Eugene Grygo, chief content editor, FTF News
In comparison to the gut-wrenching twists and turns of 2016, this year provided us with moments of healing, reflection and hope even though many events rocked the landscape for the securities industry.
But, at certain points in 2017, rationality prevailed such as when on Dec. 20, the European Securities and Markets Authority (ESMA) issued a statement to “support the smooth implementation of Legal Entity Identifiers (LEI) requirements under the Markets in Financial Instruments Regulation (MiFIR).”
The LEI effort is one of the most inspiring standards efforts ever and MiFIR is a key part of the MiFID II reforms. It makes sense that the regulator hit the pause button to allow everyone to catch up. (I wonder if there will be similar pauses for other parts of MiFID II. We will see.)
In fact, officials from ESMA and the national competent authorities (NCAs) acknowledge that they became aware of the agita that investment firms were feeling about the LEI codes they needed to gather from their clients before the MiFIR/MIFID II deadline of Jan. 3 2018, a day that may live in infamy. Given everything else firms have to do, ESMA cut the industry some slack by allowing “for a temporary period of six months that:
- “Investment firms may provide a service triggering the obligation to submit a transaction report to the client, from which it did not previously obtain an LEI code, under the condition that before providing such service the investment firm obtains the necessary documentation from this client to apply for an LEI code on his behalf;
- And trading venues report their own LEI codes instead of LEI codes of non-EU issuers currently not having their own LEI codes.”
The full ESMA statement is here.
In other sexy securities industry news, FTF News and its parent Financial Technologies Forum (FTF) are taking a break next week. However, through the magic of web technology, we have set up a feast of the best of our news coverage for 2017 that you may peruse at your leisure from Dec. 26 to Dec. 29.
In the meantime, I have done my own completely unscientific review of some of the top stories of 2017 and compiled the following list, which is completely separate from next week’s recaps.
This list of 10, which are among the most-read stories from 2017, reflects the very high fines/penalties that firms have had to pay to regulators, the burdens that regulation brings, the very real threat of cyber-attacks, and a regulator’s authority to push a firm out of the industry.
- BNPP Pays $246 Million Fine, Agrees to FX reforms (July 26)
- MiFID Challenges Hit Buy Side Hardest (May 30)
- Merrill Lynch Fined $45M for Derivatives Reporting Failures (November 2)
- Federal Reserve Fines Deutsche Bank $156 Million (April 27)
- Fed Penalizes Deutsche Bank $41 Million and Demands Ops Overhaul (June 7)
- Most firms Overwhelmed by MiFID II Best Execution Rules (September 8)
- Ex-Nomura Traders Charged with Lying to Customers (May 24)
- The Bangladesh Bank Hacking Case Remains Unsolved (Minding the Gap, July 6)
- FINRA Expels Lawson Financial, Bars CEO on Fraud Charges (February 9)
As 2017 winds down, it’s fair to ask whether the U.S. regulators will be steering their focus away from enforcement and more toward the promotion of U.S. financial markets. It’s also fair to wonder what the Trump tax cuts might do to global markets and thus behind-the-scenes operations. We should also ask if the U.S. markets can learn from the European authorities and their market reforms.
You could also just chill out and recharge your batteries, and gear up for what is likely to be a rollicking 2018.
Whatever happens, we will return Jan. 2, 2018
So, until then, Happy Holidays and Happy New Year from all of us at FTF!
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