Euronext Aims for Late-January Launch for Commodity Trading Data

Euronext expects to launch reports on investors’ trading positions in commodity derivatives towards the end of the month to comply with new European Union regulations, the exchange operator said according to a story in Reuters news. Euronext, which trades derivatives mostly based on agricultural commodities, has been preparing to publish weekly commitments of traders (COT) reports to meet the requirements of the new EU rules, known as MiFID II, that came into effect last Wednesday. The new rules aim to increase transparency in Europe’s financial markets, so regulators can spot risks early and allow investors to shop around more. COT data, already a feature of U.S. commodity markets, gives a clearer picture of trading activity by providing information on who has been buying and selling which products. Euronext had said previously it planned to publish the data from early January, but a spokeswoman said the exchange wanted to spend some time checking the new information being submitted by market participants. Euronext plans to publish the weekly reports every Wednesday afternoon, showing positions held at the close of trading on the previous Friday. The reports will show changes in the positions held by categories of participants such as investment funds and commercial firms. 

Charles Randell Appointed New Chair of UK’s Financial Conduct Authority

HM Treasury has announced the appointment of Charles Randell CBE as the new Chair of the Financial Conduct Authority (FCA). Charles is currently an external member of the Prudential Regulation Committee of the Bank of England and a non-executive board member of the Department for Business, Energy and Industrial Strategy. Randell will take up the role on April 1, 2018. The appointment is for a five-year term.

Eurex Outlines 2018 Road Map

In 2018, Europe’s largest derivatives exchange Eurex, part of Deutsche Börse Group, stated that it will continue to focus on helping its clients navigate the regulatory changes. “The introduction of MiFID II, rising capital requirements and Brexit pose challenges to the whole market,” said CEO Thomas Book. Eurex will expand its suite of products like Total Return Futures, the STOXX portfolio and its MSCI derivatives universe. In addition, the exchange will strengthen its liquidity pools through the launch of new market models like the request for quote platform EnLight. Launched in December 2017, EnLight allows banks and brokers to selectively contact market makers to find a trading counterparty.

EU Clearing Houses Given Last-Minute MiFID Reprieve

Regulators have granted a last-minute reprieve to three clearing houses in Germany and Britain from having to give customers more choice under new European Union market rules that came into effect on Wednesday. One of the aims of MiFID II is to make it easier for people to choose where to clear the listed derivatives contracts they buy and sell. This would be done through the “open access” rule, which stops any requirement to clear a derivative contract within the same exchange group that traded the contract. Britain’s Financial Conduct Authority (FCA) said it received applications for an open-access waiver from ICE Futures Europe and from the London Metal Exchange. This means the exchanges would not yet have to make changes to allow customers to clear contracts elsewhere. The FCA said it has decided to grant transitional arrangements in the interests of ensuring there is an “orderly functioning market.” “Accordingly, with effect from January 3, 2018, ICE Futures Europe and LME will not be required to consider open-access requests, as they relate to exchange-traded derivatives, until the expiry of the transitional period on July 3, 2020.” BaFin, the German markets regulator, announced late on Tuesday that it had granted the same time-limited waiver to Deutsche Boerse’s Eurex Clearing arm. Open access has been a feature of share trading and clearing for many years, but its introduction to listed derivatives has proved divisive. 

ESMA Says MiFID II Market Rules Off to Smooth Start

The rollout of the new European Union securities rules last Wednesday was generally glitch-free, however, disruptions in coming days and months cannot be ruled out, Steven Maijoor, Chairman of the European Securities and Markets Authority (ESMA) said. The new rules, known as Markets in Financial Instruments Directive II (MiFID II), were delayed by a year to give banks, asset managers and exchanges time to get ready. Regulators in Britain and Germany intervened just hours before the rollout began to give three clearing houses an exemption until July 2020. Maijoor said this would be a “one-off” waiver and the new requirements for clearing houses would come into effect in 2020. 

