ESMA 2020. A year of changes.



The European Securities and Markets Authority (“ESMA”) is guiding and supervising the EU’s financial markets since 2011 and during the time has proved itself as reliable and constructive regulator.

Following the EU’s Parliament and Council decisions, ESMA will be assigned new and additional tasks in 2020 which will enhance its positions in the financial markets’ supervision, investor protection, transparency and appropriate practices in regard with technological evolution which is accelerating the innovations on daily basis.

ESMA already published its “2020 Annual Work Programme” explaining the focus and key priorities for the next year (more details here: https://www.esma.europa.eu/document/2020-work-programme) and here is a summary of the planned work, efforts and areas of importance:

  • Supervisory convergence – the aim is for common interpretation of rules, consistency and data quality peer review as prerequisite for data-driven supervision)
  • Risk assessment –the usage of data collected will be further utilized to ensure efficient supervision and risk prevention
  • Single Rulebook –in 2020 ESMA will advise the European Commission in regard with some key provisions of MiFID II/MiFIR and MAR, as well as to contribute the plans on the Capital Markets Union, Fintech, and Sustainable Finance
  • Direct Supervision – the supervision of Credit Rating Agencies, Trade Repositories under EMIR and SFTR, recognition of third-country Central Counterparties (CCPs) and Central Securities Depositories (CSDs) will continue with focus on the processes, internal governance, controls and information security

Most of those tasks are familiar, but they will be performed by ESMA along with the completely new ones, which include:

  • ESA’s Review – ESMA shall adapt to changes stemming from the European Supervisory Authorities (ESAs) legislation review
  • EMIR 2.2 – to ensure efficient supervisory and regulatory framework to EU and third-country CCPs in regard with EMIR 2.2
  • Cross-border funds distribution – to deliver relevant Technical and to ensure that corresponding IT tools are developed
  • Investment Firms Framework – new rules and requirements in regard with capital, liquidity and regulatory reporting for the investment firms in the EU
  • Sustainable Finance – to strengthen and improve the disclosure of information by manufacturers of sustainable financial products and financial advisors towards end-investors

Like every organisation, ESMA constantly evolves and the changes planned for 2020 will strengthen its role as one of the guardians of the financial markets in the EU.



targit GmbH (Member of Be) @ International Collateral Management Forum

On the 26th and 27th of September, specialists from targit GmbH (Member of Be) took part in the International Collateral Management Forum in Vienna. The participating employees of targit GmbH moderated the panel discussion on Regulatory Reporting.

The event was attended by numerous delegates and speakers from regulatory authorities, transaction registers, financial institutions, service and solution providers, experts and managers.

It was not only a conference, but a great place and an excellent opportunity for networking, knowledge and experience exchange on various topics such as collateral management, margining, regulatory reporting and clearing.

The panel participants of the “Regulatory Reporting” discussion, presented very interesting examples, views and opinions from practical experience, which was one of the main objectives of the panel – to broaden the understanding of the reporting challenges and how to deal with them.

Given the feedback from the audience and delegates, the Forum was able to communicate its core messages so that the next events will certainly continue to take place and we will be proud to be involved.

Stay tuned and follow us on…

Meet us at the Career Fair 2019!

”FH meets economy” is this year’s motto of the 7th career fair at the University of Applied Sciences FH – BFI Vienna in which targit will participate again this year.

The opportunity to get in contact with students and graduates has proven itself in recent years, because in personal discussions experiences and qualifications are shared and job advertisements are presented. The fair is an ideal platform for the search for new potential coworkers.

Applicants are more than welcome to visit us at the targit stand!’

More info of the Career Fair here https://bit.ly/2qqNxMw

More info about Career Opportunity with us here https://www.targit.at/en/careers/

targit at the University of Applied Sciences FH – BFI Vienna
Tuesday, 05.11.2019,  15.00-18.00 

Photos by: University of Applied Sciences BFI Vienna

BE Group at Sibos 2019

From September 23 – 27 Be Group took part in SIBOS for the first time – as a leading firm in the financial service arena in the most important conference in the financial industry!

