INVESTMENT SERVICES & CAPITAL MARKETS
ESMA promotes coordinated action on the suspension of best execution reports under MiFID II
On 31 March 2021, ESMA published a statement to promote coordinated action by national competent authorities (NCAs) under MiFID II. The statement relates to the temporary suspension of the obligation on execution venues to make available to the public data related to the quality of execution of transactions on their venues (RTS 27 Reports). ESMA explains that these reports are rarely read and do not enable investors and other users to make any meaningful comparisons on the basis of the information they contain.
ESMA therefore expects NCAs not to prioritise supervisory actions towards execution venues relating to the obligation to publish the RTS 27 reports until the date on which the national transposition measures of the amending Directive postpone that obligation in national law.
The UK NCA – the FCA- has put in place temporary measures with respect to RTS 27 reports. The FCA are currently preparing a consultation looking at the RTS 27 reporting obligation, with a view to abolishing it, given concerns that have been expressed around the value these reports bring to the market and to consumers, and the burdens involved in producing them. Considering the upcoming consultation, the FCA has stated that it will not take action against firms who do not produce RTS 27 reports for the rest of 2021. The FCA expects that by end of 2021 it will have concluded its policy consideration of the future of these reports. Additionally, the FCA has also put in place temporary measures with respect to the 10% depreciation notifications while it consults on changes to these requirements and these temporary measures will also be in place until the end of 2021.
ESA report on the application of their guidelines on complaints-handling
On 31 March 2021, the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published a Report on the application of their Guidelines on complaints-handling. The Report concludes that the Guidelines have contributed to a consistent approach to complaints-handling across the banking, insurance and securities sectors and have resulted in better outcomes for consumers.
This Report examines how the ESAs Guidelines on complaints-handling have been applied since they came into force by using input provided by 44 national competent authorities (NCAs) from 29 countries. In particular, it describes the extent to which the objectives of the Guidelines have been achieved, the supervisory actions that NCAs have undertaken as a result of their national implementation, including the steps taken to identify good/poor practices by firms, as well as the challenges faced.
The Report concludes that the Guidelines have contributed to a consistent approach to complaints-handling across the banking, insurance and securities sectors and have resulted in better outcomes for consumers. Against this background, the ESAs are of the view that there is no need for revising the Guidelines at this stage.
ESMA proposes amendments to MiFIR transactions and reference data reporting regimes
On 30 March 2021, ESMA published its final report on the review of transaction and reference data reporting obligations under MiFIR.
The final report contains recommendations and possible legislative amendments to MiFID II/MiFIR with a view to simplifying the current reporting regimes whilst ensuring quality and usability of the reported data. It aims to achieve this through the:
- replacement of the trading on a trading venue (TOTV) concept with the SI approach for OTC derivatives, taking into account the conclusions of ESMA’s Final Report on the transparency regime for non-equity instruments and the trading obligation for derivatives;
- removal of the short sale indicator;
- alignment with reporting regimes such as MAR, EMIR and the Benchmark Regulation;
- reliance on international standards, including LEIs, ISINs and CFIs; and
- inclusion of three additional data elements with a view to harmonise the way they are reported and avoid inconsistent and duplicative reporting of the same information at the national level.
Based on these recommendations, the European Commission is expected to adopt legislative proposals. ESMA confirms that it is ready to provide additional technical advice on the proposals contained in the report.
ESMA updates Q&As on MiFID II and MiFIR investor protection and intermediaries topics
On 29 March 2021, ESMA published updated Q&As on MiFID II and MiFIR investor protection and intermediaries topics.
The update includes a new Q&A on how to apply the condition that the inducement is justified by the provision of an additional or higher-level service to the relevant client, proportional to the level of inducements received, as referred to in Article 11(2)(a) of MiFID II. In its answer, ESMA discusses the: (i) meaning of additional or higher-level service; (ii) meaning of providing services to a relevant client; and (iii) expectation for firms to demonstrate that quality enhancements provided to the client are proportional to the level of inducements received.
