Author name: Aya Abou Shakra

With the start of a new year, the European Commission prepares for the next phase of the European Single Market, which has its 30th anniversary this year, with further efficiency improvements within the Capital & Securities Markets. In December the European Commission (“the Commission”) published a Capital Markets Union Clearing Package, which includes, among other measures, a proposal for a review of the European Market Infrastructure Regulation (“EMIR review proposal”) also called EMIR 3. (https://lnkd.in/ekmP6pfV). Also in December, the EU member states settled their negotiating position on a proposed update of the central securities depositories regulation (CSDR). The planned review will make EU securities settlement more efficient by simplifying requirements and clarifying authorisation processes among other things. (https://lnkd.in/e7JjjEZx) The proposed reviews and updates of these regulations will also impact the position of depositories and clearing institutions between the EU and the UK especially with the encouragement for the transfer of more Euro clearing from the UK to EU CCPs.

With the publication of the final Interest Rate Risk in the Banking Book (IRRBB) standards https://lnkd.in/eMHGMZkT the embedding of the Basel standards into EU Law has been completed. The initial Basel (BCBS) Standards on IRBBB were published in April 2016 and have been developing over the years. Given the recent macro-economic climate, with increasing interest rates and inflation, the European Central Bank has also indicated that addressing sensitivities in interest rates and credit spreads is a supervisory top priority for the coming years. The implementation and embedding of the new regulation in the banking sector often require change management across multiple (agile) departments within the financial institution. FiSer Consulting specialises in firm-wide strategic implementation and change management to, amongst others, assure the timely implementation of the new regulation.

The Governing Council of the European Central Bank (ECB) has decided to reschedule the launch of the new Target 2 real-time gross settlement (RTGS) system and its central liquidity management model from 21 November 2022 to 20 March 2023. In view of the current geopolitical conditions and volatile financial markets, the additional four-month period allows users more time to complete their testing in a stable environment, ensures user readiness, as well a smooth transition to the new platform; taking into consideration that the Eurosystem will provide all the necessary support to market participants during their final preparations. This will have a large impact on the MX Migration roadmap of the global financial industry, as there are a number of other migrations planned in 2023 that potentially need to move. You can read more about it here https://lnkd.in/eGPFWbSU

On October 5th, the EU Council’s Committee of Permanent Representatives endorsed the final compromise texts of the Markets in Cryptoassets Regulation (MiCA) and the recast Regulation on information accompanying transfers of funds and certain cryptoassets. This is the next step in finalising the legislative procedure for the regulation. The next steps are formal approval by, first the EU Parliament plenary and then by the Council before they can be published in the Official Journal. The steps in the legislative process can be found here https://lnkd.in/eXJNUz3g MiCA establishes a framework that regulates the work of issuers of unbacked crypto assets, stablecoins, trading platforms, and wallets in which crypto assets are held. MiCA regulates issuers and service providers of crypto-assets, as well as it features rules with regard to market abuse. It is intended to harmonize the EU market, create regulatory certainty, improve customer protection and strengthen financial stability. The Transfer of Funds Regulation (TFR) is part of a package of legislative proposals to strengthen the EU’s anti-money laundering and countering terrorism financing (AML/CFT) rules, presented by the Commission on 20 July 2021, and will become applicable once MiCA does. The TFR compliments MiCA by adding an anti-money-laundering layer to the user protection offering of the MiCA proposal.