SUPERVISORY BENCHMARKING

The European Banking Authority (EBA) published a Decision on data for supervisory benchmarking. It comes after the publication of the amended technical standards on benchmarking of internal approaches and requires Competent Authorities to submit data for the 2016 benchmarking exercise, focusing on High Default Portfolios and with reference to end-2015 data.

• Data submitted to the EBA according to this Decision shall be covered by the EU law framework of professional secrecy and confidentiality as applicable to the EBA. Access to this data shall be provided in conformity with the EBA Regulation.
• This Decision is without prejudice to the EBA’s power (Article 35 of the EBA Regulation) to request the competent authorities to submit other data or data from institutions  

NEW EU DATA PROTECTION REGULATION

After a long pre legislative process the EU General Data protection Regulation was published on the 4th may

Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (Text with EEA relevance)

• The right to the protection of personal data is not an absolute right  but framed in relation to its function in society and be balanced against other fundamental rights, in accordance with the principle of proportionality. 
• This Regulation is set to respect the EU Charter of Fundamental Rights as enshrined in the Treaties, in particular:
•  the respect for private and family life, home and communications, 
• the protection of personal data, freedom of thought, conscience and religion, freedom of expression and information, 
• the freedom to conduct a business, 
• the right to an effective remedy and to a fair trial, 
• cultural, religious and linguistic diversity.
• See comment (Spanish, Noticias jurídicas)

* INFORMATION TO BE KEPT AND ORGANISATIONAL REQUIREMENTS UNDER MIFID II

On the 27th April the Council of the EU made public its ANNEXES to the COMMISSION DELEGATED REGULATIONsupplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purpose of that Directive

• Minimum list of records to be kept by investment firms depending upon the nature of their activities
• Identified costs that should form part of the costs to be disclosed to the clients
• All costs and associated charges related to the financial instrument that should form part of the amount to be disclosed
• Requirement for operators of trading venues to immediately inform their national competent authority
• Signals that may indicate abusive behaviour under Regulation (EU) No 596/2014
• Record keeping of client orders and decision to deal
• Record keeping of transactions and order processing  

* HST . Occassional Paper FCA_ UK

High-frequency traders (HFTs) have received a mixed reaction from academics and practitioners with some people underlining their role as liquidity providers and others highlighting the problems that they could bring to the market.

• Occasional Paper No. 16: Are high-frequency traders anticipating the order flow? Cross-venue evidence from the UK market

From summary:  Do HFTs exploit their small (milliseconds) latency advantages to anticipate orders arriving in very quick succession at different trading venues from other market participants?. The regulatory EU set-up makes it more difficult to predict where orders will be routed, compared to the US market?

EU. Parliament and ECB to study virtual currencies, whilst Luxembourg grants first distributed ledger technology

The European Parliament’s Economic and Monetary Affairs Committee  voted last week  in favor of creating a task force to study and regulate virtual currencies such as bitcoin with the aim of preventing their use by money launderers and terrorist groups. 

Also, the European Central Bank has begun experimenting with "distributed ledger technology," the platform underpinning the bitcoin digital currency, an official said Monday, cautioning that the technology’s “far-reaching” ramifications require more investigation.

Further, Bitstamp announced that Luxembourg has granted it a payment institution license, making the company the first nationally licensed Bitcoin exchange in the world. With the European Union’s “passport” that allows financial services providers legally established in one member state to operate in others, Bitstamp, the third-largest Bitcoin exchange, will also be able to operate across all 28 European Union countries. The license starts operativity on July 1, from Luxembourg

Background article here;  and here

Bank Recovery and Resolution Directive. Data disclosure (summaries / collective data)

The European Banking Authority (EBA) published its Guidelines defining how confidential information collected under the Bank Recovery and Resolution Directive (BRRD) should be disclosed in summary or collective form without identifying individual institutions or relevant entities.

• To access the guidelines, see here
• Final report, here