Meeting 1 7 Recent EU Regulatory Recent EU Regulatory Developments - - PowerPoint PPT Presentation

Meeting 1 7 Recent EU Regulatory Recent EU Regulatory Developments

Alex Merrim an Head of Market Policy SI X Securities Services

Updates extern 16 / 08. December 2010

OUTLI NE OUTLI NE

• Securities Services´ Response to CSD

Securities Services Response to CSD Consultation: Key Features and W ay Forw ard

• Other Current I nitiatives in the post-trading

space ( EMI R, Bank exposures to CCPs)

• The EU Post-Trading Agenda Mark 2
• ESMA Update

Updates extern 15 / ROL / 09. September 2010

KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON ( 1 ) DEFI NI TI ONS

• Definition of a CSD
• Core Services: Notary, Safekeeping, Settlement
• Qualification: 2 out of 3
• Qualification: 2 out of 3
• Ancillary Services: Must be broad, additions
• Designation under the SFD

Designation under the SFD

Updates extern 15 / ROL / 09. September 2010

KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON ( 2 ) AUTHORI SATI ON & SUPERVI SI ON

• Treatment of Third Country CSDs
• Designation under SFD
• Flexibility in capital adequacy regime: CRD for

banking license banking license

• Full Passporting regime

Updates extern 15 / ROL / 09. September 2010

KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON ( 3 ) ACCESS & I NTER-OPERABI LI TY

• Access to CSD, subject to Conditions
• Removal of Barrier 9: Yes but
• Removal of Barrier 9: Yes, but…

…

• Splitting of Issues
• CSD to CSD access: over-engineered; keep links

g ; p

• Access from Trading Venues, CCPs; to trading

feeds: YES

Updates extern 15 / ROL / 09. September 2010

KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON ( 4 ) PRUDENTI AL ASPECTS

• NO to mandatory securities lending and borrowing

function in CSDs

• P

i th h f iti i B k E t f

• Passing through of securities in Book Entry form
• Grandfathering of Certificated Securities
• Continued use of Commercial Bank Money
• Continued use of Commercial Bank Money
• Segregation of Assets
• Yes to outsourcing, and to exemptions

g, p

• Collaterisation of Intra-day Credit
• Code has not worked

Updates extern 15 / ROL / 09. September 2010

KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON KEY ASPECTS OF RESPONSE TO THE CSD CONSULTATI ON ( 5 ) CERTAI N HARMONI SATI ON ASPECTS

• Settlement Discipline itself should not be

harmonised

• Remove Public Barriers (e g Tax)
• Remove Public Barriers (e.g. Tax)
• Common Definition of Settlement Fails
• Harmonisation of Settlement Cycles: YES to move

y to T+ 2, but need for CBA and business case

• Timing: December 2013 (HSCWG

R d ti ) Recommendation)

• NO to Harmonised Financial Sanctions

Updates extern 15 / ROL / 09. September 2010

LEGI SLATI ON ON CSDS NEXT STEPS LEGI SLATI ON ON CSDS: NEXT STEPS

• Consultation closed on 1 March
• Commission Meetings

ith Membe States on 15 Ma ch and 8

• Commission Meetings with Member States on 15 March and 8

April

• May be some further Consultation with ECSDA
• Legislative Proposal Expected June/ July
• Hopefully, the Legislation is not “controversial”
• Will Need the Support of Stakeholders to achieve a good

pp g

• utcome

Updates extern 15 / ROL / 09. September 2010

OTHER CURRENT I NI TI ATI VES I N POST TRADI NG OTHER CURRENT I NI TI ATI VES I N POST-TRADI NG

• EMIR: Langan (EP) Report
• Will inter-operability for cash and OTC clearing survive?
• Also longer list of exemptions
• BCBS & EC Consultations on Bank exposures to CCPs
• 2% risk weight proposed: scope unclear
• Punitive 1450% Risk weight for Default Fund contributions

EC CP C i i M t A t f B k

• EC CP on Crisis Management Arrangements for Banks
• Proposals on Close-out Netting (48 hour Rule)
• Safeguarding provisions in SFD and FCD
• O th H

i CPSS IOSCO R i i f I f t t

• On the Horizon: CPSS-IOSCO Revision of Infrastructure

Standards

• Core Principles for Systemically important payment systems
• Recommendations for SSSs and CCPs

Updates extern 15 / ROL / 09. September 2010

• Recommendations for SSSs and CCPs

Th EU P t T di A d M k 2 The EU Post-Trading Agenda Mark 2

Subject Purpose Affecting Netting Tidying up conflicting EU Measures CCPs Netting Tidying up conflicting EU Measures CCPs Crisis Management Dealing with a failing market Infrastructure CCPs, CSDs R l ti Li i Will R i CCP CSD Resolution Living Wills Regime CCPs, CSDs Insolvency Dealing with a failed market infrastructure CCPs, CSDs CESR-ESCB Recommendations Revision of Risk Management Standards CCPs, CSDs Recommendations Corporate Actions Harmonising Processing CSDs, Custodians Tax Removing tax barriers such as Stamp Duty CSDs Tax Use of Withholding Agents: follow-up to Recommendation CSDs, Custodians

Updates extern 15 / ROL / 09. September 2010

General Meetings Efficient processing of info requests, investor participation CSDs, Custodians

UPDATE ESMA UPDATE on ESMA

• Operational on 1 January 2011
• New Chairman: Stephen Maijoor (Dutch AFM)
• New Executive Director (= CEO): Verena Ross (UK FSA)

New Executive Director ( CEO): Verena Ross (UK FSA)

• Post-Trading Department: headed up by Fabrizio Planta
• Vast 2011 Work Plan
• 17

t f t h i l d i EMIR ( t ti i

• 17 sets of technical advice on EMIR (recent questionnaire

to CCPs)

• 8 Other Post-trading tasks
• Council Legal Opinion says ESMA cannot designate

standardised OTC contracts

Updates extern 15 / ROL / 09. September 2010

THANK YOU FOR LI STENI NG QUESTI ONS?

Alexander.Merriman@six-group.com

Updates extern 15 / ROL / 09. September 2010