ESMA consults on revised guidelines to support smoother allocations and confirmations under T+1 26 May 2026 Post Trading The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has launched a consultation on the updated guidelines on standardised procedures and messaging protocols. This review is part of ESMA’s work to support market participants in preparing for the transition to a T+1 settlement cycle. The updates are designed to make post ...
ESMA has launched a consultation on **revised ESMA Guidelines on standardised procedures and messaging protocols for allocations and confirmations**, aligning them with the forthcoming CSDR Settlement Discipline RTS amendments and the EU’s move to **T+1 settlement by 11 October 2027**. The draft guidelines harden expectations around **mandatory electronic, standardised, machine‑readable communication** for post‑trade processes and remove reliance on manual or non‑machine‑readable methods, significantly tightening operational requirements for EU trading, post‑trade and operations functions.
What Changed
- - ESMA proposes revised Guidelines on standardised procedures and messaging protocols for allocations and confirmations under CSDR Settlement Discipline, specifically to support the transition to a...
- The guidelines will mandate the use of electronic, standardised communication channels for post‑trade allocations and confirmations, moving away from mixed paper / manual practice to fully electronic...
- Firms will be required to use international messaging standards (e.g. ISO‑based protocols) for post‑trade communication, to ensure interoperability and faster straight‑through processing across EU...
- The guidelines remove references to non‑electronic and non‑machine‑readable methods, including oral allocations and confirmations, except where there is a temporary technical disruption that prevents...
- The revisions are explicitly aligned with ESMA’s Final Report on Amendments to the CSDR RTS on Settlement Discipline, which introduce same‑day timing for allocations and machine‑readable formats for...
Suggested Considerations
- Map all current allocation and confirmation workflows and identify any use of non‑electronic, non‑standardised or non‑machine‑readable communication (including email attachments, faxes, PDFs, and oral instructions).
- Develop and execute a remediation plan to replace manual or oral allocation and confirmation processes with fully electronic, machine‑readable workflows using recognised international messaging standards.
- Review and update front‑to‑back trade processing systems (OMS, EMS, middle‑office, back‑office, matching engines) to ensure they can generate, receive and process standardised electronic allocation and confirmation messages within same‑day T+1‑compatible timelines.
- Engage with CSDs, custodians, brokers, counterparties and third‑party vendors to confirm their roadmap and readiness for the mandated electronic standards and to align implementation timelines to the 7 December 2026 application date.
- Update contractual documentation with clients and counterparties (including terms of business and service level agreements) to incorporate obligations for electronic, standardised, machine‑readable allocations and confirmations and to remove reliance on manual methods except as contingency.
Key Dates
– Deadline stated by ESMA for stakeholders to submit consultation feedback on the revised guidelines
– ESMA expects to publish its final report, including updated and finalised guidelines on standardised procedures and messaging protocols
– Expected application date of the revised ESMA Guidelines on allocations and confirmations, aligned with the anticipated application of the amended CSDR RTS on Settlement Discipline requirements for allocations and confirmations
– EU transition date to a T+1 settlement cycle, when trades in in‑scope instruments must settle one business day after the trade date and firms must fully operate under the new T+1‑aligned post‑trade framework
Compliance Impact
The change is high impact for operational and conduct compliance: failure to implement mandatory electronic, standardised post‑trade communication and to meet compressed T+1 timelines will directly increase settlement fails, trigger CSDR Settlement Discipline measures and may expose firms to supervisory findings, sanctions and client detriment. Given the hard deadlines and dependency on technology and counterparties, non‑compliance risks crystallising as both regulatory breaches and material operational risk.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
Broker DealerBankAsset Manager No description available.
BankInsuranceAsset Manager No description available.
Bank
No description available.
Bank
No description available.
Bank
No description available.
Bank
No description available.
Bank
No description available.
Bank
Joint Committee annual report highlights digitalisation, cyber resilience and sustainable finance as key priorities of 2025 24 April 2026 Joint Committee The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published its Annual Report for 2025 , setting out the main priorities and achievements of its cross-sectoral work over the past year. In 2025, the Joint Committee focused on protecting consumers in increasingly digital financial markets, stren...
Fintech
ESMA launches a call for evidence on restricted subscription and private credit ratings 16 April 2026 Credit Rating Agencies The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today launched a call for evidence to gather stakeholder views on the purposes, market practices, needs and risks associated with restricted subscription and private credit ratings. ESMA is encouraging all interested stakeholders to share views, data and analysis i...
