News

Subscribe now for the Weisshorn Consulting newsletter and benefit from our knowledge around the topic wealth & asset management. The Newsletter will provide you with a regular update on the latest topics and trends within the asset & wealth management of the most important regulatory challenges facing your business within Switzerland and the European Economic Area (EEA).

 

Weisshorn Consulting on PRIIPs

06/17/2016

We are pleased to share our point of view on PRIIPs, the EU regulation on key information documents for packaged retail and insurance-based investment products. Our publication provides a brief summary of key topics to focus on when producing, reviewing as well as providing KIDs. LINK​

MiFID II - European Parliament (EP) adopts legislation to delay transposition and application by one year

06/07/2016

The European Parliament has voted to adopt the one year postponement of MiFID II and MiFIR.

The EP has voted on Tuesday, June 7, 2016 to support the one year postponement that gives the firms a further year to implement financial legislation. Furthermore member states have also been given a years’s extension on their original deadline on July 3, 2016 to transpose MiFID II into their national law. LINK

The European Commission adopted a delegated regulation supplementing MIFIR

05/18/2016

The delegated regulation of the European Commission supplementing MiFIR with regard to definitions, transparency, portfolio compression and supervisory measures on product intervention and positions was published on 18 May 2016. Further delegated acts will be published later this year.

This Regulation aims at specifying:

  • The rules relating to determining liquidity for equity instruments
  • The rules on the provision of market data on a reasonable commercial basis
  • The rules on publication, order execution and transparency obligations for systematic internalisers
  • And the rules on supervisory measures on product intervention by ESMA, EBA and national authorities, as well as on position management powers by ESMA

Link

ESAs finalise Key Information Documents for retail investors in the EU

04/07/2016

The Joint Committee of the European Supervisory Authorities (EBA, EIOPA, ESMA - ESAs) has finalised its proposal for regulatory technical standards (RTS) with regard to presentation, content, review and provision of the key information document, including the methodologies underpinning the risk, reward and costs information in accordance with the Regulation.

The proposed KIDs provide retail investors for the first time across the EU with simple and comparable information on investment products in the banking, insurance and securities sectors. A 3-page document increases the transparency and comparability of information about the risks, performance and costs of these products. The new rules will contribute to enhancing the confidence and strengthening the protection of EU consumers of banking, insurance and securities products.

The new rules address the content and presentation of the KIDs and include:

  • a common mandatory 3-page template for the KID, covering the texts and layouts to be used;
  • a summary risk indicator of seven classes for the risk and reward section of the KID;
  • a methodology to assign each PRIIP to one of the seven classes contained in the summary risk indicator, and for the inclusion of additional warnings and narrative explanations for certain PRIIPs;
  • details on performance scenarios and a format for their presentation, including possible performance for different time periods and at least three scenarios;
  • costs presentation, including the figures that must be calculated and the format to be used for these i.e. in both cash and percentage terms;
  • specific layouts and contents for the KID for products offering multiple options that cannot effectively be covered in three pages;
  • rules on revision and republication of the KID, to be done at least each year; and
  • rules on providing the KID sufficiently early for a retail investor to be able to take its contents into account when making an investment decision.

The new rules have been submitted to the European Commission for endorsement. They will come into force on the 31 December 2016.  LINK

ESAs publishes final draft technical standards on margin requirements for non-centrally cleared derivatives

03/09/2016

The Joint Committee of the European Supervisory Authorities published the final draft Regulatory Technical Standards (RTS) outlining the framework of the European Market Infrastructure Regulation (EMIR).

These RTS cover risk mitigation techniques related to the exchange of collateral to cover exposures arising from non-centrally cleared over-the-counter (OTC) derivatives. They also specify the criteria concerning intragroup exemptions and the definitions of practical and legal impediments to the prompt transfer of funds between counterparties.

The draft RTS contain the following provisions:

  • For OTC derivatives not cleared by a Central Counterparty (CCP), the draft RTS prescribe that counterparties have to exchange both initial and depending on size, variation margins. This will reduce counterparty credit risk, mitigate any potential systemic risk and align obligations with the Basel Committee on Banking Supervision (BCBS) and International Organisation of Securities Commissions (IOSCO) standards
  • The draft RTS outline the list of eligible collateral for the exchange of margins, the criteria to ensure the collateral is sufficiently diversified and not subject to wrong-way risk, as well as the methods to determine appropriate collateral haircuts
  • The draft RTS lay down the operational procedures related to documentation, legal assessments of the enforceability of the agreements and the timing of the collateral exchange
  • The draft RTS cover the procedures for counterparties and competent authorities related to the treatment of intragroup derivative contracts

​LINK

IOSCO publishes its Securities Markets Risk Outlook 2016

03/02/2016

The International Organization of Securities Commissions (IOSCO) published the IOSCO Securities Markets Risk Outlook 2016, which identifies and examines key trends in global financial markets and the potential risks to financial stability.

