On 7 May 2020, the European Commission published Q&As on the Action plan for a comprehensive Union policy on preventing money laundering and terrorism financing.
The Commission has published an ambitious and multifaceted Action Plan, which sets out concrete measures that the Commission will take over the next 12 months to better enforce, supervise and coordinate the EU's rules on combating money laundering and terrorist financing. The aim of this new, comprehensive approach is to shut down any remaining loopholes and remove any weak links in the EU's rules.
Moreover, the Commission has also adopted a new list of third countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks.
The Q&As clarify the objective of the action plan, as well as the involvement of FIUs and the private sector, with a focus on the classification of high risk countries and the enhanced due diligence.

On 27 May 2020, the European Banking Authority (EBA) published an Opinion following the notification by the French macroprudential authority, the Haut Conseil de Stabilité Financière (HCSF), of its intention to extend a measure introduced in 2018 on the use of Article 458(9) of the Capital Requirements Regulation (CRR) to safeguard institutions from excessive risk-taking and to prevent the build-up of future vulnerabilities. The measure intends to tighten, for French global or other systemically important institutions, the large-exposure limits applicable to large and highly indebted non-financial corporations (NFCs) resident in France or groups of connected NFCs assessed to be highly indebted and based in France. Based on the evidence submitted, the EBA does not object to the extension of the proposed measure, which will be applied from 1 July 2020 to 30 June 2021.

On 8 May 2020, the European Commission published Commission Delegated Regulation (EU) …/... of 8.5.2020 amending Delegated Regulation (EU) 2018/1229 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on settlement discipline.
Most importantly, the Commission Delegated Regulation (EU) 2018/1229 specifies further the settlement discipline measures set out in the CSDR  and should enter into force on 13 September 2020. On 4 February 2020, ESMA adopted a report suggesting to the Commission the postponement of the entry into force of Commission Delegated Regulation (EU) 2018/1229 to 1 February 2021. 
To this effect, ESMA proposed an amendment to Commission Delegated Regulation (EU) 2018/1229. The Commission shall decide within three months of receipt of the draft regulatory standards whether to endorse the draft submitted. 
Moreover, the new settlement discipline regime under the Regulation will affect a wide range of market participants (CSDs, CCPs, trading venues, investment firms, credit institutions) and authorities, and will require significant IT system changes, market testing and adjustments to legal arrangements between the parties concerned.
In accordance with this requirement, CSDs which use TARGET2 - Securities (T2S) have mandated the Eurosystem to build a common T2S penalty mechanism. The T2S penalty mechanism will provide a single cash penalty calculation engine and reference data source, as well as common reporting and operational tools for all T2S CSDs. Market participants across the value chain (e.g. clients of CSD participants) will need to mobilise substantial time and resources to adapt to the new cash penalty framework. The T2S penalty mechanism is expected to go into operation during the weekend of 21-22 November 2020.
Another important change brought about by the settlement discipline regime is the mandatory buy-in process. The buy-in process requires significant changes to current market practices and contractual arrangements and major IT developments, including new or updated ISO messages. Additionally, CSDs have to change their systems and procedures and have to put in place new functionalities in order to facilitate and incentivise settlement on the intended settlement date, as well as in order to monitor and address settlement fails.
Finally, CSDs have to send monthly and annual settlement fails reports to the competent and relevant authorities, which in turn will be sent by competent authorities to ESMA. For this, CSDs, competent authorities and ESMA have to put in place IT systems for the submission and the reception of the reports, which will be based on ISO 20022 compliant messages.

On 4 May 2020, the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published joint draft Regulatory Technical Standards (RTS) to amend the Delegated Regulation on the risk mitigation techniques for non-centrally cleared OTC derivatives (bilateral margining), under the European Markets Infrastructure Regulation (EMIR), to incorporate a one-year deferral of the two implementation phases of the bilateral margining requirements.
The ESAs have intensified their coordination with national competent authorities (NCAs), as well as with relevant authorities from other jurisdictions in order to ensure adequate regulatory actions where needed during this crisis. In this context, these amending draft RTS were developed to facilitate further an internationally coordinated approach on how to adapt the implementation of the bilateral margin requirements.
The Basel Committee on Banking Supervision (BCBS) and the International Organisation of Securities Commissions (IOSCO) announced on 3 April their agreement to defer by one year, the deadline for completing the final two implementation phases of the bilateral margin requirements, in order to provide additional operational capacity for counterparties to respond to the immediate impact of COVID-19. The ESAs draft RTS present the changes to the Delegated Regulation on bilateral margining to incorporate in the EU regulatory framework the one-year deferral agreed by the BCBS and IOSCO. 
These changes would result in covered counterparties with an aggregate average notional amount of non-centrally cleared derivatives above €50 billion becoming subject to the requirement to exchange initial margin from 1 September 2021, while covered counterparties with an aggregate average notional amount of non-centrally cleared derivatives above €8 billion becoming subject to the requirement from 1 September 2022.

On 6 May 2020, the European Securities and Markets Authority (ESMA) published a Public Statement on the risks for retail investors when trading under the highly uncertain market circumstances due to the COVID-19 pandemic. ESMA also reminds investment firms of the key conduct of business obligations under MiFID when providing services to retail investors.
Several National Competent Authorities (NCAs) have noticed a significant increase in retail clients’ trading activity. The financial market turmoil following the COVID-19 pandemic has led to high market volatility and an increase in market, credit and liquidity risks. ESMA highlights the risks to retail investors when trading under these unprecedented market circumstances. 
In the current environment, ESMA believes that firms have even greater duties when providing investment or ancillary services to investors, especially when these investors  are new to the market, or have limited investment knowledge or experience. ESMA therefore reminds firms of their obligation to act in accordance with the best interests of their clients, and points to the most relevant conduct of business obligations under MiFID II, namely product governance, information disclosure, suitability and appropriateness. 
ESMA, in coordination with NCAs, will continue to monitor retail clients’ involvement in the financial markets, and firms’ compliance with the conduct of business requirements. ESMA remains prepared to use its powers to ensure financial stability, orderly functioning of EU markets and investor protection

On 8 May 2020, Opinion No 3/2020 on the proposal 2020/0054(COD) for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 1303/2013 and Regulation (EU) No 1301/2013 as regards specific measures to provide exceptional flexibility for the use of the European Structural and Investments Funds in response to the COVID-19 outbreak was published in the Official Journal.

The Opinion aims at facilitating the consideration of the Commission’s proposal by the legislators. The court of auditors has not provided detailed comments on the proposed amendments of the legislation; instead, they highlight the main issues and set out some of the risks involved.

The opinion mentions and assesses:

• Possibility of 100 % co-financing 
• Greater flexibility for Member States to target EU support where they choose 
• Keeping track of the use of the special measures 
• Timing of the measures 
• Impact on auditors’ work.

On 8 May 2020, the European Commission  decided to postpone the entry into force of two EU taxation measures to take account of the difficulties that businesses and Member States are facing at the moment with the Coronavirus crisis. 

First, the Commission has proposed to postpone the entry into application of the VAT e-commerce package by 6 months. These rules will apply as of 1 July 2021 instead of 1 January 2021, giving Member States and businesses more time to prepare for the new VAT e-commerce rules. 

Second, the Commission has decided to propose deferring certain deadlines for filing and exchanging information under the Directive on Administrative Cooperation (DAC).

Member States will have three additional months to exchange information on financial accounts of which the beneficiaries are tax residents in another Member State. Similarly, Member States will have three additional months to exchange information on certain cross-border tax planning arrangements. 

Depending on the evolution of the Coronavirus pandemic, the Commission proposes the possibility to extend the deferral period once, for a maximum of three further months. The proposed tax measures only affect the deadlines for reporting obligations.

The beginning of application of DAC 6 will remain 01 July 2020 and the reportable arrangements made during the postponement period will have to be reported by the time the deferral has terminated.

On 13 May 2020, a Communication from the commission concerning the Amendment to the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak was published in the Official Journal.

First, the Commission considers that otherwise viable non-financial undertakings subject to a temporary liquidity crisis due to the COVID-19 outbreak may face longer-term solvency issues. For a large number of these undertakings, the emergency measures put in place to control the spread of the COVID-19 outbreak have resulted in a decrease or even suspension of their production of goods and/or the provision of services, as well as a significant demand shock. The resulting losses will be reflected in a decrease of undertakings’ equity and will negatively affect their ability to take on loans from financial institutions.

Well-targeted public interventions providing equity and/or hybrid capital instruments to undertakings could reduce the risk for the EU economy of a significant number of insolvencies. They could thereby contribute to preserving the continuity of economic activity during the COVID-19 outbreak and to supporting subsequent economic recovery.

This Communication therefore sets out the criteria under EU State aid rules, based on which Member States may provide public support in the form of equity and/or hybrid capital instruments to undertakings facing financial difficulties due to the COVID-19 outbreak. It aims at ensuring that the disruption of the economy does not result in the unnecessary exit from the market of undertakings that were viable before the COVID-19 outbreak. Recapitalisations must therefore not exceed the minimum needed to ensure the viability of the beneficiary, and should not go beyond restoring the capital structure of the beneficiary to the one predating the COVID-19 outbreak.

The Commission underlines that providing national public support in the form of equity and/or hybrid capital instruments to undertakings facing financial difficulties due to the COVID-19 outbreak, as part of schemes or in specific individual cases, should only be considered if no other appropriate solution can be found and be subject to stringent conditions as such instruments are highly distortive for competition between undertakings.

Second, the Commission considers that subordinated debt can also be an appropriate means to support undertakings facing financial difficulties due to the COVID-19 outbreak.

Finally, the Commission recognises that to ensure a successful recovery, additional large-scale private and public investments will be needed to meet the challenges and seize the opportunities of the green and digital twin transitions. In this context, the Commission recalls that this amendment to the Temporary Framework complements rather than replaces existing possibilities under EU State aid rules for Member States to provide support.

On 15 May 2020, the European Council reached a political agreement on temporary support to mitigate unemployment risks in an emergency (SURE).

EU ambassadors reached a political agreement on SURE, a temporary scheme which can provide up to €100 billion of loans under favourable terms to member states. The instrument will enable member states to request EU financial support to help finance the sudden and severe increases of national public expenditure, as from 1 February 2020, related to national short-time work schemes and similar measures, including for self-employed persons, or to some health-related measures, in particular at the work place in response to the crisis.

SURE is one of the three safety nets, worth €540 billion, for jobs and workers, businesses and member states, agreed by the Eurogroup on 9 April 2020. EU leaders endorsed the agreement on 23 April and called for the package to be operational by 1 June 2020.

The Commission will raise funds on international capital markets on behalf of the EU. SURE loans will be backed by the EU budget and guarantees provided by member states according to their share in the EU's GNI. The total amount of guarantees will be €25 billion.

SURE will become available after all member states have provided their guarantees. The instrument will then be operational until 31 December 2022. On the proposal from the Commission, the Council may decide to extend the period of availability of the instrument, each time for a further 6-month period, if the severe economic disturbances caused by the COVID-19 outbreak persist.

On 15 May 2020, the European Parliament announced the EU27 needed a €2 trillion recovery package to tackle COVID-19 fallout.

In a resolution on the post-2020 EU budget revision and economic recovery plans, MEPs demand a robust package, focused on citizens’ needs and building on the EU budget. The resolution was adopted on Friday by 505 votes in favour, 119 against and 69 abstentions.

The members of the Parliament announced:

• Recovery investments must be added on top of MFF-financed programmes: the recovery plan must be provided on top of the next Multiannual Financial Framework (MFF), which is the EU’s long-term budget, not to the detriment of existing and upcoming EU programmes
• Plan must focus on priorities under the Green Deal and digital agenda: the “massive recovery package”, which MEPs demanded already in their recent April resolution, must last long enough to tackle the “expected deep and long-lasting impact of the current crisis”. They call for investments to be prioritised according to the Green Deal and the digital agenda and insist on the creation of a new standalone European health programme.
• EU revenue reform becomes vital: MEPs reiterate their call for the introduction of a basket of new “own resources” (sources of EU revenue), so as to prevent a further increase of member states’ direct contributions to the EU budget to meet the needs of the MFF and the Recovery and Transformation Fund.

1. On 18 May 2020, the European Securities and Markets Authority (ESMA) informed on the non-renewal of the emergency restrictions on short selling and similar transactions by the following national competent authorities (NCAs): Finanzmarktaufsicht (FMA) of Austria; Financial Securities and Markets Authority (FSMA) of Belgium; Autorité des Marchés Financiers (AMF) of France; Hellenic Capital Market Commission (HCMC) of Greece; and Comisión Nacional del Mercado de Valores (CNMV) of Spain.

It also notes the early termination of the emergency restrictions by the Commissione Nazionale per le Società e la Borsa (CONSOB) of Italy, that was due to expire on 18 June 2020.

ESMA has coordinated the recent emergency restrictions renewals and has contributed to this aligned action.

2. On the 15th of May 2020, CONSOB communicated the end of the effectiveness of the ban on taking net short positions (i.e. investors who sell securities they don't own, by borrowing them) on shares traded on the Italian regulated market MTA.  This ban was previously applied in compliance with article 20 of EU Regulation no. 236/2012, it was applied to all legal entities, it was NOT applied to market making activities, nor on trading based on financial indices, nor on on net short position traded to cover the equity component of convertible bonds previously purchased, or of option rights previously purchased. This regulation ceases to be into effect as of May 18th 2020.

3. On 18 May 2020, Banca d'Italia informed that the prohibition to trade based on short net positions traded on the Italian MTA market  is no longer into effect. The decision derives from a consultation with ESMA and with authorities of Austria, Belgium, France, Greece and Spain.

As a consequence of this decision, resolution no. 21303 of 17 March 2020 is no longer into effect.

4. On 18 May 2020, the Financial Services and Markets Authority (FSMA) announced the suspension of the ban on creating or increasing net short positions. The ban imposed on 18 March 2020 applies to any transaction which creates, or relates to, a financial instrument and where the effect or one of the effects of that transaction is to confer a financial advantage on a natural or legal person in the event of a decrease in the price or value of another financial instrument, pursuant to Article 20 of Regulation (EU) no. 236/2012. This measure was extended on 15 April 2020.

This exceptional measure was taken because the FSMA observed large price movements in the market. This high market volatility indicated that the market had difficulties in correctly valuing the impact of the COVID-19 crisis on the listed companies due to a lack of visibility and understanding at that time. The measure was aimed at preventing those conditions from deteriorating and potentially having adverse effects on the companies concerned and on market confidence in general.

As announced in mid-April, the current measure expires on 18 May 2020 at 11:59 PM and the FSMA has decided in concertation with ESMA and the different national authorities concerned not to extend it further.

5. On 18 May 2020, the Autorité des marchés financiers (AMF) announced the suspension of the exceptional measure imposing a ban on the creation of net short positions and on the increase of existing net short positions. 

Considering that the Coronavirus outbreak and the uncertainties surrounding its impact on the economy constituted a serious threat to market confidence, on 17 March the AMF announced its decision to ban any creation of a net short position and any increase in an existing net short position for a period of one month. Given the circumstances, on 15 April the regulator announced the extension of this ban until 18 May 2020.

Since the implementation of the ban, the Authority has observed a progressive normalisation. Markets have partly reduced their losses, trading volumes and volatility have returned to levels that are still high compared to mid-February, however this reflects market participants’ uncertainties in the current context. 

The French market’s volatility index has fallen from 84 at the closing on 16 March to a level of 30 and the average daily volume on the CAC40 traded on Euronext has decreased from 12 billion euros to 4 billion. This normalisation has also been observed on other markets subject to a similar ban.

Under these circumstances, the AMF, in consultation with ESMA and the Austrian, Belgian, Greek, Italian and Spanish authorities which have taken similar action, has decided not to renew the ban on net short positions, which will expire on 18 May at 23:59 pm. 

As a reminder, ESMA’s decision requiring net short positions holders to report new positions of 0.1% of the issued shares capital is still in force.

6. On 20 May 2020, the Autorité des marchés financiers (AMF) updated its FAQs on Temporary prohibition of net short positions and the impact on individual investors.

In the context of the coronavirus epidemic and its impact on the financial markets, the AMF took the decision to extend the temporary ban on short sales and taking or increasing net short positions until May 18, 2020. 

Taking into account the gradual normalization of risk indicators on the French market, the AMF announced on May 18 the suspension of the measure. The updated questions deal with the suspension of the measure.

1. On 20 May 2020, the European Securities and Markets Authority (ESMA) published a Public Statement addressing the implications of the COVID-19 pandemic on the half-yearly financial reports of listed issuers. 

The Public Statement provides recommendations on areas of focus identified by ESMA and highlights:

• the importance of providing relevant and reliable information, which may require issuers to make use of the time allowed by national law to publish half-yearly financial reports while not unduly delaying the timing of publication;
• the importance of updating the information included in the latest annual accounts to adequately inform stakeholders of the impacts of COVID-19, in particular in relation to significant uncertainties and risks, going concern, impairment of non-financial assets and presentation in the statement of profit or loss; and
• the need for entity-specific information on the past and expected future impact of COVID-19 on the strategic orientation and targets, operations, performance of issuers as well as any mitigating actions put in place to address the effects of the pandemic.

The Public Statement is also applicable to financial statements in other interim periods when IAS 34 Interim Financial Reporting is applied.

2. On 20 May 2020, the Autorité des marchés financiers (AMF) published a communication on the publication of the half-yearly financial report in the context of COVID-19.

In the current context linked to the COVID-19 epidemic, the preparation of the 2020 half-yearly financial report will prove to be particularly complex for companies. In order to help them as much as possible in this difficult exercise, the AMF wishes to recall a few useful principles. This communication resumes that of ESMA  published on May 20, 2020, in some cases adapting it to the specific French context.