ESMA has launched a call for evidence on restricted subscription and private credit ratings to gather stakeholder input on their market practices, uses, risks, and potential regulatory gaps under the CRA Regulation. This matters because rising use of these non-public ratings could prompt future clarifications or adjustments to ensure consistent standards with public ratings, impacting credit rating agencies (CRAs) and users reliant on them for regulatory or investment purposes.
What Changed
There are no immediate regulatory changes; this is a fact-finding call for evidence to assess whether adjustments to the CRA Regulation are needed. ESMA seeks views on definitions (e.g., restricted subscription ratings as selectively distributed to limited subscribers with economic interest; private ratings excluded from CRA scope if not distributed to >150 persons), production processes, governance comparability to public ratings, distribution risks, and market needs. Potential future outcomes include enhanced clarity on CRA Regulation application, but none are confirmed yet.
Suggested Considerations
- Review the full Call for Evidence document and annexes for specific questions on restricted subscription (Annex I) and private credit ratings (Annex II).
- Prepare and submit evidence-based responses addressing key areas: use cases/benefits vs. public ratings, contracting/distribution parties, analytical/governance comparability, transparency impacts, risks/mitigations, and multi-CRA practices.
- Provide quantitative data, concrete examples, and rationale; indicate specific questions and alternatives considered.
- Submit online by 31 May 2026 using the docx reply form; note responses may be published unless confidentiality requested.
Key Dates
- ESMA reviews responses to assess potential regulatory adjustments under CRA Regulation
- Deadline for submitting evidence-based responses, including quantitative data and market examples, via ESMA's online consultation form in docx format
Compliance Impact
Urgency: Medium - This is not mandatory rulemaking but a critical opportunity to influence potential CRA Regulation clarifications amid growing private rating use, which could standardize governance/internal controls or expand scope. Firms using or issuing these ratings should engage to mitigate risks of future unaddressed practices leading to enforcement or restrictions; inaction may expose gaps if ESMA identifies inconsistencies with public rating standards.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
Asset ManagerBankAll Firms
No description available.
BankAsset ManagerWealth Manager
ESMA publishes latest edition of its newsletter 10 April 2026 ESMA newsletter The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published today its latest edition of the Spotlight on Markets newsletter. This edition opens with ESMA’s actions to simplify the retail investor journey and make investing more accessible, setting out steps to support retail participation in capital markets. Top news highlights include the publication of t...
ESMA's latest *Spotlight on Markets* newsletter (edition 42, published 10 April 2026) summarizes recent supervisory, enforcement, and policy actions, emphasizing simplification of retail investor access, high market risks per the first 2026 TRV report, and key publications on transparency, suitability, MiFID II/MiFIR data, and Listing Act compliance.[User Query] This matters for compliance teams as it signals ESMA's priorities in reducing regulatory burdens while enhancing investor protection and market transparency amid a high-risk environment.
What Changed
- The newsletter highlights no immediate binding rules but flags forthcoming or proposed changes via publications:
- Trends, Risks and Vulnerabilities (TRV) Report 2026: Identifies high-risk EU financial markets, urging heightened risk monitoring.[User Query]
- Annual transparency calculations for equity and equity-like instruments: Updates pre- and post-trade transparency thresholds, published 27 February 2026.[User Query]
- Joint EBA-ESMA consultation on revised suitability assessment: Proposes updates to requirements for banks and investment firms on assessing client knowledge and needs under MiFID II.[User Query]
- ESMA proposals to simplify MiFID II/MiFIR obligations on market data: Aims to streamline reporting and data access burdens.[User Query]
Suggested Considerations
- Review and implement transparency calculations: Adjust trading systems and disclosures for equity/equity-like instruments per 27 February 2026 publication.
- Respond to consultations: Submit feedback on suitability (by 25 May 2026), EMIR 3 (20 April), MAR delays (29 April), CCP collateral (30 April); attend 15 April hearing.
- Assess TRV risks: Conduct internal risk reviews aligning with high-risk market warnings; update policies on retail investor journeys and fund costs.[User Query]
- Update compliance programs: Incorporate MiFID II/MiFIR simplification proposals, Listing Act statement, market abuse guidelines, EMIR 3, sustainability reporting, and new Q&As.[User Query]
- Monitor enforcement: Review supervisory actions for peer benchmarks (e.g., similar to prior MFSA review).
Key Dates
Publication of annual transparency calculations for equity and equity-like instruments
Release of first 2026 TRV report and newsletter; .