The Outlook is a forward-looking report focusing specifically on issues relevant to securities markets and on whether these may be, or could become, a threat to the global financial system.

The paper examines key trends in global financial markets and their impact on securities markets. It identifies four potential risk areas:

  • Corporate bond market liquidity
  • Risks associated with the use of collateral in financial transactions
  • Harmful conduct in relation to retail financial products and services
  • Cyber threats

LINK

FINMA condenses and modernises corporate governance requirements for banks

03/01/2016

The Swiss Financial Market Supervisory Authority (FINMA) is consolidating its corporate governance, internal control system and risk management supervisory requirements for banks.

This consolidation will take the form of a single circular incorporating outcomes from the financial market crisis and revised international standards. This means that FINMA will submit the new Circular 2016/X "Corporate governance – banks" together with the modifications to Circulars 2008/21 "Operational risks – banks" and 2010/1 "Remuneration schemes" for consultation until 13 April 2016. Particularly, the following main changes and additions are planned for the Circular 2016/X "Corporate governance – banks:

  • Further to the control aspects, principles and structures for the supreme governing body as well as the executive board will be introduced („checks and balances”)
  • Banks in supervisory categories 1 to 3 will be obliged to appoint separate audit and risk committees
  • All institutions must have a risk management framework drawn up by the executive board and signed off by the supreme governing body
  • All banks in supervisory categories 1 to 3 must have risk control headed by a chief risk officer (CRO). For banks in supervisory categories 1 and 2, the CRO must be a member of the executive board
  • Minimum corporate governance disclosure requirements will apply to all banks. Banks in supervisory categories 1 to 3 will be subject to extended disclosure requirements similar to those outlined in SIX’s Directive Corporate Governance

​LINK

EU: ESMA has published on February 18, 2016 an update of its Public Register for the Clearing Obligation

02/19/2016

The update concerns the so-called category 1 clearing members, which are either financial counterparties or non-financial counterparties above the clearing threshold who are clearing members of a central clearinghouse (CCP). Category 1 firms will be the first firms to start the central clearing of certain types of derivative contracts by June 21, 2016.

ESMA has worked with national competent authorities (NCA) and various CCPs to facilitate the identification of those Category 1 counterparties. ESMA’s first Regulatory Technical Standards (RTS) on the clearing obligation, which establish that certain OTC interest rate derivatives denominated in the G4 currencies (i.e. EUR, GBP, JPY and USD) shall be cleared by central counterparties, entered into force on December 21,  2015.

To view the updated Public Register for the Clearing Obligation under EMIR, please consult the following   LINK

EU: ESMA publishes responses to the Consultation on PRIIPs

02/10/2016

The European Securities and Markets Authority (ESMA) has published the responses received to the Consultation Paper on PRIIPs Key Information Documents from November 11, 2015.

The Regulatory Technical Standards and accompanying impact assessment to PRIIP will be submitted for endorsement by the European Commission by March 31, 2016. The Joint Committee of the three European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA – shall also publish final feedback on the consultation at this time. By January 1, 2017, PRIIP manufacturers must prepare and publish KIDs for each PRIIP they manufacture, and from that date those selling or advising on these PRIIPs must provide KIDs to retail investors.

To view the feedbacks, please consult the following   LINK

CH Liquidity regulations: «Net Stable Funding Ratio» (NSFR) general reporting to begin

02/02/2016

The general reporting on NSFR, which all supervised institutions must submit, will run from second quarter of 2016 to the end of 2017. NSFR reporting is part of the new liquidity regulations under Basel III. It should apply in Switzerland as a minimum requirement starting in 2018.

The data collection forms, which are to be used exclusively for NSFR reporting, can be downloaded from the SNB website (http://www.snb.ch/en/emi/NSFR). As these forms do not contain any formulae to calculate the NSFR, FINMA has provided new guidelines and calculation methods in Excel format to facilitate reporting.   Link