In general, the AMF is aware of the difficulties encountered by companies in pursuing their activities in the current context as well as the reduced visibility of their prospects; the AMF strives to respond as quickly as possible to emerging needs. The AMF is therefore at the disposal of companies and their statutory auditors to discuss and support them in these particular circumstances. With this same objective, the ANC and the CNCC have published questions and answers answering certain questions concerning the accounts drawn up according to the IFRS standards and according to the French accounting standards.

The AMF presented a few principles and documentation to help companies in respecting the publication of the half-yearly financial report concerning: 

• Preparation of half-yearly information
• Information in the interim financial statements and the management report
• Press releases on results and performance indicators
• Presentation of financial statements
• Continuity of exploitation
• Impairment tests
• Lease contracts.

3. On 20 May 2020, the Autoriteit Financiële Markten (AFM) called on investment firms to pay extra attention in the coming months to updating the customer image of its clients. It is obvious that the personal situation of some of the customers will change as a result of the corona crisis.

When providing investment advice and asset management, investment firms should look specifically at a possible tightening of their actualization policy. For example, there may be reason to approach potentially affected customers sooner or more often. This allows investment firms to avoid taking investment risks that no longer suit a changed customer situation.

Preventing foreseeable disappointments
Despite all the (operational) difficulties, many investment firms have been proactively in contact with their clients since the start of the corona crisis in the Netherlands. AFM trusts that investment firms will continue to do this in the coming months, with the updating of the client profile being given a place in the client contact.

Due to the corona crisis, the previously acquired customer information may be outdated or soon become obsolete for some of the ongoing advisory and asset management clients. This creates investment risks that no longer suit the new situation and advisory and management portfolios no longer fit in with the client. Timely updating of vulnerable client groups will help prevent foreseeable investor disappointments.

Later this year, the AFM wants to investigate how investment firms implement the discount obligation.

4. On 20 May 2020, the Autoriteit Financiële Markten (AFM) reminded securities-issuing institutions to be clear about the consequences of the corona crisis in half-yearly reporting following the publication of ESMA’s statement. ESMA understands that, given the current circumstances, companies need more time to produce relevant, reliable financial reporting. Nevertheless, the authority points out that publication is not unnecessarily delayed and that companies comply with their other (legal) obligations.

Importance of transparency for investors and other stakeholders
With their half-yearly financial reporting, securities-issuing companies provide current information to (potential) investors and other stakeholders. ESMA emphasizes the importance of transparency. It expects companies to be clear and specific about the current and expected effects of the corona crisis on their financial position, performance and cash flows. ESMA also expects companies to be clear about the measures they are taking to mitigate negative effects.

Internal supervision of audit committee important
ESMA also calls on audit committees of securities issuers to step up their supervisory role in financial reporting. This makes an important positive contribution to the quality of reporting.

On 26 May 2020, the European Commission published public consultation on Investment protection. 

Cross-border investments within the EU play an important role to make full use of the Single Market, mobilise private funding and provide more financing opportunities for businesses, infrastructures and projects across the European Union, as well as better choice of jobs, diversified products and services.

A favourable intra-EU investment environment, where clear rules are implemented in a coherent way, effective remedies are ensured and measures facilitating access to investment opportunities are provided, is critical to encourage people to invest across EU Member States.

With the aim of ensuring a high standard intra-EU investment climate, the Commission is assessing the current system of investment protection and facilitation within the European Union. It is therefore inviting stakeholders, and more generally EU citizens, to express their views on strengths or weaknesses of the intra-EU system, as well as possible ideas and options to improve it.

The consultation period is open until 8 September 2020.

On 15 May 2020, Council Decision (CFSP) 2020/651 of 14 May 2020 amending Decision (CFSP) 2019/797 concerning restrictive measures against cyber-attacks threatening the Union or its Member States was published in the Official Journal. 

Decision (CFSP) 2019/797 concerning restrictive measures against cyber-attacks threatening the Union or its Member States applies until 18 May 2020. The restrictive measures set out therein should be extended until 18 May 2021.

On 8 May 2020, the European Commission proposed, a three-month extension to the application of DAC6 due to the coronavirus.

In practice, this would mean for intermediaries / relevant taxpayers:
(1) a change of the date for the beginning of the period of 30 days from 1 July 2020 to 1 October 2020. For arrangements between 1 July 2020 and 30 September 2020, the period of 30 days for filing information would also begin by 1 October 2020;
(2) a change of the date for the reporting of the “historical” cross-border arrangements (25 June 2018 - 30 June 2020) from 31 August 2020 to 30 November 2020;
(3) in the case of marketable arrangements, the first periodic report would be made by 31 January 2021. 

For EU members States, the first exchange of information between them would be done by 31 January 2021 (initially 31 October 2020). It should be noted that the deferral period could be extended for up to three more months, under the proposal. The proposal would also concern an extension of the CRS deadline.

On 28 May 2020, the European Securities and Markets Authority (ESMA) updated its Questions and Answersdocument on practical questions regarding data reporting issues, under the European Markets Infrastructure Regulation (EMIR). 

The newly added Trade Repository (TR) Q&A 54 provides clarifications on reporting of OTC derivatives by a financial counterparty (FC) on behalf of a non-financial counterparty below clearing threshold (NFC-) under EMIR Refit.

In particular, the TR Q&A 54 clarifies: 

• What are the reportable details that the NFC- should provide to the FC;
• How the FC should proceed if the NFC- does not renew its LEI;
• How the FC should proceed if an NFC that has been classified as an NFC+ changes its status to NFC- and fails to timely inform the FC of this fact;
• How FC and NFC- should proceed if they report to two different trade repositories.

On 7 May 2020, the EU published Regulation (EU) 2020/605 of the European Central Bank of 9 April 2020 amending Regulation (EU) 2015/534 on reporting of supervisory financial information (ECB/2020/22) in the Official Journal.

The amendments concern an update on annexes I (Simplified supervisory financial reporting), II (Over-simplified supervisory financial reporting) , IV (FINREP data points” under IFRS or National GAAP compatible with IFRS) and V (FINREP data points” under national accounting frameworks).

1. On 28 May 2020, the European Securities and Markets Authority (ESMA) updated  its Questions and Answerson the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR).

The Q&As on MiFID II and MiFIR investor protection and intermediaries’ topics includes a new answer on ‘MiFID inducements’.

More specifically, the new Q&A provides clarification on the application of the MiFID definition of “acceptable minor non-monetary benefits”.

2. On 29 May 2020, the European Securities and Markets Authority (ESMA) updated its Questions and Answers regarding market structures and transparency issue sunder the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). 

The Q&As provide clarification on the following topics:

• the default liquidity status, SSTI and LIS thresholds of non-equity instruments;
• the publication of transactions in an aggregated form;
• the conversion of LIS/SSTI thresholds in lots [amendments to an existing ESMA Q&A]; and
• multilateral systems facilitating the execution of repurchase agreement (repo) transactions.

On 29 May 2020, the European Securities and Markets Authority (ESMA) updated its Questions and Answers regarding market structures and transparency issue sunder the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). 

The Q&As provide clarification on the following topics:

• the default liquidity status, SSTI and LIS thresholds of non-equity instruments;
• the publication of transactions in an aggregated form;
• the conversion of LIS/SSTI thresholds in lots [amendments to an existing ESMA Q&A]; and
• multilateral systems facilitating the execution of repurchase agreement (repo) transactions.

On 6 May 2020, the European Securities and Markets Authority (ESMA) approved the extension of registrations of four trade repositories (TRs) to include securities financing transactions (SFT) reporting under the Securities Financing Transactions Regulation. The TRs concerned are DTCC Derivatives Repository plc, UnaVista TRADEcho B.V., Krajowy Depozyt Papierów Warto?ciowych S.A. and REGIS-TR S.A. with effect from 7 May 2020.

All four TRs have been registered for all types of SFTs, i.e. repurchase transactions, securities or commodities lending and securities or commodities borrowing transactions, buy-sell back or sell-buy back transactions and margin lending transactions.  

The four TRs are already registered with ESMA as TRs for derivatives contracts under the European Markets Infrastructure Regulation (EMIR).

On 28 May 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on the Securitisation Regulation (Regulation 2017/2402). 

The majority of the new Q&As in this document provide clarification on different aspects of the templates contained in the draft technical standards on disclosure which are published on the website of the European Commission. In particular, the document clarifies how several specific fields in the templates should be completed, including questions which are specific to fields in the ABCP template. The document also contains clarifications addressed to securitisation repositories.

1. On 7 May 2020, the European Commission announced it has approved all requests made by 18 Member States for support with the preparation of their territorial just transition plans, which each Member State will have to draw up to get access to funding from the Just Transition Mechanism, part of the European Green Deal Investment Plan.

Under the Structural Reform Support Programme, the Commission will provide tailor-made expertise to, for example, help national and regional authorities:

• assess the social, economic and environmental impacts of the transition and outline the transition process up to 2030;
• build a dialogue among stakeholders, such as citizens, business and civil society, to reach a common vision on how to go about the transition;
• and identify actions to achieve a successful just transition. 

Commission supports Member States in their transition to a climate-neutral economy

2. On 11 May 2020, the European  Commission launched a consultation on the Strategy for smart sector integration.

In the context of the European Green Deal, this Strategy aims at facilitating the deeper decarbonisation of the European energy system, and thus of the economy, while ensuring secure and affordable energy to European citizens and businesses. It outlines how to better link the various energy sectors (electricity, gas, buildings, mobility, industry), allowing to optimize the energy system as a whole by harnessing synergies across sectors.

The strategy aims to: 

• explain the benefits and synergies enabled by better integration of the different sectors in the context of the Green Deal and a climate-neutral Europe by 2050; 
• identify the main barriers that currently prevent exploiting these benefits and synergies and that would justify additional action at European level; 
• identify a set of actions to be followed up by the Commission in order to address those barriers and foster sector integration, taking into account the subsidiarity principle.

Participants can provide feedbacks on the roadmaps from 11 May 2020 to 08 June 2020.

3. On 11 May 2020, the European Commission launched a consultation on the guidelines for trans-European Energy infrastructure.

Europe needs modern, clean, secure, future-proof and smart energy infrastructure for delivering the Green Deal. The revision of the guidelines for trans-European energy infrastructure is to ensure consistency and alignment of the EU energy infrastructure policy with the climate neutrality objective of the Green Deal. Considering new policy developments such as the accelerated take-up of renewable energy sources and smart sector integration, our infrastructure framework needs to be revised.

The revision of the TEN-E Regulation will address the new policy ambition of the European Green Deal. The Commission will deliver on this ambition and present a legislative proposal by the end of 2020. Member States and stakeholders have as well called for the revision of the guidelines to align the TEN-E policy framework with the new policy context.

Participants can provide feedbacks from 11 May 2020 to 08 June 2020.

4. On 11 May 2020, the International Capital Market Association (ICMA) issued high-level definitions for sustainable finance.

Sustainability has become a mainstream consideration for the financial sector. There is however a need for convergence on terminology among market participants and wider stakeholders.

In this publication, ICMA is proposing high-level definitions building on current market usage and existing official sector terminology for the most commonly used terms in the sustainable finance field, for example climate finance, impact finance, green finance and social finance. 

The objective is to ensure that all participants and stakeholders are using a common and transparent vocabulary. It is also designed as a contribution to other ongoing efforts in the financial industry to develop a consensus around key terms and definitions in sustainable finance.

5. On 14 May 2020, the International Securities Lending Association (ISLA) published Second Position Paper Reinforcing Global Sustainable Finance by Improving Guidance on Securities Lending,

Since the publication of the first ISLA Council for Sustainable Finance (ICSF) position paper, it has become clear that global economic recovery from the effects of the COVID-19 crisis will occur at a slow pace. The ISLA recognises that the road to a sustainable recovery, and growth thereafter, must be based upon mature, consistent and evidence-based decisions that include key stakeholders and allow for appropriate reflection.

In this second position paper, ISLA shift the debate beyond short selling to call for holistic guidance on any measures that may significantly affect sustainable securities lending, and suggest a schedule towards which stakeholders may work together. 

This guidance would serve to establish a consistent global approach to various measures that may impact upon sustainable securities lending. It would recommend that measures be evidenced based, proportional, aligned with the Principles for Sustainable Securities Lending (PSSL), involve informing the key stakeholders regularly about the market participants’ behaviour, and be subject to continuous review.

On 12 May 2020, the Financial Services and Markets Authority (FSMA) published statement addressed to investment service providers, who are given an extension until 1 September 2020 to enter the information on investment services (‘cartography’) required under MiFID due to COVID-19.

Aware that it may be difficult to collect the data required during the COVID-19 pandemic, the FSMA will not take any action against companies that do not transmit the information on investment services before 1 September 2020. As a result, the companies have this year, exceptionally, an additional period until 1 September 2020.

On 26 May 2020, Belgium published Law of 14 March 2020 on exceptional measures targeting institutions for occupational retirement provision in the context of the COVID-19 pandemic. 

The reporting obligations for the 2019 financial year can be postponed for two months:

• The annual accounts, the annual report of the board of directors and the report of the accredited statutory auditor must be sent to the FSMA no later than 31 August 2020;
• The annual accounts, the annual report, the report of the accredited statutory auditor and a document with the names and surnames of the directors and of the accredited statutory auditor (s) must be filed with the NBB by 30 September 2020 at the latest.

The decision-making process of the general assembly and the operational bodies of the IORPs can be made more flexible. It is important that these flexibilities are possible, even if the IRP statutes do not allow it.

With regard to the general assembly, the following possibilities are provided:

• The ordinary general meeting may be postponed until August 31, 2020 at the latest.
• The general meeting can be organized remotely, by videoconference for example. Physical meetings could, in principle, be organized, but in this case social distancing must of course be guaranteed;
• The board of directors can decide that members can only vote remotely, in combination or not with proxy voting.

The board of directors and the other operational bodies may, in all circumstances, take a unanimous decision in writing.

The measures apply  from 1 March 2020 to 30 September 2020.

On 28 May 2020, the Financial Services and Markets Authority (FSMA) published clarifications concerning distance contracts relating to investment services and insurance distribution in the context of COVID-19. In the context of the COVID-19 crisis, the FSMA draws the attention of financial companies to the specific regulations to be observed when providing investment services and exercising remote insurance distribution activities.

On 6 May 2020, Belgium published the Law transposing the Shareholder Rights Directive II (Directive (EU) 2017/828) (“SRDII”) in Belgium. Most provisions are immediately (or within ten days after publication) applicable. The provisions related to the identification of shareholders of listed companies become applicable as of 3 September 2020.  

Apart from transposing SRDII, the Law also makes clarifications and technical reparations to the new Companies and Associations Code and a number of other acts which were impacted by the Code. 

SRDII aims to encourage long-term shareholder engagement to ensure that decisions are made for the long-term stability of a company and take into account environmental and social issues. In that respect, several lines of measures have been taken by the European legislator and are now implemented into Belgian law.

On 28 May 2020, the Financial Services and Markets Authority (FSMA) published an update of the  circular on the obligations of issuers listed on a regulated market (Circular FSMA_2012_01). This circular comments on the obligations applicable to issuers listed on a regulated market. Certain sections of the circular have been revised due to recent regulatory developments. The changes made are mainly aimed at ensuring the compliance of the circular with the Companies and Associations Code. It also involved adapting the references made to other regulations, such as the 2020 Corporate Governance Code, the Prospectus regulation and various ESMA documents.

On 7 May 2020, the Tracfin (Traitement du renseignement et action contre les circuits financiers clandestins) published a News Letter To Professionals In The Fight Against Money Laundering And Terrorist Financing.

The letter clarifies:

• information received by Tracfin in relation to tax fraud
• typological tax credit fraud and VAT refund fraud
• Tracfin's transmissions on tax evasion
• use of Tracfin notes by the DGFIP and the DNEF
• international cooperation: significant progress in tax matters.

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Le 7 mai 2020, le Tracfin (Traitement du renseignement et action contre les circuits financiers clandestins) a publié une Lettre aux professionnels de la lutte contre le blanchiment d'argent et le financement du terrorisme.

La lettre apporte des précisions :

• les informations reçues par Tracfin en matière de fraude fiscale
• fraude typologique au crédit d'impôt et fraude au remboursement de la TVA
• Les transmissions de Tracfin sur l'évasion fiscale
• l'utilisation des notes Tracfin par la DGFIP et la DNEF
• la coopération internationale : des progrès significatifs en matière fiscale.

On 7 May 2020, the Autorité des marchés financiers (AMF) responded to questions from industry associations concerning rent waivers by SCPIs and OPCIs.

In the context of the current health crisis and following the request from the Ministry of the Economy and Finance to large property owners to cancel three months' rent for very small businesses with fewer than 10 employees affected by an administrative closure, the AMF was asked by industry associations to examine the compatibility of such a waiver with the obligation of management companies to act in the interests of investors.

In this letter, the AMF Chairman concludes that such a measure is indeed compatible with the obligation to act in the interests of unitholders.

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Le 7 mai 2020, l'Autorité des marchés financiers (AMF) a répondu aux interrogations des associations professionnelles concernant l’abandon de loyers par les SCPI et OPCI.

Dans le contexte actuel de crise sanitaire et à la suite de la demande du ministère de l’économie et des finances faite aux grands propriétaires immobiliers d’annuler trois mois de loyers pour les TPE de moins de 10 salariés touchées par une fermeture administrative, l’AMF a été sollicitée par les associations professionnelles sur la question de la compatibilité d’un tel abandon avec l’obligation d’agir dans l’intérêt des porteurs à laquelle les sociétés de gestion sont soumises.

Dans ce courrier, le président de l’AMF conclut qu’une telle mesure est bien compatible avec l’obligation d’agir dans l’intérêt des porteurs.

