Financial Services [EU]

Benchmarks [EU]

Ensuring accuracy and integrity of benchmarks Regulation (EU) 2016/1011 on indices used as financial benchmarks It sets common European Union (EU) standards to prevent manipulation of benchmarks* that could affect the price of financial instruments, or financial contracts such as loans or mortgages. Key Points Administrators* responsible for the provision of financial benchmarks must: apply robust governance arrangements and clear organisational structures; identify, prevent or […]

Credit Holders [EU]

Framework for credit servicers and credit purchasers Directive (EU) 2021/2167 on credit servicers and credit purchasers It harmonises the rules for credit servicers* and credit purchasers* of a creditor’s rights under a non-performing credit agreement. Its aim is to support development of secondary markets for non-performing loans* in the European Union (EU), while ensuring the sale of such loans does not undermine borrowers’ rights. The […]

Securitisation [EU]

Simpler, more transparent and more standardised securitisation Regulation (EU) 2017/2402 — general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation It aims to restart a high quality securitisation* market that will: improve the financing of the EU’s real economy; enhance private risk sharing; and ensure investor protection. It creates a general system to simplify rules for all securitisations and […]

Payment Finality [EU]

Revised rules for payment services in the EU Directive (EU) 2015/2366 on EU-wide payment services Directive (EU) 2015/2366 (Payment Service Directive 2 — PSD 2) provides the legal foundation for the further development of a better integrated internal market for electronic payments within the EU. It puts in place comprehensive rules for payment services*, with the goal of making international payments (within the EU) as […]

Anti-Counterfeiting [EU]

Combating counterfeiting of the euro (Pericles IV) Regulation (EU) 2021/840 establishing a programme to protect the euro against counterfeiting for the 2021–2027 period (the ‘Pericles IV’ programme) It establishes an exchange, assistance and training programme (Pericles IV) to protect the euro against counterfeiting. This runs for the duration of the 2021–2027 multiannual financial framework of the European Union (EU). It sets out: the programme’s general […]

Prospectus [EU]

Prospectus to be published when securities are issued and offered to the public Regulation (EU) 2017/1129 — securities prospectus It aims to help companies, especially SMEs, access different forms of finance in the EU. It does so by simplifying and streamlining the rules and procedures they must apply when drawing up, securing approval and distributing the prospectus* they publish when offering securities* to the public. […]

Securities Financing [EU]

Short selling of securities Regulation (EU) No 236/2012 on short selling and certain aspects of credit default swaps It seeks to regulate certain aspects of short selling* and credit default swaps (CDS)* in the European Union. It introduces: uniform transparency requirements for investment managers; and new powers for financial regulators in EU countries and for the European Securities and Markets Authority (ESMA) to use in […]

Securities Settlement [EU]

Improving securities settlement in the EU Regulation (EU) No 909/2014 on improving securities settlement in the European Union and on central securities depositories It aims to harmonise the timing and conduct of securities settlement in the European Union (EU) and the rules applicable to central securities depositories (CSDs)*. It is designed to increase the safety and efficiency of the system, particularly for transactions within the […]

Market Abuse [EU]

Market Manipulation The market abuse regulation (MAR) seeks to ensure that European Union (EU) regulation keeps pace with market developments in order to combat market abuse on financial markets as well as across commodity and related derivative markets (i.e. markets trading primary products such as gold, wheat, etc., and financial instruments based thereupon). It reinforces the investigative and sanctioning powers of the regulators appointed by […]

Payment Systems [EU]

Systemically important payment systems (SIPS) Regulation (EU) No 795/2014 on oversight requirements for systemically important payment systems (ECB/2014/28) Decision (EU) 2019/1349 on the procedure and conditions for exercise by a competent authority of certain powers in relation to oversight of systemically important payment systems (ECB/2019/25) Decision (EU) 2017/2098 on procedural aspects concerning the imposition of corrective measures for non-compliance with Regulation (EU) No 795/2014 (ECB/2017/33) […]

Payment Information [EU]

Traceability of money transfers Regulation (EU) 2015/847 on information accompanying transfers of funds It sets out rules on the information on payers* and payees*, accompanying transfers of funds*, in order to help prevent, detect and investigate money laundering and terrorist financing*. European Union (EU) rules in this area are largely based on international recommendations adopted by the Financial Action Task Force (FATF)*. Key Points As […]

