This newsletter provides a selection of opinions and analysis from our EU legal experts on interesting policy developments, recent case law and new regulatory directions of major industry practices. It is released biweekly and covers areas such as: Competition Law, Sanctions, Trade, Energy, Finance, EU funds, Data IP and Privacy, Life Sciences, Transport and Court of Justice of the European Union news.
The aim is to provide an up–to–date tool for quick and easy consultation on the most current and important topics at EU level.
EUROPEAN CENTRAL BANK (ECB)
The European Central Bank publishes first progress report on digital euro preparation phase (24.06.2024) – The European Central Bank published its first progress report on the digital euro preparation phase, which was launched on 1st November 2023 with the aim of laying the foundations for the potential issuance of a digital euro. The report outlines the progress made on key digital euro design aspects and the envisaged next steps for the project.
The European Central Bank publishes its report on Financial Integration and Structure in the Euro Area (18.06.2024) – The European Central Bank latest report on Financial Integration and Structure in the Euro Area shows that large investments are needed, in order to face future needs such as the green and digital transitions, security and aging populations. This can only be possible if the financial systems in the Euro Area are further integrated. Indeed, since its establishment, the Euro Area has demonstrated its strengths by being highly resilient during crises. However, progress in its financial integration has declined significantly over the last two years, without ever increasing by a noteworthy amount since the start of the monetary union. To further financial integration, the ECB calls for policy actions aimed at mobilising available savings, developing Euro Area bond and equity markets, and making these markets more attractive to foreign investors, while also facilitating cross-border banking and harmonising regulatory frameworks and disclosure requirements.
The European Central Bank publishes its annual review on the euro’s international role (12.06.2024) – According to the ECB’s annual review, the euro remained the world’s second most important currency in 2023. Despite high global inflationary pressures and geopolitical tensions, the share of the euro remained above 19%, according to multiple indicators of international currency use. Moving forward, the ECB recommends a broader integration of the European’s financial and economic systems to increase the resilience of the international use of the euro.
EUROPEAN SUPERVISORY AUTHORITIES (ESAs)
The European Supervisory Authorities publish a joint Opinion on the assessment of the Sustainable Finance Disclosure Regulation (18.06.2024) – The European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority published a joint opinion in the context of a comprehensive review of the SFDR framework called by the European Commission. The Opinion argues for the introduction of two straight-forward categories for financial products in the Sustainable Finance Disclosure Regulation: “sustainable” and “transition”. These two categories have the purpose of enhancing the consumers’ comprehension of the products, in order to reduce greenwashing risks and increase the information available to investors. The ESAs also suggests that the European Commission (i) adopt sustainability indicators to grade financial products, (ii) improve the definitions of sustainable investments, and (iii) simplify the way the disclosures are presented to investors.
The European Supervisory Authorities renew the term of the President of the Board of Appeal, and elect a new Vice President (14.06.2024) – Michele Siri, Professor of Insurance and Financial Markets Law, University of Genoa, Italy, was renewed by the ESAs as their Board of Appeal’s President for a new term of two years and a half, and Margarida Lima Rego, Associate Professor and Vice-Dean at NOVA School of Law, NOVA University, Portugal, was appointed as Board of Appeal’s Vice-President for the same time period.
EUROPEAN BANKING AUTHORITY (EBA)
The European Banking Authority publishes amendments to counterparty credit risk standards as part of its new roadmap for the implementation of the Banking Package in the EU (24.06.2024) – The European Banking Authority published its final draft amending Regulatory Technical Standards (RTS) on the standardised approach for counterparty credit risk (SA-CCR). This regulatory product is part of the new roadmap on the Banking Package. The amendments to the Capital Requirements Regulation (CRR3) have expanded the EBA mandate to specify the formula to calculate the supervisory delta of options under the SA-CCR framework. Alongside the supervisory delta formula for interest rate options compatible with negative interest rates, the mandate now also requires the specification of the supervisory delta formula for commodity options compatible with negative commodity prices. Therefore, the existing RTS on SA-CCR have been amended to include the formula for commodity options.