ESMA advises the European Commission on the application of sanctions under MiFID/MiFIR
On 29 March, ESMA published its final report on technical advice to the European Commission on the application of administrative and criminal sanctions under MiFID II/MiFIR.
The technical advice addresses the application of administrative and criminal sanctions, and particularly the need to further harmonise the administrative sanctions set out for infringements of MiFID II/MiFIR requirements.
ESMA’s technical advice includes proposals to: (i) amend the MiFID II requirements for National Competent Authorities (NCAs) to disclose and report information on sanctions and measures; (ii) amend the MiFID II requirement for NCAs to liaise with judicial authorities to gather information on criminal sanctions; (iii) include settlement powers among the range of sanctions and measures of Member States’ national NCAs to increase the efficiency of their enforcement proceedings; and (iv) amend the current requirements on MiFID II precautionary measures.
ESMA final reports on data reporting service providers (DRSPs) under MiFIR
On 26 March 2021, ESMA published three final reports on the DRSP under MiFIR.
Firstly, ESMA published its final report on criteria to identify those Authorised Reporting Mechanisms (ARMs) and Approved Publications Arrangements (APAs) that, by way of derogation from MiFIR on account of their limited relevance for the internal market, are subject to authorisation and supervision by a competent authority of a member state.
Secondly, ESMA published its final report presenting its technical advice including ESMA’s proposals relating to fees for DRSPs in relation to the new competences granted to ESMA under MiFIR as amended by Regulation 2019/2175.
Finally, ESMA published its final report presenting ESMA’s technical advice to the European Commission on procedural rules for penalties imposed on DRSPs.
ESMA to allow decision on reporting of net short position of 0.1% and above to expire
On 15 March 2021, ESMA announced that it has decided not to renew its decision to require holders of net short positions in shares traded on an EU regulated market, to notify the relevant national competent authority (NCA) if the position reaches, exceeds or falls below 0.1% of the issued share capital.
The measure, which applies since 16 March 2020, expired on 19 March 2021. The last reporting where the lower threshold of 0.1% applies will be in relation to 19 March 2021, and had to be reported to NCAs by 22 March 2021.
From 20 March 2021 onwards, positions holders will need to send notifications only if they reach or exceed the 0.2% threshold again, while any outstanding net short position between 0.1% and 0.2% will not have to be reported.
ESMA’s view is that with GDP forecasts showing moderate optimism for recovery, volatility decreasing and the main EU stock indices close to pre-pandemic levels, the current situation in financial markets no longer resembles the emergency situation required by the Short Selling Regulation to maintain the measure. ESMA notes that the overall level of net short positions is decreasing across the EU, reducing the risk that selling pressures could initiate or exacerbate potential negative developments connected with the evolution of the pandemic. The EFTA Surveillance Authority has also announced its decision not to renew its current measure that will similarly expire on 19 March 2021, applicable to EEA EFTA States’ markets.
ESMA publishes results of annual transparency calculations for equity and equity-like instruments
On 1 March 2021, ESMA published the results of the annual transparency calculations for equity and equity-like instruments, which will apply from 1 April 2021. The calculations made available include the: (i) liquidity assessment (ii) determination of the most relevant market in terms of liquidity (iii) determination of the average daily turnover relevant for the determination of the pre-trade and post-trade large in scale thresholds; (iv) determination of the average value of the transactions and the related the standard market size; and (v) determination of the average daily number of transactions on the most relevant market in terms of liquidity relevant for the determination of the tick-size regime.
ESMA’s annual transparency calculations are based on the data provided to Financial Instruments Transparency System (FITRS) by trading venues and approved publication arrangements in relation to the calendar year 2020. The transparency requirements based on the results of the annual transparency calculations published from 1 March 2021 for equity and equity-like instruments will apply from 1 April 2021 until 31 March 2022. From 1 April 2022 the next annual transparency calculations for equity and equity-like instruments, to be published by 1 March 2022, will become applicable.