Payment Services [EU]

Cross-Border Payments [EU]

Cross-border payments in euros The aim of the single euro payments area (SEPA) is to ensure that making electronic payments throughout the entire euro area is as easy as making cash payments and that there are no extra charges when making an electronic payment in euros in another European (EU) country. Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 […]

Investments in EU States [EU]

Purchasing property in other EU countries Chapter 4 Capital and Payment (Articles 63, 64, 65 and 66) Treaty on the Functioning of the EU concerning purchasing real estate in other European Union (EU) countries They set out the laws governing the free movement of capital* in the European Union (EU), including the right to purchase property in another EU country and exceptions to the general […]

MIFD II + MIFR [EU]

Better regulated and transparent financial markets Directive 2014/65/EU on markets in financial instruments It aims at making financial markets in the European Union (EU) more robust and transparent. It creates a new legal framework that better regulates trading activities on financial markets and enhances investor protection. The new rules, called ‘MiFID 2’, revise the legislation currently in place and will apply from January 2018. […]

Providers Accounts [EU]

Annual accounts of banks and other financial institutions Council Directive 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions It seeks to harmonise the format and contents of the annual accounts, including consolidated accounts*, of all financial institutions within the European Union (EU). Key Points The directive applies to most credit institutions (e.g. banks) and other financial institutions, with a […]

Insurance Distribution [EU]

Insurance distribution — new rules from 2018 Directive 2016/97 — insurance distribution rules It aims to improve the way insurance products are sold so that they will bring real benefits to consumers and retail investors in the EU. Key Points Under the new directive on insurance distribution*, consumers and retail investors buying insurance products or insurance-based investment products will benefit from: greater transparency of insurance […]

Insurance Prudential [EU]

Regulation and Prudential Financial and prudential supervision is the responsibility of the home state authorities. They must monitor the entire business and must ensure that the requisite technical provisions are made, and that sound administrative and accounting procedures and controls are provided. There are separate detailed directives for life and non-life insurance. The conditions of authorisation have been harmonised in the EU. The non-life insurance […]

ECB [EU]

The European Central Bank (ECB) Protocol (No 4) – statute of the European System of Central Banks and of the European Central Bank It lays down the statute of the European System of Central Banks (ESCB) and of the European Central Bank (ECB). Key Points The ECB is the central bank of the euro area and is an independent European Union (EU) institution, representing the […]

Institutions II [EU]

European Insurance and Occupational Pensions Authority (EIOPA) The 2008 financial crisis brought to light shortcomings in European Union (EU) financial supervision. Based in Frankfurt, the European Insurance and Occupational Pensions Authority (EIOPA) was created in 2010 to prevent the risks of destabilising the insurance sector. Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory […]

Institutions I [EU]

European Banking Authority (EBA) Regulation (EU) No 1093/2010 establishing the European Banking Authority It sets up the EU agency which works to ensure effective and consistent prudential regulation and supervision across the European banking sector. The agency’s overall objectives are to maintain financial stability in the EU and to safeguard the integrity, efficiency and orderly functioning of the banking sector. Consistent application of EU law […]

Fund Mergers [EU]

Fund mergers and master-feeder structures relating to undertakings for collective investment in transferable securities (UCITS) Directive 2010/44/EU implementing Directive 2009/65/EC as regards certain rules concerning fund mergers, master-feeder structures and notification procedure It sets out implementing rules for mergers of undertakings for collective investment in transferable securities (UCITS)* and master-feeder structures in the context of Directive 2009/65/EC on the rules applying to UCITS. It is […]

Special Fund Rules [EU]

Venture Capital Funds An EU regulation introduces a European Venture Capital Funds label, also known as EuVECA, and measures to allow managers to set up and market their funds across the EU using a single set of rules. This single rulebook will permit investors to know exactly what they can expect when investing in EuVECA. It will also enable venture capital funds to be better […]

Financial Trading [EU]

Settlement finality in payment and securities settlement systems Transfers and payments of financial products must be regulated to avoid major risks, especially those linked to the insolvency of participants – in the transaction. This EU law lays down rules to minimise such risks. Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement […]

Rating & Benchmarks [EU]

