54th meeting of the European Financial Markets Lawyers Group
AGENDA
Friday, 11 March 2016
9:00 – 16:30
Venue: Intesa Sanpaolo, Milano, Italy
Meeting room: Piazza Belgioioso 1- (Conference Meeting room)
***Welcome coffee as of 8:30***
1. Welcome by the Chair and adoption of the agenda (9:00-9:10)
2. MiFiD II and MIFIR (9:10-9:45)
Presenter: The Vice Chairman
Background: The European Commission has proposed to delay the application of the Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation by one year. The proposed extension is due to concerns about the technical implementation challenges faced by financial market participants, national regulators and the European authorities.
Documents: http://europa.eu/rapid/press-release_IP-16-265_en.htm?locale=en
3. Negative interest rates - Update on draft legal opinions on the treatment of negative interest rates (Follow-up on previous EFMLG discussions – state of play) (9:45-10:35)
Presenter: Bart Broucke, Nuria Alonso and Fernando Conlledo
Background: State of play in light of the previous discussions at the EFMLG on certain implications of negative interest rates on the interbank market and specific assets (deposits, loans, collateral).
Action point to consider: It is proposed to have further discussions from national perspectives based on the points suggested by the presenters with a view to determine possible EFMLG course of action.
Documents: Points for discussions as prepared by the presenters
4. EFMLG Initiative on Collateral – finalisation of the EFMLG paper (10:35-11:10)
Presenter: Dimitris Tsibanoulis and Inigo Arruga
Background: Finalisation of the EFMLG paper aiming at analysing the different issues affecting collateral (based on European Union laws or initiatives). The paper will be approved by the EFMLG at the meeting itself or shortly thereafter by written procedure.
Documents: Planned circulation of the EFMLG members: 5 March 2016 at the latest
5. Basel Committee on Banking Supervision consultative document on haircut floors for non-centrally cleared securities financing transactions, dated 5 November 2015 (11:10-11:40)
Presenter: The Vice Chairman
Background: The consultative document responds to the G20 Leaders’ request at the Seoul Summit in November 2010 to strengthen oversight and regulation of shadow banking and to the related FSB report published in October 2014. There is strong link with item 4: impact on collateral.
Action point to consider: The EFMLG will stake stock of the situation. No specific action point is envisaged at this stage.
Documents:
http://www.bis.org/bcbs/publ/d340.pdf
http://www.fsb.org/wp-content/uploads/r_141030.pdf
6. Issue of non-performing loans in various jurisdictions (IT, PT, GR, ES) (11:40-12:30)
Presenter: Francesca Passamonti, Dimitris Tsibanoulis and Pedro Ferreira Malaquias
Background: Italy and the EU have reached a deal allowing Italian banks to sell their large portfolios of non-performing loans to private investors with a government guarantee, in an effort to ease market pressure on the financial sector in the euro area’s third-largest economy. Short reporting will be given also from Greece, Spain and Italy.
Action point to consider: This item is for discussion only. The presenters will report on the topic from their perspective of their jurisdiction.
Documents: Presentation will be to be distributed separately before the meeting.
***Lunch break: 12:30-13:30***
7. Recovery and resolution of credit institutions and investment firms – Article 55 of the BRRD (Follow-up on previous EFMLG discussions – state of play) (13:30-14:00)
Presenters: Asmaa Cheikh and Nuria Alonso
Background: EFMLG letter to the Commission of 28 December 2015 to which the Commission answered stating that they are examining the issue as a matter of priority.
Action point to consider: The presenters will report, inter alia, on the main difficulties that banks have faced in the course of implementing Article 55. With view to the uncertainties about the potential future amendment of Article 55 and the lack of level playing field across Member States arising from the different implementing methods, e.g. whether or not applying a penalty in case of non-compliance with Article 55 (i.e. the obligation to include contractual terms recognizing that the liability may be subject to bail-in), it should be discussed whether the EBA or the Commission should be fostered to adopt a "best efforts" approach for the purpose of assessing compliance with Article 55 and whether to write a new EFMLG letter on this very specific issue.