Public hearing on EBA-ESMA joint guidelines on suitability of management body and key function holders
Consultation deadline on regulatory standards for post-trade risk reduction services under EMIR 3
Consultation on MAR Guidelines on delay in disclosure of inside information
Compliance Impact
Urgency: Medium. This newsletter compiles ongoing developments rather than enacting immediate rules, but tied consultations (e.g., suitability by 25 May 2026) and recent publications (e.g., transparency calculations) require prompt review to avoid enforcement risks in a high-risk market flagged by TRV.[User Query] It matters for aligning with ESMA's simplification push while preparing for stricter suitability, data, and risk rules, potentially reducing costs but increasing scrutiny on retail protection and transparency.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
Asset ManagerBroker DealerBank No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
The ECB imposed a €6.2 million penalty on BofA Securities Europe SA for intentionally breaching market risk reporting requirements between 2022 and 2024. The bank systematically underreported risk-weighted assets by including unauthorized sovereign bond option positions in its internal models, resulting in inflated capital ratios and misrepresented financial strength—a "severe" breach that signals the ECB's heightened enforcement focus on reporting accuracy and internal control governance.
What Changed
- This enforcement action does not introduce new regulatory requirements but rather clarifies existing obligations:
- Internal Models Scope Limitation: Banks must strictly adhere to supervisory permissions when applying internal models approaches; unauthorized asset classes cannot be included regardless of...
- Risk-Weighted Asset Accuracy: RWA calculations must reflect actual supervisory permissions, not theoretical modeling capabilities
- Capital Ratio Integrity: Misreporting of RWAs directly affects CET1 ratios and capital adequacy disclosures, which are fundamental to regulatory reporting
- Intentionality Standard: The ECB's classification of this breach as "intentional" (rather than negligent) indicates that awareness of supervisory limitations combined with non-compliance triggers...
Suggested Considerations
- *Immediate (for all firms with internal models):
- *Audit Internal Models Scope: Conduct comprehensive review of all asset classes currently included in internal models approaches to confirm supervisory permission exists for each category
- *Verify Sovereign Bond Derivatives Treatment: Specifically validate that all sovereign bond options, forwards, and other derivatives are explicitly covered by supervisory approval documentation
- *Reconcile RWA Calculations: Recalculate historical RWAs (at minimum for the past 3-5 years) to identify any unauthorized inclusions and assess whether prior reporting was accurate
- *Strengthen Internal Controls: Implement automated controls to prevent unauthorized asset classes from being included in model calculations, with documented supervisory permission matrices
Key Dates
2024; - Period during which BofA Securities Europe SA committed the breach across six consecutive reporting periods
- ECB penalty announcement and effective date
- Bank has the right to challenge the decision before the Court of Justice of the European Union (no statutory deadline specified, but typically within 2 months of notification)
Compliance Impact
Urgency: CRITICAL
AI-generated analysis. May contain errors or omissions — verify with the
original ECB source
before acting. Full disclaimer.
BankBroker Dealer
ESAs spring risk update highlights geopolitical pressures and rising private finance risks 27 March 2026 Joint Committee Risk monitoring The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published their spring 2026 Joint Committee update on risks and vulnerabilities in the EU financial system. The update focuses on the challenges arising from ongoing geopolitical tensions and developments in private finance. Geopolitical tensions continue to pose significant risks Th...
BankAsset ManagerInsurance
No description available.
BankAsset ManagerBroker Dealer
No description available.
BankWealth ManagerAll Firms
No description available.
BankAsset ManagerBroker Dealer
No description available.
BankInsurance
No description available.
BankAsset ManagerWealth Manager
No description available.
BankWealth ManagerAll Firms
No description available.
BankAsset ManagerWealth Manager
No description available.
BankFintech
No description available.
BankAsset ManagerWealth Manager
No description available.
Bank
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
Bank
No description available.
The ECB imposed a €2.26 million penalty on Nordea Finance Finland Ltd for incorrectly reporting large exposures by assigning guaranteed receivables to debtors instead of guarantors, breaching the 25% capital limit for 13 quarters from 2021-2024 due to serious negligence and internal control deficiencies. This enforcement action underscores the ECB's strict enforcement of large exposure rules under EU banking regulations, serving as a warning for banks on accurate counterparty identification and robust controls. Compliance professionals must prioritize exposure calculation accuracy to avoid severe penalties classified as "severe" under ECB guidelines.
What Changed
- - 2021 Regulatory Change: Prohibits assigning guaranteed receivables to debtors for large exposure calculations; exposures must be assigned to guarantors instead, ensuring proper risk attribution to...
- Large Exposure Limits (CRR): Exposures exceeding 10% of a bank's capital trigger reporting as "large"; no single exposure or group of connected counterparties may exceed 25% of capital.
