to the point: financial regulation l 05/2023

The LMA has published model provisions for sustainability-linked loans (SLLs) that aim to provide a proposed form of draft SLL provisions for inserting into LMA loan documentation. The model provisions also include drafting notes setting out points for parties to consider when undertaking an SLL transaction.

The ESAs submitted a Final Report to the EC on RTS on the ESG impact disclosure for Simple, Transparent and Standardised (STS) securitisations under the SECR aiming to help market participants assess the sustainability impact of their investments.

The ESMA announced that the amended RTS1 and RTS 2 under the MiFIR will come into effect on 5 June 2023. Key changes include adjusting the large in scale (LIS) thresholds for exchange-traded funds (ETFs) from EUR 1m to EUR 3m for pre-trade and from EUR 10m to EUR 15m for post-trade. Other amendments include, e.g. changes to the Financial Instruments Transparency System (FITRS), adjustments to the quarterly bond liquidity assessment and systematic internaliser (SI) publication, and amendments related to the annual calculation for non-equity instruments.

The EC adopted a new Retail Investment Package along with a Q&A list that should help retail investors make investment decisions that are aligned with their needs and preferences, ensuring that they are treated fairly and are duly protected.

The ESMA published a Final Report on market outages, especially on the importance for trading venues of having an appropriate outage plan to communicate. The national competent authorities should now ensure that trading venues have in place an appropriate outage plan according to this document.

The Council announced a provisional agreement on the ESAP, a platform aimed at simplifying access to financial and sustainability-related information about EU companies and investment products, which will provide a centralised, digital access point to existing public information disclosed by European companies in line with relevant regulations. The platform is expected to be available from summer 2027.

The Council adopted a regulation on markets in crypto-assets (MiCA) that aims to protect investors, increase transparency and prevent money laundering and terrorism financing in the area of crypto-assets. The MiCA covers utility tokens, asset referenced tokens, stablecoins, trading venues and crypto-asset wallets. It establishes a harmonised regulatory framework at the EU level, improving upon the current patchwork of national legislation. The regulations are part of a larger digital finance package aimed at fostering technological development, ensuring financial stability and protecting consumers. The new rules that obliged entities under the regulation will have to follow include the necessity to obtain a licence from the respective regulator, the obligation to meet certain capital requirements and rules in the area of marketing and market abuse.

The EBA published its Draft RTS on consolidation of an investment firm group under the Investment Firms Regulation (IFR), which requires investment groups to identify a parent undertaking and consolidate the group accordingly. The RTS emphasise the importance of setting up a proper organisational structure and internal control mechanisms to ensure accurate data processing and reporting for consolidation. The draft RTS include the scope of consolidation, methods of consolidation, methodology for consolidating capital requirements, and rules for minority interest and additional Tier 1 and Tier 2 instruments issued by subsidiaries.

The ECB published its final Guide to qualifying holding procedures, which clarifies how supervisors assess applications to acquire qualifying stakes in banks. A "qualifying holding" refers to a shareholder owning 10 % or more of a bank or exerting significant influence over it. Acquiring a qualifying holding or reaching specific thresholds requires prior authorisation from the ECB, with such acquisitions often being initiated through merger and acquisition activities. The provided guide offers details on complex acquisition structures, the application of proportionality and procedural elements related to qualifying holding acquisitions.

The EBA launched a tool for supervisory reporting to assist banks in identifying and understanding the applicable reporting requirements. This helps institutions of various sizes to identify the reporting requirements and templates that are relevant specifically for them.

The ESMA published an Opinion addressed to the EC with clarifications of provisions of the UCITS and AIFMD directives relating to "undue costs". Changes are made mainly in relation to Article 12 of the AIFMD and Article 14 of the UCITS. The proposal aims at preventing investors from being charged undue costs and ensuring appropriate compensation for investors.

The Council agreed its position on the instant payments proposal, which aims to improve the availability of instant payment options in euros to everyone who owns a bank account in the EU and EEA. Payment service providers will be required to offer instant payment services in euros without charging higher fees than standard transfers. The rules will be implemented gradually, with faster adoption in the euro area.

The Council adopted updated rules on information accompanying the transfers of funds by extending the scope of the rules to transfers of crypto-assets, with crypto-asset service providers being obliged to collect and make accessible certain information about the sender and beneficiary of the transfers of crypto-assets they operate, regardless of the amount of crypto-assets being transacted.

The ESMA has updated the following lists of Q&As:

1. 1. Q&A on the Application of the AIFMD – question on Article 30a of the AIFMD concerning premarketing activities by non-EU AIFMs;
   2. Q&A on the European crowdfunding service providers for business Regulation – questions and answers have been updated in the categories use of special-purpose vehicles (SPV) and authorisation and supervision of CSPs.