By Jeannette Neumann and Nicholas Comfort May 27, 2021, Bloomberg Top banking watchdogs are warning European Union lenders to stop resisting new rules or risk weakening the financial system and undermining the bloc’s role defending global accords.

The clash comes as negotiations on stricter global capital rules move into a decisive phase in the EU. Lenders and regulators are jockeying to be heard by officials at the European Commission, who are gearing up to propose how to implement the new standards in the fall ahead of their slated start in 2023.full article

By Martin Arnold and Patrick Temple-West June 2, 2021, Financial Times A global agreement is within reach that would require all listed companies to disclose the risks they face from climate change in a standardized way, the governor of France’s central bank has said.

François Villeroy de Galhau told the Financial Times that talks between government and central bank officials on new climate risk disclosure rules had progressed faster than expected and that an international framework could be agreed at November’s UN COP26 climate conference in the Scottish city of Glasgow.full article

By Lorenzo Migliorato May 27, 2021, Risk Six of the eight US systemic banks continued to pile on US Treasuries and excess reserves in the first three months of the year, despite the impending end of the Federal Reserve relief for leverage exposure. Such holdings returned to weigh on the banks’ supplementary leverage ratios (SLRs) on April 1, after the Fed revoked permission to exclude them from the denominator.full article

By Lorenzo Migliorato May 26, 2021, Risk A benign Bank of England (BOE) rule allowed the top five UK banks to lop an aggregate £717.5 billion ($1.02 trillion) off their leverage ratio exposures in the first quarter – the most since the European Union and UK leverage regimes diverged in 2016. UK-based lenders have been able to deduct qualifying central bank balances for their exposure measures for the UK-specific leverage ratio, something not permitted by the EU-wide measure under the Capital Requirements Regulation (CRR) regime.full article

It’s a strategy that’s almost guaranteed to produce skimpy profits, and banks are not thrilled to be doing it, analysts say. But they have little choice.

“Widget companies make widgets, and banks make loans,” said Jason Goldberg, a bank analyst at Barclays in New York. “This is what they do. It is what they want to do.”

By putting their customers’ deposits into investments such as loans or securities, like Treasury bonds, banks make the money needed to pay interest on those deposits and pocket a profit. When the economy is growing — like now — banks usually have no problem finding borrowers as consumers make big purchases and businesses expand. These loans provide better returns than Treasury bonds, which are usually reserved for times of uncertainty because banks will accept their lower rate of return in place of a risky loan.

I’m celebrating a landmark birthday soon, and I’ve been interested in buying myself an automatic watch. The appeal for me is that, often, designers leave little “windows” on the dial through which you can see the internal mechanisms. Looking at the initiative by the Securities and Exchange Commission (SEC) to modernize how public market data is sent out to consumers reminds me of peering through those little windows: You can see the moving parts, but not necessarily how the whole assemblage

Ed Davey says he is as an economist by background. And that he has been in the business world. Both these statements are indeed true. He’s got a master's in the subject. He took time out of parliament in the 1990s to be a management consultant.

But he’s probably best known for being the head of the only major UK political party that tried to stop Brexit. Five years on from the historic vote, as leader of the Liberal Democrats, he is still banging the drum that leaving the EU is bad for the economy and for the City.

“What...

August 19, 2021, Finadium The European Securities and Markets Authority (ESMA) published market data guidelines that apply to national competent authorities (NCAs), trading venues, approved publication arrangements (APAs), consolidated tape providers (CTPs) and systematic internalizers (SIs).

The guidelines aim to ensure that financial market participants have a uniform understanding of the requirement to provide market data on a reasonable commercial basis (RCB), including the disclosure requirements, as well as the requirement to provide the market data 15 minutes after publication (delayed data) free of charge. These guidelines also aim to ensure that NCAs will have a common understanding and develop consistent supervisory practices when assessing the completeness, comprehensibility and consistency of the RCB and delayed data provisions.

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By Anne Plested August 20, 2021, Finextra

As part of the ongoing wider review of MiFID II, ESMA is consulting on the rules around transparency. The consultation focuses on technical issues relating to post-trade data, among other things.

In its recommendations, the European regulator revisits the groundworks to adjust the foundations for any future consolidated tape (CT). After the heavy lift of MiFID II for 2018, the industry is preparing to bear the cost of additional amendments, even before a first tape is cut.

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By Annabel Smith August 9, 2021, The Trade The European equities market is set to get even more competitive now as smaller sell-side institutions continue to exit the market and the largest brokers absorb market share. 