- Severity Classification: ECB categorizes breaches as "severe" (from minor to extremely severe), guiding penalty calculations per its *Guide to the method of setting administrative pecuniary...
- Broader Framework: EBA Guidelines on large exposures provide criteria for assessing breaches and timelines for returning to compliance, emphasizing harmonized EU application.
Suggested Considerations
- Review Exposure Calculations: Immediately audit methodologies for guaranteed receivables, ensuring assignment to guarantors per 2021 rules; validate against CRR connected client principles.[ECB Press Release]
- Enhance Internal Controls: Implement robust governance to prevent "serious negligence," including automated checks, independent validation, and training on counterparty identification.[ECB Press Release]
- Conduct Gap Analysis: Test large exposure reporting for the past 4 years; remediate any breaches within EBA timelines (e.g., return to compliance promptly).
- Monitor and Report: Establish real-time monitoring for exposures >10% capital; notify ECB of breaches immediately with remediation plans.[ECB Press Release]
- Penalty Challenge Option: Affected firms may appeal to the Court of Justice of the European Union within standard timelines (typically 2 months).[ECB Press Release]
Key Dates
Regulatory change introduced prohibiting debtor assignment for guaranteed receivables; .[ECB Press Release]
Period of breaches by Nordea Finance Finland Ltd; .[ECB Press Release]
ECB announces €2.26 million penalty; .[ECB Press Release]
Compliance Impact
Urgency: High – This recent ECB enforcement (announced yesterday) demonstrates aggressive penalty application for prolonged breaches, with €2.26 million for "severe" violations signaling heightened scrutiny on large exposures amid ongoing CRR/CRD VI alignment. Firms risk similar fines, reputational damage, and supervisory escalation if controls fail, especially with ECB's 2026-2028 priorities emphasizing risk management. Immediate reviews are essential to mitigate exposure in a regime designed as a prudential backstop.
AI-generated analysis. May contain errors or omissions — verify with the
original ECB source
before acting. Full disclaimer.
Bank
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerBroker Dealer
No description available.
BankAsset ManagerWealth Manager
No description available.
Bank
ESMA consults on post-trade risk reduction services under EMIR 3 26 February 2026 Post Trading The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has launched a consultation on the requirements for how post-trade risk reduction (PTRR) services can benefit from the conditioned exemption from the clearing obligation introduced under the European Market Infrastructure Regulation (EMIR 3). ESMA is seeking feedback on several elements of the ...
ESMA has launched a consultation on draft Regulatory Technical Standards (RTS) that establish requirements for **post-trade risk reduction (PTRR) services** to qualify for a conditioned exemption from the mandatory clearing obligation under EMIR 3. This framework is critical because it balances market efficiency gains from risk reduction tools against systemic risk concerns, requiring compliance professionals to understand new operational, transparency, and monitoring requirements before the standards take effect.
What Changed
- The draft RTS introduce a structured framework governing how PTRR services operate under the clearing obligation exemption:
Eligible Service Types
The standards focus on three primary PTRR service...
- Market risk neutrality in PTRR exercises—transactions must not alter the overall market risk profile of portfolios
- Required risk reduction in submitted portfolios—genuine risk mitigation rather than speculative activity
- Compliance with pre-agreed rules and reasonable, transparent, non-discriminatory conduct
Operational & Governance Framework
The RTS establish requirements across multiple dimensions:
- Transparency towards participants in PTRR exercises
Suggested Considerations
- *For PTRR Service Providers:
- *Assess current operations against proposed RTS requirements, particularly regarding market risk neutrality and risk reduction thresholds
- *Review algorithm safeguards and execution protocols to ensure compliance with transparency and non-discrimination standards
- *Establish record-keeping systems capable of documenting PTRR exercises and demonstrating exemption qualification
- *Prepare monitoring capabilities to support NCA oversight and supervisory reporting
Key Dates
- ESMA launches consultation
- ESMA considers feedback received and prepares final report
- Deadline for stakeholder feedback submissions
- Draft RTS submitted to the European Commission
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
Broker DealerAsset ManagerBank
The EBA and ESMA consult on revised suitability assessment requirements for banks and investment firms 25 February 2026 Investor protection The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) today launched a consultation on the revised joint guidelines on the assessment of the suitability of members of the management body and key function holders . The revised guidelines form part of a broader package designed to harmonise suitability assessments and...
The EBA and ESMA have launched a consultation on revised joint guidelines updating suitability assessments for management body members and key function holders in banks and investment firms, incorporating new requirements from the revised CRD and MiFID II to enhance harmonization and supervisory convergence. This matters for compliance professionals as it introduces mandatory assessments for additional roles, strengthens AML/CFT links, and includes simplifications to reduce burdens, potentially impacting governance processes once finalized and replacing the 2021 guidelines.