The European Banking Authority updates the Pillar 3 disclosure framework finalising the implementation of the Basel III Pillar 3 framework (21.06.2024) – The European Banking Authority published a final draft implementing technical standards (ITS) on public disclosures by institutions that implement the changes in the Pillar 3 disclosure framework introduced by the amending Regulation (EU) 2024/1623 (CRR 3). These ITS will ensure that market participants have sufficient comparable information to assess the risk profiles of institutions and understand compliance with CRR 3 requirements, further promoting market discipline.
The European Banking Authority publishes its final draft Regulatory Technical Standards under the Capital Requirements Regulation (20.06.2024) – The European Banking Authority published the final draft for Regulatory Technical Standards (RTS) under the Capital Requirements Regulation (CRR), covering both the conditions for assessing the materiality of model extensions and changes, and the changes to the subset of modellable risk factors, applicable under the Fundamental Review of the Trading Book rules. The draft differentiates material extensions and changes from non-material extensions and changes and sets out a combination of quantitative and qualitative conditions for the categorisation of extensions and changes. This publication completes the June 2019 roadmap on market and counterparty credit risk approaches.
The European Banking Authority publishes regulatory products under the Markets in Crypto-Assets Regulation (19.06.2024) – The European Banking Authority published the last package of technical standards and guidelines under the Markets in Crypto-Assets Regulation (MiCAR), thereby completing the delivery of its technical standards under the regulation. This package covers reporting, liquidity stress testing, as well as supervisory colleges, and it comprises, among others, (i) the Final draft RTS further specifying the liquidity requirements of the reserve of assets; (ii) the Final draft RTS to specify the highly liquid financial instruments; and (iii) the Guidelines on recovery plans.
The European Banking Authority publishes the technical standards and guidelines under the Markets in Crypto Assets Regulation (13.06.2024) – Pursuant to the provisions of the Markets in Crypto Assets Regulation, the EBA published a set of regulatory instruments to develop a well-regulated market for asset-referenced and e-money tokens in the European Union. The regulatory package covers prudential matters. It comprises new regulatory technical standards relating to own fund and liquidity, and new guidelines on recovery plans.
The European Banking Authority issues a revised list of its Implementing Technical Standards validation rules (13.06.2024) – The revised list of Implementing Technical Standards (ITS) validation rules, issued by the EBA, deactivated some of the rules present in older versions of the list. This means that data submitted in accordance with deactivated rules should not be formally validated by the Competent Authorities.
EUROPEAN SECURITIES AND MARKET AUTHORITY (ESMA)
The European Securities and Market Authority publishes the 2023 Annual Report (14.06.2024) – The Annual Report for 2023 illustrates the authority’s key achievements after the first year of implementation of its five-years plan for enhancing investor protection and promoting stable and orderly financial markets in the European Union. The Annual Report
mainly focuses on investor protection, risk monitoring and supervision. In 2023, ESMA has been especially active in the monitoring of risks and resilience of financial markets and in supporting supervisory convergence through extensive work in the digital space. Among others, some of ESMA’s key achievements are: the exploration of new areas of regulation, in preparation for the implementation of the Digital Operational Resilience Act; the launch of a new data strategy for 2023-2028, aiming to leverage technology and data to improve market supervision and investors’ protection; the assessment of greenwashing through a progress report on greenwashing risks and supervision.
COUNCIL OF THE EUROPEAN UNION (COUNCIL)
Council reaches agreement for a new regulatory package for retail investment (12.06.2024) – Council reached an agreement for a new regulatory package, aimed at strengthening the EU rules on retail investor protection. The package will provide retail investors with clearer information about investment products and will ensure more transparency and disclosure. Vincent Van Peteghem, Belgian Minister of Finance, commented the agreement by highlighting the need to incentivize retail investors to make sound investment decisions in the EU market, in the hope that their enhanced trust in the capital markets will make their savings flow to innovative European companies, including small and medium enterprises.
