Wednesday, February 3, 2021

EU Tips the Scales toward ESG-Friendly Financial Firms

SFDR is About to Set off a Competitive Frenzy

Author: David Schwartz

The European Union has embarked on an aggressive legislative push to make environmental, social, and governance (ESG) considerations as a focus of financial services industry regulation. The first salvo in the EU push, the Regulation on Sustainability-Related Disclosures in the Financial Services Sector (SFDR), was finalized in December of 2019, with an implementation deadline for key provisions (Level 1) on March 10, 2021. The new regulation is broadly applicable to almost any type of asset manager, including investment firms, banks, pension funds, and insurance companies. The effect of SFDR is expected (and may even be intended) to be felt beyond the financial sector, shifting market appetites toward ESG-friendly companies, giving such companies a competitive advantage in the ability to raise capital in the corporate finance market.

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Categories: All, Cross-Post

Tags: EU, ESG

Sunday, July 17, 2016

EU Urges a New Look at Basel Reforms

Have we traded growth for stability?

Author: David Schwartz

In his final address on July 12, 2016 as the EU’s Commissioner for Financial Stability, Jonathan Hill announced that the European Commission would push the Bank for International Settlements (BIS) to rethink some of its Basel III reforms in light of their affects on capital, trade finance, market liquidity, and access to clearing.  While applauding the regulatory work done to ensure financial stability, Hill worries that global regulators have become too risk averse, missing the big picture and trading growth for stabil

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Sunday, June 3, 2012

EU Financial Transaction Tax Casts an Extremely Wide Net

Author: David Schwartz
On May 23, the European Parliament adopted a controversial financial transaction tax that would impose a 0.1% tax for shares and bonds and a 0.01% tax on derivatives. The language casts a very wide net and would require financial institutions located outside the EU to pay the tax if they traded securities originally issued within the EU, as well as taxing shares issued outside of the EU but subsequently traded by at least one institution established within the EU.
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Monday, April 30, 2012

Comparing US and EU Derivatives Regulation Regimes

Author: David Schwartz

As a result of commitments made at the G20 in 2009, member states across the globe are engaging in a number of regulatory reform initiatives addressing derivatives. Though the G20 members agreed to some basic principles of regulation, and officials say that some level of cooperation and coordination is happening, the proposed regimes are not identical, and each may have extraterritorial effects.  These new sets of rules and regulations emanating from each jurisdiction's initiative may present some difficult compliance issues for end users of derivatives with global trading operations.  Sidley & Austin has put together a report comparing and contrasting some of the provisions and new regulations under the US's Dodd-Frank Act and those under the EU's EMIR and MiFID II.

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Saturday, March 3, 2012

ESMA Issues Consultation Draft on Regulation of OTC Derivatives, CCPs and Trade Repositories

Author: David Schwartz
The European Securities and Markets Authority has issued a discussion draft on proposed regulation of  OTC Derivatives, CCPs and trade repositories.  The draft introduces provisions to improve transparency and reduce the risks associated with the OTC derivatives market and establishes common rules for central counterparties and for trade repositories.
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