What Changed
- - Incorporation of revised CRD requirements for large institutions, including ex-ante applications where authorities perform ex-post assessments, and mandatory suitability assessments for key roles...
- Expanded application to CRD-covered entities and MiFID II investment firms, with further specifications for third-country branches.
- Strengthened integration with AML/CFT framework, providing guidance on identifying reasonable grounds to suspect money laundering or terrorist financing risks during assessments.
- Introduction of targeted simplifications to streamline processes, reduce administrative burdens, and offer greater flexibility/clarity for institutions and supervisors.
- Parallel EBA consultation on RTS specifying standardized documentation (e.g., suitability questionnaires, CVs, internal assessments) for large institutions to ensure consistent submissions.
Suggested Considerations
- Assess current suitability processes against new requirements (e.g., ex-ante applications, AML/CFT checks, third-country branch specs) and prepare for mandatory assessments of additional roles like CFOs.
- For large institutions, evaluate EBA RTS on documentation and align internal templates (e.g., suitability questionnaires, CVs).
- Participate in public hearings on 15 April 2026 if relevant.
- Plan governance updates, including ongoing monitoring of collective/individual suitability and corrective measures.
Key Dates
15:30; - Public hearing on joint guidelines
16:30; - Public hearing on EBA RTS
- Deadline for submitting comments on joint guidelines and EBA RTS
25 May 2026; - EBA publishes all contributions (unless requested otherwise)
consultation); - Revised guidelines enter into force, repealing 2021 guidelines
Compliance Impact
Urgency: High - As a consultation launched today (25 February 2026), firms have ~3 months to engage, but final guidelines will repeal existing ones, mandating process updates for core governance/AML functions in banks and investment firms; delays risk non-compliance with harmonized EU standards, especially for large institutions facing RTS on documentation. Matters due to expanded scope (e.g., CFOs, third-country branches) and AML ties, amplifying fit-and-proper regime enforcement amid supervisory convergence push.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
BankBroker DealerAll Firms
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
ESMA consults on guarantees as CCP collateral and on certain aspects of CCP investment policy 23 February 2026 CCP The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has launched a public consultation following the review of the European Market Infrastructure Regulation (EMIR 3). ESMA is encouraging all interested stakeholders, including non-financial counterparties (NFCs), to share their views about: the relevant conditions under which ...
ESMA has launched a public consultation under EMIR 3 to gather stakeholder input on conditions for CCPs accepting public guarantees, public bank guarantees, and commercial bank guarantees as collateral, eligibility of debt instruments for CCP investment policies, and secured arrangements for emission allowances as margins or default fund contributions. This matters because it permanently broadens eligible collateral types and extends access to NFC clients, enhancing EU CCP efficiency, competitiveness, and accessibility amid liquidity pressures in energy and other markets.
What Changed
- - Permanent expansion of eligible CCP collateral to include public guarantees, public bank guarantees, and commercial bank guarantees, with specified conditions for acceptance.
- Criteria for deeming debt instruments as eligible financial instruments under CCP investment policies.
- Requirements for highly secured arrangements to deposit emission allowances as margins or default fund contributions.
These build on EMIR 3's measures to broaden collateral scope and entity coverage,...
Suggested Considerations
- Review and Respond to Consultation: CCPs, clearing members, NFCs, and clients should analyze the paper, prepare responses to Annex 1 questions by 30 April 2026, and submit online; indicate confidentiality if needed.
- Assess Internal Policies: CCPs must evaluate current collateral, investment, and emission allowance frameworks against proposed conditions; clearing members/NFCs should model impacts on liquidity and margin posting.
- Monitor Developments: Track ESMA's final report and RTS submission; prepare for potential supervisory expectations on guarantee acceptance and debt instrument eligibility post-2026.
- Engage with Industry: Join associations like EACH for coordinated feedback on risk-based approaches and proportionality.
Key Dates
- ESMA to submit final draft technical standards to the European Commission following final report preparation
- Consultation response deadline; submit online via ESMA portal, addressing specific questions with rationale
Compliance Impact
Urgency: High - Firms face a tight 2-month window (from 23 February 2026) to influence final RTS, with implementation likely in 2027+ affecting core clearing operations; delays risk non-compliance with broadened collateral rules amid ongoing liquidity strains, especially for NFCs in volatile markets like energy.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
BankBroker DealerAll Firms
ESMA publishes a supervisory briefing on the AAR representativeness obligation 20 February 2026 CCP The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published a supervisory briefing on the representativeness obligation linked to the active account requirement (AAR). The briefing sets out ESMA’s supervisory expectations for how counterparties should comply with and report on the AAR representativeness obligation. It provides guidanc...
