CUBE RegNews: 20th June

Eva Dauberton

Eva Dauberton

News Editor

EBA issues new MiCAR regulatory products   

  

The European Banking Authority (EBA) has released new Regulatory Technical Standards (RTS), Implementing Technical Standards (ITS), and Guidelines (GL) as part of the Markets in Cryptoassets Regulation (MiCAR). These standards and guidelines focus on reporting, liquidity stress testing, and supervisory colleges. 


Key takeaways  

The EBA’s regulatory products package includes: 


Next steps 

The draft technical standards will be submitted to the Commission for endorsement, following which they will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union. 


The guidelines will be translated into the official EU languages and published on the EBA website.The deadline for competent authorities to report whether they comply with the guidelines will be two months after the publication of the translations. 


Click here to read the full RegInsight on CUBE’s RegPlatform   

 

EC consults on OTC derivatives identifying reference data under MiFIR  


The European Commission has initiated a consultation on a Draft Delegated Regulation specifying over-the-counter (OTC) derivatives identifying reference data to be used for the purposes of transparency requirements, as set out in the Markets in Financial Instruments Regulation (MiFIR). 


Some context  

Regulation (EU) No 2024/791 (‘MiFIR review’), which amends Regulation (EU) No 600/2014 (‘MiFIR’), came into effect on 28 March 2024. Under Article 8a(2) of MiFIR, OTC derivatives are subject to pre-and post-trade transparency under specific conditions.


MiFIR mandates market operators and investment firms operating a multilateral trading facility (‘MTF’) or an organised trading facility (‘OTF’) that utilise a central limit order book or a periodic auction trading system to make public the current bid and offer prices as well as the depth of trading interests at those prices advertised through their systems. They must also make public the price, volume, and time of executed transactions. The same obligation applies to investment firms that conclude transactions in those derivatives either on their own account or on behalf of clients. 


The MiFIR review introduced, alongside identifying reference data for transaction reporting, identifying reference data for the transparency requirements. 


Key takeaways  

This Draft Delegated Regulation sets out identifying reference data to be used for OTC interest rate swaps and OTC credit default swaps to meet the transparency requirements laid down in Article 8a(2) and Articles 10 and 21 MiFIR.  This Draft Delegated Regulation also provides the full set of relevant identifying reference data that need to be assigned to a given ISO 6166 International Securities Identifying Number (‘ISIN’). 


As the relevant identifying reference data prescribed by this regulation does not align with the attributes that currently form part of the ISIN standard for those OTC derivatives, this delegated regulation will trigger a revision of the template needed for the assignment of the ISO 6166 ISIN. 


The changes will come into effect on 1 September 2025. 


Next steps  

The consultation is open for four weeks and closes on 10 July 2024. 

  

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RBA raises SSF Standards to ease regulatory burden on small firms 


The Reserve Bank of Australia has announced its decision to raise the settlement activity threshold for Securities Settlement Facilities (SSF Standards). This adjustment aims to strike a better balance between the risks presented by small firms to the financial system and the regulatory burden they face. 


Some context  

The SSF Standards aim to ensure that Clearing and Settlement Facility licensees (CSFLs) conduct their affairs in a way that promotes overall stability in the Australian financial system. 


Since 2012, a CSFL operating a SSF is exempt from the SSF Standards if the value of financial obligations settled through the SSF in a financial year does not exceed a threshold of $200 million. The threshold was first introduced in 2005 in recognition of the fact that the activities of small SSFs are unlikely to affect the overall stability of the Australian financial system. 


Key takeaways  

As a result of this change, the SSF Standards will no longer apply to CSFLs that settle less than $40 billion of financial obligations through their facility in a financial year. 


Next steps  

This change will come into effect on 24 June 2024. 


Click here to read the full RegInsight on CUBE’s RegPlatform   


ASX admits first Bitcoin ETF 


The Australian Securities Exchange (ASX) has announced the admission of its first spot Bitcoin exchange-traded fund (ETF), VanEck Bitcoin ETF (VBTC), marking a significant milestone in the Australian financial market and cryptocurrency industry. 


VBTC will be backed by a Bitcoin holding through a US domiciled master fund, ensuring that each unit of the ETF corresponds to a specific amount of Bitcoin. This structure will allow investors to track the price of Bitcoin, providing them with a reliable and clear representation of the value of this cryptocurrency. 


Click here to read the full RegInsight on CUBE’s RegPlatform   

 

OSFI provides update on data collection modernisation initiative 


The Office of the Superintendent of Financial Institutions (OSFI) in Canada has provided an update on its Data Collection Modernisation (DCM) initiative and upcoming opportunities for industry engagement. 


Some context 

In collaboration with the Bank of Canada and Canada Deposit Insurance Corporation, OSFI launched the DCM initiative in 2023 to modernise data collection for federally regulated financial institutions and pension plans. The objective is to obtain timely, reliable, relevant, and high-quality data through a modern and scalable technology platform. 


Since the launch, OSFI has been assessing the current state of regulatory data collection and has initiated a procurement process to acquire the necessary resources and optimal vendor software solution. This will replace the current Regulatory Reporting System (RRS) platform and address user experience issues. 


Key takeaways 

OSFI has completed the assessment of the current state data and identified thematic opportunities for modernising regulatory data collection. This includes improving data quality and increasing the collection and reporting frequency of granular data. 


On the technology front, OSFI has identified a qualified pool of software vendors and system integrators who are participating in the procurement stage to define the requirements for a new solution. 


Next steps 

OFSI plans to share the details of the data assessment by fall 2024 and invites the industry to engage via industry forums. OFSI also plans to award a contract to a software vendor and a system integrator to initiate planning and implementation by early 2025. 


Click here to read the full RegInsight on CUBE’s RegPlatform