Directive amending MiFID II to help economic recovery from Covid-19 (MIFID Quick Fix) published
On 26 February 2021, Directive (EU) 2021/338, amending MiFID II to help the economic recovery from the Covid-19 pandemic, was published in the Official Journal. The Directive amends MiFID II in regard to information requirements, product governance and position limits, specifically how they apply to investment firms. The amendments form part of the EU’s Capital Markets Recovery Package. The Directive is in force as of 27 February 2021 and Member States have until 28 February 2022 to transpose the measures into national law.
Please see above the ESMA Statement dated 31 March 2021 for suspension of best execution reports (RTS 27 reports).
ESMA updates Q&As on the implementation of EMIR
On 31 March 2021, ESMA published its updated Q&As on the implementation of EMIR. The updated Trade Repository (TR) Q&A 51 provides further clarifications on two aspects related to intragroup transactions (IGT) reporting exemption: (i) reporting of details of derivatives when the IGT reporting exemption ceases to be valid; and (ii) location of parent undertaking for purposes of the IGT reporting exemption.
ESMA updates EMIR validation rules
On 29 March 2021, ESMA updated the EMIR validation rules. The update concerns field 1.30 Variation Margin Received where the requirement to leave blank the said field if the field 1.21 on Collateralisation is populated with ‘U’ (Uncollateralised) has now been removed. The amendment will apply from 30th April 2021.
FCA updates its EMIR validation rules
The UK FCA also updated its validation rules for UK EMIR. The FCA updated its rules in line with the ESMA update. The amendment will apply from 21 June 2021. UK reporting counterparties and UK Trade repositories should use the UK EMIR validation rules when submitting derivative transactions entered into from 11pm on 31 December 2020 onwards. UK EMIR forms part of “EU retained law” as defined in the European Union (Withdrawal) Act 2018.
ESAs Q&As on exchange of collateral under EMIR
On 19 March 2021, the ESAs published a set of joint Q&As on bilateral margin requirements under Article 11(15) of EMIR. The Q&As cover:
- intragroup transactions – in particular on: (a) the scope of the partial exemption from the requirement related to the exchange of collateral for OTC derivatives contracts not cleared by a central counterparty; and (b) which competent authority should decide on an intragroup exemption where a counterparty is a financial counterparty and the other counterparty is a non-financial counterparty and they are established in different Member States; and
- (ii) the scope of the covered bonds exemption, in relation to the Article 30 exemption in the RTS 2016/2251.
EC consultation on Delegated Regulation under EMIR extending clearing obligation exemption for pension scheme arrangements (PSAs) for further year
On 16 March 2021, the EC published a draft Delegated Regulation extending the transitional period under Article 89(1) of EMIR for consultation.
EMIR provides for a temporary exemption from the clearing obligation for PSAs meeting certain criteria – this transitional period is set out under Article 89(1) of EMIR and provides further time for central counterparties (CCPs), PSAs and clearing members to develop viable technical solutions which would allow PSAs to meet the cash variation margin calls of CCPs.
The EC notes that the temporary exemption has been extended over the years, since no viable technical solution has emerged – the recent review of EMIR prolonged the exemption until 18 June 2021. In accordance with Article 85(2), it is possible to further extend it by two years maximum. Through this draft Delegated Regulation, the EC is proposing to prolong the existing exemption by an additional year. The deadline for comments is 13 April 2021.
Securities Financing Transactions Regulation (SFTR)
ESMA guidelines on reporting under Articles 4 and 12 of the SFTR
On 29 March 2021, ESMA published guidelines on reporting under Articles 4 and 12 of the SFTR.