ESMA has published supervisory guidance clarifying how counterparties must comply with the **representativeness obligation** under the Active Account Requirement (AAR), a key component of EMIR 3 that mandates EU counterparties maintain active accounts at EU central counterparties (CCPs) and clear representative volumes of derivatives trades. This briefing is critical because market participants and regulators have held conflicting interpretations of the representativeness requirement, creating compliance uncertainty that this guidance now resolves.
What Changed
The supervisory briefing addresses three core compliance areas:
Identifying Most Relevant Subcategories: Counterparties must continuously identify the five most relevant subcategories for each class of derivatives over each reference period, based on their trading activity. The guidance clarifies that the number of subcategories to select equals the maximum number available for that derivative class.
Representativeness Compliance Standard: Counterparties must clear, on an annual average basis, at least five trades in each of the most relevant subcategories per class of derivative contracts...
Suggested Considerations
- *Immediate (by 26 February 2026):
- Review the ESMA supervisory briefing and Commission Delegated Regulation (EU) 2026/305 in detail
- Assess whether your firm meets the €6 billion notional clearing volume outstanding threshold triggering AAR obligations
- Identify internal teams responsible for AAR compliance (trading, operations, compliance, reporting)
- *Short-term (by 31 July 2026):
Key Dates
- AAR RTS enter into force (20 days after Official Journal publication on 6 February 2026)
- First EMIR 3 representativeness reporting deadline
- First AAR compliance report due
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
Asset ManagerBroker DealerBank No description available.
The ECB imposed €12.18 million in penalties on J.P. Morgan SE on 19 February 2026 for misreporting risk-weighted assets (RWAs) from 2019-2024 due to misclassification of corporate exposures (15 quarters) and improper exclusion of transactions in credit valuation adjustment (CVA) risk calculations (21 quarters), both attributed to serious negligence and internal control failures. This enforcement action underscores the ECB's focus on accurate prudential reporting, as underreported RWAs led to overstated capital ratios, distorting supervisory oversight of the bank's risk profile and capital adequacy. Compliance teams must prioritize RWA calculation integrity to avoid similar "severe" and "moderately severe" sanctions under the ECB's penalty guide.
What Changed
This is an enforcement action, not a new rule change, but it reinforces existing requirements under the Capital Requirements Regulation (CRR) for accurate RWA calculations, including proper classification of corporate exposures for credit risk and inclusion of all relevant transactions in CVA risk (which measures counterparty default risk in derivatives). The ECB applied its Guide to the method of setting administrative pecuniary penalties, categorizing breaches as "severe" (credit risk) and "moderately severe" (CVA risk), based on duration, negligence, and impact on supervisory transparency.
Suggested Considerations
- Conduct immediate RWA process reviews: Audit corporate exposure classifications and CVA calculations for misreporting risks, ensuring compliance with CRR risk weights.
- Strengthen internal controls: Implement robust validation mechanisms to detect errors timely, addressing "serious negligence" gaps highlighted by ECB.
- Enhance reporting accuracy: Recalibrate models and data inputs for quarterly ECB submissions; test for overstatement of capital ratios via underreported RWAs.
- Monitor ECB sanctions page (https://www.bankingsupervision.europa.eu/banking/supervisory-sanctions/html/index.en.html) for updates and self-assess against penalty guide severity categories.
- J.P. Morgan specifically: Pay €12.18 million and consider legal challenge under Article 263 TFEU.
Key Dates
2024; - Period of breaches: 15 quarters of corporate exposure misclassification and 21 quarters of CVA transaction exclusions
- ECB publishes decision imposing €12.18 million penalties on J.P. Morgan SE
- Deadline for J.P. Morgan to challenge the decision before the Court of Justice of the European Union (typically 2 months from notification)
Compliance Impact
Urgency: High – This recent (published yesterday) ECB action against a major global bank signals intensified enforcement on RWA reporting, with penalties scaling by breach severity and duration; firms with derivatives or corporate lending books face elevated remediation pressure to prevent distorted capital views and fines up to "extremely severe" levels. It matters because RWAs directly underpin capital requirements, and control failures erode supervisory trust, potentially triggering broader SSM investigations.
AI-generated analysis. May contain errors or omissions — verify with the
original ECB source
before acting. Full disclaimer.
Bank
No description available.
