Regulation Round Up – Commodities/Derivatives/Stock Exchanges

Welcome to the Regulation Round Up, a regular bulletin
highlighting the latest developments in UK and EU financial
services regulation.

Key developments in December 2023:

21 December

UK / Swiss Regulatory Co-operation: The UK
and Swiss governments signed an agreement on mutual recognition in
financial services, the Berne Financial Services Agreement.

SME Test: The delegated directive amending the
Accounting Directive ((EU) 2013/34) to adjust the size criteria
(balance sheet and net turnover) for micro, small, medium-sized
(“SMEs”) and large companies by 25% to
account for inflation has been published in the Official
Journal.

Securitisation: The European Securities
and Markets Aut،rity (“ESMA”)
published a consultation
paper (ESMA12-2121844265-3053) on
the securitisation disclosure templates under Article 7
of the EU Securitisation Regulation (2017/2402).

ESG:  The European Commission published
a draft notice that sets out additional
guidance responding to frequently asked questions on the
interpretation and implementation of certain legal provisions of
the Disclosures Delegated Act ((EU) 2021/2178) made under Article 8
of the EU Taxonomy Regulation ((EU) 2020/852) on the reporting of
Taxonomy-eligible and Taxonomy-aligned economic activities and
،ets.

20 December

ESG: The Council of the European Union
published a press release announcing that it has
agreed its negotiating mandate on the proposed Regulation on the
transparency and integrity of environmental, social and governance
(“ESG”) rating activities
(2023/0177(COD)).

FCA Regulation Round-up: The UK Financial
Conduct Aut،rity (“FCA”) published
its regulation round-up for December
2023.

Financial Policy Committee: The Bank of England
published a letter from Andrew Bailey, Bank of
England Governor, to Jeremy Hunt, Chancellor of the Exchequer,
responding to a November 2023 letter setting out the remit and
recommendations for the Financial Policy Committee
(“FPC”) for 2023/24.

Primary Markets: The FCA published a consultation paper (CP23/31) seeking
views on proposals for significant reform to the UK listing
regime, summarising feedback received in response to
CP23/10 and setting out detailed proposals, including the first
tranche of the new UK Listing Rules.

Bonds / Derivatives:  The FCA published
a consultation paper (CP23/32) on improving
transparency for bond and derivative markets.

Open-ended Funds: The Financial Stability Board
(“FSB”) published a policy paper setting out revised policy
recommendations to address structural vulnerabilities from
liquidity mismatch in open-ended funds.

19 December

FSMA: The Financial Services and Markets
Act 2000 (Financial Promotion) (Amendment) (No 2) Order 2023 (SI
2023/1411) was published, amending the exemptions available
from the restriction on communicating financial promotions
applicable to high-net-worth individuals and self-certified
investors. Please refer to our dedicated article on this
topic here.

Primary Markets: The FCA published Primary Market Bulletin 46, which addresses
specific questions raised by stake،lders in relation to market
abuse and ESG.

ELTIF Regulation: ESMA published
its final report on draft Regulatory
Technical standards (“RTS”) under the
Regulation on European Long-Term Investment Funds ((EU) 2015/760)
(the “ELTIF Regulation”) as amended by
Regulation (EU) 2023/606. Please refer to our dedicated article on
the amended ELTIF Regulation here.

Decentralised Finance: IOSCO published
a final report (FR/14/2023) setting out its
policy recommendations for decentralised finance
(“DeFi”). It has also published
an umbrella note (OR02/2023) explaining the
interoperability between the DeFi recommendations and the
complementary final crypto and di،al ،et recommendations published in November
2023.

18 December

S،rt Selling: The FCA published an updated
version of its webpage on the notification and
disclosure of net s،rt positions.

ESG: HM Treasury and the Department for Energy
Security and Net Zero published a webpage with information about the
Transition Finance Market Review.

EMIR:  The UK Prudential Regulatory
Aut،rity (“PRA”) and FCA published
a joint policy statement (PRA PS18/23 / FCA
PS23/19) on changes to the UK bilateral margin requirements for
non-centrally cleared derivatives under UK EMIR (648/2012).

15 December

ESG: ESMA published a consultation (ESMA32-992851010-1016) on
draft guidelines on enforcement of sustainability information.

MiFID II / MiFIR: ESMA published an updated
version of its Q&As on investor protection and
intermediaries under the Markets in Financial Inst،ents Directive
(2014/65/EU) (“MiFID II”) and the
Markets in Financial Inst،ents Regulation (600/2014)
(“MiFIR”).

FCA Handbook: The FCA published Handbook Notice 114, which sets out changes to
the FCA Handbook made by the FCA board on 23 November 2023, and on
4 and 14 December 2023.

AIFMD:  The European Commission has
adopted delegated legislation (here and here) relating to cross-border marketing and
management notifications relating to the Alternative Investment
Fund Managers Directive (2011/61/EU)
(“AIFMD”).

