Securities Markets News

The Dutch Authority for the Financial Markets (“AFM”) and the Dutch Central Bank (“DCB”) have been given the statutory duty of safeguarding the integrity of the financial markets. For this reason, the AFM and the DCB test the reliability of (candidate)(co-)policymakers within an organization.
The AFM and the DCB shall establish whether the reliability of a person as referred to in Section 4:10(1) of the Act on Financial Supervison (“AFS”) is beyond doubt on the basis of this person’s intentions, acts and antecedents. In establishing a person’s reliability, the AFM and the DCB shall in any event consider the following antecedents:

1. criminal antecedents;
2. financial antecedents;
3. supervision antecedents;
4. fiscal antecedents under administrative; and
5. other antecedents.

The antecedents listed above are inter alia set out in annex C of  the Decree on Conduct of Business Supervision of Financial Undertakings under the AFS (Besluit Gedragstoezicht financiële ondernemingen Wft).  The AFM has recently published an article (only available in Dutch) which specifically addresses what is meant by “other” antecedents. This article can be found via: meldplicht-betrouwbaarheid-jaarboek-compliance.pdf

 

For applying for a license under the AFS or for applying for a declaration of no objection with the DCB, a (candidate)(co-)policymakers needs to be tested on reliability before the AFM or the DCB can grant them with a license or a declaration of no-objection. Therefore, we recommend to obtain advice on this topic to assure whether the reliability of  the (candidate)(co-)policymakers is beyond doubt.

We can provide you with a detailed advice about this important matter if you or your the (candidate)(co-)policymakers need to be tested on reliability with the AFM and/or DCB.

The ESMA has published a report on the comparison of liability regimes in Member States in relation to the Prospectus Directive.

This is the first report of its kind and provides a comparison of liability regimes covering the 27 EU Member States along with Iceland and Norway and is aimed at providing clarify for market participants about the different regimes in place. The report contains an overview of the different arrangements and frameworks in place in EEA Sates to address administrative, criminal, civil and governmental liability.

 

The report was compiled in response to the European Commission request of January 2011 for assistance in identifying and monitoring the different regimes in EEA states. The report does not cover how the regimes, or sanctions, are applied.

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Source:

http://www.esma.europa.eu/content/Comparison-liability-regimes-Member-States-relation-Prospectus-Directive

The ESMA has published its Technical Advice 2013 evaluating the impact of the Regulation on short selling and certain aspects of credit default swaps (Regulation) on European financial markets.

The ESMA has prepared this in response to a European Commission request for Technical Advice to inform its report to the European Parliament and Council on the impact of the Regulation, due by end of June 2013. The advice was requested only a short time after the implementation of the Regulation on 1 November 2012 and so there were limits to the market data available, and limited regulatory experience in supervising the Regulation’s requirements to draw on.  The report makes a number of recommendations that would help to improve how the Regulation works in practice, with the overall recommendation that the regime be re-assessed at a future date when more data and experience have been accumulated.

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Source:

http://www.esma.europa.eu/news/Press-release%E2%80%94ESMA-publishes-review-impact-short-selling-regulation?t=326&o=home

Bron: "ESMA" Guidelines , AFM Press release

Pursuant to the MiFID rules, execution venues are required to make public the current bid and offer prices and the depth of their trading books in respect of listed shares. Competent authorities may waive this publication requirement. ESMA has published an amended waiver policy document in that regard.

Pursuant to (national regulations implementing) the Markets in Financial Instruments Directive (“MiFID”), European regulated markets (such as NYSE Euronext or London Stock Exchange) and multilateral trading facilities (such as NYSE Alternext) are required to publish in ‘real time’ the price of listed shares, as well as data concerning the depth of their trading books. Pursuant to the MiFID, certain exemptions from these requirements may apply. Furthermore, MiFID allows national competent authorities to waive these requirements upon request by markets operators, based on the ‘market model’ or the type and size of orders. The predecessor of the European Securities and Markets Authority (“ESMA”) had developed guidance for national competent authorities to deal with waiver requests in an attempt to build common supervisory approaches and practices.

 

On 26 March 2012, ESMA published updated guidance on MiFID pre-transparency waivers. ESMA makes a distinction between: (i) reference price waiver, (ii) negotiated trade waiver, (iii) order management facility waiver and (iv) large in scale waiver.

 

ESMA’s guidance document also provides information on the pre-trade transparency of trading systems already set up in Europe and the compliance of such systems with MiFID. In the table included in the document, ESMA sets out examples of waivers and the conditions to be complied with.

On 24 March 2012, the final text of the European regulation on short selling and certain aspects of credit default swaps was published in the Official Journal of the European Community.

The final text of the new EU regulation on short selling and certain aspects of credit default swaps (the “Regulation”) does not materially deviate from that of the European Commission’s proposal. The Regulation provides for a harmonised European framework governing short selling of certain listed instruments. Among others, the Regulation:

 

(a) prohibits the use of ‘uncovered’ Credit Default Swaps (“CDs”) in sovereign debt, i.e. transactions where no underlying long position exists in the relevant sovereign bond, are no longer permitted (Member States are however allowed to suspend the prohibition in their own jurisdiction in certain circumstances);
(b) imposes certain ‘certainty of settlement’-requirements in relation to uncovered short selling of shares and sovereign bonds;
(c) introduces an harmonised notification and reporting regime for shares, whereby holders of net short positions must notify these privately to the regulator when they exceed 0.2% of the issued share capital of the issuer company and must publicly disclose these (on a named basis) when they exceed 0.5%. In each case, further notification or reporting is required at each 0.1% above the initial threshold;
(d) provides national competent authorities and ESMA with additional powers to intervene in the markets in times of stress; and
(e) excludes sales under a repo agreement or futures contracts from the definition of short sales in shares and debt instruments.

 

Many provisions of the Regulation are to be further implemented by means of delegated acts and technical standards. ESMA has been requested to advise the European Commission in that regard. That process is already at an advanced stage. The Regulation will enter into force on 1 November 2012 and will be directly applicable in the Member States.