On 12 May 2020, Law No. 2020-546 of 11 May 2020 extending the state of health emergency and supplementing its provisions was published in the Official Journal.

The current law deals with sanitary measures,  pre-trial detention,  circulation of individuals, quarantine and the creation of an information system in order to fight against the expansion of the COVID-19 pandemic.

The state of health emergency declared by article 4 of Act No. 2020-290 of 23 March 2020 as an emergency to deal with the COVID-19 epidemic is extended until 10 July 2020 inclusive.

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Le 12 mai 2020, la loi n° 2020-546 du 11 mai 2020 prorogeant l'état d'urgence sanitaire et complétant ses dispositions a été publiée au Journal officiel.

La présente loi traite des mesures sanitaires, de la détention préventive, de la circulation des personnes, de la quarantaine et de la création d'un système d'information afin de lutter contre l'expansion de la pandémie COVID-19.

L'état d'urgence sanitaire déclaré par l'article 4 de la loi n° 2020-290 du 23 mars 2020 pour faire face à l'épidémie de COVID-19 est prolongé jusqu'au 10 juillet 2020 inclus.

On 18 May 2020, the Autorité des normes comptables (ANC) published its recommendations and observations concerning the inclusion of the consequences of the COVID-19 event in the interim financial statements and statements of financial position drawn up as from January 1, 2020. The ANC publishes : 

• Detailed document
• Synthesis.

The health crisis has led to containment measures in France and abroad, which have had serious consequences for the economy. Few companies are not experiencing extremely substantial changes in their activities.

The ANC therefore considered that it was its mission to assist companies in taking into account the consequences of the serious health and economic crisis they are going through.

Accounting is both a management tool and a communication tool. It strives to promote the relevance of the methods used to account for transactions and, through summary statements (balance sheet, income statement, notes), constitutes a common language that promotes transparency and security.

Consequently, the ANC has focused on two areas of analysis and discussion: firstly, the presentation of accounting information and secondly, the methods of accounting for transactions.

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Le 18 mai 2020, l’Autorité des normes comptables (ANC) a publié ses recommandations et ses observations relatives à la pris en compte des conséquences de l’événement COVID-19 dans les comptes et situations intermédiaires établis à compter du 1er janvier 2020.

L'ANC publie : 

• Document détaillé
• Synthèse.

La crise sanitaire a conduit à des mesures d'endiguement en France et à l'étranger, qui ont eu de graves conséquences sur l'économie. Rares sont les entreprises qui ne connaissent pas de changements extrêmement importants dans leurs activités.

L'ANC a donc considéré qu'il était de sa mission d'aider les entreprises à prendre en compte les conséquences de la grave crise sanitaire et économique qu'elles traversent.

La comptabilité est à la fois un outil de gestion et un outil de communication. Elle s'attache à promouvoir la pertinence des méthodes utilisées pour comptabiliser les opérations et constitue, à travers les états de synthèse (bilan, compte de résultat, annexe), un langage commun qui favorise la transparence et la sécurité. 

En conséquence, l'ANC s'est concentré sur deux domaines d'analyse et de discussion : d'une part, la présentation des informations comptables et, d'autre part, les méthodes de comptabilisation des transactions.

On 28 May 2020, the Tracfin (Traitement du renseignement et action contre les circuits financiers clandestins) published a Typological analysis of the main AML/CFT risks identified linked to the health and economic crisis of the COVID-19 pandemic.

Faced with the health crisis caused by the COVID-19 pandemic and the AML/CFT risks it generates, TRACFIN is mobilising to support professionals subject to the AML/CFT system and provides them with an analysis of the reports received and the main corresponding fraud and money laundering risks.

This document should enable professionals to increase their vigilance on the specific risks related to the pandemic and to specify the alert criteria to be implemented in their risk mapping.

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Le 28 mai 2020, le Tracfin (Traitement du renseignement et action contre les circuits financiers clandestins) a publié une analyse typologique des principaux risques identifiés de LAB/CFT liés à la crise sanitaire et économique de la pandémie COVID-19.

Face à la crise sanitaire provoquée par la pandémie COVID-19 et aux risques de LAB/CFT qu'elle génère, TRACFIN se mobilise pour soutenir les professionnels soumis au dispositif de LAB/CFT et leur fournir une analyse des déclarations reçues et des principaux risques de fraude et de blanchiment correspondants.

Ce document devrait permettre aux professionnels d'accroître leur vigilance sur les risques spécifiques liés à la pandémie et de préciser les critères d'alerte à mettre en œuvre dans leur cartographie des risques.

On 13 May 2020, the Commission nationale de l'informatique et des libertés (CNIL) published its GDPR register.

The register of processing activities is provided for in Article 30 of the GDPR. It is an essential part of the documentation required for pilotage and for demonstrating compliance with the GDPR.

Its establishment enables the Data Protection Officer or the focal point on these matters within a public or private body :

• to list the personal data processing operations implemented under the responsibility of this body;
• to ask themselves the right questions, with the different professions of the organization, on the objectives of the files set up, the minimization of the data collected, their sensitivity, their conditions of conservation, their recipients, and to evaluate the risks;
• to gather the information necessary to inform the persons identified in the organization's data processing operations;
• to define a "GDPR compliance" action plan.

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Le 17 mai 2020, la Commission nationale de l'informatique et des libertés (CNIL) a publié son registre RGPD.

Le registre des activités de traitement est prévu par l’article 30 du RGPD. Il constitue un élément essentiel de la documentation nécessaire au pilotage et à la démonstration de sa conformité au RGPD.

Son élaboration permet au délégué à la protection des données ou au référent sur ces questions au sein d’un organisme public ou privé :

• de recenser les traitements de données personnelles mis en œuvre sous la responsabilité de cet organisme ;
• de se poser les bonnes questions, avec les différents métiers de l’organisme, sur les objectifs des fichiers mis en place, la minimisation des données recueillies, leur sensibilité, leurs conditions de conservation, leurs destinataires, et d’évaluer les risques ;
• de rassembler les informations nécessaires à l’information des personnes identifiées dans les traitements de données de l’organisme ;
• de définir un plan d’action « conformité RGPD ».

On 25 May 2020, the Association Française des Marchés Financiers (Amafi) published its answer to the consultation on Amendment project of AMF position DOC-2009-29 on Mechanism for verifying the minimum level of knowledge of market participants.

Following AMF's work to improve the quality of its professional certification system, the Authority proposes to update its AMF Position DOC-2009-29 setting out the questions and answers on the system for verifying the minimum level of knowledge of market participants.

AMAFI fully supports the AMF's objective of updating this Position in the form of Q&A, which is a useful and practical tool for the appropriation of the Authority's doctrine. In particular, AMAFI welcomes the effort to summarise Instruction DOC-2010-09 added to the first part of the Position. In general, the amended draft does not call for any comment from AMAFI.

Nevertheless, the association wished to propose a few additional textual references in the body of the Position and, on the substance, a supplement in a question-answer relating to the persons concerned by the obligation to verify minimum knowledge. AMAFI's comments do not concern developments relating to management companies or FIAs.

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Le 25 mai 2020, l'Association Française des Marchés Financiers (Amafi) a publié sa réponse à la consultation sur le projet d'amendement de la position DOC-2009-29 de l'AMF sur le mécanisme de vérification du niveau minimum de connaissance des acteurs du marché.

Suite aux travaux de l'AMF visant à améliorer la qualité de son système de certification professionnelle, l'Autorité propose d'actualiser sa Position AMF DOC-2009-29 qui présente les questions-réponses sur le dispositif de vérification du niveau minimal de connaissance des acteurs de marché.

L'AMAFI soutient pleinement l'objectif de l'AMF d'actualiser cette Position sous forme de questions-réponses, qui constitue un outil utile et pratique pour l'appropriation de la doctrine de l'Autorité. En particulier, l'AMAFI se félicite de l'effort de synthèse de l'instruction DOC-2010-09 ajoutée à la première partie de la Position. D'une manière générale, le projet modifié n'appelle aucun commentaire de la part de l'AMAFI.

Néanmoins, l'association a souhaité proposer quelques références textuelles supplémentaires dans le corps de la Position et, sur le fond, un complément dans une question-réponse relative aux personnes concernées par l'obligation de vérification des connaissances minimales. Les commentaires de l'AMAFI ne concernent pas les développements relatifs aux sociétés de gestion ou aux FIA.

On 5 May 2020, the Autorité des marchés financiers (AMF) presented the main indexes available in France on equity markets.

The article provides for an overview of main stock markets in France and indices.

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Le 5 mai 2020, l'Autorité des marchés financiers (AMF) a fourni les principaux indices français sur les marchés boursiers.

L'article donne un aperçu des principales places boursières françaises et des indices.

On 15 April 2020, the Association Française de Gestion (AFG) commented on ESMA guidelines on UCITS and AIFs ' performance fees.
The AFG believes that most of the ESMA guidelines are useful indications to ensure that the models used in the various European countries meet the objective of aligning the interests of the fund and its investors.
However, the ESMA guidelines go too far by imposing a single model based on a reference period of at least 5 years, without any real prior impact study at European level. Imposing such a time horizon without any distinction of asset class, strategy or recommended holding period is likely to jeopardise the virtuous models existing in other European countries, such as France, probably prompting their managers to abandon them in favour of higher fixed costs. 
The association believes that one of the main objectives of the regulator's work should be to maintain a viable fee model that can be based on performance fees. This model would make it possible to strengthen the alignment of interests between investors and management companies by sharing profits when results are satisfactory or by charging lower fixed fees when results are not.
In light of the above analysis, the AFG, exceptionally, is in favour of partial application of these guidelines, i.e. maintaining most of its provisions, but asks that the application of an observation period of at least five years be optional rather than mandatory.

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Le 15 avril 2020, l'Association française de gestion (AFG) a commenté les lignes directrices de l'AEMF sur les commissions de performance des OPCVM et des fonds alternatifs.
L'AFG estime que la plupart des lignes directrices de l'ESMA sont des indications utiles pour s'assurer que les modèles utilisés dans les différents pays européens répondent à l'objectif d'alignement des intérêts du fonds et de ses investisseurs.
Cependant, les lignes directrices de l'ESMA vont trop loin en imposant un modèle unique basé sur une période de référence d'au moins 5 ans, sans véritable étude d'impact préalable au niveau européen. Imposer un tel horizon temporel sans distinction de classe d'actifs, de stratégie ou de période de détention recommandée risque de mettre en péril les modèles vertueux existant dans d'autres pays européens, comme la France, ce qui incitera probablement leurs gestionnaires à les abandonner au profit de coûts fixes plus élevés. 
L'association estime que l'un des principaux objectifs du travail du régulateur devrait être de maintenir un modèle de frais viable qui puisse être basé sur des commissions de performance. Ce modèle permettrait de renforcer l'alignement des intérêts entre les investisseurs et les sociétés de gestion en partageant les bénéfices lorsque les résultats sont satisfaisants ou en facturant des frais fixes moins élevés lorsque les résultats ne le sont pas.Au vu de l'analyse qui précède, l'AFG est exceptionnellement favorable à une application partielle de ces lignes directrices, c'est-à-dire au maintien de la plupart de ses dispositions, mais demande que l'application d'une période d'observation d'au moins cinq ans soit facultative plutôt qu'obligatoire.

On 30 April 2020, Decree No. 2020-493 of 28 April 2020 establishing the list of collective investments whose management is exempt from value added tax pursuant to Article 33 of Law No. 2019-1479 of 28 December 2019 was published in the Official Journal.
The decree lists collective investments whose management benefits from an exemption from value added tax in application of of 1° of article 261 C of the General Tax Code (CGI).

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Le 30 avril 2020, le Décret n° 2020-493 du 28 avril 2020 fixant la liste des placements collectifs dont la gestion est exonérée de la taxe sur la valeur ajoutée en application de l’article 33 de la loi n° 2019-1479 du 28 décembre 2019 a été publié au Journal Officiel.
Le décret énumère les placements collectifs dont la gestion bénéficie d'une exonération de la taxe sur la valeur ajoutée en application du 1° de l'article 261 C du Code général des impôts (CGI).

On 29 May 2020, the Système unifié de rapport financier (e-surfi) published the modalities for the transmission of the activity report to be submitted by branches of establishments having their registered office in another EU Member State or party to the EEA Agreement.

Branches of institutions having their registered office in another Member State of the European Union or party to the Agreement on the European Economic Area shall submit to the ACPR a report on their activity in electronic form via the ONEGATE portal.

A specific office automation report entitled "RCIRAPPORTACTIVITY" is available in Onegate under the RCI (Internal Control Report and Related Documents) domain in order to report this information. The period open on the Onegate portal for the submission of this report during the year 2020 is 12/2019.

With regard to the measures to make the submission of this report more flexible in view of the health crisis related to COVID-19, esurfi informs that this report, initially to be submitted by May 31 of each year according to Instruction No. 2019-I-24, will be due no later than August 24, 2020 for the 2019 fiscal year, in accordance with the communication published on the ACPR website.

The list of expected reports, their description and the corresponding regulatory references has been updated and added to the technical documentation published on the e-surfi website.

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Le 29 mai 2020, le Système unifié de rapport financier (e-surfi) a publié les modalités de transmission du rapport d'activité à soumettre par les succursales d'établissements ayant leur siège social dans un autre État membre de l'UE ou partie à l'accord EEE.

Les succursales d'établissements ayant leur siège social dans un autre État membre de l'Union européenne ou partie à l'accord sur l'Espace économique européen doivent soumettre à la CCAM un rapport d'activité sous forme électronique via le portail ONEGATE.

Un rapport bureautique spécifique intitulé "RCIRAPPORTACTIVITÉ" est disponible dans Onegate sous le domaine RCI (Rapport de contrôle interne et documents connexes) afin de rapporter ces informations. La période ouverte sur le portail Onegate pour la soumission de ce rapport au cours de l'année 2020 est le 12/2019.

En ce qui concerne les mesures visant à assouplir la soumission de ce rapport compte tenu de la crise sanitaire liée à la COVID-19, l'esurfi informe que ce rapport, qui doit initialement être soumis au 31 mai de chaque année conformément à l'instruction n° 2019-I-24, sera dû au plus tard le 24 août 2020 pour l'exercice 2019, conformément à la communication publiée sur le site web de la CCAR.

La liste des rapports attendus, leur description et les références réglementaires correspondantes ont été mises à jour et ajoutées à la documentation technique publiée sur le site web e-surfi.

On 28 April 2020, the Autorité des marchés financiers (AMF) proposed several targeted measures concerning shareholder activism.
France saw unprecedented debate in 2019 on the behaviour of "activist" funds and the need to govern such practices better. As regulator, and following on from the public reports on this subject, the AMF proposes a number of targeted measures to enhance transparency for the market and dialogue between issuers and shareholders.The active involvement of shareholders in the life of listed companies is a necessary condition for their proper functioning and sound governance. In this respect, the AMF considers that it should be encouraged. For the regulator, the challenge therefore is not how to prevent activism, but how to set limits and make sure that it is able to control excesses.
 The aim of the AMF proposals is to:

• enhance transparency on stake-building and knowledge of the shareholder structure, by lowering the first legal notification threshold and making public any statutory threshold crossing reported to the company;
• ensure better information for the market regarding investors’ financial exposure, by supplementing the reporting on net short positions by information on the debt instruments also held by the investor (bonds and credit default swaps, for example). The AMF will support such proposals on the European level;
• foster an open, loyal dialogue between listed companies and their shareholders: the AMF will supplement its guide on ongoing information and management of inside information to include certain developments on shareholder dialogue. It will add to its policy to specify that, subject to compliance with the rules on market abuse, issuers may provide the market with any necessary information in reply to public statements concerning them, even during "quiet periods". It will also recommend that any shareholder who initiates a public campaign should immediately disclose to the issuer in question the material information that it would send to the other shareholders;
• increase the analysis and response capabilities of the AMF to enable swift and appropriate answers when the circumstances so require: for example, via the introduction of a power to impose fines with regard to administrative injunctions and the possibility to order any investor, and no longer only an issuer, to make corrective or supplementary publications if errors or omissions have been identified in its public statements.

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Le 28 avril 2020, l'Autorité des marchés financiers (AMF) a proposé plusieurs mesures ciblées concernant l'activisme actionnarial.
La France a connu en 2019 un débat sans précédent sur le comportement des fonds "activistes" et la nécessité de mieux encadrer ces pratiques. En tant que régulateur, et dans le prolongement des rapports publics sur ce sujet, l'AMF propose un certain nombre de mesures ciblées pour renforcer la transparence du marché et le dialogue entre les émetteurs et les actionnaires.L'implication active des actionnaires dans la vie des sociétés cotées est une condition nécessaire à leur bon fonctionnement et à une bonne gouvernance. A cet égard, l'AMF considère qu'elle doit être encouragée. Pour le régulateur, l'enjeu n'est donc pas de prévenir l'activisme, mais de fixer des limites et de s'assurer qu'il est en mesure de contrôler les excès.
 L'objectif des propositions de l'AMF est de :

• améliorer la transparence sur la prise de participation et la connaissance de la structure de l'actionnariat, en abaissant le premier seuil légal de notification et en rendant public tout franchissement de seuil statutaire déclaré à la société ;
• assurer une meilleure information du marché sur l'exposition financière des investisseurs, en complétant la déclaration des positions courtes nettes par une information sur les titres de créance également détenus par l'investisseur (obligations et credit default swaps, par exemple). L'AMF soutiendra de telles propositions au niveau européen ;
• favoriser un dialogue ouvert et loyal entre les sociétés cotées et leurs actionnaires : l'AMF complétera son guide sur l'information permanente et la gestion de l'information privilégiée par certains développements sur le dialogue avec les actionnaires. Elle complétera sa politique en précisant que, sous réserve du respect des règles relatives aux abus de marché, les émetteurs peuvent fournir au marché toute information nécessaire en réponse aux déclarations publiques les concernant, même pendant les "quiet periods". Elle recommandera également que tout actionnaire qui lance une campagne publique communique immédiatement à l'émetteur en question les informations importantes qu'il enverrait aux autres actionnaires ;
• de renforcer les capacités d'analyse et de réaction de l'AMF pour permettre des réponses rapides et appropriées lorsque les circonstances l'exigent : par exemple, par l'introduction d'un pouvoir d'infliger des amendes en matière d'injonctions administratives et la possibilité d'ordonner à tout investisseur, et non plus seulement à un émetteur, de procéder à des publications correctives ou complémentaires si des erreurs ou des omissions ont été identifiées dans ses déclarations publiques.