ESMA states that the guidelines aim to clarify a number of provisions of SFTR and to provide practical guidance on the implementation of some of those provisions. Furthermore, the guidelines will contribute to the reduction of costs along the complete reporting chain. In particular, the guidelines provide clarity as to the following aspects:
- the reporting start date when it falls on a non-working day;
- the number of reportable securities financing transactions (SFTs);
- the population of reporting fields for different types of SFTs;
- the approach used to link SFT collateral with SFT loans;
- the population of reporting fields for margin data;
- the population of reporting fields for reuse, reinvestment and funding sources data;
- the generation of feedback by Trade repositories and its subsequent management by counterparties, namely in the case of rejection of reported data and reconciliation breaks; and
- the provision of access to data to authorities by Trade repositories.
ESMA consults on simplified supervisory fees for trade repositories under EMIR and SFTR
On 24 March 2021, ESMA launched a public consultation on the simplification of supervisory fees for Trade Repositories (TRs) under EMIR and SFTR.
Since 2013, ESMA’s mandate includes the registration and supervision of Trade Repositories. ESMA, based on several years practical experience in the implementation of its mandate regarding TRs, seeks feedback on the following proposals to simplify the:
- general approach to fees determination;
- calculation of turnover and of annual supervisory fees;
- calculation of fees for registration, for extension of registration and in the case of concurrent applications;
- calculation of fees for recognition and on-going supervision of third-country TRs; and
- the payment and reimbursement modalities.
The proposed supervisory fee framework is consistent with the existing regime for Securitisation Repositories and Credit Rating Agencies under ESMA’s direct supervision.
The closing date for responses is 24 April 2021. ESMA will consider the responses to this consultation in providing technical advice to the Commission and aims to publish its final report in Q2 2021.
ECON draft report on proposed Regulation on markets in cryptoassets (MiCA)
On 9 March 2021, the European Parliament’s Economic and Monetary Affairs Committee (ECON) published a draft report dated 25 February 2021 setting out the ECON’s suggested amendments to the MiCA legislative text proposed by the European Commission.
Prospectus Regulation (PR)
Commission Delegated Regulation supplementing the Prospectus Regulation on minimum information content for exemption document
On 26 March 2021, Commission Delegated Regulation (EU) 2021/528, supplementing the Prospectus Regulation on the minimum information content of the document to be published for a prospectus exemption in connection with a takeover by means of an exchange offer, a merger or a division, was published in the Official Journal (OJ). The regulation enters into force on 18 April 2021.
ESMA updates Q&As on Prospectus Regulation
On 31 March 2021, ESMA published its updated Q&As on the PR. The updated Q&As provide clarification on the: (i) application of the exemption in Article 1(5)(b) PR in a situation concerning non-transferable securities; (ii) application of the PR where shares can be exchanged for global depositary receipts (and vice versa); (iii) dissemination of amended advertisements; and (iv) status of transferable securities.
Regulation amending the Prospectus Regulation to facilitate the recapitalisation of companies affected by Covid-19 published in OJ
On 26 February 2021, Regulation (EU) 2021/337, amending the Prospectus Regulation as regards an EU Recovery prospectus and other amendments to facilitate the recapitalisation of companies affected by the Covid-19 pandemic, was published in the OJ. The Regulation is in force as of 18 March 2021.
Technical negotiations concluded on the UK and EU Memorandum of Understanding (MoU)
On 26 March, HMT announced that technical negotiations were concluded on the UK and EU MoU. HMT states that formal steps need to be undertaken on both sides before the MoU can be signed but it is expected that this can be done expeditiously.
The MoU, once signed, creates the framework for voluntary regulatory cooperation in financial services between the UK and the EU. The MoU will establish the Joint UK-EU Financial Regulatory Forum, which will serve as a platform to facilitate dialogue on financial services issues.
FINANCIAL CRIME AND ANTI-MONEY LAUNDERING
EBA consultation on changes to its guidelines on risk-based anti-money laundering and countering the financing of terrorism (AML/CFT) supervision under the Fourth Money Laundering Directive (MLD4)
On 17 March 2021, the EBA published a consultation paper on changes to its guidelines on risk-based supervision of credit and financial institutions’ compliance with AML/CFT obligations under MLD4.
