Recent regulatory updates: EU and UK RTS27 reliefs and UK EMIR updates

The past few weeks have been busy with several regulatory updates across the EU and the UK. Some noteworthy changes are presented below:

EU temporary relief from RTS 27 reporting

Last month, the European Parliament and the EU Council published Directive (EU) 2021/338, amending MiFID II to help recovery from the COVID-19 pandemic. The Directive is coined by industry circles as the MiFID II ‘Quick-Fix’ Directive.

The MiFID II ‘Quick-Fix’ Directive amends MiFID II, inter alia, by adding the following subparagraph in Article 27(3) ‘The periodic reporting requirement to the public laid down in this paragraph shall not apply until 28 February 2023. The Commission shall comprehensively review the adequacy of the reporting requirements laid down in this paragraph and submit a report to the European Parliament and the Council by 28 February 2022.

Member States are expected to adopt and publish by 28 November 2021 the laws, regulations and administrative provisions necessary to comply with the MiFID II ‘Quick-Fix’ Directive.

The measures introduced by MiFID II ‘Quick-Fix’ Directive shall apply from 28 February 2022.

There is a good chance that Member States will proceed to temporary relieve firms from RTS 27 reporting before formal transposition of the MiFID II ‘Quick-Fix’ Directive into local laws considering also last year’s relevant regulatory forbearance that ESMA published, but this still remains to be seen.

FCA supervisory flexibility on RTS 27 reporting

Last week, the FCA published a statement specifying that they are putting in place temporary measures with respect to RTS 27 reports while they consult on changes to these requirements later this Spring. Specifically, the FCA will not be taking action against firms who do not produce RTS 27 reports for the rest of 2021.

FCA updates its UK EMIR validation rules

On another development, last week, the FCA has updated its validation rules for UK EMIR. The update concerns field 1.30 Variation Margin Received where the requirement to leave blank the said field if the Collateralisation field is populated with ‘U’ (Uncollateralised) has now been removed. The amendment will apply from 21st June 2021.