Welcome to Euro Shorts, a short briefing on some of the week’s developments in the financial services industry in Europe. If you would like to discuss any of the points we raise below, please contact me or one of our other lawyers.

1. ]
Welcome to Euro Shorts, a short briefing on some of the week’s developments in the financial services
industry in Europe.
If you would like to discuss any of the points we raise below, please contact me or one of our other lawyers.
Claire Cummings
020 7585 1406
claire.cummings@cummingslaw.com
www.cummingslaw.com
Brexit update: Theresa May meeting with Donald Tusk
The UK Prime Minister, Theresa May, had her first one to one meeting with European Council
President, Donald Tusk, this week. Ms May said that Britain and the European Union must work
together to make their divorce smooth and forge a new "strong relationship", while Mr Tusk said
that UK should start the formal procedure to leave the bloc as soon as possible. However,
according to reports, Ms May feels little pressure to hurry, as she has won the agreement of EU
officials to take at least until the end of this year to come up with a negotiating stance for the
UK’s talks with the EU. The two leaders did agree, nevertheless, that Britain would have "a
strong voice" in the EU while it was still a member.
AIFM additional reporting requirements
The City of London Law Society (CLLS) has responded to the FCA's proposals to extend AIFMs'
reporting requirements beyond the strict requirements in the AIFMD. Its comments include the
following: (i) AIFMs have experienced considerable difficulty with reporting under the AIFMD
and that the extent of these requirements is a significant factor for non-EEA AIFMs considering
whether to market their funds in the EEA; (ii) there are considerable ongoing uncertainties over
the data required for reporting and definitions, such as the definition of leverage, leading to a risk
that the data being filed is inconsistent and potentially unreliable; (iii) more caution is needed
before gold-plating the requirements of EU directives in the light of the referendum vote for the
UK to leave the EU; and (iv) it is unclear whether the benefit involved in the FCA gathering
information is sufficient to justify the additional reporting burden for AIFMs.
EMIR: ESRB response to ESMA’s clearing obligation consultation

2. ]
The European Systemic Risk Board has responded to ESMA's July 2016 consultation paper on the
EMIR clearing obligation for financial counterparties with a limited volume of activity. In its
consultation, ESMA proposed to prolong in its RTS, by two years, the phase-in for financial
counterparties classified as category 3 under the applicable Delegated Regulations and the ESRB
has asked ESMA to reconsider its proposed new deadlines. It suggests that ESMA should
consider adopting the same deadline of 21 June 2019 that ESMA proposes to apply to its
Delegated Regulation on RTS on central clearing for interest rate derivatives. The ESRB
encourages ESMA, national competent authorities and the industry to work with category 3
counterparties to find solutions to allow them to make use of clearing as quickly and with as little
risk as possible before the deadlines set out in the RTS.
G20 September summit communique
The G20 has published a communique following the summit held last week, in which the G20
leaders state the following: (i) they reiterate their support for Basel III and the resolution
framework for central counterparties (CCPs); (ii) they are committed to full and timely
implementation of the agreed OTC derivatives reform agenda; (iii) they encourage members to
close the gap in implementing the principles for financial market infrastructures; (iv) they
welcome the FSB’s consultation on proposed policy recommendations to address structural
vulnerabilities from asset management activities; and (v) call on FATF to make initial proposals
on beneficial ownership by October 2016.
Cross-sector risks facing EU financial system
The Joint Committee of the European Supervisory Authorities (ESAs) (i.e. the EBA, EIOPA and
ESMA) has highlighted the following main risks to the financial system resulting from the lasting
effects of the 2007 financial crisis: (i) low growth and low yield environment, which may lead to
participants engaging in risky search-for-yield business, increasing risks around asset valuation
and concerns about market liquidity; (ii) profitability of financial institutions; (iii)
interconnectedness within the financial system - related stability risks should be thoroughly
assessed to mitigate the increasing risk exposure outside the traditional financial system; and (iv)
the impact of the UK referendum on EU membership, which the Joint Committee believes has
added further political and legal uncertainty.
European Commission reinstates Q&As on financial services legislation
The European Commission has reinstated its Q&As relating to MiFID, AIFMD, the Capital
Requirements Directive (CRD), the Payment Services Directive (PSD) and the second Electronic
Money Directive (2EMD) to its website that it had previously deleted. The Commission had
deleted the Q&As in August and had provided links to the Q&As produced by the EBA, ESMA
and EIOPA instead, as they were now mandated to publish Q&As in these areas. The
Commission has given no reason for the reinstatement.
Brexit: impact on financial services industry
The House of Commons Library has published a briefing paper on the impact of Brexit across
policy areas. The paper includes, at section 3.6, material on the impact of Brexit on financial
services, which considers: (i) current issues arising from the referendum vote, including
passporting and the implementation of EU legislation that has not yet come into effect; (ii) models

3. ]
for the UK's relationship with the EU after it leaves the EU, focusing particularly on the current
Swiss relationship with the EU; and (iii) the views of the City of London on the UK's decision to
leave the EU.
New FCA website
The FCA has announced that that the whole of its new website is now live at www.fca.org.uk.
The FCA launched the first phase of the new website in June 2016. The FCA has based its
improvements on over 5,000 feedback responses to date and requests users to keep sending their
views so it can continue to refine the website.
Greece bailout update
EU finance ministers will discuss progress on the Greek bailout reforms at its two-day meeting
which starts today. According to reports, Greece is struggling to keep up with bailout reforms
demanded by creditors in exchange for continued loan payouts and there are indications that it
may fall short of economic commitments it needs to meet for its next tranche of €2.8 billion of
aid, which is due this month. The European Commission is cited as stating that the tranche will
not be disbursed as Greece has implemented only 2 of the 15 political reforms required for the
release of the funds. Meanwhile, Greece is hoping to start talks by the end of the year for more
lenient debt repayment terms.
CummingsTel: + 44 20 7585 1406Mob: + 44
7734 057 327www.cummingslaw.com
7 327www.cummingslaw.com