(Only in Italian)
(Only in Italian)
Council Regulation (EU) 2022/2578 establishing a market correction mechanism to protect Union citizens and the economy against excessively high prices (the ‘MCM Regulation’) sets up a temporary market correction mechanism (‘MCM’) for orders placed for trading Title Transfer Facility (TTF) derivatives and derivatives linked to other virtual trading points (‘VTPs’) with maturities between month-ahead and year-ahead. This means that the MCM applies to any commodity derivative, traded on a regulated market, the underlying of which is a transaction in gas in any VTP in the Union.
The MCM regulation sets out the technical details of the application of the MCM solely with respect to orders placed for TTF derivatives, and not for orders placed for derivatives linked to other VTPs. This was due to the urgent need to apply the MCM to the TTF derivatives, commonly seen as the standard pricing proxy on European gas markets, and because the application of the MCM to orders for derivatives linked to other VTPs required additional preparation.
Therefore, the MCM Regulation empowers the Commission to adopt an implementing act to define the technical details of the application of the MCM to derivatives linked to such other VTPs, namely regarding the occurrence of a market correction event and the application of a dynamic bidding limit with respect to such derivatives. The MCM Regulation also empowers the Commission to exceptionally exclude certain derivatives amongst those linked to other VTPs.
The Commission is of the view that the MCM should apply to all derivatives linked to other VTPs, and that this should be subject to no exception. In their effects assessment reports, ACER and ESMA confirmed the Commission’s position, namely that the inclusion of the other VTPs does not lead to significant negative effects on financial or gas markets.
Both ACER and ESMA noted that the extension of the MCM to derivatives linked to other VTPs may carry limited additional benefits, that most of those derivatives lack sufficient liquidity, and that some central clearing counterparties (‘CCPs’) may incur additional costs to change their default management process.
However, in view of the implementation of the MCM regulation, both ACER and ESMA concurred with the Commission’s conclusion that the application of the MCM to all derivatives linked to other VTPs does not lead to significant negative effects on financial or gas markets.
In order to preserve the sound functioning of derivatives markets and to allow market participants to adequately manage their risk exposures, it is of paramount importance that this Regulation does not interfere with contracts concluded before the entry into application of this Regulation.
Therefore, the dynamic bidding limit should not apply to contracts entered into before the entry into force of this Regulation, nor to trades that allow market participants to offset or reduce positions resulting from contracts in derivatives linked to other VTPs concluded before the entry into force of this Regulation.
Moreover, CCPs play a key role in assuring the orderly functioning of markets for TTF derivatives by mitigating counterparty risk. It is equally important to ensure that the extension of the mechanism to other VTPs does not put CCPs clearing the relevant instruments at risk in case of default of a clearing member.
Those CCPs should therefore be able to implement default management processes without being subject to the bidding limit. To that end, the dynamic bidding limit should not apply to trades executed as part of a default management process organised by a CCP.
In this way, CCPs would have the flexibility to deal effectively with default situations, without having to worry about supply limits imposed by the market. This would ensure the stability and safety of the FTT derivatives markets and other VTPs, preventing possible crises and increasing investor confidence.
The Regulation will apply as of 1 May 2023.
Ransomware attacks target individuals, businesses and government agencies, across the world. The impact of these attacks can be devastating for individuals, government agencies and business activity and even disrupt essential infrastructure and services.
This FATF report analyses the methods that criminals use to carry out their ransomware attacks and how payments are made and laundered. Criminals are almost exclusively using crypto, or virtual assets and have easy access to virtual asset service providers around the world. Jurisdictions with weak or non-existent AML/CFT controls are therefore of concern.
The report proposes a number of actions that countries can take to more effectively disrupt ransomware-related money laundering.
This includes building on and leveraging existing international cooperation mechanisms, given the transnational nature of ransomware attacks and related laundering.
Authorities also need to develop the necessary skills and tools to quickly collect key information, trace the nearly instantaneous financial transactions and recover virtual assets before they dissipate.
The multi-disciplinary nature of ransomware also means that authorities must extend their collaboration beyond their traditional counterparts to include cyber-security and data protection agencies.
The FATF also finalized a list of potential risk indicators that can help public and private sector entities identify suspicious activities related to ransomware.