BankAsset ManagerWealth Manager
ESMA publishes list of supplementary deferrals for sovereign bonds 19 February 2026 Post Trading The European Securities and Markets Authority (ESMA), together with National Competent Authorities (NCAs), has agreed supplementary deferrals that may be applied on top of the standard Markets in Financial Instruments Regulation (MiFIR) deferral regime for sovereign bonds. ESMA and all NCAs, except the National Bank of Slovakia (NBS), have decided to allow the following supplementary deferrals: fo...
ESMA has authorized **supplementary deferrals for sovereign bond post-trade transparency**, allowing market participants to omit transaction volumes from immediate publication for medium-sized trades on liquid bonds, with full disclosure required by end-of-day. This measure balances market transparency with liquidity protection in EU sovereign bond markets, effective May 4, 2026, with a compressed implementation timeline requiring immediate compliance planning.
What Changed
Scope of Supplementary Deferrals
The decision permits volume omission deferrals for sovereign bonds classified as Group 1, Category 1 instruments (medium-size, liquid instruments) under MiFIR's post-trade transparency framework. Market operators and investment firms may defer publication of transaction volumes until end-of-trading-day, rather than the standard 15-minute deferral period.
Regulatory Rationale
ESMA determined that these deferrals are necessary to account for specific characteristics of sovereign bond markets, particularly protecting market liquidity and ensuring orderly price...
Suggested Considerations
- *Immediate Compliance Preparation (by May 4, 2026)
- *System Configuration: Trading venues and investment firms must update post-trade reporting systems to implement volume omission deferrals for Group 1, Category 1 sovereign bonds, with automated end-of-day publication triggers.
- *Instrument Classification: Establish processes to correctly identify which sovereign bonds qualify as Group 1, Category 1 under Commission Delegated Regulation (EU) 2017/583 (RTS 2), referencing Table 2.6 of Annex III.
- *APA Coordination: Approved Publication Arrangements must configure deferral management services to apply volume omission rules consistently across all reporting firms, with fallback procedures for system failures.
- *Policy Documentation: Update post-trade transparency policies, procedures, and client disclosures to reflect the new deferral regime and explain the timing of volume publication.
Key Dates
- ESMA Board of Supervisors adopts decision
- ESMA publishes supplementary deferrals list
- Original implementation date (subsequently extended)
- **Effective date for supplementary deferrals application**
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
Broker DealerAsset ManagerBank
Upcoming changes to the Euribor Panel 18 February 2026 Benchmarks The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, is issuing a statement on the upcoming changes to the Euribor panel, in its capacity as supervisor of the European Money Market Institute (EMMI), administrator of Euribor. This statement concerns the announcement by EMMI that Barclays Bank PLC (BBPLC), based in the United Kingdom, will withdraw from the Euribor panel. The ...
BankBroker Dealer
No description available.
BankAll Firms
No description available.
The ECB imposed a €7.55 million periodic penalty payment on Crédit Agricole for failing to complete a climate-related and environmental (C&E) risk materiality assessment by the May 31, 2024 deadline, marking the second enforcement action in the ECB's escalating shift from guidance to active enforcement on climate risk supervision. This enforcement demonstrates that the ECB is moving beyond symbolic warnings to substantial financial penalties, signaling that banks must treat climate risk identification and assessment as mandatory compliance obligations rather than discretionary best practices.
What Changed
The ECB's enforcement action reflects several critical regulatory developments:
Mandatory Climate Risk Materiality Assessment
Banks must now conduct comprehensive materiality assessments of climate-related and environmental risks as a binding supervisory requirement, not a guidance recommendation. The assessment must identify all material C&E risks to which the institution is or might be exposed.
Binding Supervisory Decisions with Enforcement Teeth
The ECB has transitioned from non-binding guidance (2020) to legally binding decisions with accruing daily penalties for non-compliance.
Suggested Considerations
- *Immediate (Q1 2026):
- related and environmental risks, documenting exposure across the portfolio
- *Near-term (H1 2026):
- related risks into existing credit risk, operational risk, and market risk frameworks
- testing purposes
Key Dates
- ECB published non-binding Guide on climate-related and environmental risks
- ECB conducted economy-wide climate stress test covering 1,600 eurozone banks
- ECB published guidance on climate stress testing; all significant institutions received feedback letters with staggered timelines
- ECB issued binding supervisory decisions to 28 banks with specific compliance deadlines
- ECB decision requiring Crédit Agricole to conduct C&E risk materiality assessment
Compliance Impact
Urgency: CRITICAL
AI-generated analysis. May contain errors or omissions — verify with the
original ECB source
before acting. Full disclaimer.
