Commission Delegated Regulation (EU) 2017/583 sets out the transparency requirements applicable to bonds, structured finance products, emission allowances and derivatives.
In order to ensure a smooth implementation of those requirements, that Delegated Regulation has introduced an annual phase-in of application of certain transparency thresholds over the course of 4 years, starting from 2019.
That phase-in allows gradual broadening of the application of corresponding transparency obligations.
This concerns, in particular, the ‘average daily number of trades’ criterion used for the determination of bonds for which there is a liquid market and as the trade percentiles used for the determination of the size specific to the instrument (SSTI) which allows for pre-trade transparency obligations to be waived.
The report highlights the increasing vulnerabilities across the financial sector as well as the rise of environmental and cyber risks.
Some of the risks emerging during 2021 and highlighted in the report were amplified by Russia’s invasion of Ukraine. The EU economy was on track for a strong recovery from the crisis caused by the Covid-19 pandemic and the financial sector largely proved resilient. However, the recovery appears to have been hindered by new waves and variants of the virus, concerns regarding inflation risk, rising commodity prices and heightened geopolitical risks.
In light of the risks and uncertainties, the ESAs advise national competent authorities, financial institutions and market participants to take the following policy actions:
In light of the risks and uncertainties, the ESAs advise national competent authorities, financial institutions and market participants to take the following policy actions:
  • Financial institutions should be prepared for further potential negative implications stemming from geopolitical tensions and ensure compliance with the sanctions regimes put in place both at the EU and at global levels;
  • Financial institutions and supervisors should prepare for a possible deterioration of asset quality in the financial sector;
  • The impact of further increases in yields and sudden reversals in risk premia on financial institutions and investors should be closely monitored;
  • Retail investors are of particular concern, and supervisors should monitor risks to retail investors seeing that their participation in financial markets has increased substantially in recent years;
  • Financial institutions should further incorporate ESG considerations into their business strategies and governance structures; and
  • Considering the elevated level and frequency of cyber incidents, financial institutions should strengthen their cyber resilience and prepare for a potential increase in cyberattacks.
ESMA has published the updated Guidelines on Market Abuse Regulation (EU) No 596/2014 (MAR) with regard to delaying disclosure of inside information and interactions with prudential supervision.
The Guidelines add some cases of legitimate interest of issuers to delay the disclosure of inside information.
The Guidelines clarify the following
  • in the case of redemptions, reductions and repurchases of own funds subject to supervisory authorisation, institutions have a legitimate interest in delaying the disclosure of inside information until the competent prudential authority has authorised the transactions;
  • there is a legitimate interest for institutions to delay the disclosure of the draft SREP decision informally communicated to an institution, until that decision becomes final after the completion of the decision process by the competent prudential authority;
  • with regard to the content of SREP decisions, P2Rs should be considered as privileged and highly price-sensitive information, while P2Gs could be only privileged information.
The Guidelines stem from Commission Delegated Regulation (EU) 2021/1257  and aim at:

  • Promoting a coherent application of the Delegated Regulation by insurance undertakings and insurance intermediaries across Member States and National Competent Authorities (NCAs);
  • Restricting the potential for the mis-selling of insurance products with regard to the sustainability preferences of consumers; and
  • Promoting a more convergent approach by NCAs in the supervision of insurance undertakings and insurance intermediaries.
EIOPA’s draft Guidelines provide guidance on:
  • How to help customers better understand the concept of “sustainability preferences” and their investment choices;
  • The collection of information on sustainability preferences from customers;
  • How to match customer preferences with products, based on the SFDR product disclosures;
  • When to assess sustainability preferences (i.e. only once the suitability of the product has been assessed according to the customer’s knowledge and experience, financial situation and other investment objectives); and
  • The sustainable finance-related competences expected of insurance intermediaries and insurance undertakings who provide advice on IBIPs.
The consultation will end on 13 May 2022.