Financial Services Regulatory Update – March 2023 Round Up

Individual Accountability Framework

On 9 March 2022, the Central Bank (Individual Accountability Framework) Act 2023 was signed by the President (here).

The Individual Accountability Framework (“IAF”) consists of four pillars:

• a senior executive accountability regime (“SEAR”) which will require in-scope firms to determine where responsibility and decision-making lie within a firm’s senior management structure and impose a “duty of responsibility” on senior executives;
• common conduct standards which will apply to persons in controlled functions (“CFs”), additional conduct standards which will apply to individuals in pre-approval controlled functions (“PCFs”) and business standards which will apply to a firm itself;
• enhancements to the Central Bank of Ireland (the “CBI”)’s existing fitness and probity (“F&P”) regime; and
• amendments to the CBI’s administrative sanctions procedure.

The CBI is now consulting on three sets of draft Regulations and a draft guidance (here) that will further implement the IAF in conjunction with the Act. The deadline for comments is 13 June 2023 (here). Further information on the CBI consultation can be found in our briefing (here).

CBI Markets Update

On 28 February 2023, the CBI issued its 3rd markets update of 2023 (here). The update provides information on recent CBI and European Securities and Markets Authority (“ESMA”) publications.

Distance Financial Services Directive

On 2 March 2023, the Council of the EU (the “Council”) adopted a position on the Directive for financial services concluded at a distance (here). The Council’s position clarifies the scope of financial services covered, its application and includes a right of withdrawal from contract provision for services offered.

CBI Guidance on new Fitness and Probity Process

On 7 March 2023, the CBI issued guidance on the new fitness and probity application process (here). This guidance includes the requirement that applications must now be submitted via the Central Bank Portal rather than the previous Online Reporting System. These changes will come into effect on 24 April 2023.

The CBI has also published draft guidance (here) for regulated financial services providers for submitting individual questionnaires (“IQs”) through the Central Bank Portal for persons who are proposed to hold PCF roles.

ECON report on ESAP Regulation

On 7 February 2023, the European Parliament’s Economic and Monetary Affairs Committee (“ECON”) issued its report on the proposed Regulation to establish a European single access point (“ESAP”) providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability (here).

Gender Diversity in Applications for PCF roles

On 8 March 2023, the CBI published its report on gender diversity in applications for senior positions in regulated firms which require pre-approval from the CBI (here). On 10 March 2023, the CBI released remarks from Deputy Governor Derville Rowland on the importance of enhanced diversity within financial services (here).

CBI Consumer Protection Outlook

On 10 March 2023, the CBI published its 2023 consumer protection outlook report (here). The report identifies five key drivers of risk facing consumers in the financial services sector, and outlines ways in which relevant firms are expected to mitigate those risks. The five key risks identified are:

• poor business practices and weak business processes;
• ineffective disclosures to consumers;
• the changing operational landscape;
• technology-driven risks to consumer protection; and
• the impact of shifting business models.

ESAs’ Consumer Communication (Crypto-assets)

On 17 March 2022, the European Supervisory Authorities (“ESAs”) comprising of the European Banking Authority (“EBA”), the European Insurance and Occupational Pensions Authority (“EIOPA”) and ESMA issued a warning to consumers about the risks involved with crypto-assets (here).

Insider List Regime

On 20 March 2023, ESMA released a letter sent to the Council and the European Parliament (the “Parliament”) detailing concerns over proposed amendments to the Market Abuse Regulation regarding the insider list regime (here). ESMA is concerned that the current amendments will render it more difficult to identify insiders and consequently increase the risk of insider trading.

Credit Rating Agencies

On 24 March 2023, ESMA issued a public notice (here) detailing fines against a ratings agency for breaches of the Credit Rating Agencies Regulation (“CRA Regulation”). The full decision of the Board of Supervisors can be found (here).

Crowdfunding Regulation Q&As

On 8 March 2023, ESMA issued an update to its Q&As on the European crowdfunding service providers for business Regulation (“Crowdfunding Regulation”) (here). The update confirms that a MiFID firm can perform PSD2-exempt payment services in relation to its activities as a crowdfunding service provider, i.e. where those payment services relate to securities asset servicing, including dividends, income or other distributions, or redemption or sale.