Bank
No description available.
BankCrypto ExchangeAll Firms
No description available.
BankWealth ManagerAll Firms
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankFintechCrypto Exchange No description available.
BankAsset ManagerInsurance
ESMA signs Memorandum of Understanding with the Reserve Bank of India 27 January 2026 CCP International cooperation The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has signed a Memorandum of Understanding (MoU) with the Reserve Bank of India (RBI) to facilitate cooperation and exchange of information for the recognition of central counterparties (CCPs) established in India and supervised by RBI. This agreement marks a significant step...
BankBroker Dealer
No description available.
BankAsset ManagerWealth Manager
No description available.
BankWealth ManagerFintech
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
The European Supervisory Authorities and UK financial regulators sign Memorandum of Understanding on oversight of critical ICT third-party service providers under DORA 14 January 2026 Digital Finance and Innovation International cooperation The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) have today signed a Memorandum of Understanding (MoU) with the Bank of England (BoE), the Prudential Regulation Authority (PRA), and the Financial Conduct Authority (FCA). This agreement...
BankAsset ManagerWealth Manager
ESAs publish joint Guidelines on ESG stress testing 08 January 2026 Guidelines and Technical standards Joint Committee The European Supervisory Authorities (EBA, EIOPA and ESMA - the ESAs) published today their Joint Guidelines on environmental, social, and governance (ESG) stress testing . These Guidelines provide national insurance and banking supervisors with clear guidance on how to integrate ESG risks into supervisory stress tests, both when using established frameworks and when conducti...
The European Supervisory Authorities (ESAs)—EBA, EIOPA, and ESMA—published final Joint Guidelines on 8 January 2026 to standardize how national competent authorities (NCAs) integrate ESG risks into supervisory stress testing frameworks for banking and insurance sectors, without mandating new ESG-specific tests. These guidelines promote consistency, long-term methodologies, and common standards across the EU, initially prioritizing climate and environmental risks (physical and transition) before expanding to social and governance factors. They matter for compliance professionals as they shape future supervisory expectations, enhancing resilience assessments and aligning with CRD (Article 100(4)) and Solvency II (Article 304c(3)) mandates, potentially influencing firm-level stress testing preparations.
What Changed
- - Standardized Integration of ESG Risks: NCAs must embed ESG risks into existing supervisory stress tests or ad-hoc assessments, using a risk-based materiality assessment to scope relevant risks,...
- Methodological and Governance Guidance: Outlines design for ESG-inclusive tests, including objectives (e.g., capital/liquidity robustness, strategy resilience), scenario analysis, and organizational...
- No New Obligations: Does not require NCAs to conduct dedicated ESG stress tests, but ensures consistency when they do, improving legal certainty and transparency in approval processes.
- Phased Approach: Initial focus on climate/environmental risks, with gradual extension to full ESG coverage based on data and model maturity.
Suggested Considerations
- For NCAs: Review and integrate ESG risks into stress testing frameworks via materiality assessments; define objectives, scenarios, and governance; notify ESAs of compliance post-translation; maintain risk-based, phased approach.
- For Firms: No direct mandates, but prepare by enhancing internal ESG risk modeling, data collection (especially climate/physical/transition risks), and stress testing capabilities to align with supervisory expectations; conduct voluntary ESG scenario analyses.
- General: Monitor NCA implementations, update policies for ESG risk integration in ICAAP/ORSA, and engage in industry feedback on data/methodological gaps.
Key Dates
Publication of Final Report and Joint Guidelines by ESAs
Statutory deadline for ESAs to publish guidelines per CRD Article 100(4) and Solvency II Article 304c(3)
NCAs notify respective ESAs of compliance or intent to comply
Application date of Joint Guidelines for NCAs
Compliance Impact
Urgency: Medium. While not imposing immediate firm-level requirements, the guidelines signal escalating supervisory focus on ESG risks from 2027, with potential for more frequent/punitive stress tests; firms delaying ESG integration risk capital/liquidity shortfalls in exercises, amplified by improving data availability and EU sustainability push (e.g., CSRD, SFDR). Proactive preparation mitigates future remediation costs and supports strategic resilience.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
BankInsurance
No description available.
BankAsset ManagerWealth Manager
No description available.
Bank
No description available.
BankAsset ManagerBroker Dealer
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
Bank
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankFintechCrypto Exchange
No description available.
BankAsset ManagerWealth Manager
No description available.
Bank
No description available.
BankWealth ManagerAll Firms
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankWealth ManagerAsset Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerWealth Manager
No description available.
BankAsset ManagerBroker Dealer