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In this issue, we have worked with our Financial Services team to handpick 5 key legal and regulatory updates for in-house lawyers. See below for instructions to sign up to the Financial Services sector blog, run by our in-house legal experts.

ESMA recommends aligning MiFIR derivatives trading obligation with EMIR REFIT

The European Securities and Markets Authority (ESMA) published a final report on alignment of the Markets in Financial Instruments Regulation (EU) 600/2014 (MiFIR) with the changes introduced by Regulation (EU) 2019/834 (EMIR REFIT), to the European Market Infrastructure Regulation (EU) 648/2012 (EMIR). Since the amendment of EMIR by EMIR REFIT there has been a misalignment between the counterparties subject to the clearing obligation under EMIR and the counterparties subject to the derivatives clearing obligation under MiFIR. ESMA recommends aligning MiFIR with EMIR as amended by EMIR REFIT.

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FCA, ICO and FSCS issue joint warning on personal data misuse

The FCA, the Information Commissioner’s Office (ICO) and the Financial Services Compensation Scheme (FSCS), issued a joint warning to insolvency practitioners and FCA-authorised firms to be responsible when dealing with personal data. It follows reports that some insolvency practitioners and FCA-authorised firms have attempted to sell clients’ personal data to claims management companies (CMCs) unlawfully.

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Financial Action Task Force issues global standards on use of virtual assets

The Financial Action Task Force (FATF) issued global, binding standards with the support of the G20 to prevent misuse of virtual assets for money laundering and terrorist financing. The FATF measures ensure that virtual currencies have the same safeguards applied to them as the traditional financial sector, which will ultimately increase trust in blockchain technology. Regulation should take place within traditional banks and virtual assets service providers, with focus on Know Your Customer procedures and reporting suspicious transactions while keeping the customers identity private.

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Mark Steward discusses the FCA’s market integrity work

The FCA published a speech by its executive director of enforcement and market oversight, Mark Steward, outlining the regulator’s approach to market integrity and its detective and enforcement techniques. Steward warned would-be abusers that the FCA’s increased powers materially ‘ratchet up the risk of being found out’. The speech discusses the ‘market cleanliness metric’, which records abnormal price movements two days prior to a takeover announcement, and is currently at its lowest level since it was introduced in 2008.

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ISDA report and forum say 2020 must be the year of engagement with benchmark transition

The International Swaps and Derivatives Association (ISDA) published a research note on major developments in the adoption of risk-free rates (RFRs) expected in 2020. It discusses upcoming issues related to the adoption of RFRs, including the publication of new benchmark fallbacks for derivatives contracts and central counterparty (CCP) changes in discounting, and price alignment interest (PAI) for certain currencies. Alongside the report ISDA held a forum in New York to discuss the issues and the need for an industry-wide engagement in the year ahead, particularly as regards fallbacks. A similar event will be held in London on 20 February 2020.

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See the full update here:  FS weekly highlights - 13 Febuary covering the topics listed below.

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