On 17 May 2020, Decree of 11 May 2020 approving amendments to the General Regulation of the Autorité des marchés financiers was published in the Official Journal.

The decree approves amendments made to the General Regulation of the AMF concerning:

• EEA: references to the Member States of the European Union and to the European Union shall be understood to include the States party to the Agreement on the European Economic Area; 
• clarifications of the constitutive documents of the SICAV (Open-ended investment company) and UCITS: when one of the items in the constitutional documents of the similar SICAV differs from that of the reference UCITS or general-purpose investment fund or when, pursuant to the second paragraph of Article L. 214-24-33 of the Monetary and Financial Code, the SICAV results from the demerger of a SICAV that has already been authorised by the AMF, this is clearly identified in the authorisation file of the similar SICAV in accordance with the terms and conditions specified in an AMF instruction.

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Le 17 mai 2020, l'Arrêté du 11 mai 2020 portant homologation de modifications du règlement général de l’Autorité des marchés financiers a été publié au Journal officiel.

L'arrêté homologue les modifications du règlement général de l’AMF concernant:

• EEE : les références aux Etats membres de l’Union européenne et à l’Union européenne doivent s’entendre comme incluant les Etats parties à l’accord sur l’Espace économique européen
• précisions sur les documents constitutifs de la SICAV (société d'investissement à capital variable) et des OPCVM : lorsque l’un des éléments des documents constitutifs de la SICAV analogue diffère de celui de l’OPCVM ou du fonds d’investissement à vocation générale de référence ou lorsque, en application du deuxième alinéa de l’article L. 214-24-33 du code monétaire et financier, cette SICAV résulte de la scission d’une SICAV déjà agréée par l’AMF, cela est clairement identifié dans le dossier d’agrément de la SICAV analogue selon des modalités précisées par une instruction de l’AMF.

On 7 May 2020, Decree of 6 May 2020 amending the Decree of 23 March 2020 granting the State guarantee to credit institutions and finance companies pursuant to Article 6 of the amended Finance Act 2020-289 for 2020 was published in the Official Journal.

The current decree targets credit institutions, finance companies, lenders mentioned in Article L. 548-1 of the Monetary and Financial Code and intermediaries in equity financing on their behalf, for loans granted to companies.

It amends the decree of 23 March 2020 granting a State guarantee to credit institutions and finance companies pursuant to Article 6 of the amended Finance Act 2020-289 for 2020.

As a main point, this decree extends the scope of the State guarantee to loans intermediated by intermediaries in participatory financing and to loans granted to various forms of real estate non-trading companies, it reduces the exclusion under collective procedures to only those procedures opened before 31 December 2019 and not yet closed at the time of granting a loan, and it clarifies the fact that the State guarantee remains attached to the loan in case of mobilization of the latter in the context of monetary operations central banks.

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Le 7 mai 2020, l'Arrêté du 6 mai 2020 portant modification de l’arrêté du 23 mars 2020 accordant la garantie de l’Etat aux établissements de crédit et sociétés de financement en application de l’article 6 de la loi no 2020-289 de finances rectificative pour 2020 a été publié au Journal Officiel.

La présent arrêté cible les établissements de crédit, sociétés de financement, prêteurs mentionnés à l’article L. 548-1 du code monétaire et financier et intermédiaires en financement participatif pour le compte de ces derniers, pour les prêts consentis à des entreprises.

Il modifie de l’arrêté du 23 mars 2020 accordant la garantie de l’Etat aux établissements de crédit et sociétés de financement en application de l’article 6 de la loi no 2020-289 de finances rectificative pour 2020.

A titre principal, cet arrêté étend le champs de la garantie de l’Etat aux prêts intermédiés par des intermédiaires en financement participatif et aux prêts octroyés à diverses formes de sociétés civiles immobilières, il ramène l’exclusion au titre des procédures collectives aux seules procédures ouvertes avant le 31 décembre 2019 (inclus) et non encore closes au moment de l’octroi d’un prêt, et il explicite le fait que la garantie de l’Etat reste attachée au prêt en cas de mobilisation de celui-ci dans le cadre d’opérations monétaires banques centrales.

On 7 May 2020, the Autorité des marchés financiers (AMF)  updated its doctrine with regard to PACTE law on Cantonment or side-pocket funds.

Following the PACTE law, the regulator updates its doctrine in order to take into account the impacts of legislative and regulatory changes, including recent changes to the AMF general regulations, relating to cantonment funds.

The old system consisted of splitting and then liquidating the initial UCI while creating two new UCIs:

• a replica UCI intended to receive sound assets and allowing the management company to continue to manage it normally;
• a side-pocket in the form of specialized professional funds intended to confine illiquid assets. From its creation, this side-pocket was the object of an extinctive management, consisting for the management company in liquidating the assets over the water when the market conditions allow it, and until emptying it completely.
• Updating with regard to PACTE Law
  In addition to updating the relevant provisions of position-recommendation DOC-2011-25, instruction DOC-2011-19 and instruction DOC-2011-20, provisions on side-pockets have been added to the within instructions DOC-2011-21, DOC-2011-22 and DOC-2012-06. Plus, the procedures for approving a private equity fund by analogy were included in Instruction DOC-2011-22.

The updated documents are as follows:

• Instruction DOC-2011-19 - Approval procedure, establishment of a KIID and prospectus and periodic information of French UCITS and foreign UCITS marketed in France;
• Instruction DOC-2011-20 - Approval procedures, establishment of a KIID and a prospectus and periodic information on general purpose investment funds, alternative funds of funds and general purpose professional funds;
• Instruction DOC-2011-21 - Approval procedures, establishment of a KIID and a prospectus and periodic information of employee savings funds;
• Instruction DOC-2011-22 - Approval procedures, establishment of a KIID and regulations and periodic information for private equity funds;
• The position-recommendation DOC- 2011-25- Guide to mutual fund monitoring.

Simplification of the procedure

• For UCITS and approved AIFs
  Within the framework of the new system, in addition to declaring the demerger to the AMF, the management companies send the AMF a request for approval by analogy of the new UCITS or AIF and a request for approval for the liquidation of the UCITS or the split AIF. In order to avoid sending 3 separate forms to the AMF, the procedure has been simplified by creating a single form (appended to the instructions) which combines the declaration of the demerger, the application for approval by analogy of the new UCITS or FIA as well as the request for authorization to enter into liquidation of the UCITS or the split AIF.
• For declared AIFs
  Similarly, a single form is provided in the appendix to instruction DOC-2012-06. It combines the declaration of the split, the declaration of the new AIF and the declaration of the entry into liquidation of the split AIF.

Version française

Le 7 mai 2020, l'Autorité des marchés financiers (AMF) a mis à jour sa doctrine au regard des textes PACTE sur les Fonds de cantonnement ou side-pocket.

A la suite de la loi PACTE, le régulateur met à jour sa doctrine de prendre en compte les impacts des modifications législatives et réglementaires, y compris les modifications récentes du règlement général de l’AMF, relaves aux fonds de cantonnement.

L’ancien dispositif consistait à scinder puis à liquider l’OPC initial tout en créant deux nouveaux OPC :

• un OPC réplique destiné à recevoir les actifs sains et permettant à la société de gestion de continuer à le gérer normalement ;
• une side-pocket sous forme de fonds professionnel spécialisé destinée à cantonner les actifs illiquides. Dès sa création, cette side-pocket faisait l’objet d’une gestion extinctive, consistant pour la société de gestion à liquider au fil de l’eau les actifs lorsque les conditions de marché le permettent, et ce jusqu’à la vider totalement.
• Actualisation au regard des textes PACTE

Outre la mise à jour des dispositions concernées de la position-recommandation DOC-2011-25, de l’instruction DOC-2011-19 et de l’instruction DOC-2011-20, des dispositions sur les side-pockets ont été ajoutées au sein des instructions DOC-2011-21, DOC-2011-22 et DOC-2012-06. Par ailleurs, les modalités d’agrément par analogie d’un fonds de capital investissement ont été insérées au sein de l’instruction DOC-2011-22.

Les documents mis à jour sont ainsi les suivants :

• L’instruction DOC-2011-19 - Procédure d’agrément, établissement d’un DICI et prospectus et information périodique des OPCVM français et des OPCVM étrangers commercialisés en France ;
• L’instruction DOC-2011-20 - Procédures d’agrément, établissement d’un DICI et d’un prospectus et information périodique des fonds d’investissement à vocation générale, fonds de fonds alternatifs et fonds professionnels à vocation générale ;
• L’instruction DOC-2011-21 - Procédures d'agrément, établissement d'un DICI et d'un prospectus et information périodique des fonds d'épargne salariale ;
• L’instruction DOC-2011-22 - Procédures d’agrément, établissement d’un DICI et d’un règlement et information périodique des fonds de capital investissement ;
• L’instruction DOC-2012-06 - Modalités de déclaration, de modifications, établissement d’un prospectus et informations périodiques des fonds professionnels spécialisés, des fonds professionnels de capital investissement et des organismes de financement spécialisé ;
• La position-recommandation DOC- 2011-25- Guide du suivi des OPC.

Simplification de la procédure

• Pour les OPCVM et les FIA agréés :
  Dans le cadre du nouveau dispositif, outre la déclaration de la scission à l’AMF, les sociétés de gestion adressent à l’AMF une demande d’agrément par analogie du nouvel OPCVM ou FIA et une demande d’agrément pour la mise en liquidation de l’OPCVM ou du FIA scindé. Afin d’éviter l’envoi à l’AMF de 3 formulaires distincts, la procédure a été simplifiée en créant un formulaire unique (annexé aux instructions) qui regroupe la déclaration de la scission, la demande d’agrément par analogie du nouvel OPCVM ou FIA ainsi que la demande d’agrément pour l’entrée en liquidation de l’OPCVM ou du FIA scindé.
• Pour les FIA déclarés :
  De la même manière, un formulaire unique est prévu en annexe de l’instruction DOC-2012-06. Il regroupe la déclaration de la scission, la déclaration du nouveau FIA et la déclaration de l’entrée en liquidation du FIA scindé.

On 29 May 2020, the Autorité des marchés financiers (AMF) published the results of Legibility study of the documentation on fees related to equities and funds. 

The AMF conducted a qualitative study among retail investors to assess the clarity of the information provided about fees on direct investments in securities or investments via collective undertakings. 

The aim of the study is to:

• Analyse the knowledge of “average” investors regarding fees related to equities and funds
• Evaluate the contribution and effects of the information documents now available to them
• Collect investors’ perceptions regarding these documents, to verify their clarity and explanations.

Version française

Le 29 mai 2020, l'AMF a publié les résultats de l'étude de lisibilité de la documentation sur les frais liés aux actions et aux fonds.

L'AMF a mené une étude qualitative auprès des investisseurs particuliers afin d'évaluer la clarté de l'information fournie sur les frais relatifs aux investissements directs en valeurs mobilières ou aux investissements via des organismes de placement collectif.

L'objectif de l'étude est le suivant :

• Analyser les connaissances des investisseurs "moyens" sur les frais liés aux actions et aux fonds
• Évaluer la contribution et les effets des documents d'information qui leur sont désormais accessibles
• Recueillir les perceptions des investisseurs concernant ces documents, afin de vérifier leur clarté et leurs explications.

On 19 May 2020, the Association Française des Marchés Financiers (Amafi) published its answer to the EC consultation on MiFID II/MiFIR Refit.

The massive financing needs that have emerged as a result of the COVID-19 crisis require to amend these legislations quickly to ease the Union’s economic recovery. The association considers the scope of issues should be broadened and encourages the European Commission to also consider reviewing investment research rules for SMEs and to include the Share Trading Obligation and the Derivative Trading Obligation in a Brexit context.

Taking into account the necessity to relaunch the CMU project, AMAFI believes that the review of MiFID II/MiFIR should aim at achieving two main objectives:

• Ensure EU-27 financial markets have the capacity to contribute to the financing of the EU economy, so it does not exclusively rely on third country resources in terms of expertise, capital and liquidity. It requires to preserve and to strengthen the competitiveness of financial market actors operating in the EU-27;
• Introduce more proportionality to better reflect the specificities of the wholesale market and of the most simple products (such as ordinary shares and bonds that directly finance the economy) for which a better integration at EU level is critical and should take place in the short term.

Version française

Le 19 mai 2020, l'Association Française des Marchés Financiers (Amafi) a publié sa réponse à la consultation de la CE sur la refonte de la MiFID II/MiFIR.

Les besoins de financement massifs qui sont apparus suite à la crise de la COVID-19 nécessitent de modifier rapidement ces législations pour faciliter la reprise économique de l'Union. L'association estime que le champ des questions devrait être élargi et encourage la Commission européenne à envisager également de revoir les règles de recherche en matière d'investissement pour les PME et d'inclure l'obligation de négociation d'actions et l'obligation de négociation de produits dérivés dans un contexte Brexit.

Compte tenu de la nécessité de relancer le projet CMU, l'AMAFI estime que la révision de la MiFID II/MiFIR devrait viser à atteindre deux objectifs principaux :

• Faire en sorte que les marchés financiers de l'UE-27 aient la capacité de contribuer au financement de l'économie de l'UE, afin qu'elle ne dépende pas exclusivement des ressources de pays tiers en termes d'expertise, de capitaux et de liquidités. Il faut pour cela préserver et renforcer la compétitivité des acteurs des marchés financiers opérant dans l'UE-27 ;
• Introduire une plus grande proportionnalité afin de mieux refléter les spécificités du marché de gros et des produits les plus simples (tels que les actions ordinaires et les obligations qui financent directement l'économie) pour lesquels une meilleure intégration au niveau de l'UE est essentielle et devrait avoir lieu à court terme.

On 5 May 2020, the Autorité des marchés financiers (AMF) announced it was compliant  with ESMA's guidelines on stress testing scenarios for money market funds and is updating its guidance position DOC-2018-05 accordingly.

In particular, the results of the stress test scenarios are to be used for management companies' disclosures to the AMF required by EU Regulation 2017/1131 ("MMF Regulation").

ESMA guidelines will be updated at least once a year in light of the latest market developments. In this case, the ESMA guidelines published on 3 March 2020 are based on data calibrated in 2019. The AMF therefore considers that these guidelines will have to be thoroughly reviewed to take into account recent events affecting financial markets.

Since these guidelines cannot immediately incorporate the lessons learned from these recent events, the AMF is complying with the ESMA guidelines by updating its position DOC-2018-05, but calls for a rapid update of these guidelines at the European level. In addition to an update in the calibration of parameters, the AMF believes that structural changes in the proposed scenarios are necessary in order to better identify possible events or future changes in economic conditions that could have an adverse effect on money market funds.

Clarifications on the limits of the common parameters

The AMF draws the attention of asset management companies to these guidelines, which now contain the common parameters that must be used to produce the stress test results that must be submitted as part of the regulatory reporting requirements under Article 37 of the MMF Regulation. As stated in question 28 of the AMF’s MMF educational guide and in accordance with §49 of the above-mentioned guidelines, the AMF points out that since the scenarios developed on the basis of reference parameters published by ESMA are common to all funds, they are not necessarily adapted to the portfolio of each money market fund.

Management companies must therefore ensure that they develop their own stress test scenarios, with appropriate frequency and monitoring, within the framework of Article 28 of the MMF Regulation, as well as the more general obligation to conduct market stress and liquidity tests as part of risk management.

Version française

Le 5 mai 2020, l'Autorité des marchés financiers (AMF) a annoncé être en conformité avec les lignes directrices de l''ESMA sur les scénarios de simulation de crise pour les fonds monétaires et qu'elle met en conséquence à jour sa position DOC-2018-05. 

Les résultats des scénarios de ces simulations de crise doivent notamment être utilisés pour les déclarations des sociétés de gestion à l’AMF requises par le règlement (UE) 2017/1131 (« Règlement MMF »).

Ces orientations seront actualisées une fois par an au moins à la lumière des derniers développements sur les marchés. En l’occurrence, les orientations de l’ESMA publiées le 3 mars 2020 sont basées sur des données étalonnées en 2019. A ce titre, l’AMF considère que ces orientations devront être profondément revues pour prendre en compte les évènements récents ayant affecté les marchés financiers.

Faute de pouvoir intégrer immédiatement les enseignements de ces récents évènements dans ces orientations, l’AMF se conforme à ces orientations de l’ESMA via une mise à jour de sa position AMF DOC-2018-05 mais appelle de ses vœux une mise à jour rapide de ces orientations au niveau européen qui tirerait parti des récents évènements de marché. Au-delà d’une mise à jour dans l’étalonnage des paramètres, l’AMF estime que des changements structurels dans les scénarios proposés sont nécessaires afin de permettre de mieux identifier les éventuels évènements ou futurs changements de conditions économiques susceptibles d’avoir un effet défavorable sur les fonds monétaires.