For several years shrinking commissions and stringent regulatory requirements imposed on the European market through MiFID II have made it difficult for participants to make equities trading pay. Rising costs have progressively encouraged economies of scale as a necessary means of survival in the market. 

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By Philip Stafford January 10, 2018, Financial Times

European equity market executives on Wednesday sought to downplay a rift with the regulator responsible for implementing trading restrictions under MiFID II financial reforms.

At the last minute, the European Securities and Markets Authority (ESMA) was compelled to announce a delay of restrictions for trading shares across the region in “dark pools” late on Tuesday.

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By Louisa Chender January 8, 2018, Global Investor Group

Market participants noted an improvement in the quality of dark executions as the dark trading landscape changed in the run up to MiFID II’s effective date, according to Rebecca Healey, head of EMEA market structure at buy-side trading network Liquidnet.

“The challenge is that as dark trading moves to larger blocks, it is harder to find the other side of the trade as liquidity is less fluid. Activity becomes slower, so you need to be patient and wait; and that is not always possible,” Healey told FOW.

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By Alice Tchernookova August 12, 2021, Practice Insight From IFLR A recent survey has found that large swathes of the investment management industry are unprepared for the UK’s upcoming Investment Firms Prudential Regime (IFPR), although the new rules will begin to apply in January next year.

The survey, conducted by governance, risk and compliance advisory firm ACA Group across 700 participants, found that 97% of respondents were not ready for the regime. More worryingly, ACA said, 41% of these firms are acutely aware of the required changes but have adopted a wait-and-see approach.full article

By Heather McKenzie August 16, 2021, Best Execution Whenever the cost of market data is discussed, trading firms could be forgiven for thinking it is Groundhog Day. Complaints that market data is too costly have been raised for many years, studies are commissioned and yet the cost of data continues to rise.

Among the market regulators and supervisory bodies currently investigating market data costs are the UK’s Financial Conduct Authority (FCA) and the European Securities and Markets Authority (ESMA).full article

By Ben Goss July 20, 2021, FTAdviser

The UK has never in my lifetime felt as much like an island as it has during the pandemic.

A holiday abroad – once as easy as jumping on a £39 flight – has become something to dream about. Those with family in France or Spain have felt the distance to be as great as if they were on the other side of the world.

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By Sonia Rach July 22, 2021, FTAdvsier

The growing trend in the advice profession of firms operating their own platforms as opposed to using white-label or third party versions, is down to advisers reclaiming control and making use of some emerging opportunities, said Mark Polson. Speaking at a virtual event this morning (July 22) called ‘Advisers Assemble! Why advisers and DFMs are choosing to operate their platform,’ the Lang Cat principal referred to research by platform technology provider Seccl which found 44% of advisers are considering platform ownership.full article

By Silla Brush July 14, 2021, Bloomberg Tensions are rising within the European Union over the failure to name a replacement to lead the bloc’s top financial-markets regulator.Paris-based European Securities and Markets Authority has been without a chair since Steven Maijoor’s mandate came to an end in March because of a political standoff at the Council of the European Union, which represents the national governments that make up the bloc. The delayed selection is damaging the watchdog, Evelyn Regner, a member of European Parliament, said in a letter to the presidency of the council.full article

The Federal Reserve’s floor for overnight funding markets is proving to be no match for the deluge of cash. 

Money-market securities ranging from Treasury bills to repurchase agreements continue to trade below 0.05% -- the offering rate on the overnight reverse repo facility, which is supposed to act like a floor for the front end. The Fed at its June meeting had

US lawmakers may be about to cut the Gordian knot of so-called tough legacy instruments tied up in the $200 trillion US dollar Libor transition, with a federal bill that has support from both sides of the political aisle.

The Adjustable Interest Rate (Libor) Act was passed by the House Financial Services Committee on July 29. If advanced by House and Senate votes, it will provide safe harbour under federal law for the toughest legacy contracts, including bonds and securitisations that otherwise

There are plenty of moving parts when it comes to replacing LIBOR, the predominant derivatives and fixed-income valuation benchmark underpinning hundreds of trillions of dollars in contracts.

The deadline for the cessation of new LIBOR-based contracts is rapidly approaching, but questions remain as to which replacement rate is best, which could have implications for institutional investors. Meanwhile, Congress is working on a solution for contracts without sufficient "fallback" language.

New contracts based on the London interbank offered rate, which has been plagued by cases of bank manipulation, will cease at the end of 2021.

In the U.S., the Federal Reserve's recommended alternative reference rate is the secured overnight financing rate, or SOFR. The transition to SOFR is being led by the Alternative Reference Rates Committee, an industry group established by the Fed.

In late July, the ARRC formally recommended a...