Besides the great presentations of our colleagues, Masha Cilliers (Partner iBe UK speaking about “Balancing security and frictionless journey with contextual and advanced identity management”) and Vittorio Carlei (Head of Big Data & Advanced Analytics of Be TSE SpA speaking about “When does a digital ecosystem really exist?”), who both delivered remarkable speeches in front of big audiences, Masha’s contribution even made it to the summary of the SIBOS closing plenary of SWIFT!

In addition, Be Group had numerous meetings at its booth on the topics of PSD2, OpenBanking, Capital Markets Solutions, Market Data and Regulatory Reporting Tools and of course – given the origin of SIBOS – many meetings featuring payments (the future of instant payments, R2P, etc.) and SWIFT (platform evolution, APIs, GPI, ISO20022, etc.)!

Be | Shaping The Future has become a reality – and belongs to the top Consultants in the financial industry in Europe!

 

Herbert Hangel

International Collateral Management Forum

Experts form targit GmbH (member of Be) will participate and moderate discussions at the International Collateral Management Forum. Join us and other leading institutions on the 26th and 27th of September 2019 in Vienna, Austria and learn more about latest developments in Collateral Management, EMIR, MiFID II, SFTR and Regulatory Reporting.

More about the event can be found on the following link: https://bit.ly/2kXkXA4

The Benchmarks Regulation, the EURIBOR, EONIA and €STR

The ongoing reform of EURIBOR and EONIA under the Benchmarks Regulation (“BMR”) will have not only arithmetic impact on the calculation methods, but will affect also the business, IT and legal processes for instruments and institutions using those important interest rate indices.

 

What does it mean?

It means that according to the texts in the BMR, EURIBOR and EONIA as they now are, are not compliant with the regulation, and as a minimum should not to be used for new contracts after 1 January 2020 as they are. While on the surface this future obstacle looks easy to deal with, there is a bigger issue – the existing agreements and instruments referring to the different tenors of EURIBOR or to EONIA.

In order to solve the problem and mitigate the associated risks, the European Money Markets Institute (“EMMI”) has proposed a change in calculation method and definition for the EURIBOR to make it compliant and assure smooth transition period. In regard with EONIA, a new index – “EUROpean Short-Term Rate” (€STR), will be published by ECB and it is recommended that the market participants gradually replace EONIA with the €STR for all products and contracts.

 

What are the main changes?

  • First, the applied calculation methodologies – from contribution-based (i.e. quotations) to transaction-based approach for all tenors. In that regard the EMMI developed a hybrid methodology, based on real data as much as possible and enriches it with data from other sources where real figures are not available.

 

  • Second, the tenors – EURIBOR will be calculated and published only for the following tenors:
  • One Week (1W),
  • One Month (1M),
  • Three Months (3M),
  • Six Months (6M) and
  • Twelve Months (12M).

 

  • Third, the contributors – the conceptual term “prime bank” disappeared and the calculated and distributed by EMMI EURIBOR will represent “…the rate at which wholesale funds in EURO could be obtained by credit institutions in the EU and EFTA countries in the unsecured money market”.

 

  • Fourth, and probably the most important of all – the move in the quotation day for EURIBOR from T+2 to T+1. In other words, the rates of the previous business day are republished and used as EURIBOR rates for that day. And to add more flavour – there is a “intraday re-fixing policy” in case error occurs.

 

 

What impacts on the industry should be expected?

The impacts can be separated in two major groups – legal and operational, any of which can be fragmented in more sub-topics and all of them will require efforts and time.

For example, change of the existing contracts and creating new templates will engage primarily the legal departments of the institutions, but the communication and negotiation process with partners and clients will be a task for the relationship officers. At the same time, the corresponding amendments in the IT systems, internal methodologies and procedures for monitoring pricing and revaluation etc will be needed.

 

When it will happen?

The current timeline foresees that in Q2 of 2019 the “new” EURIBOR based on the EMMI’s hybrid methodology starts, and the first €STR publication is expected on 2 October 2019, reflecting the trading activity of 1 October 2019. However, the authorities, together with the industry are currently discussing to push back the end of these EONIA and EURIBOR rates by one or two years, and the final decision should be known before the end of 2019.