Brussels
24 February 2017
Reporter: Drew Nicol
EU watchdogs lay down the law on VM deadline
The EU supervisory authorities have chastised the union’s financial services industry for failing to meet the already delayed deadline for exchanging variation margin.

The criticisms came from the European Securities Markets Authority, the European Banking Authority and the European Insurance and Occupational Pensions Authority.

In a joint statement, the regulators acknowledged that the latest requirements posed significant operational challenges for smaller counterparties but reiterated that the initial six-month delay was allowed in order to address these issues.

The regulators confirmed that no further delays would be possible because of the lengthy process for adopting EU legislation.

It was also clarified that none of the regulators have the power to issue non-action letters such as the US Commodity Futures Trading Commission’s (CFTC), which allowed a seven-month grace period to finalise their compliance infrastructures for the new variation margin requirements.

“The timeline for implementation has been known in EU since 2015, and it is unfortunate that the financial industry has not managed to prepare for the implementation. Furthermore, a delay of nine months was already granted by Basel Committee on Banking Supervision and the International Organisation of Securities Commissions in 2015 on the basis of similar arguments from the industry,” the authorities explained.

“That delay was agreed with the clear expectation that the financial industry would be ready to prepare the implementation within two years.”

More regulation news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Profile Software enhances services ahead of MiFID II
19 May 2017 | Bern, Switzerland | Reporter: Becky Butcher
Profile Software has upgraded its web-based platform for wealth management, known as Axia, with new advisory service capabilities, ahead of implementation deadline of MiFID II's 3 January 2018 deadline.
Shadow banking on the up, says FSB
12 May 2017 | London | Reporter: Mark Dugdale
The value of the global ‘shadow banking’ market increased in 2015 to now stand at $34 trillion, according to the Financial Stability Board
Pension funds given three-year exemption to EMIR central clearing
05 May 2017 | Brussels | Reporter: Mark Dugdale
Pension funds have been handed a three-year exemption from central clearing of over-the-counter derivatives under the European Market Infrastructure Regulation
Geopolitics causing confusion in financial crime compliance
25 April 2017 | London | Reporter: Stephanie Palmer
The Trump administration’s approach to regulation is a concern when it comes to financial crime compliance, but experts speaking at the SWIFT Business Forum suggested that attendees may have bigger fish to fry
DTCC pushes ahead with best-interest standards despite regulatory delay
21 April 2017 | New York | Reporter: Stephanie Palmer
DTCC's WMS business will go ahead with new capabilities to meet the US DOL's mandatory best-interest standards for retirement savings, despite the department delaying implementation of the standards
European Parliament takes steps to bolster vulnerable MMFs
10 April 2017 | Brussels | Reporter: Stephanie Palmer
The European Parliament has finalised and approved new rules to make money market funds more resilient to turbulence in the market
Carney: Brexit challenges responsible financial globalisation
07 April 2017 | London | Reporter: Mark Dugdale
Carney’s speech on financial services, delivered at Thomson Reuters in London’s Canary Wharf, comes a week after the UK triggered Article 50 and commenced the two-year period for negotiating its exit from the EU
More regulation news