Europe: Commission Communication on financial services regulation

The European Commission has published a Communication titled Regulating Financial Services for Sustainable Growth: see here (pdf). The Communication describes the actions already taken by the Commission as well as forthcoming proposals. The Commission intends that the vast majority of its new proposals will be presented to the Council and European Parliament by the end of 2010.

These proposals will cover derivatives, credit default swaps, short-selling, improvements in the Markets in Financial Instruments Directive, revisions to the Deposit Guarantee Schemes Directive and the Investor Compensation Schemes Directive, revisions to expand the scope of the Market Abuse Directive to include derivatives, amendments to the Capital Requirements Directive (CRD IV), a Communication on sanctions in the financial services sector to promote convergence, and further work on international accounting standard convergence.

UK: the Financial Services and Markets Act 2000 (Amendments to Part 18A etc.) Regulations 2010

The Financial Services and Markets Act 2000 (Amendments to Part 18A etc.) Regulations 2010 were laid before Parliament on April 7 and come into force today. A copy of Regulations is available here (html) and here (pdf). In the accompanying explanatory memorandum - available here (pdf) - the purpose of the Regulations is explained as follows:

The Markets in Financial Instruments Directive (MiFID) required competent authorities to be given powers to suspend trading in a financial instrument. The FSA was given these powers under [the Financial Services and Markets Act 2000 (FSMA)] as the competent authority in the UK. The FSA is currently required to give written notice individually to each institution on whom it proposes to impose a requirement to suspend or remove a financial instrument (such as the shares of a particular firm) from trading. The FSA does not find this procedure practical or efficient as they would have to identify and write to the thousands of firms who trade bilaterally (known as ‘over-the-counter’ or OTC trading). As a result, the FSA is not able to impose a trading suspension with immediate effect ...

The purpose of these Regulations is to amend Part 18A of the FSMA to permit the FSA to suspend trading in a financial instrument or class of financial instrument by notice to the market without the need for separate written notice to the institutions concerned".