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

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



Claire Cummings will be giving a talk on the GDPR at the offices of Northern Trust in Canary Wharf on Tuesday, 23 January 2018. If you would like more details on this event, please e-mail Claire at:

Cummings will also be holding a roundtable teach-in and discussion exploring how to prepare for the GDPR and giving an update on the progress of MiFID II to date. The roundtable will be held on Wednesday, 21 February 2018 at our offices at 42 Brook Street. Again, if you would like more details on this event, please e-mail Claire at:


New rules and reforms in 2018 and beyond

The following reforms will, or are expected to, take place in 2018-19, as follows: (i) MiFID II, which came into effect on 3 January 2018; (ii) the new Prospectus Regulation, which came into force on 20 July 2017, which will repeal and replace the Prospectus Directive with effect from 21 July 2019; (iii) changes to the AIM Rules as a result of AIM’s application to the FCA to be registered as an SME growth market with effect from 3 January 2018; (iv) the General Data Protection Regulation (GDPR) which will be directly applicable within the EU from 25 May 2018; and (v) corporate governance reforms, the key areas being executive pay, strengthening the employee, customer and stakeholder voice and corporate governance for large privately-held businesses.


Delegated Regulations published in OJ

The following Delegated Regulations were published in the Official Journal of the EU this week: (i) Commission Delegated Regulation (EU) 2018/63 supplementing MiFID II with regard to RTS on the authorisation, organisational requirements and the publication of transactions for data reporting services providers (DRSPs); (ii) Commission Delegated Regulation (EU) 2018/64 supplementing the Benchmarks Regulation with regard to specifying how 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; (iii) Commission Delegated Regulation (EU) 2018/66 supplementing the Benchmarks Regulation specifying how the nominal amount of financial instruments other than derivatives, the notional amount of derivatives and the NAV of investment funds are to be assessed; and (iv) Commission Delegated Regulation (EU) 2018/67 supplementing the Benchmarks Regulation with regard to the establishment of the conditions to assess the impact resulting from the cessation of or change to existing benchmarks. All the Delegated Regulations will enter into force on 6 February 2018 (that is, twenty days after their publication in the OJ).



The European Parliament has updated its procedure file on the proposed Fifth Money Laundering Directive (MLD5). The procedure file indicates that the Parliament will debate and vote on MLD5 at its plenary session to be held from 16 – 19 April 2018. The Parliament and the EU Council reached political agreement on the text of the Directive on 15 December 2017.


EC calls for feedback on roadmap on MMF Regulation

The European Commission has published a roadmap relating to a delegated act under the Regulation on money market funds (MMF Regulation), which specifies quantitative and qualitative liquidity requirements applicable to assets received as part of a reverse repurchase agreement and on credit quality assessment. The Commission is required to introduce detailed requirements for the methodology for a proper credit risk assessment to ensure that the MMF manager performs their tasks properly. The Commission also aims to link the MMF Regulation with the Securitisation Regulation. The Commission is consolidating the three separate empowerments provided to it under the MMR Regulation into a single delegated act. In the light of ESMA's final report on the MMR Regulation in November 2017, the Commission has launched a four week period to receive additional feedback, which will close on 12 February 2018. The Commission is not consulting separately on the delegated act.


Update on PRIIPS Regulation

The Regulation on key information documents (or KIDs) for packaged retail and insurance-based investment products (PRIIPs Regulation) entered into force on 29 December 2014 and came into effect on 1 January 2018. The PRIIPs Regulation introduces a new pan-European pre-contractual product disclosure document with the aim of helping retail investors understand, compare and use information provided to them about different investment products. The Regulation lays down uniform rules on: (i) the format and content of the KID; (ii) the provision of the KID to retail investors; and (iii) sets out the overall principles on the approach and content of the KID. The Regulation applies to PRIIP manufacturers responsible for drawing up KIDs, such as fund managers, insurance companies, banks and investment firms, and persons advising on or selling PRIIPs.

With regard to PRIIPs and the AIFMD, an AIF that is offered to EEA retail investors will constitute a PRIIP for the purpose of the Regulation and the AIFM (as the PRIIP manufacture) will therefore be required to provide a KID to these investors prior to investment. Please note, however, that under the Regulation, UCITS funds and AIFs with a UCITS KIID benefit from a two-year grandfathering period.

With regard to MiFID II, a KID provided to retail investors under the PRIIPs Regulation must also comply with the disclosure of information requirements under MiFID II, namely in the areas of risk and performance and information on costs and associated charges. It is understood that the PRIIPs rules will meet the less prescriptive MiFID II requirements relating to risk and performance, whilst the extent to which the KID satisfies the MiFID II costs and charges requirements has been partially clarified by ESMA’s Q&As on MiFID II, in which it states that the PRIIPs calculation methodology complies with MiFID II (see Q&A 7 dated 6 June 2017 of the December 2017 Q&As on investor protection).


We have taken great care to ensure the accuracy of this version of Legal Shorts. However, Legal Shorts is written in general terms and you are strongly recommended to seek specific advice before taking any action based on the information it contains. No responsibility can be taken for any loss arising from, action taken or refrained from on the basis of this publication. If you would like to be removed from the mailing list of this publication please click unsubscribe below. Nothing within this communication may be copied, re-printed or similar without prior written consent from Cummings.

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Cummings Fisher
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United Kingdom

25 05 2019

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