SFTR Q&As

On 23 March 2023, ESMA published an updated version of its Q&As on complying with reporting requirements under the Regulation on reporting and transparency of securities financing transactions (“SFTR”) (here). ESMA has added a new Q&A on reporting of the jurisdiction of the issuer.

EU Green Bonds

On 28 February 2023, the European Parliament (the “Parliament”) and the Council reached a provisional agreement on the creation of European green bonds (“EuGB”) (here). This agreement determines that the proceeds of the green bonds are to be invested in economic activities classed as green under the EU Taxonomy.

Climate Risk Test

On 9 March 2023, the European Commission (the “Commission”) requested EU entities to undertake a climate risk exercise (here). This request is addressed to the ESAs, the European Central Bank (“ECB”) and the European Systemic Risk Board (“ESRB”). The mandate for the exercise is available (here).

Annexes to SFDR Delegated Regulation

On 23 March 2023, the ESAs made available in an editable format annexes to Commission Delegated Regulation (EU) 2022/1288 supplementing the Sustainable Finance Disclosure Regulation (“SFDR”) (here).

ECB letter to Commission on Climate Stress Test

On 28 March 2023, Christine Lagarde, President of the ECB, issued a letter addressed to European Commissioner for Financial Stability, Financial Services and the Capital Markets Union, Mairead McGuinness (here). The letter confirms that the ECB will engage with a forthcoming assessment of the financial system’s resilience to stress in the transition to the EU’s 2030 goals for the reduction of greenhouse gas emissions.

SFDR and Occupational Pensions

On 7 March 2023, the European Union (Sustainability-Related Disclosures in the Financial Services Sector) (Occupational Pension Schemes) Regulations 2023 were published (here).

These Regulations amend the Pensions Act 1990 to provide that the Irish Pension Authority’s existing powers of supervision and enforcement are extended to the provisions of Regulation (EU) 2019/2088 (the “Sustainable Finance Disclosure Regulation” or “SFDR”).

Benchmarking Exercises 2022

On 10 March 2023, the EBA issued reports on its market risk benchmarking exercise 2022 (here) and credit risk benchmarking exercise 2022 (here). The aim of these exercises is to demonstrate the approach taken internally by banks in the calculation of their capital requirements.

Credit Suisse and UBS merger

On 19 March 2023, the Swiss Financial Market Supervisory Authority (“FINMA”), approved the takeover of Credit Suisse by UBS. In a press release (here), FINMA welcomed the takeover solution to the crisis of confidence faced by Credit Suisse, deeming it necessary to ensure stability for the bank’s customers, and to avert “serious damage” to the Swiss and international financial markets.

Banking supervisory authorities, including the US Federal Reserve (here) and the Bank of England (here), have released statements endorsing the takeover, as well as expressing confidence in their respective financial systems. In a joint statement (here), published on 20 March 2023, the EBA, the Single Resolution Board (“SRB”), and the ECB welcomed the actions of the Swiss authorities and stated that the European banking sector is “resilient, with robust levels and liquidity”.

Banking Supervisory Fees

On 21 March 2023, Decision (EU) 2023/656 of the ECB was published in the Official Journal (here). The Decision outlines the total amount of supervisory fees under the single supervisory mechanism (“SSM”) for 2022. The annual figure for 2022 has been set at €593.7m, with banks under the direct supervision of the ECB paying €566.7m. The Decision entered into force on 26 March 2023.

RTS - Collective Investment Undertakings

On 9 March 2023, Commission Delegated Regulation (EU) 2023/511 on regulatory technical standards (“RTS”) on the calculation of risk-weighted exposure amounts of collective investment undertakings (“CIUs”) was published in the Official Journal (here). This Delegated Regulation came into effect on 29 March 2023.

Amending Delegated Regulation under BRRD

On 22 March 2023, Commission Delegated Regulation (EU) 2023/662 (here) amending Delegated Regulation (EU) 2015/63 on ex ante contributions to resolution financing arrangements under the Bank Recovery Resolution Directive (“BRRD”) was published in the Official Journal. The Delegated Regulation entered into force on 23 March 2023 and applies retroactively as of 1 October 2022.

