The rapporteur for the review of MiFID, Markus Ferber, has published this report, which includes marked-up suggested amendments to the proposal and an explanatory report summarising his proposed changes.

A directive has been proposed by the Committee on Economic and Monetary Affairs for the European Parliament to harmonise criminal penalties for insider traders across the EU. The committee sees the measures as “essential to ensure effective implementation of EU financial services legislation”. The European Parliament has argued that the sanctions should be ‘effective, proportionate and dissuasive’.

This BoE paper explains which criteria are important when determining the eligibility for central clearing of OTC derivatives/products, noting that suitability for mandatory central clearing is likely to depend on product and process standardisation, but also on market liquidity and that systemic risk reduction benefits associated with central clearing can only be achieved when CCPs have robust risk management processes.

This consultation covers risks related to legal, financial and operational arrangements, as well as issues related to access, governance and efficiency. Responses are required by 18 May 2012.

ESMA has published a new version of this document, which is aimed at competent authorities under MiFID to ensure that in their supervisory activities their actions are converging in accordance with the opinions provided by ESMA. New items are shown in red text.

Further to CP11/17, FSA sets out the final rules requiring certain firms to maintain and be able to retrieve a CASS Resolution Pack. The CASS RP contains documents and records that would help an insolvency practitioner return client assets more quickly following an investment firm failure. FSA summarises the feedback received and explains the changes have made as a result. It is noted that FSA will set out its response to other matters covered in CP11/16 in due course.

These Regulations make amendments to the Capital Requirements Regulations 2006/3221) (the “principal Regulations”) for the purposes of implementing (in part) Omnibus I and CRD 3. Regulation 3 amends the definitions in regulation 1(2) of the principal Regulations for the purposes of both Omnibus 1 and CRD3. Regulations 4 to 12 relate to Omnibus 1. Regulations 4 to 7 and 10 insert provisions into the principal Regulations enabling EBA to settle disagreements between competent authorities in relation to various joint decisions required to be made under Directive 2006/48/EC. Regulations 5, 6, 8, 9, 11 and 12 replace references to CEBS with references to EBA and include references to the EBA and ESRB in relation to various co-operation and notification obligations required. Regulations 13 and 14 relate to CRD3. Regulation 13 amends the principal Regulations to impose new duties on FSA to benchmark remuneration trends and practices in credit institutions and investment firms, collect information about employee remuneration and notify that information to EBA. Regulation 14 amends the list of relevant measures in regulation 26 of the principal Regulations, in relation to which certain provisions on disclosure of information in FSMA apply. (Date in force: 16/04/12)

This EC press release argues that, if adopted as a new own resource of the EU budget the financial transaction tax will significantly reduce the contributions of member states to the EU budget. According to estimates presented yesterday by the EC, Member States' contributions would be cut by €54bn in 2020 (a table within the press release estimates how each inpidual member state would be affected). . The EC proposes that two thirds of the revenues of the tax go to the EU budget, with the remaining one third being retained by Member States. It notes comments by Financial Programming and Budget Commissioner Janusz Lewandowski: “taxing the transactions of all financial institutions at rates as low as 0.01% is only fair. The financial sector does not pay VAT and has received massive support by taxpayer's money”.

This report provides an overview of ESMA’s supervisory activity and summarises the results of the first examinations ESMA conducted in December 2011 of three groups of credit rating agencies (Fitch, Moody’s and Standard & Poor’s). These examinations are the first step in an on-going supervisory process conducted by ESMA, which does not represent a full scope investigation. It is emphasised that ESMA has not determined whether any observation highlighted below constitutes a breach of the provisions of the Credit Ratings Regulation. ESMA is still progressing in its assessment of the areas discussed in the report and it is published without prejudice to the possibility of further investigations which could lead to enforcement or supervisory action. ESMA identified several shortcomings and areas for improvement that apply to a varying extent to all credit rating agencies relating to the following topics: transparency of rating methodologies, disclosure and presentation of ratings; adequacy of controls over IT systems; recording of core internal processes. ESMA will followup on the observations through risk mitigation plans for each inpidual credit rating agency in the first half of 2012.

The European Union has announced possible punitive fees for excessive cancelled orders. These will be modelled on the Nasdaq OMX Group ltm. exchanges in Nordic countries. Arlene McCarthy, a member of European Parliament said, “There should be an obligation on operators of trading venues to have in place rules to avoid what I would call abusive order entry,”