Précisions sur les limites des paramètres communs

L’AMF attire l’attention des sociétés de gestion de portefeuille sur ces orientations qui contiennent désormais les paramètres communs qui doivent être utilisés pour la production des résultats au stress-tests devant être remis dans le cadre des obligations de reporting réglementaire prévu par l’article 37 du Règlement MMF. L’AMF rappelle en outre que, comme précisé par la question 28 du guide pédagogique MMF et conformément au §49 des orientations précitées, les scénarios élaborés sur la base de paramètres de référence publiés par l’ESMA étant communs à l’ensemble des fonds, ils ne sont pas nécessairement adaptés au portefeuille de chaque fonds monétaire.

Les sociétés de gestion doivent donc veiller à développer leurs propres scénarios de simulation de crise, avec une fréquence et un suivi adapté, dans le cadre de l’article 28 du règlement MMF, ainsi que de l’obligation plus générale d’effectuer des tests de résistance de marché et de liquidité dans le cadre de la gestion des risques.

On 31 May 2020, Decree No. 2020-658 of 30 May 2020 on various adjustments to general savings products with specific tax treatment was published in the Official Journal.

The decree extends the period of time available to savers to provide proof that they are eligible for the people's savings passbook account. In addition, this decree ensures that the name "livret de développement durable et solidaire" is updated in all regulatory texts. The purpose of the decree is to adapt certain maturities relating to the popular savings account to the current crisis context and to clarify certain provisions relating to accounts based on sustainable and solidarity-based development passbooks.

Notwithstanding the provisions of Article R. 221-38 of the Monetary and Financial Code, for the year 2020 :

1. When the holder of a working class's savings account ceases to meet the conditions laid down by law to benefit from it and is required to request its closure in 2020 pursuant to the first paragraph of the aforementioned article, he or she shall request its closure by 30 September at the latest;
2. Institutions depositing accounts in people's savings books are required to automatically close by September 30 the accounts for which the required annual justifications have not been produced for the previous year or the current year.

Version française

Le 31 mai 2020, le Décret n°2020-658 du 30 mai 2020 portant diverses adaptations des produits d’épargne générale à régime fiscal spécifique a été publié au Journal officiel.

Ce décret prolonge la durée dont disposent les épargnants pour apporter la preuve qu’ils sont éligibles au compte sur livret d’épargne populaire. Par ailleurs, le présent décret s’assure que la dénomination « livret de développement durable et solidaire » soit mise à jour dans tous les textes réglementaires. L’objectif de ce décret est d’adapter certaines échéances relatives au livret d’épargne populaire au contexte de crise actuel et clarification de certaines dispositions relatives aux comptes sur livret de développement durable et solidaire.

Nonobstant les dispositions de l’article R. 221-38 du code monétaire et financier, pour l’année 2020 : 

1. Lorsque le titulaire d’un compte sur livret d’épargne populaire cesse de remplir les conditions fixées par la loi pour en bénéficier et qu’il est tenu d’en demander la clôture en 2020 en application du premier alinéa de l’article précité, il en demande la clôture au plus tard le 30 septembre ;
2. Les établissements dépositaires de comptes sur livret d’épargne populaire sont tenus de solder d’office au 30 septembre les comptes pour lesquels les justifications annuelles requises n’ont été produites ni pour l’année précédente ni pour l’année en cours.

On 3 May 2020, the Autorité des marchés financiers (AMF) reminded the fundamental right of shareholders to cast their vote at general meetings.

Prior to the holding of general meetings, some of which may give rise to heated disputes, the AMF recalls the fundamental right of shareholders to cast their vote at general meetings, the nature of which is of public order has been recalled by the case law and which must be exercised in accordance with the principle of equality of shareholders.

If a shareholder dialogue, and in particular exchanges between the social leaders (or their agents) of an issuer and the shareholders, can naturally take place before a general meeting, such steps could not result in pressures of a nature to compromise the sincerity of the vote or hinder the free expression of the shareholders' vote, or intervene in violation of regulation (EU) n ° 596/2014 of April 16, 2014 on market abuse.

It is recalled that under article L. 242-9 of the French Commercial Code, it is an offense to prevent a shareholder from participating in a shareholders' meeting as well as being granted, guaranteed or promise advantages to vote in a certain way or not to participate in the vote, as well as grant, guarantee or promise these advantages.

Version française

Le 3 mai 2020, l'Autorité des marchés financiers (AMF) a rappelé le droit fondamental des actionnaires d’exprimer leur vote en assemblée générale.

En amont de la tenue d’assemblées générales, dont certaines peuvent donner lieu à de vives contestations, l’AMF rappelle le droit fondamental des actionnaires d’exprimer leur vote en assemblée générale, dont le caractère d'ordre public a été rappelé par la jurisprudence et qui doit s’exercer dans le respect du principe d’égalité des actionnaires.

Si un dialogue actionnarial, et notamment des échanges entre les dirigeants sociaux (ou leurs mandataires) d’un émetteur et des actionnaires, peut naturellement intervenir en amont d’une assemblée générale, de telles démarches ne sauraient se traduire par des pressions de nature à compromettre la sincérité du vote ou à entraver la libre expression du vote des actionnaires, ou intervenir en violation du règlement (UE) n° 596/2014 du 16 avril 2014 sur les abus de marché.

Il est rappelé qu’aux termes de l’article L. 242-9 du code de commerce, constituent un délit le fait d'empêcher un actionnaire de participer à une assemblée d'actionnaires ainsi que le fait de se faire accorder, garantir ou promettre des avantages pour voter dans un certain sens ou pour ne pas participer au vote, ainsi que le fait d'accorder, garantir ou promettre ces avantages.

On 4 May 2020, the Autorité des marchés financiers (AMF) clarified Stock Exchange notions concerning joint securities account pursuant legal decision.

Any natural person authorised to issue a purchase order within the framework of an open-price offer (OPO) and holder of a securities account allowing the purchase of shares must be able to place his order with his financial intermediary.

This is also the case for each individual holding a joint securities account.

A special feature of a joint account is that it has several holders. As such, in the context of a joint securities account, it should be possible to place two separate orders in the context of an OPO, one for each natural person who is the holder and who is authorised to issue an order in the context of an OPO (it should be noted that these are ordinary securities accounts, and that a PEA cannot be a joint securities account).

However, for financial intermediaries whose platform is not equipped with this technical method, the investigating judge strongly recommends that joint account holders be informed beforehand, either in the account agreement or at least before any OPO.

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Le 4 mai 2020, l'Autorité des marchés financiers (AMF) a clarifié les notions de Bourse concernant les compte-titres joints.

Toute personne physique habilitée à émettre un ordre d’achat dans le cadre d’une ore à prix ouvert (OPO) et titulaire d’un compte-titres permettant l’achat d’acons doit pouvoir passer son ordre auprès de son intermédiaire financier.

Tel est également le cas pour chaque personne physique titulaire d’un compte-titres joint.

Un compte joint a pour particularité d’avoir plusieurs titulaires. A ce titre, dans le cadre d’un compte-titres joint, il devrait pouvoir être passé deux ordres distincts lors d’une OPO, un par personne physique titulaire et habilitée à émettre un ordre dans le cadre d’une OPO (étant précisé qu’il s’agit de compte-titres ordinaires, un PEA ne pouvant être un compte-titres joint).

Toutefois, pour les intermédiaires financiers dont la plateforme ne serait pas dotée de cette modalité technique, le juge d’instruction recommande vivement d’en informer au préalable les titulaires de compte joint, que ce soit dans la convention de compte, ou a minima préalablement à toute OPO.

On 28 May 2020, the Association Française de Gestion (AFG) published the results of the study on Responsible Investment statistics for French asset management.

The AFG has collected information from its members, portfolio management companies, on their responsible investment (RI) activities, distinguishing between SRI offerings and other ESG approaches that take into account environmental, social and governance criteria. Management companies are increasingly involved in the development of sustainable finance and to promote the importance of sustainable finance, 74 of them responded to the survey in 2019.

The results of the third edition confirm the steady growth of responsible investment in asset management and the positive evolution of the weight of SRI funds within responsible investment.

Version française

Le 28 mai 2020, l'Association Française de Gestion (AFG) a publié les résultats de l'étude sur les statistiques de l'Investissement Responsable pour la gestion d'actifs en France.

L'AFG a recueilli auprès de ses membres, sociétés de gestion de portefeuille, des informations sur leurs activités d'investissement responsable (IR), en distinguant les offres ISR des autres approches ESG qui prennent en compte des critères environnementaux, sociaux et de gouvernance. Les sociétés de gestion sont de plus en plus impliquées dans le développement de la finance durable et pour promouvoir l'importance de la finance durable, 74 d'entre elles ont répondu à l'enquête en 2019.

Les résultats de la troisième édition confirment la croissance constante de l'investissement responsable dans la gestion d'actifs et l'évolution positive du poids des fonds ISR au sein de l'investissement responsable.

On 13 May 2020, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) published Circular 3/2020 on high-risk third countries. In this circular, BaFin provides information on third countries that have strategic deficiencies in their anti-money laundering and terrorist financing systems that pose significant risks to the international financial system. The Circular is based on EU Commission and FATF lists of third countries having strategic deficiencies in their AML/CFT systems. It highlights the measures in place against the different countries part of this list.

On 6 May 2020, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) published Circular 2/2020 (GW) (auditing and reporting period). The circular is aimed at the auditors of the annual financial statements of credit institutions, financial service institutions, insurance companies, payment institutions, electronic money institutions and capital management companies.

With this circular, BaFin specifies the existing audit report ordinances with regards to the audit and reporting period as well as the audit frequency for reporting on the institutions' precautions to prevent money laundering and terrorist financing.

On 13 May 2020, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) published a summary of the temporary measures taken since the outbreak of the COVID-19 pandemic.

• BaFin took part in the state special programs launched by the KfW . In terms of Banking Supervision,  BaFin also considers the suggestions shared by the Banking Industry. 
• BaFin clarified the process to obtain simplified loans under the KfW program. 
• BaFin adapted its supervision following the governments measures and the important organisational challenges for supervised entities;
• -BaFin suspended the determination of the new SREP;
• BaFin adjusted its reporting system;
• The importance of the AML/CFT supervision remains a key priority during this crisis.

On 22 May 2020, the Securities and Futures Commission (SFC) published a circular supplemental to the SFC’s Circular on Leveraged and Inverse Products (the “L&I Products Circular”). The amended provisions mainly relates to Product Structure, as followings:

• Both swap-based synthetic replication and futures-based replication structures are allowed for L&I Products seeking SFC authorization.
• Inverse Products shall be subject to a maximum leverage factor of one time (-1x) for Mainland equity indices and two times (-2x) for other indices.
• As with conventional ETFs, SFC expects L&I Products to track indices with constituent securities which are sufficiently liquid and broadly based. Given the novelty of these products in the Hong Kong market and their technical complexities, the SFC will only accept applications for:
  a. L&I Products tracking (i) liquid and broadly based equity indices, (ii) on a case by case basis, non-equity indices, including commodities indices where there is no potentially outsized impact from roll costs on the performance of the products, and
  b. initially swap-based L&I Products tracking Mainland equity indices. SFC will continue to keep in view the eligible replication structure of L&I Products from time to time.

On 7 May 2020, the Securities and Futures Commission (SFC) published Circular to licensed corporations on Margin requirements for non-centrally cleared OTC derivative transactions. 

This circular informs licensed corporations (LCs) that the Securities and Futures Commission (SFC) will defer the introduction of initial margin (IM) requirements for non-centrally cleared over-the-counter (OTC) derivative transactions by one year to provide operational relief amidst the COVID-19 situation.

On 11 May 2020, the Houses of the Oireachtas (Ireland's national parliament) published an Addendum to the dormant accounts fund action plan 2020.

The Dormant Accounts Action Plan 2020 was prepared in line with the Disbursement Scheme currently in place and was published on November 7th 2019. The Action Plan allocated funding of €45.5 million to 43 measures to be delivered across 9 Government Departments.  

Given the impact of the COVID-19 crisis on the community and voluntary, charity and social enterprise sectors, this Addendum to the 2020 Action Plan is now being put in place. It comprises two measures:

• A maximum of €35 million will be provided for a targeted Stability Fund. This will provide once-off cash grants to provide immediate short-term cash flow for organisations providing critical services which have suffered significant income loss due to COVID-19 restrictions. The Fund will be targeted to relevant sectors and will help to address certain urgent critical needs. 
• A contribution of €5 million will be provided to a Philanthropic Fund with the potential to leverage philanthropic donations over time. The focus of the Fund will be on responses to the COVID-19 crisis that require innovative and adaptive solutions to existing and emerging societal challenges.  It will support the community and voluntary, charity and social enterprise sectors to innovate and adapt in a changing economic and societal landscape.  The Fund will be administered by Social Innovation Fund Ireland, supported by an advisory board.  The allocation for this measure will rest with the Department of Rural and Community Development.

On 16 May 2020, the Italian Government issued the Law-Decree no.33, containing new provisions on freedom of movement elaborated to deal with the COVID-19 economic emergency.

The Law-Decree (re-)allows freedom of movement within regions. However, regional governments can autonomously decide to implement more restrictive measures where the local situation requires it. Movements among regions or towards / from external countries are not allowed until 3 June 2020. Social distancing still has to be respected. Additionally, the Law-Decree requires to avoid large groups of people. Economic, productive activities can be carried out if the respect of these guidelines (i.e. social distancing, safety measures, no groups of people) is ensured.

On the 7th of May 2020, Banca d'Italia and CONSOB announced that they identified the information needed to carry out assessment prescribed by article 32 of Regulation (EU) no. 648/2012 (EMIR) in relation to the acquisition of a qualified equity investment in a central counterpart.  Information requirements have been identified based on the provisions of the European regulator, diffused on December 2016 and available in Appendix I of the document "Joint Guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector " (link: esas-joint-committee.europa.eu/Publications/Guidelines/JC_QH_GLs_EN.pdf, page 33). To make sure to fulfill such requirements, candidates intending to proceed with an acquisition are invited to contact Banca d'Italia prior to the acquisition itself. Banca d'Italia and CONSOB, as prescribed by article 31 comma 3 of EMIR, have the right to request further information.

On the 8th of May 2020, Banca d'Italia published a document answering FAQ on technical-operational methods for data reporting. The following points are covered:

1. Reporting must be realised by entities classified as "Relevant Legal Entities (RLEs)" and by other entities identified by the Crisis Resolution and Management Unit. For a definition of RLE,  the Liability Data Report should be consulted. According to the version of 2019, a RLE is defined as a legal entity that fulfills one of the following criteria:

• It represents or provides more than 5% of the group's total risk exposure amount, leverage exposure or total operating income; or
• It provides critical functions

2.  xbrl format should be used for data reporting

3.  The FMI report (available at: srb.europa.eu/sites/srbsite/files/2020_fmir_guidance_v1.0.pdf) provides guidelines on how to compile data reporting

4. Concerning timing, institutions must send the FMIC information to Banca d'Italia by the 30th of April 2020 (so-called primary reporting) with the reference date 31st December 2019. The data will be forwarded to SRB by 24 May 2020 (secondary reporting date).

5. The module to be used for data reporting is one, composed of 3 sections (name of the information base, code and description)

6. 4 different templates should be used

7. The reference scheme to be used for data reporting is available at the following link: www.srb.europa.eu/eu/fr/xbrl/fws/res/cp-2017-15/2019-06-03/mod/fmi-con.xsd 

8. A naming convention should be used to transmit information

On the 8th of May 2020, CONSOB published recommendation no. 5/2020 on art. 127-quinquies of legislative decree no. 58 of 24th of February 1998 (TUF), which covers the voting mechanism used by listed and quoted issuers in their statute. In particular, the recommendations concern the increased voting mechanism, defined as long-term investment incentive tool / as a reward measure for stable shareholders. These recommendations clarify that, in the application of the  increased voting mechanism, the holding period preceding the listing of the company should be counted. This is only possible if there is continuity between the shares package initially held (prior to the listing) and the shares package currently held (once the company has been listed).

On the 7th of May 2020, CONSOB publishes a recommendation on the reporting of ex post costs and charges connected with the provision of investment and accessory services. These recommendations are provided in the context of the MiFID II discipline, that requires intermediaries to provide a disclosure of costs and charges connected with the provision of investment and accessory services. This aims to ensure that investors are aware of all the costs and charges.  This should enable them to compare services and financial instruments. 

National conditions have also been key to elaborate the recommendations: the Italian market is characterized by a significant distribution activity targeting retail investors. Hence, CONSOB elaborated the following recommendations keeping into consideration this condition: 

(i) for reporting purposes, alternatively it should be used either a stand alone document OR a document with a wider content. In this case, cost and charges should be displayed in a section on the first page (or in the one immediately following the title page and index). An appropriate graphic should highlight the content of the section. No additional information or promotional messages should be placed in the same section.

(ii) In order to report cost and charges, the table indicated by ESMA in Q&A no. 13 of the document "Questions and Answers on MiFID II and MiFIR investor protection and intermediaries topics",  section "Information on costs and charges", should be used.

(iii) In providing costs and charges as percentages, the parameter taken as a reference should be consistent with the aggregate level of costs and charges

(iv) Below the table displaying costs and charges, it should be clearly displayed the effect of costs and charges on investment returns

(v) Each cost in the table should be shortly described, and it should be explained how the amount of that cost was calculated

(vi) Investors should be able to reconcile the items shown in the analytical format and in the aggregate one.  In cases where reconciliation of the values is not possible, the intermediary should explain the reasons.

(vii) Intermediaries should transmit the reports referring to the calendar year, by April of the year following the reference year. 

(viii) If the intermediary provides an interim report of costs and charges, it should be clarified that annual amounts may not coincide with the sum of the amounts shown in the interim report. Reasons should also be provided for this inconsistency.