Documents:
2015-12-28 EFMLG letter to European Commission - Article 55 of the European Bank Recovery and Resolution Directive
2016-01-15 EC reply to the EFMLG - Article 55 of the European Bank Recovery and Resolution Directive
8. ESMA Discussion Paper Benchmark Regulation of 15 February 2016 and ECB Announcement on the Euro Foreign Exchange Reference Rates dated 7 December 2015 (14:00-14:30)
Presenter: The Vice Chairman
Background: On 15 February 2016 ESMA published a Discussion Paper regarding the technical implementation of the incoming Benchmarks Regulation, seeking stakeholder’s input for the purposes of its future proposals on draft regulatory standards. The exact date when the Benchmarks Regulation will enter into force is still unknown as it has not yet been published in the Official Journal. ESMA held an open hearing on the Discussion Paper on 29 February 2016 in Paris. It will use the responses to develop detailed implementing measures on which it will publish a follow-up consultation in Q3 2016.
Action point to consider: The EFMLG will take stock of the situation.
Documents:
https://www.esma.europa.eu/press-news/esma-news/esma-consults-implementation-benchmarks-regulation
https://www.ecb.europa.eu/press/pr/date/2015/html/pr151207.en.html
ESMA Discussion Paper – Benchmark Regulation
9. Update on Euribor/Euribor+ - State of play(14:30-15:00)
Presenter: Moise Ba
Background: Following the recommendations outlined in the FSB’s Report “Reforming Major Interest Rate Benchmarks” published in July 2014, Euribor and other major reference interest rates based on unsecured funding costs should be underpinned to the greatest extent possible with transactions data. In this context, EMMI has been working on a transaction-based determination methodology for Euribor.
Action point to consider: As evidenced by the EFMLG conference call preparing this EFMLG meeting, the fears for lack of legal certainty coexist with the assurances given by the fact that Euribor+ is introduced with the necessary caveats and with the reality that the Commission does not want to take ad hoc legislative action regarding conversion of contracts from Euribor to Euribor+. The EFMLG will debate in order to come to some common view guiding EFMLG contribution to the Euribor+ process. In addition, the practicalities of providing input in the EMMI task force could also be discussed.
Documents:
Article from Risk.net of 2 February 2016 - Corporates warn of legal risk in Euribor transition
Call for nomination of EMMI Legal Working Group
10. ESMA Supervisory Convergence Work Programme 2016 (11 February 2016) (15:00-15:30)
Presenter: The Vice Chairman
Background: The Supervisory Convergence Work Programme for 2016 supplements ESMA’s Annual Work Programme for 2016 (ESMA/2015/1475) by further elaborating the nature and focus of the work ESMA will carry out – within its competence - in order to promote supervisory convergence and how that will contribute to implementing ESMA’s Strategic Orientation for 2016-2020. It provides an overview and explanation of the steps ESMA will take in 2016 to promote sound, efficient and consistent supervision in the EU, in particular, as regards credit rating agencies and trade repositories. It sets out priority areas and how they have been identified and sets them in the context of the wider work programme and environment.
Action point to consider: The EFMLG will take stock of the situation with a view to identify issues of particular interest to follow.
Documents: https://www.esma.europa.eu/sites/default/files/library/2016-203_2016_supervisory_convergence_work_programme.pdf
11. [Update of State of Play on the Financial Transaction Tax] [if time allows, 15:30-16:00].
Presenter: Inigo Arruga
Background: In December 2015 ten EU countries that have pledged to impose a tax on financial transactions reached a compromise on some aspects of the levy, and gave themselves another six months to agree on the remaining key issues, including the rate of the tax and the use of its proceeds.
Action point to consider: The EFMLG will stake stock of the situation. No specific action point is envisaged at this stage.
Documents: Note
Any other issues (16:00-16:30)
Short points on important updates:
- Banking structural reform (follow-up to the Liikanen report) – State pf play.
- 2014 ISDA Amendment Agreement with respect to Section 2(a)(iii) of the ISDA Master Agreement, designed to address the open-ended payment-withholding option during the continuation of a counterparty default under that section.
Potential expansion of EFMLG membership
Next EFMLG meeting
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