of cross-border regulations is essential to combat limited regulatory alignment.

ESMA postpones to 2024 the annual IFRS amendment of the ESEF

Retrieved on: 
Wednesday, May 10, 2023

ESMA postpones to 2024 the annual IFRS amendment of the ESEF

Key Points: 
  • ESMA postpones to 2024 the annual IFRS amendment of the ESEF
    The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has decided to postpone to 2024 the amendment of the European Single Electronic Format (ESEF) Regulatory Technical Standard (RTS).
  • ESMA accordingly amends the ESEF RTS to reflect the annual update of the IFRS Taxonomy.
  • ESMA will combine both the 2023 and 2024 IFRS Taxonomy updates in its proposals to update the ESEF RTS in 2024.
  • During 2023, ESMA will publish the annual update of the ESEF Reporting Manual to provide additional guidance on the implementation of the ESEF requirements.

ESMA publishes the annual transparency calculations for non-equity instruments, bond liquidity data and quarterly SI calculations

Retrieved on: 
Tuesday, May 2, 2023

ESMA publishes the annual transparency calculations for non-equity instruments, bond liquidity data and quarterly SI calculations

Key Points: 
  • ESMA publishes the annual transparency calculations for non-equity instruments, bond liquidity data and quarterly SI calculations
    The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has started today to publish the results of the annual transparency calculations for non-equity instruments, new quarterly liquidity assessment of bonds and the quarterly systematic internaliser calculations under MiFID II and MiFIR.
  • The transparency requirements based on the results of the annual transparency calculations for non-equity instruments apply from 1 June 2023 until 31 May 2024.
  • From 1 June 2024, the results of the next annual transparency calculations for non-equity instruments, to be published by 30 April 2024, will become applicable.
  • Bonds quarterly liquidity assessment
    ESMA has published the latest quarterly liquidity assessment for bonds available for trading on EU trading venues.

ESMA recognises four new Third Country CCPs

Retrieved on: 
Tuesday, May 2, 2023

ESMA recognises four new Third Country CCPs

Key Points: 
  • ESMA recognises four new Third Country CCPs
    The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has recognised four additional third country CCPs (TC-CCPs) under Article 25 of the European Market Infrastructure Regulation (EMIR), bringing the total number of TC-CCPs recognised by ESMA to 39.
  • The newly recognised TC-CCPs are:
    - Bursa Malaysia Derivatives Clearing Berhad (Malaysia);
    - Taiwan Futures Exchange Corporation (Taiwan);
    - Cámara de Riesgo Central de Contraparte de Colombia S.A. (Colombia); and
    - Tel-Aviv Stock Exchange Clearing House Ltd (Israel).
  • ESMA now has 25 cooperation arrangements for TC-CCP supervision with supervisory authorities from 20 third countries.
  • ESMA has updated its list of recognised third-country central counterparties (TC CCPs) accordingly.