Banking Supervision Decisions

On 23 March 2023, two Decisions of the ECB relating to on-site inspections and internal model investigations were published in the Official Journal:

• Decision (EU) 2023/672 (here) specifying the criteria for the delegation of decision-making powers to the heads of work units of the ECB for the adoption of decisions on on-site inspections and decisions on internal model investigations;
• Decision (EU) 2023/673 (here) nominating heads of work units to adopt delegated decisions relating to on-site inspections and internal model investigations.

ECB Opinion on Mortgage Payment Breaks

On 20 March 2023, the ECB issued an opinion on mortgage payment breaks, or so-called “mortgage holidays” (here). The opinion was delivered in response to a Polish law which enabled mortgage holders to suspend, for a specific time period, repayments on mortgages in zloty, and focused on the law’s impact on the banking system and financial stability of the euro area.

The ECB stated its view that, whilst payment holidays can in limited circumstances support financial stability, “widespread and untargeted” measures create uncertainty and can threaten financial stability, particularly in a context where several systematically important euro banks hold Polish mortgage loan exposures. The ECB invited the Polish authorities to consider targeted eligibility criteria for the application of future mortgage payment holidays.

RTS – Interest Rate Risk Exposures

On 27 March, 2023, the Commission published a draft delegated regulation (here) setting out RTS issued under Article 98(5) of the Capital Requirements Directive (“CRD IV”) to specify the supervisory shock scenarios, the common modelling and parametric assumptions and the definition of a large decline, for the purposes of supervisory tests of the exposures of institutions to the interest rate risk arising from non-trading book activities and their impact on net interest income and economic value of equity.

CBI Guidance for (Re)insurers on Climate Risk

On 27 March 2023, the CBI published guidance (here) clarifying its expectations on how (re)insurers should address climate risk in their business and to assist (re)insurers in developing their governance and risk management frameworks to appropriately consider and address climate change risk.

The CBI expects that actions identified by (re)insurers to assess the financial impact and manage any material exposures be incorporated into the (re)insurers’ shorter term strategic and business planning horizons.

Digitalisation Monitoring Survey

On 7 March 2023, EIOPA issued a digitalisation monitoring survey to European insurers (here). This survey has been issued to allow EIOPA better understand how European insurers are responding to digitalisation.

Differential Pricing in Non-life Insurance

On 16 March 2023, EIOPA issued a supervisory statement on differential pricing practices in non-life insurances lines of business (here). The statement offers guidance to competent authorities on their supervision of non-life insurance products.

“Dear CEO” Letter on Risk Management Frameworks

On 29 March 2023, the CBI issued a “Dear CEO” letter outlining the key findings and best practices identified during its targeted reviews of control frameworks and risk management statements across a sample of MiFID investment firms (here).

The CBI expects all firms to consider the letter’s contents, and to review their risk and control frameworks against outlined best practices. The CBI states that relevant firms are required to discuss the letter at their next board meetings, and that discussion should be recorded as part of meeting minutes.

CBI Securities Markets Report

On 2 March 2023, the CBI issued its third securities markets risk outlook report (here). The report identifies risks in securities markets and relevant actions for firms to mitigate such risks.

Our briefing (here) provides further detail on this report.

ECON draft report on proposed MiFIR and MiFID II Directive

On 3 March 2023, ECON published its draft report for the proposed Directive that will amend the Markets in Financial Instruments Directive (“MiFID II Directive”) (here). On 8 March 2023, ECON published its report on the proposed Regulation to amend the Markets in Financial Instruments Regulation (“MiFIR”) (here).

Client Asset Supervision

On 2 March 2023, the CBI published its industry engagement session presentation on revised client asset requirements (here). This presentation was carried out by the CBI’s client asset supervision team (“CAST”) and details developments in the Irish client asset regime.

Supervisory Guidance on Structured Retail Products

On 3 March 2023, the CBI published supervisory guidance on how best to comply with the expectations set out in its structured retail products ("SRP") letter of April 2022 (here). This guidance is a series of Q&As and specifically addresses the decrement index and the presentation of back-testing from the SRP letter.

MiFID II Product Governance Requirements

On 27 March 2023, ESMA published a final report on the review of the product governance requirements under MiFID II (here). The report builds on the text of 2017 ESMA guidelines taking into account recent regulatory and supervisory developments.

