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COVID-19

A summary of AFME coronavirus-related capital markets, compliance and prudential advocacy as well as official-sector pronouncements

COVID-19 has had significant implications for our members globally with many having to focus resources on managing business continuity issues. 

AFME is working together with our members and regulators to ensure that markets remain well-functioning and liquid in light of the market impact of COVID-19. 

We are continuing to monitor developments and below is an overview of the most recent regulatory decisions and AFME responses where relevant.

If your questions cannot be answered here, please do not hesitate to contact our press team.

To listen to our Markets, Compliance and Prudential audio updates, visit our Podcast page.


Markets Markets

- Regulatory Pronouncements - Regulatory Pronouncements

  • Bilateral margining requirements: On 4 May, the ESAs published draft RTS to incorporate a one-year deferral of the two implementation phases of the bilateral margining requirements.
  • MiFID II compliance: On 6 May, ESMA issued a statement on risks for retail investors in the current market environment and reminding investment firms of key conduct of business obligations when servicing retail clients.
  • UK announcements: On 7 May, the BoE and PRA issued announcements regarding flexibility on resolution requirements, the effective removal of Pillar 2A capital requirements and a general statement on prioritisation in light of COVID addressing issues including climate change and LIBOR transition.

  • Our sister organisation GFMA (FX Division) and ISDA have co-signed a letter on EMIR Refit requesting a reflexible and pragmatic approach to ESMA's supervision of the regulation amid COVID-19. April 27
  • Regulatory reporting: On 22 April  the FCA announced an extension of the submission deadlines for various regulatory returns. The extension applies for submissions that are due up to and including 30 June 2020. 

ESMA issued on (9 April) a public statement postponing MiFID/MiFIR publication dates:

  • The publication of the annual non-equity transparency calculations is now 15 July 2020 – previously due by 30 April 2020. Their application will be now 15 September 2020 – previously 1 June 2020, and the transitional transparency calculations will apply until 14 September 2020

  • The publication of the systematic internaliser data for derivatives, ETCs, ETNs, emission allowances and structured finance products is now due by 1 August 2020 – previously due 1 May 2020, and the mandatory regime will apply from 15 September 2020
  • The publication and application of the transparency calculation for bonds continues to be applicable from 1 June 2020

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  • Basel Committee and IOSCO announce deferral of final implementation phases of the margin requirements for non-centrally cleared derivatives (3 April)
  • The timelines for responding to the European Commission banking and finance consultations launched by Directorate‑General for Financial Stability, Financial Services and Capital Markets Union have been extended (updated - 3 April):
  1. The review of the MiFID II/MiFIR regulatory framework deadline has been extended until 18 May 2020. 
  2. The revision of the non-financial reporting directive deadline has been extended until 11 June 2020.


  • AFME response to the Pre-Emption Group (PEG) announcement on relaxation of pre-emption rights for share issuance (1 April)
  • ESMA issued a no-action relief statement for the upcoming best execution reporting deadlines for execution venues and investment firms under MiFID 2/R  (31 March).

Tick size regime changes (operational risks in pursuing implementation by 26 March)

  • Regulatory developments: ESMA issued a statement, supported by the FCA, noting that ESMA expects competent authorities not to prioritise their supervisory actions in relation to the new tick-size regime from 26 March, the application date, until 26 June 2020, and to generally apply their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner. AFME also issued a  statement.

SFTR (operational/stability risks in implementing reporting obligations by 11 April)

  • AFME is a Member of the EFSA and sent a request for postponing the entry into force of SFTR 18 March
  • Regulatory developments: ESMA issued a statement, supported by the  FCA, noting that ESMA expects competent authorities not to prioritise their supervisory actions towards entities subject to Securities Finance Transactions (SFT) reporting obligations as of 13 April 2020 and until 13 July 2020. ESMA also expects TRs to be registered sufficiently ahead of the next phase of the reporting regime, i.e. 13 July 2020, for credit institutions, investment firms, CCPs and CSDs and relevant third-country entities to start reporting as of this date. ESMA issued an updated statement on 26 March providing further clarifications.


Margin Requirements for Non-Centrally Cleared Swaps: AFME/GFMA co-signed a joint trades letter to BCBS and IOSCO requesting a suspension of the IM phase-in.


Initiative on Keeping European Markets Open

  • AFME and other trade associations issued a joint statement on 20 March addressed to EU and UK authorities to emphasise the importance of keeping the European financial markets open during this period.
  • In the days that followed, European and global authorities issued communications pledging to ensure open and functioning markets. They include:


Consultation Extentions

ESMA issued a statement extending the response date for all ongoing consultations with a closing date on, or after, 16 March by four weeks.

The four-week extension applies to the following open consultations:

Consultation on MiFIR report on SI

Guidelines on securitisation repository data completeness and consistency thresholds

Consultation on MiFID II/ MiFIR review report on the transparency regime for equity

Draft Regulatory Technical Standards under the Benchmarks Regulation

Draft technical standards on the provision of investment services and activities in the Union by third-country firms under MiFID II and MiFIR

Consultation paper on MiFIR Review Report on Transparency for Non-equity TOD

- Publications - Publications

  • AFME has published a new research note on the “Initial impact of COVID-19 on Europe’s capital markets” (April 21) - The report analyses the significant impact that Covid-19 has had across all major capital markets sectors including: equities (IPOs and secondary), fixed income primary and secondary  (sovereigns, corporates, securitisation, high yield, leveraged finance), FX, derivatives, and banks. 

Compliance Compliance

- Regulatory Tracker Documents - Regulatory Tracker Documents

Tracker document providing an overview of selected announcements from markets authorities at European and national level - updated April 21

Overview of statements from authorities on financial crime risks in the pandemic - updated April 24

Letters


Prudential regulation & supervision; recovery & resolution Prudential regulation & supervision; recovery & resolution

- Official sector response tracker - Official sector response tracker

AFME is working with official sector authorities to ensure that its members can continue to support their clients during these challenging times. 

The EBA, ECB, FSB, the SRB and BoE/PRA have already issued a number of helpful clarifications and guidance which can be found here: 


Blog: Is Europe doing too little too late again?

European authorities have made changes to help give banks enough capacity to support their customers in light of COVID-19, but have these changes gone far enough? Michael Lever, Head of Prudential regulation at AFME, is author of a piece that discusses this topic.

- Podcasts - Podcasts

Rebecca Hansford

Head of Media Relations

+44 (0)20 3828 2693