Regulatory Radar - February 2016 has been saved
Regulatory Radar - February 2016
Newsletter on regulation for the financial services industry
Monthly newsletter providing an overview of the key regulatory changes impacting the financial services industry
Highlights of this issue
Commission proposes to delay MiFID II and MiFIR implementation dates by one year
On 10 February, the European Commission published the legislative proposals to delay both the MiFID II and MiFIR implementation dates by a year to 3 January 2018. The delay will apply to the package in full, and is deemed necessary due to the “magnitude” of the data challenges.
The Commission has not proposed to extend the date by which Member States must transpose the Directive (currently set at 3 July 2016), This should give firms more time to incorporate the local rules into implementation programs, although Member States may seek to secure an extension to the transposition date during negotiations.
The proposals will now pass to the EU Parliament and the Council for negotiation and adoption. We expect that all parties will want the decision finalised as soon as possible to provide certainty to the European Securities and Markets Authority (ESMA), national regulators and firms.
For more information, also read our Regulatory Newsflash of 15 February 2016 on the MiFID II Delay.
The Insurance Distribution Directive has entered into force
On 23 February the Insurance Distribution Directive (IDD) has entered into force after publication in the European Official Journal on 20 January 2016. Member States now have 24 months to transpose the IDD provisions into national law.
The IDD aims to create a level playing field between insurance distributors across the European Union. It will guarantee that customers get the same standards of choice and service when buying insurance, regardless of through which medium or in which Member State it was bought. The rules involve more transparency and protection and also includes procedures on for cross-border business and contains rules for the supervision and sanctioning of insurance distributors. The IDD complements the rules on sale of investment products (MiFID II) and packaged retail and insurance-based investment products (PRIIPS). A more detailed analysis can be found in our Regulatory Radar December 2015 and the more detailed Regulatory Newsflash of 31 July 2015.
FATF presents outcome of its Plenary Meeting
On 19 February the Financial Action Task Force (FATF) presented the outcome of its Plenary Meeting in Paris from 17 to 19 February in Paris. Following the meeting, the FATF issued two public documents identifying jurisdictions that may pose a risk to the international financial system:
- Jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies for which a call for action applies. This list included Iran and the Democratic People’s Republic of Korea who remain both subject to the FATF call on its members and other jurisdictions to apply countermeasures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdictions.
- Jurisdictions with strategic AML/CFT deficiencies for which they have developed an action plan with the FATF. Here the FATF welcomed significant progress in Algeria, Angola and Panama, which are no longer subject to the FATF’s on-going global AML/CFT compliance process. Following countries remain on the list of jurisdictions with strategic deficiencies: Afghanistan, Bosnia and Herzegovina, Guyana, Iraq, Laos PDR, Myanmar, Papua New Guinea, Syria, Uganda, Vanuatu and Yemen. The FATF and the FATF-style regional bodies (FSRBs) will continue to work with these jurisdictions and to report on the progress made in addressing the identified deficiencies.
Since a large number of jurisdictions have not yet been reviewed by the FATF, the FATF announces it will continue to identify additional jurisdictions, on an on-going basis, that pose a risk to the international financial system.
Further the FATF explained that work on terrorist financing remains its top priority and announced following reports were published:
- Consolidated FATF Strategy on Combating Terrorist Financing. This strategy focusses on enhancing effective exchange of information, considering whether changes are necessary to the FATF Standards for combatting terrorist financing and assessing and improving implementation of counter terrorist financing measures.
- Guidance for a Risk-Based Approach for Money or Value Transfer Services (MVTS). This guidance will assist countries and their competent authorities, as well as the practitioners in the MVTS sector and in the banking sector that have or are considering MVTS providers as customers, to apply the risk-based approach to the development of measures to combat money laundering and terrorist financing for the MVTS sector.
FSMA publishes circular on the function of appointed actuary at institutions for occupational pensions
On 24 February the FSMA published a circular detailing the function of appointed actuary at institutions for occupational pensions (NL / FR). With this circular the FSMA sets out its expectations regarding the legal mandate of the appointed actuary. The circular does not treat other aspects that may be included in the role of the appointed actuary which are out of scope of his legal mandate.
At first the circulars addresses the conditions for the appointment of the appointed actuary, FSMA wishes to draw attention to certain incompatibilities in general and more specific to the independence required from the function of appointed actuary.
Further the FSMA explains the topics that should be included in the advices and reports of the appointed actuary. FSMA wants to clarify the quality standards that should contribute to a better and independent insight on the technical aspects relevant for an institutions for occupational pensions.