Credit rating agencies SUMMARY OF: Regulation (EC) No 1060/2009 on credit rating agencies WHAT IS THE AIM OF THE REGULATION? It seeks to regulate the activity of credit rating agencies to protect investors and European financial markets against the risk of malpractice. Its aim is to guarantee the independence and integrity of the credit rating process and to improve the quality of the ratings […]

OTC Derivatives [EU]

EU rules on derivatives contracts Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories The European market infrastructure regulation (known as ‘EMIR’), lays down rules regarding over-the counter (OTC) derivative contracts, central counterparties (CCPs)* and trade repositories*, in line with the G20 commitments made in Pittsburgh in September 2009. EMIR aims to reduce systemic risk, increase transparency in the OTC market and […]

Failing Banks [EU]

Failing banks and investment firms: rules and procedures Regulation (EU) No 806/2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund Regulation (EU) 2019/877 amending Regulation (EU) No 806/2014 as regards the loss-absorbing and recapitalisation capacity of credit institutions and investment firms Regulation (EU) […]

Reorganisation [EU]

Reorganisation and winding-up of credit institutions Directive 2001/24/EC — a single bankruptcy procedure for banks with branches in more than one EU country It aims to ensure that, where a credit institution (generally a bank) with branches in other EU countries fails, a single bankruptcy procedure is applied to all creditors and investors. Kèy Points The directive: — applies the principle of home country control. This […]

Prudential [EU]

Banks and investment firms — prudential supervision Directive 2013/36/EU — banks and investment firms — prudential supervision The capital requirements directive — known as ‘CRD IV’ — governs access to the deposit-taking activities of banks and investment firms. It replaces the former capital requirements directives (2006/48/EC and 2006/49/EC). It covers topics previously dealt with by those directives, including those relating to: — access to the taking […]

Capital & Reserves [EU]

Free movement of capital in the EU Council Directive 88/361/EEC — the capital liberalisation directive It was designed to give the European Union (EU) single market its full financial dimension. Its purpose was to progressively abolish all restrictions on the free movement of capital between EU countries, implementing Article 67 of the Treaty establishing the European Communities (Article 67 was subsequently repealed). The rules of […]

Institution Resolution [EU]

Restructuring and Bank Rescue The European Commission produced State aid rules to assess public support of financial institutions during the financial crisis. The framework provides common conditions at EU level for access to public support and requirements for such aid to be compatible with the internal market. The Commission may approve State support to remedy a serious disturbance in the economy of a State. The […]

ECB [EU]

Supervising banks’ health: ECB accountability and transparency The European Central Bank (ECB) is accountable to the European Parliament when exercising its power of European banking supervision. Interinstitutional Agreement 2013/694/EU between the European Parliament and the European Central Bank on the practical modalities of the exercise of democratic accountability and oversight over the exercise of the tasks conferred on the ECB within the framework of the […]

Depositories [EU]

Rules on the obligations of depositaries for EU investment funds Delegated Regulation (EU) 2016/438 supplementing Directive 2009/65/EC with regard to obligations of depositaries This delegated regulation sets out in detail the specific rights and obligations of depositaries* and management and investment companies under EU rules for undertakings for collective investment in transferable securities (UCITS). In 2018, it was amended by Regulation (EU) 2018/1619 in regard […]

Accounts of Banks [EU]

Financial Institutions Accounts European Union directives lay down accounting provisions for banks and other financial institutions. They prescribe the form of balance sheet layout, assets and liabilities presentation. Certain balance sheet entries must be shown in particular ways. There are two standard profit and loss account layout. There are special provisions in relation to on certain types of item in the profit and loss account. […]

Key Information [EU]

Key information about investment products Regulation (EU) No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) It obliges those who produce or sell investment products to provide retail investors with key information documents (KIDs) about the products. The aim is to help investors to understand and compare the key features and risks of these products. Key information for retail investors […]

Bank Accounts [EU]

Opening/switching bank accounts and information on fees Directive 2014/92/EU — comparable and transparent fees and rules for all payment accounts and payment account switching It aims to tackle 3 main issues: access to basic payment accounts*, transparency and comparability of payment account fees, and bank account switching. Access to bank accounts The law says that anyone residing legally in the European Union has the right […]

Compensation Schemes [EU]

Deposit-guarantee schemes The European Union aims to protect the depositors of all credit institutions and to safeguard the stability of the banking system as a whole. Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes Deposit protection is a key aspect of completion of the internal market and forms an essential counterpart to the prudential supervision of […]