On the 8th of May 2020, Banca d'Italia published FAQs concerning Critical Functions Reporting. The document covered the following points:

1. Reporting must be made by significant banks and by less significant banks that carry out cross-border activities

2. xbrl format should be used for reporting purposes

3. SRB website can be consulted to retrieve detailed guidelines on how to realise reporting

4. Concerning timing, institutions must send the information base to Banca d'Italia by the 30th of April 2020 (so-called primary reporting) with reference date is 31 December 2019. The data will be forwarded to SRB by 24 May 2020 (secondary reporting date).

5. The report consists of a single module (i.e. an XBRL file) with 4 information bases (CFRC, CFRI, CFRP, CFRR).

6.  The reporting is composed by 5 different templates

7. The document provides links for the 4 reference schemes to be used for the different types of informative base

8. Also in this case, for the xbrl file a naming convention should be followed.

On 18 May 2020, Borsa Italiana published a notice bringing changes to the ATFund Market Rules. 

In particular, modifications concern the exclusion upon request from financial instruments' negotiations. The issuer requesting the exclusion from trading of financial instruments from the ATFund market must ensure that, on the date of the request, the following conditions are met : i) there are no financial instruments circulating on the date of request; ii) there are no exchanges in the three trading sessions prior to the date of the request; iii) the issuer commits not to issue and admit to trading financial instruments that are fungible with those that are the subject to the exclusion request. It is also specified that the market operator, following the receipt of the request from the issuer,  is consequently exempted from the trading obligations referred to in article 2021.3.

On 9 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the Application questionnaire for the set up of a fully licensed alternative investment fund manager.

This application constituted a request for approval as a fully authorized AIFM in accordance with Chapter 2 of the AIFM law. The category of AIFM to which the client belongs will determine which "application worksheet" is applicable to its situation. 

On 9 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the Registration form for alternative investment fund managers.

The AIFM registration form should not be used by any AIFM reporting full authorisation under Chapter 2 of the AIFM Law.

It is reminded that AIFMs which no longer fulfill one of the mentioned conditions in the document must apply for full authorisation as AIFM within 30 calendar days by using the current application form.

On 9 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the  form for Marketing of AIFs managed by a non-EU AIFM to professional investors in Luxembourg (Article 45 of the AIFM Law).

On 4 May 2020, the Commission de Surveillance du secteur financier (CSSF) published Circular CSSF 20/742 about money laundering, related to the entry into force of:

1. the Law of 25 March 2020 amending notably the Law of 12 November 2004 on the fight against money laundering and terrorist financing and,
2. the Law of 25 March 2020 establishing a central electronic data retrieval system concerning IBAN accounts and safe-deposit boxes.

The purpose of this circular is to draw the attention of professionals of the financial sector to the major changes that the two aforementioned laws bring to the applicable AML/CFT system to the Luxembourg financial sector.

On 9 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the Benchmark Regulation questionnaire.

This questionnaire aims at providing the CSSF with information about use of benchmark(s) as defined by Regulation (EU) 2016/1011 and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014.

On 14 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the Benchmark Regulation questionnaire.

This questionnaire aims at providing the CSSF with information about use of benchmark(s) as defined by Regulation (EU) 2016/1011 and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014.

On 4 May 2020, the Commission de Surveillance du secteur financier (CSSF) published statement on the AML/CFT supervision in the Collective Investment Sector during the COVID-19 crisis.

The CSSF highlights that it has implemented several measures to ensure it meets the operational challenges associated with AML/CFT supervision during this time.  In that context, the Expert Working Group AML OPC chaired by the CSSF and composed of representatives of ALFI, ALCO, ABBL, LPEA, LUXREAL, IRE, Le Barreau and The Financial Intelligence Unit decided to convene a special meeting to further detail the impacts of COVID-19 in the Collective Investment Sector to complement the aforementioned circular. The presentation released with this communiqué outlines the conclusion by this Expert Working Group OPC.

This document takes the form of a PowerPoint presentation saved as a PDF file so that it can be quickly disseminated to the employees of supervised entities involved in the Collective Investment Sector (“CIS”). It is designed to provide sector specific details to the CSSF circular 20/740.

It can be used as part of the remote training process implemented by the entities so that all their lines of defense remain abreast of the implications of the COVID-19 situation in the fight against money laundering and terrorism financing.

On 12 May 2020, the Commissariat aux Assurances (CAA) published Circular Letter 20/10 on establishing a temporary licensing regime as an insurance agent or sub-broker in the context of the COVID-19 crisis.

The inability of the CAA to organise examination sessions during the period of containment due to the coronavirus crisis and the prospects of only gradual standardisation are likely to hamper insurance companies and brokers in maintaining and developing their sales networks.

A candidate insurance agent or sub-broker may be granted a temporary licence for a period of 12 months if all the following conditions are met: 

1. the principal insurance undertaking or the principal broker has applied for registration for the next examination session or has registered for a cancelled examination session and the candidate has not been invited to attend a make-up session; 
2. temporary approval is explicitly requested;
3. the principal insurance undertaking or the principal broker has produced a certificate certifying several pieces of information on the applicant's knowledge and training.

Temporary approval is only granted if the candidate cannot attend the examination session for which he was registered due to the cancellation or postponement of that session or the existence of a waiting list.

On 12 May 2020, Law of 12 May 2020 extending certain deadlines provided for in the sectoral laws of the financial sector during the state of crisis was published in the Official Journal.

The deadlines are extended as detailed below:

• accounts of credit institutions, the deadline for publishing the annual accounts and the reports relating thereto in the electronic Recueil électronique des sociétés et associations referred to in that Article shall be extended by three months
• annual accounts and consolidated accounts of insurance and reinsurance undertakings, the time limit for publishing the annual accounts and the reports relating thereto in the electronic Recueil électronique des sociétés et associations referred to in that Article shall be extended by three months
• for value added tax, the time limits for publication of the annual and half-yearly reports pursuant to that Article shall be extended by three months
• venture capital investment companies (SICARs), the deadline for making available to investors the annual report together with the auditor's certificate referred to in that Article shall be extended by three months for venture capital investment companies not subject to Part II of the said law
• institutions for occupational retirement provision in the form of sepcav and assep, the deadline for drawing up the annual accounts and the reports relating thereto referred to in that article shall be extended by three months
• specialised investment funds, the deadline for making the annual report referred to in that Article available to investors shall be extended by three months for specialised investment funds not covered by Part II of the said law
• undertakings for collective investment, the time limit for publication of the half-yearly report referred to in that Article shall be extended by three months.

On 12 May 2020, the Law of 12 May 2020 adapting certain deadlines in fiscal, financial and budgetary matters in the context of the state of crisis was published in the Official Journal.

These provisions concern :

• income tax
• community and business taxes for the year 2019
• receivables for which the collection is entrusted to the Receiver of Direct Contributions Administration
• mortgage plan.

On 13 May 2020, the Commission de Surveillance du secteur financier (CSSF) informed it launched the IFM notification on fund issues and large redemptions via eDesk.

The CSSF implemented a specific monitoring of the largest investment fund managers (“IFM”) on 10 March 2020, in view of the specific circumstances and risks to which these companies were exposed to as a result of the prevailing market conditions. Since then, these IFMs have had to notify the CSSF of significant developments and issues as well as on related decisions and measures taken by IFMs. The CSSF further extends the scope of the exercise to a wider number of IFMs and integrates the related notification process into its eDesk portal.

All IFMs concerned by the notification on fund issues and/or large redemptions have been contacted by the CSSF. An IFM Notification has to be transmitted to the CSSF via eDesk only if the following events occur:

• significant events/issues affecting the functioning of the investment funds managed by the IFM;
• larger redemptions at the level of Luxembourg regulated investment funds (UCITS, Part II UCI, SIF) managed by the IFM (i.e. daily net redemptions exceeding 5% of the NAV, net redemptions over a calendar week exceeding 15% of the NAV and/or application of gates/ deferred redemptions).

In order to give IFMs sufficient time to prepare, the IFM Notification applies as from 2 June 2020.

On 29 May 2020, the Chambre de commerce de Luxembourg commented on Draft Law No. 7595 relating to the granting of the State guarantee within the framework of the instruments set up at the level of the European Union to mitigate the socio-economic consequences of COVID-19.

The Chamber of Commerce welcomes the implementation of European instruments aimed at mitigating the consequences of the current economic crisis for businesses and calls for better coordination between Member States to tackle this crisis. It notes that it is necessary to ensure that businesses and SMEs in the different Member States can benefit quickly and without administrative constraints from the various support measures.

On 29 May 2020, the Grand-Ducal Regulation of 29 May 2020 amending the Grand-Ducal Regulation of 20 March 2020 introducing measures concerning the holding of meetings in companies and other legal entities was published in the Official Journal.

The Regulation excludes the application of paragraphs 3 and 4 of article 1 of the Grand-Ducal Regulation of 20 March 2020 introducing measures concerning the holding of meetings in companies and other legal entities.

The paragraphs provided that :

§3. "Any company is authorized to convene its annual meeting for later of the following dates : (i) a date that falls within a period of six months after the end of its corporate year or (ii) a date that falls within a period up to June 30, 2020"..

§4. "The company shall be entitled to take this decision for any meeting called for 30 June 2020 at the latest. Any company which has already convened its meeting and which would take this decision, shall publish it and, where appropriate, notify to its shareholders or associates or other participants in the form in which it had convened such meeting or by publication on its website no later than the third working day before the meeting.".

On 29 May 2020, the Law of 22 May 2020 extending the deadlines for the filing and publication of annual accounts, consolidated accounts and related reports during a state of crisis was published in the Official Journal.

The Law extends by way of derogation from the provisions of the amended Law of 19 December 2002 on the register of commerce and companies and the accounting and annual accounts of undertakings, by three months:

(i) the deadline for the filing of annual accounts and the balance of the accounts included in the standard chart of accounts with the RCSL,

(ii) the deadline for the publication of the annual accounts and the related reports in the RESA and,

(iii) the deadline for the publication of the report on payments made to governments in the RESA.

In addition, by was of derogation from the provisions of the amended Law of 10 August 1915 on commercial companies, the Law extends by three months:

(i) the publication of the consolidated accounts and the reports relating thereto, and

(ii) the deadline for publication of the consolidated report on payments made to government in the RESA.

As regards the annual general meeting of the companies referred to in article 8 of the Commercial Code, the Law provides that it my be convened on a date which is within nine months after the end of its previous financial year.

The Law provides that the period referred to in article 1500-2, point 2 of the Law of 10 August 1915 on commercial companies, concerning the penal sanctions applicable to managers and directors who have not submitted the annual financial statements, consolidated financial statements, management report and certificate if the person in charge of the audit to the general meeting within a period of six months from the end of the financial year is extended by three months. Consequently, the directors and managers have now nine months to submit the annual account, starting from the end of the previous financial year.

The Law shall only apply to the annual accounts, consolidated accounts as well as the reports relating thereto and to the general meetings relating to a financial year closed on the date of the end of the state crisis.

On 29 May 2020, the Commission des norms comptables (CNC) published Q&As on Impact of the COVID-19 pandemic on the annual and consolidated accounts of Luxembourg companies and groups.

In the context of the current crisis, the purpose of this document is to provide Luxembourg companies and groups with a useful insight into certain accounting implications related to the COVID-19 pandemic.

Within this Q&A, it is proposed to provide elements of answers to the following 6 questions: 

1. Approval, filing and publication of the annual accounts and consolidated accounts for the financial year 2019: are the deadlines extended? 
2. COVID-19 pandemic: event that originated during the financial year 2019 or subsequent event that does not give rise to an adjustment? 
3. Valuation of assets and liabilities at the end of fiscal year 2019: are the consequences of the spread of COVID-19 taken into account? 
4. Going concern principle: consequences in the event of significant doubt or even definitive questioning at the time of the closing of the financial statements for the financial year 2019? 
5. Subsequent events: obligation and content of the information to be provided in the notes to the financial statements? 
6. (Consolidated) management report: should the information on the development of the business, the main risks and uncertainties and the foreseeable development of the company or the group cover the consequences related to the COVID-19 pandemic?

On 29 May 2020, the Chambre des députés of Luxembourg published Draft Law repealing the Law of 24 March 2020 extending the state of crisis declared by the Grand Ducal Regulation of 18 March 2020 introducing a series of measures in the fight against COVID-19.

The purpose of this Draft Law is to put an end to the state of crisis which was declared, in accordance with article 32, paragraph 4, of the Constitution, by the Grand-Ducal Regulation of 18 March 2020 introducing a series of measures in the context of the fight against COVID-19 and which was extended for a period of three months by the Act of 24 March 2020 extending the state of crisis declared by the Grand-Ducal Regulation of 18 March 2020 introducing a series of measures in the context of the fight against COVID-19.

The end of the state of crisis will have the effect that all the regulations made pursuant to article 32, paragraph 4, of the Constitution will cease to have effect for the future while retaining their effects that have been in effect since they came into force.

It should be noted that the content of the exceptional regulatory measures that are to last over time has already been included in various sectoral laws.

On 12 May 2020, Grand-Ducal Regulation of 12 May 2020 implementing Article 10 (2) of the Law of 25 March 2020 on cross-border arrangements subject to a declaration was published in the Official Journal.

The transmission of the information referred to in Article 10(1) of the Act of 25 March 2020 on cross-border arrangement that must be declared is organised by secure electronic means in accordance with the procedures defined by the Administration des contributions directes.

On 5 May 2020, the Commission de Surveillance du secteur financier (CSSF) published the Whistleblowing Q&As - Reporting of breaches of financial sector regulations to the CSSF. The Q&A answers following questions:

1. Who is the whistleblowing procedure aimed at? 
2. May the customers of financial service providers use the whistleblowing procedure? 
3. How to blow the whistle? 
4. Will the CSSF consider a whistleblower’s report if they have not first tried to raise their concerns internally? 
5. Will the whistleblower's identity become known, in particular to their employer? 
6. Will the whistleblowing reports be forwarded to the ECB in the context of the Single Supervisory Mechanism (SSM)? 
7. What information does the CSSF need from a whistleblower? 
8. Will the CSSF give legal advice in the context of a whistleblowing procedure? 
9. Will the CSSF inform the whistleblower of any actions taken on the whistleblowing report?

On 9 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the Application for an authorisation as a European Long-Term Investment Fund (ELTIF) and an authorisation to manage the ELTIF.

The application will be considered as complete only once the applicant is constituted and the CSSF has received all the requested documents in their final version. Any subsequent modifications to these documents must be immediately notified to the CSSF by submitting an updated application form.

On 9 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the SIF / UCI Part II / SICAR Questionnaire.

The CSSF advises that a submitted application file can be assessed only once it is complete i.e. that all of the requested information in the tabs is provided and all the necessary documents attached. Hence, any incomplete application file will lead to delays in launching or completing, the examination phase.

On 9 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the Application questionnaire for additional sub-fund(s).

On 14 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the Application questionnaire for the set up of a fully licensed alternative investment fund manager.

On 14 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the SIF / UCI Part II / SICAR Questionnaire.

The CSSF advises that a submitted application file can be assessed only once it is complete i.e. that all of the requested information in the tabs is provided and all the necessary documents attached. Hence, any incomplete application file will lead to delays in launching or completing, the examination phase.

On 14 May 2020, the Commission de Surveillance du secteur financier (CSSF) updated the Registration form for an alternative investment fund manager.

The AIFM registration form should not be used by any AIFM reporting full authorisation under Chapter 2 of the AIFM Law.

It is reminded that AIFMs which no longer fulfill one of the mentioned conditions in the document must apply for full authorisation as AIFM within 30 calendar days by using the current application form.

On 18 May 2020, the Dutch Banking Association (Nederlandse Vereniging van Banken, NVB) published its answer to the consultation on Registration Implementation Act ultimately stakeholders of trusts and similar legal arrangements.

In order to prevent criminals from hiding behind legal structures, it is essential to have up-to-date information from the ultimate beneficial owner (UBO) of a trust. In their role as gatekeepers, banks should therefore have full access to the information from the UBO register for trusts. 

That writes the Dutch Association of Banks (NVB) in response to the consultation of the implementation law registration ultimately interested parties of trusts and similar legal constructions.

The NVB previously also argued for full access to the UBO register for companies. Investigative authorities, but also banks in their role as gatekeepers, can then use that information to combat money laundering and fraud. However, in the current bill, the Dutch legislator has chosen to give reporting institutions, including banks, only partial access to the information from the register.

However, given their gatekeeper function, the banks have a special role in preventing money laundering and terrorist financing. In order to efficiently comply with, for example, the Sanctions Act and the screening of names against sanctions lists, it is necessary that the banks also have access to data on the place of birth, country and day instead of just the month and year.

On 20 May 2020, De Nederlandsche Bank (DNB) published the  Implementation Act for the amendment of the fourth anti-money laundering directive.

The Implementation Act, the Implementation Decree and the Royal Decree announcing the date were published in the Dutch Official Gazette on 20 May 2020. The Implementation Scheme was already published on May 15, 2020.

The Implementation Act for the amendment of the fourth anti-money laundering directive comes into force on 21 May. This brings crypto service providers under the integrity supervision of De Nederlandsche Bank.

On 25 May 2020, the Cooperation agreement on the exchange of confidential data or information between the Financial Supervision Office (BFT) and the Netherlands Authority for the Financial Markets (AFM) under the Money Laundering and Terrorist Financing (Prevention) Act and the Audit Firms Supervision Act was published in the Official Journal. 

Both the FTT and the AFM have a (derivative) duty in combating and preventing money laundering and the financing of terrorism, and in that context exercise integrity supervision over audit firms and their employees. It is in the interest of integrity supervision that the FTT is able to provide the AFM with confidential data or information for the performance of its supervisory duties under the Act, and that the AFM is able to provide the FTT with confidential data or information insofar as this is useful to strengthen the integrity of the financial markets or accountancy organisations.

