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Welcome to Euro Shorts, a short briefing on some of the week’s developments in the financial services industry in Europe.

If you would like to discuss any of the points we raise below, please contact me or one of our other lawyers.


Claire Cummings

020 7585 1406


New FCA transaction reporting instrument reference data errors and omissions form

The FCA has updated its webpage on instrument reference data to make available a new instrument reference data errors and omissions form. The update deals with requirements under the Commission Delegated Regulation (EU) 2017/585 (supplementary to MiFIR) which deal with data standards and formats for financial instrument reference data and technical measures which will apply when a trading venue or systematic internaliser (SI) detects that submitted instrument reference data is incomplete or inaccurate and must promptly make a notification to its competent authority. The FCA advises that trading venues and SIs may use the new form when complying with the duty to notify it of any errors or omissions in their instrument reference data and. provide as much information as possible.


EMIR: ESMA consults on guidelines for CCPs

Following its December 2016 peer review report on CCPs' margin and collateral requirements, ESMA is consulting on draft guidelines on anti-procyclicality margin measures for CCPs under EMIR. Margin calls and haircuts on collateral by CCPs may have procyclical effects and CCPs are required to regularly monitor and, if necessary, revise the level of margins to reflect current market conditions, taking into account any procyclical effects of such revisions. CCPs are further required to adopt at least one of three anti-procyclicality (APC) margin measures to address this issue. The aim of the draft guidelines is to clarify the application of EMIR in the context of the procyclicality of margins and cover the monitoring of margin procyclicality, the implementation of APC margin measures and disclosures intended to facilitate margin predictability. Comments are invited by 28 February 2018.


IOSCO statement on use of financial benchmarks

The International Organization of Securities Commissions has published a statement setting out matters for users of financial benchmarks to consider when selecting an appropriate benchmark and in contingency planning. The matters for users to consider fall into two categories, which are those related to: (i) assessing the appropriateness of a benchmark, in both its initial selection and ongoing use; and (ii) contingency planning, such as if the selected benchmark becomes unavailable. In both cases, IOSCO’s statement recognises users' reliance on benchmarks, aims to increase awareness of the risks involved and encourages their mitigation, where appropriate.


AFME updates DDQ for custodians

The Association for Financial Markets in Europe (AFME) has published a revised version of its post-trade due diligence questionnaire (DDQ) for global custodians. AFME’s DDQ taskforce has reviewed the 2016 version of the DDQ, and the revised DDQ incorporates around 20 additional questions. The most significant change made, following requests from AFME members, is the addition of a global custody section to allow those entities to outline their approach to due diligence for third parties. The DDQ is designed to harmonise and simplify the process of completing questionnaires for global custodians. AFME explains that the revised DDQ should further standardise the process by allowing firms to use the DDQ without sending a sizeable addendum of additional questions.


Delegated Regulations under BMR

The European Parliament has updated its procedure files for the certain Delegated Regulations supplementing the Regulation on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds. The European Parliament did not object to any of the regulations, which relate to a number of matters specifying technical elements, specifying how the nominal amount of financial instruments other than derivatives, the notional amount of derivatives and the net asset value of investment funds are to be assessed and specifying how specific criteria are to be applied for assessing whether certain events would result in significant and adverse impacts on market integrity, financial stability, consumers, the real economy or the financing of households and businesses in one or more member states. The Delegated Regulations will now proceed to publication in the Official Journal of the EU (OJ) and enter into force 20 days after publication.


Payment Accounts Directive (PAD): publication of technical standards

Certain technical standards required under the Payment Accounts Directive (2014/92/EU) (PAD) have been published in the Official Journal of the EU (OJ). These relate to: (i) regulatory technical standards (RTS) for standardised terminology for the most representative services linked to a payment account; (ii) implementing technical standards (ITS) on the standardised presentation format of the statement of fees and its common symbol which follow from the requirement under the PAD for member states to ensure that payment service providers (PSPs) provide the consumer, at least annually and free of charge, with a statement of all fees incurred, as well as, where applicable, information regarding the interest rates for services linked to a payment account; and (iii) ITS dealing with the requirement under the PAD for member states ensure that PSPs provide the consumer with a fee information document on paper or another durable medium containing the standardised terms in the final list of the most representative services linked to a payment account and, where such services are offered by a PSP, the corresponding fees for each service. The Regulations will enter into force on 31 January , which is 20 days after their publication in the OJ).



This week, James Hogbin of IP Sentinel, discusses the effect of the recording requirements introduced by MiFID II on personal devices, as follows:

“The FCA has effectively banned personal devices in almost all regulated firms. The new MiFID II rules that came into force at the beginning of the year have been translated into the Senior Managers Arrangements, Systems & Controls (SYSC) handbook. One of the expected major impacts on regulated firms’ technology was the implementation of a much broader call recording requirement. This issue has been well consulted on and was seen as just one of those things by the industry in general.

However, thanks to some rather aggressive drafting when the FCA transcribed MiFID II into SYSC, the regulations, as written, effectively force companies to record all voice and electronic messaging on personal devices or to just ban them entirely and provide compliant company devices. This is a pretty major issue. It means that firms cannot rely on a Bring your Own Device policy for equipment, allow DR or remote access on home PCs, web access to Linkedin, Facebook, Twitter or any other site where you can leave messages without major interventions, all of which are utterly unacceptable on a personal device.

According to SYSC, firms will have to provide locked-down and highly controlled company devices to their staff. Whilst an improvement, the technology to do this is cumbersome and expensive and also requires a high degree of skill to implement and maintain, which will be totally cost prohibitive for small and medium-sized firms. Another implication of the new rules is that services such as Google gMail & Microsoft o365 will have to be so locked down as to lose most of their competitive advantage over a DIY approach.”

If you would like to receive further information regarding the above or understand more about how to remain compliant with the FCA rules regarding your IT systems, please contact James Hogbin on +44(0)7786910895 or at:


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Cummings Law
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United Kingdom

25 05 2019

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