Spain’s BME Receives Approval as APA and ARM

BME has received authorization from the Spanish securities market regulator, Comisión Nacional del Mercado de Valores (CNMV), to provide Approved Publication Arrangement (APA) and Approved Reporting Mechanism (ARM) services in compliance with MiFID II and MiFIR requirements.  As an APA, BME will help financial institutions to fulfill their post-trade transparency obligations related to OTC transactions. Through the APA, BME will publish details of its clients’ OTC transactions through the group's information dissemination services. It will also allow the publication of firm quotes by systematic internalizers. As an ARM, BME will offer transaction reporting services to its clients through which they will be able to inform competent authorities the details of their transactions in the formats required by the regulation. This service is the evolution of the current Transaction Reporting Service (SIO) offered by BME in compliance with MiFID I.

Malaysian Securities Commission Invites ATSs to Participate in Regulatory Sandbox

The Securities Commission Malaysia (SC) announced that parties interested in establishing and operating an Alternative Trading System (ATS) in Malaysia can apply to participate in regulatory sandbox sessions under the SC’s FinTech Innovation Lab (aFINity - alliance of FinTech community). This follows the Budget 2018 announcement on the introduction of ATS in the Malaysian capital market. The SC’s Innovation Lab will commence from January 2 to March 30, 2018. Since 2015, the SC has pioneered the regulatory sandboxing approach where regulation is imposed on a graduated scale in line with the growth of the market and complexity of the product. The Lab allows the SC to discuss and provide feedback to innovative business ideas and concepts, and to explore proof of concept solutions designed to meet specific industry needs.

Athens Exchange Approved as ARM and APA under MiFID II

The Athens Exchange announced that following the decision of the HCMC Board, it is compliant with the requirements of MiFID II for the provision of data reporting services and as an approved reporting mechanism (ARM) and approved publication arrangement (APA). As a result, ATHEX is fully ready to provide transactions reporting services and trade reporting services to its clients from EU Member States covering a wide number of products and the enhanced number of fields required by MiFIR. The new MiFIR requirements regarding reporting from Investment Firms will go live on January 3, 2018. For the provision of the transactions service reporting, ATHEX has already successfully connected to the UAT systems of NCAs in Greece, Cyprus and Romania with the participation of its clients. For the provision of the trade reporting services, ATHEX has already successfully connected in its test environment a wide network of data feed vendors that disseminate its feed.

ESMA Grants Six-Month Delay for LEI Requirement

Regulators will grant financial firms a six-month delay in implementing part of the sweeping MiFID II overhaul of rules that’s set to take effect on Jan. 3, as both companies and countries struggle to meet the deadline. The European Securities and Markets Authority last Wednesday proposed the grace period for a requirement that companies wanting to trade with any party based in the European Union will need a code, known as a legal entity identifier, or LEI. The identifying code is important as it lets firms continue to trade from MiFID’s Jan. 3 start date. 

Europe’s Privacy Law Set to Change How Personal Data is Handled

Historically, privacy concerns have been a lower priority than convenience and wealth, however, over the years, people, organizations and governments have come to realize the negative impact a breach of private information can have on consumers. As a result, we have seen an increasing number of privacy laws passed by governments across the globe over time. The European Union’s General Data Protection Regulation (GDPR) is the latest privacy-based regulation, and its effective date is quickly approaching. Organizations worldwide must be ready to comply with their many stringent requirements starting on May 25, 2018. It will impact organizations across the globe that handle personal data for EU residents. Even before its application date, the GDPR has had a major impact by putting forth substantive updates and new requirements. Organizations around the world are grappling with the issue of how to ensure compliance and still maintain solid business processes. According to a story in The Hill, a few of the provisions include: Article 15, which grants EU residents the “right of access” and requires companies to detail what personal data is processed and how it is processed upon request; Article 17, arguably one of the toughest new requirements, granting the right to be “forgotten” and data erasure — which requires companies to stop processing and delete personal data upon request; Article 20, which will confer the right to enable transfer of personal data between companies upon request and Article 35, which will require companies to perform data protection impact assessments to identify risks to EU residents’ data.  U.S. companies that conduct business overseas also have to comply with GDPR or face the same fines as EU businesses.