These supervisors cooperate and make agreements about the processing of personal data in general and, more specifically, determine the conditions under which the data exchange will take place, including agreements about the confidentiality of the confidential data or information subject to supervision, data minimization, data security, and the maximum retention periods.

On 25 May 2020, the Law of 22 April 2020 amending the Financial Supervision Act in connection with the automatic unlocking of identifying data via a central electronic system, as well as some other data by banks and other payment service providers (Banking Data Referral Portal Act) was published in the Official Journal.

Banks and other payment service providers offering accounts with an IBAN identification number as referred to in the SEPA Regulation that contains the country code NL, and banks offering safes in the Netherlands, are connected to a central electronic system managed by the Minister of Justice and Security for the automated disclosure of identifying data relating to their clients, for the payment of claims and requests from designated authorities and officials. 

Clients are defined as: persons who purchase financial products or safes from the banks and payment service providers referred to in the first paragraph and persons who can exercise control over these financial products or safes on their behalf.

Banks and other payment service providers shall provide data by means of the central electronic system referred to in the first paragraph to satisfy claims or requests for identifying data under or pursuant to: a. Sections 126a, 126nc, 126uc, 126zk, 126ii or 577bb of the Dutch Code of Criminal Procedure. Banks and other payment service providers shall make use of the citizen's registration number to request information from their own records for the purpose of providing the information referred to in the first paragraph, to the extent that they have such a number at their disposal.

Rules shall be laid down by or pursuant to an order in council on the administration of the central electronic system concerning the authorities and officers using the system, the data to be accessed by means of the system and the technical requirements to be met by the system and its connection to it.

On 20 May 2020, the De Nederlandsche Bank (DNB) informed on the entry into force of the connection obligation to the Referral portal Banking data.

The Banking Data Referral Portal Act was adopted by the Upper House on 21 April 2020 and will enter into force shortly. Payment and electronic money institutions that offer accounts with a Dutch IBAN identification number are legally obliged to connect to this portal.

The Banking Data Referral Portal (VB) is a digital facility for the automated provision of identifying data that is requested by the competent investigative services and the Tax and Customs Administration. With this portal, the process of demanding identifying data and complying with a claim, which is now being done manually, is digitized. Payment and electronic money institutions are legally obliged to meet claims by investigative authorities and the tax authorities. After the law comes into effect, payment and electronic money institutions are also obliged to join the VB if they fall within the scope of the law.

The Banking Data Reference Portal Act introduces a connection obligation for payment and electronic money institutions that offer accounts with a Dutch IBAN identification number. Payment and electronic money institutions that in the future plan to offer accounts with a Dutch IBAN identification number must join before the start of this service and must take into account that realizing the connection takes time.

On 28 May 2020, the De Nederlandsche Bank (DNB) announced it adopted an Assessment Framework for supervising compliance with requirements for the Policy Guideline for Individual Customer Assessment for supervising compliance with the requirements of the policy rule.

The assessment framework includes:

• a number of indicators that clarify the extent to which banks meet the requirements
• the role of testing the IQC system by the internal audit department and the external auditor
• a growth path for the period 2020 - 2023 that indicates when expected improvements must be made by the banks
• which resources DNB can use if targets are not met, or are not met on time. All banks are informed about the policy rule and what is expected of them. As a result of the assessment framework, banks receive an annual statement on an individual basis of the extent to which the requirements of the policy rule have been met. The improvements that DNB expects to be realized by banks are also indicated, according to the growth path included in the assessment framework.

On 29 May 2020, the Netherlands opened a consultation on the Capital Buffers Implementation Decree 2020.

This draft decision contains amendments to the Decree on prudential rules (Bpr), the Decree on the implementation of EU regulations on financial markets (BUEUVo) and the Decree on special prudential measures, investor compensation and deposit guarantee under the Wft in implementation of Directive 2019/878 / EU (CRD-V) and Regulation (EU) 2019/876 (CRR-II) regarding capital requirements for banks and investment firms.

This Decision incorporates the amendments resulting from the Capital Requirements Amendment Directive and the Capital Requirements Amendment Regulation for which the Financial Supervision Act already provides a sufficient basis. 

The aim is to implement amendments to the Decree on Special Prudential Measures, Investor Compensation and Deposit Guarantee under the Financial Supervision Act and the Decree on Prudential Rules under the Financial Supervision Act which will enter into force for the most part on 29 December 2020. The main part will enter into force on 28 June 2021.

Consultations runs until 26 June 2020.

On 20 May 2020, De Nederlandsche Bank (DNB) requested payment and electronic money institutions to provide the financial statements in time.

According to the Financial Supervision Act, payment and electronic money institutions must submit the following within six months after the end of the financial year, i.e. for the financial year 2019 at the latest on 30 June 2020 : the annual accounts, the management report and the data referred to in Articles 361, 391 and 392 of Book 2 of the Civil Code.

In addition, DNB requests payment and electronic money institutions - if applicable - to also send the external auditor's report and management letter. DNB uses this for supervision and can thus gain a better insight into the controlled and sound business operations of the company.

On 19 May 2020, the Autoriteit Financiële Markten (AFM) published recommendations for the review of MiFID II.

MiFID II, which came into force on 3 January 2018, is currently being reviewed by the European Commission and the European Securities and Markets Authority (ESMA). The aim of MiFID II is to improve the efficiency and transparency of the European financial markets and to strengthen investor protection.

In anticipation of potential changes to the MiFID II regulation, the AFM has carried out a study that includes policy recommendations for the areas of equity, commodities and investor protection. They concern changes to the regulatory framework of MiFID II (level 1 or level 2), suggestions for further ESMA guidance on level 3 and increased European convergence in supervision.

Central underlying themes for equity are whether transparency has increased sufficiently, what the impact is on liquidity and how the market structure has changed, as a consequence of MiFID II. For commodities, AFM investigated the impact of the introduction of position limits, position management controls and pre-trade transparency requirements for trading venues that trade in commodity derivatives in the Netherlands. 

On 19 May 2020, the Dutch Banking Association (Nederlandse Vereniging van Banken, NVB) answered European consultation on MiFIR / MiFID II.

European rules on financial markets and investment must better protect investors and make financial markets more transparent. However, this goal is not yet achieved in all parts of the Markets in Financial Instruments Directive (Mifid II). 

A number of issues related to investor protection (such as cost transparency, 'product governance' and distribution fees) and market infrastructure (such as 'consolidated tape') require adjustments.

The Dutch Banking Association (NVB) underlines this issue in response to a consultation in which the overall functioning of the financial regulatory framework for the functioning and transparency of financial markets (MiFIR / MiFIDII).

The benefits of MiFID II are rather limited, but costs have increased resulting in a negative cost-benefit balance. This is partly due to:

• the ambiguous and multi-interpretable nature of the MiFIR/MiFID II legislative texts
• timing issues.

For example, in the initial phase of MiFID II guidance was urgently sought after. When level 2 and level 3 guidance were published, it was effectively too late as financial market participants already interpreted and implemented MiFID II based on level 1 texts. Due to the different interpretations across Member States, ESMA’s level 2 and level 3 guidance caused further confusion and additional burdens as key concepts were not clearly defined. In the upcoming review definitions and timelines should be better aligned.

On 27 May 2020, De Nederlandsche Bank (DNB) announced the Network for Greening the Financial System (NGFS) guides central banks and supervisors towards better management of climate-related and environmental risks

Prudential supervisors around the world are stepping up to integrate climate-related and environmental risks into their work. There is also a positive trend among financial institutions to better account for climate related risks of their assets.
This can be concluded from the publications of the NGFS:

• A Guide for Supervisors gathering leading practices of the supervisory community and issuing five recommendations for courses of action to be taken by NGFS members and beyond.
• A Status Report on financial institutions ’ experiences from working with green, non-green and brown financial assets and a potential risk differential offering an overview of industry definitions and practices regarding environmental related risks’ quantification and mitigation.

On 11 May 2020, the Swiss National Bank (SNB) announced the expansion of the COVID-19 refinancing facility to include cantonal loan guarantees as well as joint and several loan guarantees for startups.

The Swiss National Bank announced the establishment of the SNB COVID-19 refinancing facility (CRF) on 25 March 2020. This facility allows banks to obtain liquidity from the SNB by assigning credit claims from corporate loans as collateral. In so doing, the SNB enables banks to expand their lending rapidly and on a large scale. 

To date, the SNB has accepted as collateral for the CRF only credit claims in respect of loans guaranteed by the federal government under the COVID-19 ordinance on joint and several guarantees. It will now additionally accept claims secured by loan guarantees or credit default guarantees offered by cantons, provided these have been granted in order to cushion the economic impact of the COVID-19 pandemic. 

Claims secured by joint and several guarantees provided for startups by the federal government in cooperation with the cantons are now also deemed to be eligible collateral. This expansion of the CRF is effective immediately. 

On 19 May 2020, the Eidgenössische Finanzmarktaufsicht (FINMA) published Guidance 06/2020: extension or discontinuation of exemptions due to the COVID-19 crisis.

The FINMA is publishing further guidance in the context of the COVID-19 crisis containing adjustments to the periods for various exemptions already granted and specifying in more detail how the net stable funding ratio (NSFR) is calculated.

In Guidance 06/2020 of 19 May 2020, FINMA adjusts the periods of various exemptions already granted. Clients are continuing to hold unusually large deposits with Swiss banks. FINMA is therefore extending the exemption for the calculation of the leverage ratio (exclusion of central bank reserves) for all banks until 1 January 2021 (previously 1 July 2020). 

As there is no longer any broad use being made of the exemptions concerning risk diversification at banks, these are not being extended. However, institutions can request specific exemptions in individual cases. The exemption concerning market risks is to be incorporated into future supervisory practice.

FINMA has granted exemptions in the area of anti-money laundering for the opening of new client relationships. These will be extended for specific situations, in particular for foreign clients, in order to return gradually to the normal opening procedure. FINMA is also setting out in more detail the handling of durations for loans procured as part of the SNB’s COVID-19 refinancing facility (CRF) for calculating the net stable funding ratio (NSFR).

On 19 May 2020, the Eidgenössische Finanzmarktaufsicht (FINMA) published Audit points on Market behavior and market conduct  and Risk management in connection with cross-border services.

Audit point on Market behavior and market conduct:

• Risk analysis
• Adequacy of organizational measures and internal rules taking risk analysis into account
• Controls to prevent and detect market abuse

Audit point on Risk management in connection with cross-border services:

• Risk Policy
• Country analyses / country manuals
• Organisation
• Monitoring
• Training and Education
• Compensation models
• Compliance with existing risk policy
• Compliance with FINMA circular 17/6

On 7 April 2020, the Eidgenössische Finanzmarktaufsicht (FINMA) issued Guidance 05/2020 on Duty to report cyber-attacks pursuant to Article 29 para. 2 FINMASA.

FINMA continues to view the risk of cyber attacks1 on the Swiss financial centre as very high. FINMA-supervised institutions are a target for cybercriminals, who not only have their sights on financial interests, but also target the availability, confidentiality and integrity of the critical technology infrastructure and sensitive information. Particularly in high-stress situations (such as the current COVID-19 pandemic), there is an increased risk of cyber-attacks.

Cybercriminals are utilising this time of uncertainty, adapting their attack strategies to the current situation and thereby placing an additional burden on already challenged firms. 

FINMA is publishing this guidance to remind all supervised institutions of their legal requirement, pursuant to Article 29 para. 2 FINMASA, to immediately report any incident that is of substantial importance to the supervision. This encompasses significant incidents with regard to successful or partially successful cyber-attacks.

FINMA will review the possibility of transferring the following clarifications to a circular at a later point in time based on experience.

On 15 May 2020, the Eidgenössische Finanzmarktaufsicht (FINMA) published its Rules for the organization of the management and subordinate divisionses for the organization of the management and subordinate divisions.

These regulations govern the organisation, cooperation and division of tasks between management and subordinate levels.

On 5 May 2020, the Eidgenössische Finanzmarktaufsicht (FINMA) updated the SST templates.

This document summarizes the deadlines for the regular update of the OHS templates as well as the planned blank calculations and new features. It also describes any extraordinary updates.

On 29 May 2020, the Swiss National Bank (SNB) published a new dossier on its data portal "Relationship between the balance of payments financial account, the international investment position and the financial accounts".

The dossier describes the links between three statistics that model Switzerland's financial relations with the rest of the world using different approaches: the financial account of the balance of payments, the international investment position and the financial accounts. It also details the differences that appear in the data produced by these statistics. In this way, it contributes to a better understanding of the relationships between these statistics and helps users to choose data that meet their analytical needs.

On 15 May 2020, the Eidgenössische Finanzmarktaufsicht (FINMA) updated its Organisational Regulations Organisational Regulations.

These rules define the framework for the organisation, role and responsibilities of the Board of Directors, the Executive Board and the Internal Audit unit, and apply in execution of and in addition to the provisions set out in FINMASA.

On 26 May 2020, a consultation on the Federal Act on the Regulation of the Activities of Insurance Intermediaries was launched in the Schweizer Bundesblatt (Swiss Official Journal).

Switzerland consults on the two following points:

• Certain points of the insurers' agreement must be declared legally binding (commissions paid to intermediaries, prohibition of cold calling, training, minutes of the interview);
• Penalties in the event of non-compliance must also be provided for.

Stakeholders can send their comments until 3 September 2020.

On 27 May 2020, the Eidgenössische Finanzmarktaufsicht (FINMA) updated the lists of Authorised foreign collective investment schemes offering to non-qualified investors and Swiss collective investment schemes at the end of April 2020.

On 19 May 2020, the UK Government published Draft UK-EU Comprehensive Free Trade Agreement (CFTA) and an accompanying Annex,  including Chapter 17 on Financial Services.

This Chapter shall apply to:
(a) ‘cross-border financial service supplier of a Party’ - a person of a Party that is engaged in the business of supplying a financial service within the territory of the Party and that seeks to supply or supplies a financial service through the cross-border supply of that service;
(b) ‘cross-border trade in financial services’ or ‘cross-border supply of financial services’: the supply of a financial service:
(i) from the territory of a Party into the territory of the other Party;
(ii) in the territory of a Party to a person of the other Party; or
(iii) by a national of a Party in the territory of the other Party;

but does not include the supply of a financial service in the territory of a Party by an investment in that territory.
(c) ‘financial service’: any service of a financial nature, including all insurance and insurance-related services, banking and other financial services (excluding insurance), and services incidental or auxiliary to a service of a financial nature. 

Regarding Cross-Border Financial Service Suppliers, the UK and EU shall accord to:
(a) financial services and cross-border financial service suppliers of the other Party seeking to supply or supplying the financial services; and
(b) financial services and cross-border financial service suppliers of the other Party engaged in the cross - border trade in financial services or seeking to supply such services.

Each Party shall:

• permit persons located in its territory, and its nationals wherever located, to purchase financial services from cross-border financial service suppliers of the other Party located in the territory of that Party. This obligation does not require a Party to permit such suppliers to do business or solicit in its territory. 
• may define “doing business” and “solicitation”
• permit a financial service supplier of the other Party to supply a new financial service that the Party would permit its own financial service suppliers, in like circumstances, to supply without adopting a law or modifying an existing law.

The draft agreement also introduces provisions regarding Financial Services Committee (FSC) which shall contain a principal representative of each Party and who shall be an official of the Party’s authority responsible for financial services.

The FSC shall:
(a) supervise the implementation of this Chapter on Financial Services;
(b) assess the functioning of this Agreement as it applies to financial services;
(c) consider issues regarding financial services that are referred to it by a Party; and
(d) carry out such functions as  are conferred on it by this Chapter's Annex.

This Agreement shall enter into force on one of the following dates, whichever is the latest:
(a) 1 January 2021 in the event that the Parties have, prior to that date, exchanged written notifications certifying that they have completed their respective internal requirements and procedures;
(b) the first day of the month following the date the Parties exchange the written notifications referred to in (a).

On 27 May 2020, the Financial Conduct Authority (FCA) updates information regarding Trade repositories (TR) wishing to offer its services relating to onshored EMIR (UK EMIR) or onshored Securities Financing Transactions Regulation (UK SFTR) in the UK.

TRs should let the FCA know if they intend to offer UK EMIR or UK SFTR services to UK markets from the end of the transition period:

• In order to give sufficient time for these notifications to be processed, firms should aim to submit their completed notifications, together with all supporting documentation, by midnight on 4 December 2020. The FCA cannot guarantee that notifications submitted after this time, or incomplete notifications, will be processed by 31 December 2020.
• If firms are a UK TR that is a UK legal entity and part of the same group as a TR with an ESMA registration, and wish to apply for registration in the UK and enter the TRR, firms will need to notify the FCA that firms wish to enter the TRR and submit a completed registration form (with supporting documentation) by 11pm on 31 December 2020.
• If firms are a new UK-based TR that does not fall into the categories above and wish to apply for registration in the UK in order to provide TR services in the UK, firms will need to submit a completed registration form after 31 December 2020 with supporting documentation. The FCA will process these applications once the UK regime is in full effect.

The FCA also provides a list of TRs who already applied to offer UK EMIR TR services in the UK at the end of the transition period.

1. On 1 May 2020, the UK Statutory Instruments 2020 No. 480 - Financial Services and Markets Act 2000 (Regulated Activities) (COVID-19) (Amendment) Order 2020 was published on the UK legislation.

