MONTHLY REGULATORY updates
C516 - Findings of the assessment of Compliance Officers' Annual Reports and Internal Audit Reports on the prevention of money laundering and terrorist financing, for the year 2021 (link)
Through C516 CySEC informs the regulated entities for the findings of the assessment performed by CySEC of the Compliance Officers' Annual Reports and Internal Audit Reports on the prevention of money laundering and terrorist financing, for the year 2020.
CySEC informs that in carrying out assessment reviews, CySEC evaluated regulated entities' adherence to the requirements set out in the:
- Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 (L.188(I)/2007), as amended
- CySEC's Directive for the Prevention of Money Laundering and Terrorist Financing
- Circular C033
- Circular C186
- Circular C191
Circular C516 refers to the common weaknesses and deficiencies identified during the assessment as to the content of the:
- Compliance Officers' Annual Reports on the prevention of money laundering and terrorist financing and the relevant BoD minutes.
- Internal Audit Reports on the prevention of money laundering and terrorist financing and the relevant BoD minutes.
This Circular C516 also refers to the obligations of regulated entities, taking into account the findings of the assessment.
CySEC notes that regulated entities should be aware that common and recurring weaknesses and deficiencies will be the subject of rigorous compliance checks by the CySEC.
CySEC expects that all regulated entities take into account the findings that are referred in this Circular C516 when preparing the Reports for the calendar year 2021 and onwards.
C517 - EU Council's Restrictive Measures against Russia due to its military aggression against Ukraine - EU adopts sixth package of sanctions (link)
Through C517 CySEC draws the attention of the Regulated Entities to the additional restrictive measures of the Council of the European Union ('EU Council') dated 3 June 2022 imposed against Russia due to its military aggression against Ukraine.
Amendments and additions were made to COUNCIL REGULATION EU) 2022/879 of 3 June 2022, amending Regulation (EU) No 833/2014 concerning Article 5m (amended), Article 3m (new) & Article 5n (new).
Considering these amendments/additions to COUNCIL REGULATION (EU) 2022/879, all Regulated Entities that are affected by the said restrictive measures are expected to inform CySEC by Tuesday, 21 June 2022, at the latest, regarding the appropriate actions/measures taken or intended to be taken by the Regulated Entity for compliance with Articles 5m, 5n and 3m, if applicable.
It is reminded that the obligation of the Regulated Entities to report to CySEC the existence of business relationships with persons or entities subject to the EU Council's Restrictive Measures against Russia due to its military aggression against Ukraine, constitutes a continuous obligation and requires compliance for both existing EU Council's Restrictive Measures, and those which may be imposed in the future against Russian for its military aggression against Ukraine.
Investment Services & Regulated Markets
MiFIR & MiFID
ESMA will not publish August Systematic Internaliser regime data for non-equity instruments other than bonds and CTP data (link)
On 28 June 2022, the European Services and Markets Authority (ESMA) declared that will not publish the 1 August 2022 publication of the Systematic Internaliser (SI) regime data for non-equity instruments other than bonds, as well as that of the consolidated tape (CTP) data. This is caused by the operational constraints which prevent it from performing the scheduled calculations.
Upon market participants' requests, ESMA has been computing, on a voluntary and best effort basis, the total volume and number of transactions executed in the EU in order to help market participants meet their obligations since that data is not otherwise easily available.
Systematic Internaliser Regime
The non-publication of the data means the mandatory SI regime will not apply from 15 August to 14 November 2022, and investment firms (IFs) will not need to perform the SI-test for non-equity instruments other than bonds. Nevertheless, IFs can continue to opt into the SI-regime in the interim period.
The SI-calculations for non-equity instruments other than bonds will resume on 1 November 2022, based on an observation period from 1 April 2022 to 30 September 2022. IFs will then be required to perform the SI determination by 15 November 2022.
The CTP calculations will resume at the next regular publication date on 1 February 2023 based on an observation period from 1 July 2022 to 31 December 2022.
ESMA reminds reporting entities of their obligations to continue reporting transparency data also in the absence of the August publication for non-equity instruments other than bonds, in order to ensure that the transparency data covers trading activity necessary for subsequent transparency calculations.
Anti Money Laundering (AML) & Financial Crime
New EU Authority for Anti-money laundering: Council agrees its partial position (link)
On 29 June 2022, The Council of the European Union announced that it agreed its partial position on the proposal of the European Union to create a dedicated Anti-money laundering Authority (AMLA) in order to boost the efficient functioning of the AML and CFT framework. The new Authority will make a strong contribution in the fight against ML and TF, by supervising the practices in both financial and non-financial sections and the oversight of the high-risk and cross-border financial entities.
Attention also will be given on other types of credit such as Crypto Asset Service Providers which are recognised as risky.
ESMA updated Q&A on the Market Abuse Regulation (MAR) (link)
On 23 June 2022, the European Securities and Markets Authority (ESMA) updated its Q&A on the Market Abuse Regulation (MAR).
This document intends to promote common supervisory approaches and practices in the application of MAR by providing responses to questions posed by the general public and competent authorities in relation to the practical application of the MAR framework.
In this version, a new Q&A concerning the scope of Article 11(1a) of the MAR was added. More specifically, Q&A 9.2 explains whether the scope of Article 11(1a) is limited to the communication of information to one or more potential investors who negotiate the terms and conditions to subscribe to bonds, or whether it covers the full process of private placement of bonds to qualified investors including the offering of bonds to potential investors contacted after the terms and conditions have been determined.