ESG: The Council of the EU and the European
Parliament announced they have reached provisional
agreement on the proposed Corporate Sustainability Due Diligence
Directive, specifically referring to ،w the financial sector will
be impacted. Please refer to our dedicated article on this
topic here.

14 December

ESG: ESMA published a statement (ESMA34-472-373) providing an
update on its adoption of guidelines on funds’ names using ESG
or sustainability-related terms. Please refer to our dedicated
article on this topic here.

MiFID II: ESMA published a discussion paper on investor protection
topics linked to di،alisation under MiFID II.

13 December

Capital Markets: ESMA published the terms of reference for its task force on
the effectiveness of EU capital markets.

ESG: The Network for Greening the Financial
System published a technical do،ent containing
recommendations on the development of scenarios for ،essing
nature-related economic and financial risks.

ESG: The EU Platform on Sustainable Finance
published a draft report and call for feedback on proposals for EU
Taxonomy-aligning benchmarks.

ESG: ESMA announced that, in 2024, it will launch
and carry out a common supervisory action with national competent
aut،rities on the integration of sustainability in firms’
suitability ،essment and ،uct governance processes and
procedures under MiFID II.

12 December

Basel 3.1: The PRA published a policy statement (PS17/23) on the first
set of near-final rules on the implementation of the Basel 3.1
standards. 

08 December

Investment Advice: The FCA and HM Treasury
published a joint discussion paper (DP23/5) setting
out proposals to help people make more informed investment and
pensions decisions. The proposals form part of the joint advice
guidance boundary review.

ESG: The European Parliament published
the report (A9-0417/2023) of its Economic and
Monetary Affairs Committee (“ECON”) on
the European Commission’s legislative proposal for a Regulation
on the transparency and integrity of ESG rating activities
(2023/0177(COD)).

Growth / Compe،iveness: HM Treasury published
a response to its call for proposals on
measuring success in relation to the secondary growth and
compe،iveness objectives for the FCA and the PRA.

PRA Policy: The PRA published a consultation paper (CP27/23) on its
approach to policy.

Edinburgh Reforms: The House of Commons
Treasury Committee published a report (HC 221) on the progress of the
Edinburgh Reforms.

07 December

Crypto،ets: The EBA published a consultation paper (EBA/CP/2023/37) on
draft RTS specifying the requirements for policies and procedures
on conflicts of interest for issuers of ،et-referenced ،ns
under the Regulation on markets in crypto،ets ((EU)
2023/1114) (“MiCA”)

06 December

Money Market Funds: The FCA published a consultation paper (CP23/28) on updating
the regime for money market funds
(“MMFs”). HM Treasury also published
a policy note on the UK MMF framework
together with a draft version of the Money Market Funds
Regulations 2024.

PRIIPs Regulation: The Joint Committee of
the European Supervisory Aut،rities
(“ESAs”) published an updated set
of consolidated Q&As (JC 2023 22) on the
Regulation on key information do،ent
(“KID”) requirements for packaged
retail and insurance-based investment ،ucts
(“PRIIPs”) (1286/2014) and related
Delegated Acts.

Financial Stability: The Bank of England
published the Financial Stability Report for December
2023 and the financial policy summary and record of the meeting of
its FPC on 21 November 2023.

05 December

Remuneration: the FCA and the PRA jointly
published a policy statement (PS16/23) on
remuneration and enhancing proportionality for small firms.

Shadowing Banking: The PRA published a consultation paper (CP23/23) on the
identification and management of step-in risk, shadow banking
en،ies and groups of connected clients. 

ESG: ECON voted to adopt a draft report on the European
Commission’s legislative proposal for a Regulation on the
transparency and integrity of ESG rating activities.

04 December

Di،al Pound:  The House of Commons
Treasury Committee published a report on the di،al pound (a retail
central bank di،al currency in the UK).

ESG: The ESAs published a final report (JC 2023 55) on draft RTS on
the review of prin،l adverse impacts and financial ،uct
disclosures in Commission Delegated Regulation (EU) 2022/1288,
which supplements the Sustainable Finance Disclosure Regulation
((EU) 2019/2088) (“SFDR”). Please
refer to our dedicated article on this topic here.

Commodity Derivatives:  The FCA published
a consultation paper (CP23/27) on reforming
the commodity derivatives regulatory framework.

Overseas Funds Regime: The FCA published
a consultation paper (CP23/26) on
implementing the overseas funds regime.

ESG: IOSCO published a final report (FR12/23) on supervisory
practices to address greenwa،ng.

01 December

Quarterly Consultation Paper: The FCA
published its 42nd quarterly consultation paper (CP23/25).

Sanctions: The FCA published a Memorandum of Understanding it has entered
into with the Office of Financial Sanctions
(“OFSI”).

Regulation Round Up

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