The proposed changes address the key obstacles to effective AML/CFT supervision that the EBA has identified during its review of the existing guidelines, including the effective use of different supervisory tools to meet the supervisory objectives. The changes that the EBA is proposing include practical step-by-step approaches to addressing those aspects of AML/CFT supervision that competent authorities have found particularly challenging.
Furthermore, the revised guidelines focus on helping the supervisors identify and manage ML/TF risks more effectively, including the risks that may arise from de-risking practices in some sectors or member states by providing greater detail on ML/TF risk assessments and by requiring to develop a robust supervisory strategy and plan that are based on those risk assessments. The deadline for comments is 17 June 2021.
EBA opinion on key money laundering (ML) and terrorist financing (TF) risks across the EU
On 3 March 2021, the EBA published its biennial opinion on risks of ML and TF affecting the EU’s financial sector.
The ML and TF risks identified by the EBA include those that are applicable to the entire financial system (for instance, the use of innovative financial services) while others affect specific sectors (such as de-risking). The list also includes ML and TF risks that emerge from wider developments such as the Covid-19 pandemic that has an impact on both firms’ anti-money laundering (AML) and counter terrorist financing (CTF) compliance and competent authorities’ supervision. The opinion sets out recommendations to competent authorities aimed at closing these gaps.
UCITS AND AIFS
ESMA updates Q&As on the application of the Alternative Investment Fund Managers Directive (AIFMD) and Collective Investment in Transferable Securities (UCITS) Directive
On 30 March 2021, ESMA published updated Q&As on the application of AIFMD and UCITS Directive.
In respect of the updated AIFMD Q&As, the update contains new Q&As on ESMA’s guidelines on performance fees in UCITS and certain types of Authorised Investment Funds (AIFs). The new Q&As provide clarification on the: (i) crystallisation of performance fees; (ii) timeline of the application of the performance reference period; and (iii) scope of the guidelines in respect of European long-term investment funds (ELTIFs).
Regarding the updated UCITS Q&As, ESMA has added two new Q&As on ESMA’s guidelines on performance fees in UCITS and certain types of AIFs. The Q&As provide clarification on the crystallisation of performance fees and on the timeline of the application of the performance reference period.
Results of 2020 common supervisory action with NCAs on UCITS managers’ liquidity risk management
On 24 March 2021, ESMA published the results of the 2020 common supervisory action (CSA) on the supervision of UCITS managers’ liquidity risk management (LRM).
ESMA notes that overall, most UCITS managers have demonstrated that they have implemented and applied sufficiently sound LRM processes. However, in a few cases, some adverse supervisory findings were identified, particularly linked to documentation, procedures and methodology. In some cases, the liquidity assessment before investing should be strengthened, as well as the data reliability verification and the internal control framework. To further improve the quality of LRM processes, ESMA requests that market participants critically review their LRM frameworks to ensure that none of these adverse supervisory findings exist in their frameworks. More generally, they should also ensure ongoing compliance with all relevant UCITS regulatory requirements, and associated EU and national guidance. NCAs supervised the LRM practices of UCITS managers in their respective Member States with a high degree of convergence. Despite this, ESMA has identified the need for further convergence work with respect to NCAs follow-up actions, including enforcement actions where appropriate. NCAs will undertake follow-up actions on individual cases to ensure that regulatory breaches as well as weaknesses identified are remedied, especially regarding the adverse supervisory findings identified. ESMA will carry out further work to promote convergence in the way NCAs follow-up on the supervisory findings made during the CSA.
Money Market funds
ESMA consults on legislative review of the Money market funds Regulation (MMF Regulation)
On 26 March 2021, ESMA published a consultation paper on the legislative review of the MMF Regulation.
