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
Mansion House speech 2015
Chancellor George Osborne gave his Mansion House Speech this week, which set out the terms
for the UK’s renegotiation of EU membership and the sell off of the Royal Bank of Scotland. He
also supported Mark Carney’s stance on rogue bankers (see below). With regard to the EU
renegotiation, Mr Osborne stated that among “..the principles we seek to establish in this
renegotiation are these simple ones: fairness between the euro-ins and the euro-outs enshrined
and the integrity of the single market preserved.” As regards the RBS sell-off, Mr Osborne said
that the time was right for British business and taxpayers to start selling off part of the
government’s 79% stake in the bank, even though the shares are worth £13billion less than was
paid for them during the financial crisis. The shares will be sold to major City institutions in the
coming months.
BoE Carney targets ‘irresponsible’ traders
Mark Carney, the Bank of England governor, called for longer prison sentences for bankers who
break the law during his Mansion House speech this week. Dr Carney said that individuals had
acted with a "culture of impunity", but that the “age of irresponsibility is over”. Dr Carney set out
plans to inject more regulation in the fixed-income, currency and commodities (FICC) markets
that have witnessed many of the recent fines for market rigging, including a market standards
board to draw up and police codes of conduct. Dr Carney also criticised the behaviour of the Bank
in the run up to the financial crisis, but said that the Bank's governance had now been reformed
and more would be done to strengthen the way it operated.
ESMA speech on MiFID II and EMIR

2. ESMA has published a speech by its Executive Director, Verena Ross, on ESMA’s work on
MiFID II and EMIR. With regard to MiFID II, Ms Ross explained that ESMA is still at the rule-
making stage and comments in particular on the transparency regime for derivatives, position
limits for commodity derivatives and the trading obligation for derivatives and the "problematic"
timetable envisaged in MiFIR. With regard to EMIR, Ms Ross said that ESMA is at the
implementation stage, commenting in particular on the clearing obligation, which is expected to
be implemented in the coming months, and the review of EMIR reporting requirements. ESMA
expects to submit draft technical standards to the European Commission at the end of the summer
and the revised ESMA standards should become applicable in the second half of 2016.
Responses to CMU
The European Commission has published the responses it has received to its green paper on the
capital markets union (CMU), published in February this year. The consultation closed to
comments in May and respondents include the FCA, HM Treasury and the Bank of England. The
Commission has also published responses it has received to its consultations on the Prospectus
Directive and on an EU framework for simple, transparent and standardised securitisation. In each
case, the Commission will publish a summary of responses at a later stage.
Lord Hill’s next steps for CMU
Following the consultation exercise, Lord Hill has announced that the Commission plans to
publish its action plan in September 2015, drawing on the first findings from the consultations,
and that concrete proposals will follow the action plan. Early actions will include: (i) a
comprehensive package on securitisation, with updated calibrations for the Solvency II Directive
and the Capital Requirements Regulation; (ii) the definition of infrastructure and revised
calibrations for Solvency II; and (iii) proposals to review the Prospectus Directive. Lord Hill said
that he hopes that these can be fast-tracked in order to get early momentum, build confidence,
and set a clear sense of direction.
BoE to launch Open Forum
The Bank of England has announced that it will be launching an Open Forum, to be held in the
autumn, to bring together all stakeholders in fixed income, currency and commodities (FICC)
markets. The aim is to discuss: (i) the prospects for market functioning, (ii) where regulations
might overlap or conflict; and (iii) whether enough has been done to build the real markets the
UK deserves. The launch of the Open Forum initiative follows the publication by the Fair and
Effective Markets Review (FEMR) of its final report on the fairness and effectiveness of FICC
markets, in which it makes 21 recommendations to help restore trust and improve standards in
these markets. The Bank has published a new Open Forum webpage and issued a discussion
paper entitled "Open Forum: Building Real Markets for the Good of the People" to prompt
discussion at the event, the details and venue of which will be announced at a later date.
EMIR: second consultation on risk mitigation techniques
The Joint Committee of the European Supervisory Authorities (ESAs) have published a second
consultation paper on draft RTS on risk mitigation techniques for OTC derivative contracts not
cleared by a CCP under EMIR. The second consultation paper builds on the proposals outlined in
the Joint Committee's first consultation paper, which was published in April 2014. In the second

3. consultation paper, the Joint Committee are seeking feedback on a narrow set of topics as most of
the issues that arose from the last consultation paper have been addressed in the amended version
of the RTS, which are set out in the second consultation paper. Comments are invited by 10 July
2015.
CFTC to close Dodd-Frank swaps loophole
CFTC Chairman Timothy Massad has announced a plan to require the non-US affiliates of US
banks to comply with CFTC rules for uncleared swaps, even where the non-US affiliate enters
into the swap with a non-US counterparty. This would close a loophole under which parties avoid
the application of Dodd-Frank swaps rules to swaps between two non-US parties by removing
guaranties of those swaps by a US parent or affiliate. The new plan, which is still being discussed
internally, would therefore require even "de-guaranteed" transactions to comply with US rules if
the offshore unit's financials are consolidated into the financial statements of the US parent
company. This plan would likely affect most large US banks since US accounting rules generally
require consolidation of entities in which the parent has a "controlling financial interest."
IMF withdraws from talks over Greece bailout
The IMF withdrew from bailout talks with Greece yesterday, citing major differences in most
areas and saying it was “well away from an agreement” after a five-month stalemate with the
Tsipras government. Eurogroup chief Jeroen Dijsselbloem said that without the IMF, a deal is
"unimaginable because it needs to have proper content and if it has proper content, the IMF will
also participate". The key disagreements are on pensions, taxes and financing. The talks between
Tsipras and European Commission chief Jean-Claude Juncker broke up without reaching a deal on
reforms in exchange for bailout cash.
Cummings
Tel: + 44 20 7585 1406
Mob: + 44 7734 057 327
www.cummingslaw.com
12 June 2015