Derivatives on Fractional Shares

On 28 March 2023, ESMA issued a statement commenting on investor protection concerns raised by the sale of financial instruments enabling the purchase of derivatives on fractions of shares (here).

The statement, addressed to investment firms and national competent authorities, clarifies the application of certain investor protection requirements established under MiFID II. The statement also clarifies that where derivatives on fractions of shares are packaged retail and insurance-based investment products (“PRIIPs”), the PRIIPs Regulation applies and firms need to provide retail clients with a PRIIPs KID.

Proposed ITS - MiFID II

On 28 March 2023, ESMA published a final report detailing proposed ITS amending Implementing Regulation (EU) 2017/980 regarding cooperation in supervisory activities under MiFID II (here).

Supervisory Briefing on Copy Trading Services

On 30 March 2023, ESMA published a supervisory briefing (here) outlining supervisory expectations regarding firms offering copy trading services under MiFID II.

Statement on Derivatives Trading Obligation

On 30 March 2023, ESMA published a statement on the application of the derivatives trading obligation (“DTO”) under Article 28 MiFIR to certain credit default swaps (“CDS”) (here), in the context of ICE Clear Europe’s decision to cease to clear CDS as of end-October 2023 and the migration of CDS positions from ICE Clear Europe to other CCPs. ESMA states that, in order to support the orderly migration of positions and mitigate perceived related risks, and for the sole purpose of that migration, it expects national competent authorities not to prioritise their supervisory actions in relation to DTO in certain index CSDs and to apply their risk-based supervisory powers in a proportionate manner. ESMA also noted that, given the global dimension to the migration in terms of CCPs as well as clearing members and clients involved, it has coordinated its approach closely with the UK Financial Conduct Authority ("FCA") and the US Commodity Futures Trading Commission ("CFTC").

MiFID and MiFIR Q&As

On 31 March 2023, ESMA published updated Q&As on transparency topics under MiFID II and MiFIR (here). The update relates to a new Q&A on "Delivery/cash settlement location" in the context of non-equity transparency.

On 31 March 2023, ESMA published updated Q&As on data reporting under MiFIR (here).  ESMA amended Question 11 in section 24 relating to the concept of the underlying and also added:

• a new Question 8 in section 2 regarding which legal entity identifier (“LEI”) should be used to report in FIRDS the issuer of sovereign bonds issued by an EEA member state; and
• a new Question 14 in section 24 concerning which ISO 3166-1 country code should be used by trading venues and investment firms to identify stateless natural persons for the purposes of transaction reports.

CBI Letter on Costs and Fees of UCITS

On 24 March 2023, the CBI published an industry letter following its review of the costs and fees charged to UCITS by firms (here).

The CBI’s letter sets out expectations for firms, outlining key actions which should be taken “without delay” to mitigate the deficiencies identified. Firms are expected to calculate fees and costs, on an ongoing basis, in a fair and equitable manner, serving the best interests of investors.

All firms managing UCITS and AIFs will be required to conduct a gap analysis against the CBI's findings and, where appropriate, put in place a plan to address any identified gaps by the end of Q3 2023. The CBI expects this letter to be discussed by the board of every firm.

Our briefing (here) provides further detail on this letter.

UCITS and AIFs Marketing Requirements

On 27 February 2023, the CBI published updated guidance to the national provisions governing the marketing requirements for UCITS (here).

The CBI also published an update on its guidance to the national provisions governing the marketing requirements for AIFs (here). 

ELTIF Regulation

On 20 March 2023, Regulation (EU) 2023/606 was published in the Official Journal (here), amending Regulation (EU) 2015/760 (the “ELTIF Regulation”).

The amending Regulation introduces a number of targeted changes to the ELTIF framework, including amendments to the scope of eligible assets and investments, portfolio composition and diversification requirements, borrowing of cash and other fund rules and provisions in respect of retail investors.

The amending Regulation entered into force on 9 April 2023 and will apply from 10 January 2024.

AIFMD, EuVECA and EuSEF Q&As

On 10 March 2023, ESMA published an updated version of Q&As on the application of the Alternative Investment Fund Managers Directive (“AIFMD”) (here). The update adds a new question on the interpretation of “substantive direct or indirect holding” in Article 3(2) of the AIFMD.

