EU weighs softer derivatives rules

epaselect epa05208889 A photograph made available on 13 March 2016 showing a Euro symbol projected onto the European Central Bank (ECB) in Frankfurt am Main, Germany 12 March 2016. The European Central Bank (ECB) is participating in Luminale, a light show that takes place every two years in Frankfurt. Both the ECB?s main building by the river Main and the Eurotower in the city centre will be illuminated by a ?symphony? of light consisting of bars, lines and circles ? primarily in blue and yellow, the colours of the European Union. It will be based on Ludwig van Beethoven?s Prelude to the Ode to Joy, the European anthem. The euro symbol will be projected onto the south facade of the main building and will be visible to passenger planes on approach to land at Frankfurt airport. The light show takes place every day from 20:00 CET to midnight from 13 to 18 March 2016.  EPA/BORIS ROESSLER



Banks and asset managers moved closer to winning easier rules for derivatives as European Union member states signaled support for amending regulations as part of a delay in the wider law that revamps oversight of trading across the continent.
EU states are considering attaching the policy changes to legislation postponing until January 2018 the vast MiFID II law that overhauls rules for stocks, bonds, commodities and derivatives in the 28-nation bloc, according to a proposal from the Netherlands, which holds the rotating presidency of the EU. The exclusion for certain derivatives from trading transparency requirements was included in the proposal.
The undated Dutch proposal, prepared for an April 20 meeting of national officials, attempts to “strike a right balance” among the views of the 28 EU countries as they prepare to negotiate with the European Parliament on a final version of the bill. The discussion paper was obtained by Bloomberg. Bouke Bergsma, a spokesman for the Dutch presidency of the EU, declined to comment on the document.
The European Commission, the EU’s executive arm, first floated a delay of MiFID II in November, but the process has become bogged down as lawmakers debate the best approach. Both the European Parliament and the Council of the European Union, which represents the interests of member states, must approve the change.
The parliament settled on its negotiating position on the bill earlier this month; now member states are trying to do the same.
Data Reporting
The initial goal of delaying the law was to give banks and other financial firms time to build data-reporting systems and other technology to meet the new requirements. But the proposed delay has also opened the door to industry lobbying for softer rules.
The commission has sought to streamline the MiFID delay, pushing back the start date without significant further changes to the legislation. The parliament attached significant
conditions to its version of the bill.
At an April 4 meeting of national officials, “no clear majority” emerged for the commission’s quick-fix approach, and some member states were “in favor of including substantive amendments on the topics covered by the proposed amendments of the European Parliament,” according to the Dutch paper.

‘Legal Consequences’
As a result, the Dutch proposed five changes, starting with pushing back by one year to July 3, 2017, the deadline for national lawmakers to convert the EU rules into national law. Member states and “market participants can be exposed to legal consequences if no clarity is provided on the extension of the dates by July 3, 2016,” the Dutch paper states. “That leaves the Council with very limited time to reach a general approach on this file.”
The Dutch proposal also supports exempting certain derivatives from requirements designed to increase transparency and price competition on platforms before trades are completed. At issues are so-called package transactions that include two or more linked contracts that firms use to hedge or speculate on the price of an interest rate or other asset.

Leave a Reply

Send this to a friend