This Order amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/554) (RAO) and makes supplemental provision in respect of the amendments, in particular: 

• to create a new type of exempt agreement. This amendment provides that a credit agreement is an exempt agreement where a lender provides a borrower with credit of £25,000 or less for the purposes of a business carried on, or intended to be carried on, by the borrower and where the agreement is entered into under the Bounce Back Loan Scheme (“the BBLS”) operated by the British Business Bank. 
• to provide that where a lender carries out the activity of debt-collecting in relation to a BBLS loan the activity is not excluded from the activity specified in article 39F. The effect is that where a lender carries out the activity of debt collecting in relation to BBLS loans, the activity is a specified activity. 
• to provide a transitional provision whereby a lender who enters into a loan under the BBLS and who had permission to carry out the activity in debt collecting will, from the date this Order comes into force, continue to have permission to carry out that regulated activity.

2. On 7 May 2020, the Bank of England (BoE), together with Prudential Regulation Authority (PRA), announced changes to resolution measures aimed at alleviating operational burdens on PRA-regulated firms (firms) in response to the COVID-19 outbreak:

• Resolvability Assessment Framework: The dates for the major UK banks and building societies to submit their first reports on their preparations for resolution and publicly disclose a summary of these reports have been extended by a year. These firms will be required to submit their first reports to the PRA by October 2021 and make public disclosures by June 2022. The BoE will also make its first public statement on these firms’ resolvability by June 2022.
• Valuation in Resolution: To provide flexibility to firms’ core operational teams, the compliance deadline for the BoE’s Statement of Policy on valuation capabilities to support resolvability has been extended by three months to 1 April 2021. The deadline for firms to implement the BoE’s other Statements of Policy relevant to resolvability remains 1 January 2022.
• Resolution plan reporting: Firms will not be required to submit certain resolution pack information under PRA Supervisory Statement SS19/13 ‘Resolution Planning’ until the end of 2022, unless notified otherwise on an individual basis by the PRA. 
• Minimum Requirement for Own Funds and Eligible Liabilities (MREL): the BoE clarified that, in line with its current policy, the BoE intends to exercise its discretion with respect to the transition time firms are given to meet higher MRELs. Firms not currently subject to a leverage-based capital requirement, but which subsequently become subject to one, will be given at least 36 months after that requirement takes effect to meet the higher MREL resulting from it.

3. On 4 May 2020, the Financial Conduct Authority (FCA) updated statement following the BBLS launch.

On 4 May 2020, BBLS formally launched. This statement sets out the FCA’s approach to its regulation of firms in relation to the Government’s CBILS and BBLS (the Schemes). The statement applies to any loan made under the Schemes by an ‘accredited lender’ from 4 May 2020.

The unprecedented nature of the current coronavirus pandemic and the impact on the economy has created a climate of deep uncertainty and anxiety for the economy, business and consumers. The FCA recognises the Government’s Schemes need to be able to enable fast and efficient lending decisions. To ensure this, the Government has made changes to the criteria lenders must apply when considering firms for a loan under these Schemes.

4. On 4 May 2020, the Financial Conduct Authority (FCA) informed that the FCA is collaborating with key strategic partners and the industry to pilot a ‘digital sandbox’. This will provide enhanced regulatory support to innovative firms tackling challenges caused by the coronavirus (COVID-19) pandemic.

The FCA is planning to open applications later in the summer. The following features could be the foundations of a digital sandbox:

• Access to high-quality data assets including synthetic or anonymised data sets to enable testing and validation of technology solutions.
• Regulatory call-to-action – as with our latest sandbox cohort, we could identify areas of regulatory interest where we would like to see innovation play a greater role, or issue specific challenges.
• A collaboration platform – to facilitate diversity of thinking, share learnings and foster an ecosystem around solving complex industry wide challenges.
• An observation deck – to enable regulators and other interested parties to observe in-flight testing at a technical level, to inform policy thinking in a safeguarded environment.
• Application programming interface (API) or vendor market place – where FinTech, RegTech and other vendors can list their solutions and APIs, to encourage greater interoperability and foster a thriving ecosystem.
• Access to regulatory support – such as development of testing plans, signposting to relevant regulations, informal steers or support to understand the wider regulatory environment or the authorisation process.

5. On 5 May 2020, the Financial Conduct Authority (FCA) updated on Accessing restricted savings regarding Coronavirus (COVID-19): Information for firms.

During the coronavirus (COVID-19) crisis, consumers may find themselves needing access to their savings in accounts with restrictions on access. Customers may contact firms asking to withdraw funds from these accounts. As ever the FCA expects firms to:

• pay due regard to the interests of their customers and treat them fairly
• communicate in a way that is clear, fair and not misleading, and
• consider the needs of vulnerable customers in their actions or communications.

Meeting these obligations does not require firms to offer access to all customers, or to offer unlimited access to funds in a restricted-access account. Firms are free to form a judgement on a case by case basis, balancing their customers’ needs with their own obligations, including managing their prudential risk.

6. On 6 May 2020, the Financial Conduct Authority (FCA) extended the maximum period firms can arrange cover for a Senior Manager without being approved, from 12 weeks to 36 weeks, in a consecutive 12-month period.

The modification by consent to rule SUP10.3.13R is available to all solo regulated firms. It aims to provide flexibility to firms managing their governance arrangements during the coronavirus pandemic.

It also allows firms to allocate an absent Senior Manager’s prescribed responsibilities to the individual covering the role.

7. On 6 May 2020, the Financial Conduct Authority (FCA) published its expectations on Financial crime systems and controls during coronavirus situation.

In the current climate, it is important for firms to maintain effective systems and controls to prevent money laundering and terrorist financing.

Regarding operational challenges, firms should not seek to address operational issues by changing their risk appetite. While continuing to operate within the legislative framework for anti-money laundering and counter terrorist financing, firms may need to re-prioritise or reasonably delay some activities. These could include ongoing customer due diligence reviews, or reviews of transaction monitoring alerts. The FCA considers such delays reasonable as long as: 

• the firm does so on a risk basis (for example, reviews for high risk customers should not be delayed unless absolutely necessary) 
• there is a clear plan to return to the business as usual review process as soon as reasonably possible.

Regarding client identity verification, the FCA expects firms to continue to comply with their obligations on client identity verification. The MLRs and Joint Money Laundering Steering Group guidance already provide for client identity verification to be carried out remotely and give indications of appropriate safeguards and additional checks which firms can use to assist with verification. 

The FCA also reminded firms on the latest:

• Joint statement on arrangements for senior management
• UK Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS)
• Temporary measures for firms submitting regulatory returns.

8. On 7 May 2020, the Financial Conduct Authority (FCA) updated on the Payment Accounts Directive.

The Payment Accounts Regulations require the FCA to gather certain data (on basic bank accounts and switching) from payment service providers (PSPs) that offer payment accounts covered by those regulations. Submissions covering the reporting period 1 March 2018 to 29 February 2020 should be due. 

In normal circumstances, the FCA expects to receive these within 2 months of the end of the relevant reporting period (in this instance, by 30 April 2020). However, for this reporting period, the FCA extended the deadline to 30 June 2020.

9. On 7 May 2020, the FCA published draft guidance for insurance and premium finance firms regarding Coronavirus and customers in temporary financial difficulty.

This guidance sets out the FCA's expectations for firms when dealing with customers of general insurance and pure protection contracts who may be experiencing temporary financial difficulty as a result of the coronavirus pandemic (COVID-19). It is not intended to have any relevance in other circumstances (for example customers in financial difficulty which pre-dates coronavirus, where existing forbearance rules apply).

If confirmed, the measures would come into force by 15 May 2020. The FCA will review this guidance in the next 3 months in the light of developments regarding coronavirus and may revise the guidance if appropriate.

10. On 14 May 2020, the Financial Conduct Authority (FCA) informed on the Financial services exemptions in forthcoming Corporate Insolvency and Governance Bill.

These measures will not be available for some financial services firms and contracts. The list of exclusions from the measures is expected to include banks, investment firms, insurers, payments and e-money institutions and certain market infrastructure bodies. Firms that safeguard client assets are also expected to be excluded from the company moratorium during the coronavirus period and temporary suspension of wrongful trading provisions.

The Bill provides the following measures:

• Company moratorium: The Bill proposes to create a moratorium during which no legal action can be taken or continued against a company without leave of the court.
• Suspension of Ipso Facto (Termination) clauses: The proposed Bill will mean suppliers will not be able to jeopardise a rescue in this way. The proposals include safeguards to ensure that continued supplies are paid for, and suppliers can be relieved of the requirement to supply if it causes hardship to their business.
• Temporary suspension of wrongful trading provisions from 1 March 2020 for 3 months: The Bill proposes to temporarily remove the threat of personal liability arising from wrongful trading for directors who continue to trade a company through the coronavirus pandemic with the uncertainty that the company may not be able to avoid insolvency in the future. 

In addition, the Bill proposes to provide a new Restructuring Plan which is expected to be available to financial services firms, through the appropriate safeguards including a role for the FCA and PRA.

Finally, the Bill proposes to contain other insolvency and corporate governance changes where no specific exclusions for the financial services sector are expected. These include:

• Temporary suspension of Statutory Demands and Winding up Petitions 
• Temporary flexibility of Annual General Meetings (AGMs)
• Temporary flexibility of Filing Requirements.

Some of the proposed measures are expected to apply retrospectively. For example, the temporary ban on the use of statutory demands is expected to apply from 1 March (until 30 June) and the temporary ban on the use of winding up petitions is expected to apply to petitions made from 27 April (until 30 June).

11. On 14 May 2020, the Financial Conduct Authority (FCA) confirmed a series of temporary measures to help customers who hold insurance and premium finance products and who may be in financial difficulty because of coronavirus (COVID-19).

These measures will come into force on Monday 18 May 2020. They will be reviewed in the next 3 months in the light of developments regarding coronavirus and may be revised if appropriate.

The targeted measures being implemented require firms to consider what options they can provide to customers including: 

• Reassessing the risk profile of customers. This may have changed because of coronavirus and there may be scope to offer customers materially lower premiums.
• Considering whether there are other products they can offer which would better meet the customer’s needs and revise the cover accordingly. For example, a motor insurance customer might no longer need associated add on cover such as key cover or could be moved from fully comprehensive cover to third party fire and theft.
• Waiving cancellation and other fees associated with adjusting customers’ policies.

12. On 4 May 2020, the Prudential Regulation Authority (PRA) published Statement on credit risk mitigation eligibility and leverage ratio treatment of loans under the Bounce Back Loan scheme (BBLS).

This statement sets out the PRA’s observations on the risk weighted treatment of exposures under the scheme, particularly eligibility for recognition as unfunded credit risk mitigation (CRM) under the Capital Requirements Regulation (CRR).

It also sets out a change to the UK leverage ratio framework. The PRA is offering a modification by consent for banks subject to the UK Leverage Ratio Part of the PRA Rulebook to exclude loans under this scheme from the leverage ratio total exposure measure, if they choose to do so.

13. On 7 May 2020, the Prudential Regulation Authority (PRA) published its Statement on prioritisation in light of COVID-19.

This statement sets out further details of the PRA’s plans to help firms maintain their safety and soundness and deliver the critical functions they provide to the economy:

• Climate change: to postpone the launch of the exercise until at least mid-2021. This delay reflects a desire to maintain the ambitious scope of the exercise, whilst giving firms enough time to invest sufficiently in their capabilities to allow them to deliver to a high standard. 
• LIBOR transition: to suspend transition data reporting at the end of Q1, and cancel some Q1 firm meetings. 
• Insurance Stress Test 2019: to pause further work on the Insurance Stress Test, given other pressures on firms and the need to focus on COVID-19 specific stresses. The PRA will therefore not be publishing the results of last year’s test (IST2019) and will postpone the next Insurance Stress Test to 2022, with a view to seeking feedback from firms on the proposed design during Q4 2021.
• Stressed VAR: not expect firms to update their SVAR 12-month period during the current period of financial market stress, other than if a firm’s current period no longer represents a significant period of stress for the firm’s portfolio (e.g. due to a material change in risk profile). The PRA will permit firms to delay reviewing the choice of historical data until December 2020, in line with EBA guidance.

14. On 14 May 2020, the Prudential Regulation Authority (PRA) published Policy Statement 11/20 on Credit risk: Probability of Default and Loss Given Default estimation – PS11/20. This PS is relevant to UK banks, building societies and PRA-designated UK investment firms.

After considering the responses, the PRA has made several changes to the draft policy in the CP. These are:

• extending of the implementation deadlines for the EBA roadmap and the mortgage hybrid approach, including removing the transitional period outlined in paragraph 2.8 of PS7/19;
• amending the approach to discounting cured exposures;
• accepting temporary divergence between accounting impairment models and approved IRB models for defaulted exposures, due to the need to make timely changes to impairment models; and
• clarifying the use of Sterling Overnight Index Average (SONIA), including for defaults that occurred before the first date SONIA is available from the Bank of England.

Having considered the consultation feedback and the implications of COVID-19, the PRA has decided to extend the implementation deadline for all changes to residential mortgage exposures by one year and one day to Saturday 1 January 2022. This applies to changes resulting from both the EBA roadmap for IRB, including the move from 180 days past due to 90 days past due in the definition of default, and the mortgage hybrid approach.

15. On 29 May 2020, the Prudential Regulation Authority (PRA) published a document responding to a number of questions from firms in relation to requirements in the CRR for property valuations for residential and commercial real estate exposures. In particular, given the disruption in the property market caused by COVID-19, firms have identified difficulties in conducting physical inspections due to social distancing measures, obtaining reliable property valuations and determining appropriate approaches to suspended or unreliable house price indices.

This document is aimed at all firms to which the CRR applies.

The document will be updated if appropriate as the COVID-19 situation evolves.

On 14 May 2020, the International Swaps and Derivatives Association (ISDA) published a Report Summarizing Final Results of Consultation on Pre-cessation Fallbacks for LIBOR.

The report, Summary of Responses to the ISDA 2020 Consultation on How to Implement Pre-cessation Fallbacks in Derivatives, was prepared for ISDA by The Brattle Group and confirms the preliminary findings published by ISDA in April. 

The consultation, which was launched in February, asked whether the 2006 ISDA Definitions should be amended to include fallbacks that would apply to all covered derivatives referencing LIBOR following a permanent cessation of the benchmark or a ‘non-representative’ pre-cessation event, whichever occurs first.

The results of the consultation indicate that a significant majority of respondents support including pre-cessation and permanent cessation fallbacks without optionality or flexibility in the amended 2006 ISDA Definitions for LIBOR and in a single protocol for including the updated definitions in legacy trades.

Following these results, ISDA expects to publish amendments to the 2006 ISDA Definitions to incorporate the fallbacks for new trades in July. A protocol will simultaneously be launched to allow participants to incorporate the revisions into legacy trades if they choose too. Both will come into effect before the end of the year.

On 14 May 2020, the International Accounting Standards Board issued several small amendments to IFRS Standards.

The package of amendments includes narrow-scope amendments to three Standards as well as the Board’s Annual Improvements, which are changes that clarify the wording or correct minor consequences, oversights or conflicts between requirements in the Standards.

• Amendments to IFRS 3 Business Combinations update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations.
• Amendments to IAS 16 Property, Plant and Equipment prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.
• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets specify which costs a company includes when assessing whether a contract will be loss-making.
• Annual Improvements make minor amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the Illustrative Examples accompanying IFRS 16 Leases

All amendments are effective 1 January 2022.

On 20 May 2020, the International Capital Market Association (ICMA) published ESMA response to its's proposals for reporting of central bank repos under MiFIR.

Under SFTR, SFTs transacted with one of the 27 EU central banks that are part of the European System of Central Banks (ESCB) are exempted from the reporting obligation. However, these trades have in turn been included in the scope of MiFIR transaction reporting. This requirement will apply at the same time as SFTR goes live. However, there has been no guidance as to how repos and other SFTs can be reported under MiFIR, considering that the reporting framework has not been designed to cater for SFTs and their specific characteristics. Following extensive discussions, ICMA’s SFTR Task Force developed a proposal to report repo trades under MiFIR, consisting of two sample reports and an explanatory note. Both documents were submitted to ESMA in November 2019 for review and validation.

The ESMA response received on 8 May 2020 confirms all the main aspects of the ICMA proposals. In particular: 

• The basic principle proposed by ICMA was confirmed. Under MiFIR, it is the collateral that should be reported, not the repo itself.
• Only the purchase leg needs reporting.
• Repos with multiple collateral securities should be reported as a Complex Trade, a concept introduced for certain derivatives. This means breaking up such a repo into components.
• In cases where the collateral allocation is only available after the T+1 reporting deadline, ESMA leaves it to National Competent Authorities to assess whether the delay is justified, taking into account that the reported trade is an SFT.
• Pledge-based repos (which are really secured loans, not repos) must be reported, because the rules on what to report are set by SFTR, not MiFIR, and ESMA has interpreted SFTR as including pledge-based repos.

On 28 May 2020, the International Organization of Securities Commissions (IOSCO) published consultation on outsourcing principles to ensure operational resilience.

The Board of the International Organization of Securities Commissions (IOSCO) is requesting feedback on proposed updates to its principles for regulated entities that outsource tasks to service providers.  The consultation period will end on 1 October 2020.

The proposed Principles on Outsourcing are based on IOSCO´s 2005 Outsourcing Principles for Market Intermediaries and the 2009 Outsourcing Principles for Markets but their application has been expanded to include trading venues, market participants acting on a proprietary basis, credit rating agencies and financial market infrastructures.

The revised principles comprise a set of fundamental precepts and a set of seven principles.  The fundamental precepts cover issues such as the definition of outsourcing, the assessment of materiality and criticality, their application to affiliates, the treatment of sub-contracting and outsourcing on a cross-border basis.

The seven principles cover the following areas:  

• Due diligence in the selection and monitoring of a service provider 
• The contract with a service provider   
• Information security, business resilience, continuity and disaster recovery 
• Confidentiality Issues 
• Concentration of outsourcing arrangements 
• Access to data, premises, personnel and associated rights of inspection  
• Termination of outsourcing arrangements