ESMA also published updates to its Q&As on the Regulation on European Venture Capital Funds (“EuVECA”) and the Regulation on European Social Entrepreneurship Funds (“EuSEF”) (here). The new question relates to investment in another qualifying venture capital fund/qualifying social entrepreneurship fund.

Corrigendum amending PRIIPS RTS

On 16 March 2023, a corrigendum to Commission Delegated Regulation EU 2021/2268 containing RTS relating PRIIPs was published in the Official Journal (here).

AIF Forms

On 23 March 2023, the CBI published updated AIFs forms (here):

• Qualifying Investor AIF Application Form Section 9 ORION Investment Limited Partnership Agreement (here);
• Retail Investor AIF Application Form Section 10 Partnership Agreement ORION (here); and
• Retail Investor AIF Application Form Section 10 Partnership Agreement (here).

Notice of Intention regarding MMF Regulation

On 27 March 2023, the CBI issued a notice of intention (here) in respect of the ESMA guidelines on stress test scenarios under the MMF Regulation. The ESMA guidelines (here) were published on 27 January 2023 and came into effect two months later on 27 March 2023. The CBI states that it will consult on the incorporation of a provision in the CBI UCITS Regulations and AIF rulebook that all managers of MMFs adhere to the guidelines. In the interim, the CBI expects full compliance with the ESMA guidelines from 27 March 2023.

UCITS and AIFMD Q&As

On 24 March 2023, the CBI published the 38th edition of its UCITS Q&A (here).  This edition of the Q&A contained amendments to three Q&As (ID 1107, 1108, 1109) concerning PRIIPs filing requirements. It also contained two new Q&As (ID 1110 and 1111) in relation to the filing requirements for PRIIPs KIDs of UCITS which intend to market to different types of investor. The CBI also updated its guidance clarifying for UCITS the filing and submission requirements for PRIIPs KIDs (here).

On 4 April 2023, the CBI published the 39th edition of its UCITS Q&A (here) which reflected a change in terminology to refer to “digital” rather than “crypto” assets.

On the same date, the CBI published the 47th edition of its AIFMD Q&A (here) which revises ID1145 relating to whether a RIAIF or a QIAIF can invest either directly or indirectly in digital assets. The CBI states that the revised Q&A does not change the CBI’s position in relation to RIAIFs. However, the CBI states that it was increasing limits for indirect exposure to digital assets, depending on the liquidity provided by the QIAIF: where a QIAIF is open-ended the CBI states that it can gain exposure to digital assets of up to 20% of NAV. The CBI states that where a QIAIF is closed-ended or has limited liquidity it can gain exposure to digital assets of up to 50% of NAV.

Details of the pre-submission process for QIAIFs proposing to invest directly in digital assets in excess of the limits outlined in ID1145 or any direct investment in digital assets is set out (here).

AIFMD 2

On 28 March 2023, the Council published the initial positions of the three EU institutions on the proposal for a Directive of the European Parliament and of the Council amending Directives 2011/61/EU and 2009/65/EC as regards delegation arrangements, liquidity risk management, supervisory reporting, provision of depositary and custody services and loan origination by AIFs (“AIFMD2”) (here).

Information Note -LDI funds

On 29 March 2023, the CBI issued an information note (here) on liability-driven investment (“LDI”) funds. In the note, the CBI confirms the expectations set out in the CBI’s November industry letter (here) regarding LDI funds. In particular, the CBI states that minimum safeguards regarding the maintenance of a minimum yield buffer of 300-400 basis points should continue to be observed.

Our earlier briefing (here) provides further detail on the CBI November industry letter.

EMIR 3

On 20 March 2023, the ESRB issued a letter to the Parliament and the Council concerning legislative amendments to EMIR (here). The ESRB draws attention to five areas which, it states, have not yet been addressed or for which EU co-legislators could further enhance. These five areas are: the active account requirement, data, collateral, the non-objection procedure and the joint monitoring mechanism.

EMIR Q&As

On 31 March 2023, ESMA updated its Q&As on the implementation of EMIR (here). ESMA inserted a new question on the inclusion of derivatives in the trade state report under Article 9 of EMIR. ESMA has also amended Q&As relating to reporting to trade repositories under Article 9 of EMIR and relating to exchange traded derivatives under Article 9 of EMIR.