ESMA sets out four types of potential reforms for MMFs:
- Reforms targeting the liability side of MMFs – such as decoupling regulatory thresholds from suspensions/gates to limit liquidity stress, and to require MMF managers to use liquidity management tools such as swing pricing;
- Reforms targeting the asset side of MMFs by e.g. reviewing requirements around liquidity buffers and their use;
- Reforms targeting both the liability and asset side of MMFs by reviewing the status of certain types of MMFs such as stable Net Asset Value (NAV) MMFs and Low Volatility Net Asset Value (LVNAV); and
- Reforms that are external to MMFs themselves by assessing whether the role of sponsor support should be modified. In addition, ESMA is also gathering feedback from stakeholders on other potential changes, particularly linked to ratings, disclosure and stress testing.
ESMA states that the Covid-19 crisis has been challenging for MMFs as a number of EU MMFs faced significant liquidity issues during the period of acute stress in March 2020 with large redemptions from investors on the liability side, and a severe deterioration of liquidity of money market instruments on the asset side.
In this context, the consultation paper discusses the potential reforms of the EU MMF regulatory framework that could be envisaged, in light of the lessons learnt from the difficulties faced by MMFs during the Covid-19 crisis in March 2020. ESMA will consider the feedback that it receives to this consultation in Q2 and expects to publish its opinion on the review of the MMF Regulation in the second half of this year. The deadline for comments is 30 June 2021. ESMA will consider the feedback it received to this consultation in Q2 2021 and expects to publish its opinion on the review of the MMF Regulation in the second half of 2021.
Sustainable Finance Disclosure Regulation (SFDR)
European Supervisory Authorities (ESAs) consult on taxonomy related product disclosures
On 15 March 2021, the ESAs published a consultation paper seeking input on draft Regulatory Technical Standards (RTS) regarding disclosures of financial products investing in economic activities that contribute to an environmental investment objective – these economic activities are defined by the Taxonomy Regulation.
The draft RTS aim to: (i) facilitate disclosures to end investors regarding the investments of financial products in environmentally sustainable activities; and (ii) create a single rulebook for sustainability disclosures under the Regulation on sustainability-related disclosures in the financial services sector (SFDR) and the Taxonomy Regulation. This will be done by amending the draft RTS under the SFDR, to minimise overlapping or duplicative requirements between the two regulations.
The consultation paper includes additional taxonomy-related disclosures in respect of information about which environmental objectives the investments of the product contribute to, and information about how, and to what extent, the activities funded by the product are taxonomy-aligned. The ESAs’ proposal on how and to what extent activities funded by the product are taxonomy-aligned, consist of two elements: (a) a graphical representation of the taxonomy-alignment of investments of the financial product and a key performance indicator calculation for that alignment; and (b) a statement that the activities funded by the product that qualify as environmentally sustainable, are compliant with the detailed criteria of the Taxonomy Regulation.
The ESAs also propose to standardise the presentation of the disclosures by amending the templates for the pre-contractual and periodic disclosures proposed in the draft RTS under the SFDR.
European Parliament (EP) adopts report recommending Directive setting ESG supply chain due diligence obligations
On 10 March, the EP adopted a legislative initiative report setting out recommendations for a new directive on corporate due diligence and corporate accountability that would require companies to address human rights and environmental due diligence in their value chains.
The proposals include: (i) requiring companies carry out due diligence to identify, address and remedy their impact on human rights (including social, trade union and labour rights), the environment (contributing to climate change or deforestation, for example), and good governance (such as corruption and bribery) throughout their value chain; (ii) sanctions for non-compliance and legal support for victims of corporations in third countries, unless companies can prove that they have acted in line with due diligence obligations and taken measures to prevent such harm; (iii) a ban on imports of products linked to severe human rights violations such as forced or child labour; and (iv) that the rules apply to companies operating in EU internal market, including those from outside the EU.
The framework should apply to all large undertakings, including publicly listed SMEs and high-risk SMEs, which should receive technical assistance to comply with the requirements. The EP recommends that EU trade agreements include these aims in their trade and sustainable development chapters. The EC has announced it will present its legislative proposal later this year.
