Contents

• Download the full regulatory news bulletin
• Brexit: Draft Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021
• EU BMR: Regulation amending BMR to address benchmark cessation risks and exempt certain third-country FX benchmarks
• 2021 trade repositories fees: European Commission consults on Delegated Regulation supplementing EMIR and SFTR
• COVID-19: European Parliament adopts proposed Directive amending MiFID

Brexit: Draft Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021

A draft version of the Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021 has been published, together with a draft explanatory memorandum.

The instrument amends UK financial services law to reflect the creation of a UK Emissions Trading Scheme (ETS), to be governed by the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021, if approved by Parliament. This instrument is specifically concerned with amendments to financial services law that govern access to a UK ETS auction platform, what is required of an auction platform, and the auctioning and trading of emissions allowances as financial instruments. Among other things, it amends the Financial Services and Markets Act 2000 (FSMA) to continue the FCA's power to suspend auctioning of emission allowances if deemed necessary as part of its functions derived from market abuse regulations.

The instrument will amend several pieces of legislation, including:

• FSMA;
• the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
• the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005;
• the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; and
• the UK Market Abuse Regulation (UK MAR).

The draft Regulations state that they will come into force the day after they are made.

The FCA will consult on its own rule changes that will be enacted as a result of the Regulations and will also provide guidance on how the Regulations apply to the UK ETS.

EU BMR: Regulation amending BMR to address benchmark cessation risks and exempt certain third-country FX benchmarks

Regulation (EU) 2021/168 amending the Benchmarks Regulation (BMR) as regards the exemption of certain third-country foreign exchange (FX) benchmarks and the designation of replacement benchmarks for certain benchmarks in cessation has been published in the Official Journal of the European Union (OJ). The Regulation will enter into force and apply from 13 February 2021.

The purpose of the Regulation is to ensure that EU financial markets remain stable after they stop using the London Interbank Offered Rate (LIBOR). The European Commission has been granted the power to replace, when necessary, certain benchmarks (including certain critical and third country benchmarks).

2021 trade repositories fees: European Commission consults on Delegated Regulation supplementing EMIR and SFTR

The European Commission is consulting on a draft Delegated Regulation amending Delegated Regulations (EU) 1003/2013 and (EU) 2019/360 as regards the annual supervisory fees charged by ESMA to trade repositories for 2021 under the European Market Infrastructure Regulation (EMIR) and the Regulation on reporting and transparency of securities financing transactions (SFTR).

The European Securities and Markets Authority (ESMA) is responsible for registering and supervising trade repositories in the EU. Trade repositories must pay ESMA an annual fee for this service. This consultation considers the calculation of the fees to be paid by trade repositories in 2021.

The proposed amendments to these Regulations reflect the effect of two UK TRs transferring part of their services and activities to the EU to be able to continue providing services and activities to counterparties established in the EU. As the new EU TRs effectively started their activity in the EU in January 2021, their level of activity in 2020 was almost non-existent and consequently their annual supervisory fee for 2021 would be negligible, although their activities are likely to be significant.

The proposed Delegated Regulation changes the reference period for the calculation of the applicable turnover of trade repositories from 2020 to January to June 2021. This will have the effect of ensuring that the annual supervisory fees for 2021 for these TRs will be calculated on the basis of their applicable turnover during the first half of 2021.

The consultation closes on 9 March 2021. The Commission intends to adopt the Delegated Regulation in Q2 2021.

COVID-19: European Parliament adopts proposed Directive amending MiFID

The European Parliament has announced that it has adopted the proposed Directive amending the Markets in Financial Instruments Directive (MiFID) to help the EU's economic recovery from the COVID-19 pandemic. The Parliament has also published a provisional edition of the text of the proposed Directive as adopted.

The proposed Directive will enter into force on the day after its publication in the OJ.

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Authored by Yvonne Clapham