Market Correction Mechanism

On 1 March 2023, ESMA issued its assessment report on the effects of the market correction mechanism (“MCM”) on financial markets as introduced under Regulation (EU) 2022/2578 (here). The report finds that there have been no noticeable market changes in central counterparty (“CCP”) risk management, margin requirements or assessed market indicators distinctly attributable to the MCM. 

CBI Innovation Hub

On 21 March 2023, the CBI released its yearly update on its Innovation Hub (here). Launched in 2018, the CBI’s Innovation Hub is intended to provide an informal forum for engagement between fintech firms and the CBI. According to the update, the Innovation Hub received a significant number of enquiries from a range of firms, including crypto and blockchain firms, and from those in payment services in the past year.

Our briefing (here) provides further detail.

DLT Pilot Regime Q&A

On 31 March 2023, ESMA published updated Q&As regarding the implementation of the Regulation on a pilot regime for market infrastructures based on distributed ledger technology (“DLT Pilot Regime Regulation”) (here). ESMA has included a new Q&A on how the tentative market capitalisation of DLT shares should be calculated.

RTS - CCPRRR

On 3 March 2023, Delegated Regulation EU 2023/450 (here) and Delegated Regulation EU 2023/451 (here) were published in the Official Journal. These Delegated Regulations lay down RTS which give further effect to the Regulation on the recovery and resolution of central counterparties (“CCPRRR”).

Delegated Regulation EU 2023/451 specifies the factors to be considered by the competent authority and the supervisory college when assessing the recovery plan of CCP. These Delegated Regulations entered into force on 23 March 2023.

On 14 March 2023, the European Commission adopted two Delegated Regulations containing RTS supplementing the CCPRRR (here and here). These standards will specify the content of the written arrangements and procedures for the functioning of the resolution college and the contents of the resolution plan.

Guidelines -Recovery and Resolution

On 24 March 2023, ESMA published guidelines under Article 9 of the CCPRRR that will apply two months after publication:

• Guidelines on CCP recovery plan indicators (here); and
• Guidelines on CCP recovery plan scenarios (here).

RTS – Business Reorganisation

On 29 March 2023, ESMA published a final report (here) outlining draft RTS on business reorganisation plans under Articles 37(4) and 38(4) of the CCPRRR.

AML/CFT Draft Legislation

On 28 March 2023, the Parliament published the position adopted by MEPs from the Parliament’s ECON and from the Committee on Civil Liberties, Justice and Home Affairs on proposed changes to the EU’s anti-money laundering and countering the financing of terrorism (“AML/CFT”) legislative framework (here).

This package consists of the EU Single Rulebook Regulation, the 6th Anti-Money Laundering Directive and the Regulation establishing the European Anti-Money Laundering Authority (“AMLA”).

The Minister for Finance, Michael McGrath, has announced Ireland’s interest in hosting the new AMLA (here).

Single Access Point - Information for Financial Crime Investigations

On 29 March 2023, the Council announced (here) that it has agreed its negotiating mandate in relation to the proposed EU law which would create a single access point through which national authorities investigating crime could access financial information.

The Council has proposed that, in addition to the creation of a single access point, financial institutions, when sharing transaction records as part of a criminal investigation, should be required to employ a harmonised approach. Following adoption of its negotiating mandate, the Council will enter negotiations with the Parliament.

Consultation - Extension of Risk-based Supervision to Crypto Asset Service Providers

On 29 March 2023, the EBA published a consultation paper inviting responses to proposed revisions to the EBA’s risk-based supervision guidelines (here). It is envisaged that crypto asset service providers (“CASPs”) will be subject to the guidelines, in addition to traditional credit and financial institutions. Responses can be submitted until the closing date of 29 June 2023.

Guidelines under MLD4

On 31 March 2023, the EBA published a set of final reports on guidelines issued under the Fourth Money Laundering Directive (“MLD4”). The EBA states it is seeking to clarify supervisory expectations for financial service providers in relation to AML/CFT obligations, whilst seeking to avoid unwarranted de-risking. The guidelines will apply three months after their publication:

• Final Report: Guidelines amending Guidelines EBA/2021/02 on customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions (“The ML/TF Risk Factors Guidelines”) under Articles 17 and 18(4) of Directive (EU) 2015/849 (here); and
• Final Report: Guidelines on policies and controls for the effective management of money laundering and terrorist financing (“ML/TF”) risks when providing access to financial services (here).