Requirements of the Portuguese Securities and Exchange Commission (‘the CMVM’) regarding the promotion, distribution and marketing of PRIIPs in the territory of Portugal
Through Circular C430 issued on 10 March 2021, CySEC informed Investment Firms of new requirements coming into effect in Portugal as of 1 July 2021. These requirements are:
- When marketing/distributing and/or making PRIIPs available in Portugal and/or to investors in Portugal, Investment Firms must prepare and submit the KID to the CMVM no later than 2 days prior to the date when the KID or PRIIP is made available.
- Prior to engaging in marketing communications and or launching advertising messages related to PRIIPs Investment Firms need to submit the aforesaid messages/communications to CMVM for approval.
ESMA launches a Common Supervisory Approach (CSA) with NCAs on MiFID II Product Governance rules
Through Circular C431 issued on 10 March 2021, CySEC informed Investment Firms, UCITs Management Companies and AIFMs (where UCITS Man Co’s and AIFMS offer the non-core services under the UCI and/or AIFM Laws), of ESMA’s CSA where CySEC will be participating. For the purposes of the CSA CySEC informed the entities captured by the CSA that it will consider:
- Articles 17(3), 25(2) of Cyprus Law 87(I) of 2017 as amended,
- Part III of CySEC Directive DI87-01 as amended,
- CySEC Circular C236.
- ESMA’s Q&A document reference number ESMA35-43-349 and
- ESMA’s Guidelines document reference number ESMA35-43-620.
Opinion of the European Banking Authority on the risks of money laundering and terrorist financing affecting the European Union’s financial sector
On 16 March 2021 CySEC through the issuance of Circular C432 informed Investment Firms, Administrative Service Providers, UCITS Man Co’s (inclusive of internally managed UCITS), AIF managers (inclusive of authorised AIFMS, Mini Managers, internally managed AIFs/AIFLNPs etc.) of the Opinion of the European Banking Authority on the risks of money laundering and terrorist financing affecting the European Union’s financial sector. In the aforesaid Opinion EBA identifies AML risks such as institutions’ involvement in facilitating or handling tax related crimes.
CySEC expects its regulated entities to consult the Opinion in order to improve the effectiveness and efficiency of their AML/CFT systems.
Requirements of the Portuguese Securities and Exchange Commission (the ‘CMVM’) regarding the appointment of tied agents in the territory of Portugal
Through the issuance of Circular C433 on the 16th of March CySEC informed Investment Firms of the requirements of CMVM and more specifically that advertising and/or prospecting with an aim to agree on financial contracts or collecting information regarding current or potential clients may only be carried out by firms authorised to carry out such activities or Tied Agents.
CySEC advised Investment Firms to consult with their legal advisors to ensure continuous compliance with the legal framework in in Portugal.
Updates to the AML Law of Cyprus
On 17 March 2021 amending law 22(I)/2021 (in Greek only) was published in the Government Gazette. The law amends the Law regarding the prevention and suppression of money laundering and terrorist financing. The amending law harmonises the Cyprus AML framework with the EU Directive 2018/1673 on combating money laundering by criminal law.
Suspension of redemption of UCITS and AIF units on the 2nd and 5th of April 2021
Through the issuance of Circular C434 on 23 March 2021, CySEC informed UCITS Management Companies and/or Managers of AIFs that hold assets in transferable securities listed on Regulated Markets and whose NAV is calculated on a daily basis, that the redemption of their units is suspended on the 2nd and 5th of April 2021 due to bank holidays in most stock exchanges and main settlement systems.
Requirements of the Czech National Bank (the ‘CNB’) regarding the provision of investment services and/or the performance of investment activities in the territory of Czech Republic
On 24 March 2021, through the issuance of Circular C435, CySEC informed Investment Firms of the requirements under local law when providing services in the territory of the Czech Republic. The new requirements in the Czech Republic stipulate that EEA firms when providing investment services in the Czech Republic on a permanent basis such firms are required to establish a branch in the Czech Republic.
CySEC advised Investment Firms to consult with their legal advisors to ensure continuous compliance with the legal framework in the Czech Republic.