Proposed Regulation on Instant Payments

On 6 March 2023, the ECON committee issued its draft report on the proposed Regulation amending the Single Euro Payments Area Regulation and the SEPA Migration Regulation regarding instant credit transfers in euro (here). The draft report focuses on instant payments (“IPs”) and the need to update the current legislation.

On 22 March 2023, the ECB published an opinion on the proposed Regulation (here). The ECB “strongly welcomes” the Commission’s initiative to promote the uptake of IPs in the Eurosystem, and recommended some amendments to the proposed Regulation.

ECJ Ruling on Interpretation of Article 47 PSD

On 16 March 2023, the Court of Justice of the EU (“CJEU”) issued a preliminary ruling in ZG v Beobank SA (Case C-351/21) regarding the interpretation of Article 47(1)(a) of the Payment Services Directive (“PSD”) (here).

The case, on referral from a Belgian court, concerned disputed debit card transactions. In its ruling, the CJEU held that Article 47(1)(a) PSD must be interpreted as meaning that a payer’s payment service provider is required to provide that payer with information enabling the natural or legal person who benefited from a payment transaction debited from that payer’s account to be identified, and not only the information which that provider, after making its best efforts, has available with regard to that payment transaction.

EBA Decision on Reporting of Payment Fraud

On 23 March 2023, the EBA published Decision EBA/DC/482 amending Decision EBA/DC/453 concerning the reporting of payment fraud data under the Payment Services Directive (here).

CSDR Refit Regulation Proposal

On 1 March 2023, ECON confirmed its amendments to the proposed Regulation amending the Central Securities Depositories Regulation (the “CSDR”) (here). The proposed Regulation is intended to improve the efficiency of central securities depositories (“CSDs”) in the EU and include; 

• measures improving settlement fails;
• minimising administrative burdens and cross-border obstacles for third country CSDs; 
• the establishment of CSD supervisory colleges; and 
• allowing certain CSDs banking-type ancillary services.

CSDR Q&As

On 13 March 2023, ESMA published an update to its Q&As on the implementation of the CSDR (here). The new Q&A relates to settlement discipline and partial settlement functionality.

BMR Q&As

On 31 March 2023, ESMA published an updated version of its Q&As on the Benchmarks Regulation (“BMR”) (here). ESMA has updated Q&A 7.5 on IOSCO Principles under Article 32(2) BMR and Q&A 7.7 on legal representatives under Article 32(3) BMR.

Selected Consultations, Discussion Papers, Speeches and Reports Published

CBI – Insurance Newsletter – March 2023 (here)

CBI – "Implementing DORA - Achieving enhanced digital operational resilience in European financial services" - Remarks by Gerry Cross, Director of Financial Regulation, Policy & Risk – speech (here)

CBI – Financial Conditions of Credit Unions, 2022 Issue 9, March 2023 (here)

EBA – Consultation Paper Draft Implementing Technical Standards Amending Regulation (EU) 2021/453 with regard to the specific reporting requirements for market risk (here)

EBA – Consultation Paper Draft Regulatory Technical Standards on the assessment methodology under which competent authorities verify an institution’s compliance with the internal model approach as per Article 325az(8) of Regulation (EU) No 575/2013 (Capital Requirements Regulation 2 - CRR2) (here)

EBA – EBA’s retail risk indicators (here)

EBA – Report on the benchmarking of diversity practices and the gender pay gap (here)

ECB – Banking supervision annual report 2022 (here)

ESMA – Report - 2022 Corporate reporting enforcement and regulatory activities (here)

ESMA – Consultation Paper - Amendments to Guidelines on position calculation under EMIR (here)

ESMA – “The macro-prudential supervision of investment funds – from a global debate to a balanced European regulatory frameworks” – speech by Verena Ross, Chair (here)

European Commission – Benchmarks Regulation – review of the scope and regime for non-EU benchmarks (here)

HM Treasury – Senior Managers & Certification Regime: a Call for Evidence (here)

ISDA – ISDA in Review – March 2023 (here)

UK Financial Conduct Authority and UK Prudential Regulation Authority – DP1/23 – Review of the Senior Managers and Certification Regime (SM&CR) (here)

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