Brussels, Feb 26 (efe-epa).- The European Union on Friday repeated its goal of becoming more autonomous in military and strategic defensive areas and reducing its reliance on the United States, while also underlining its intentions to continue working closely with Nato and Washington.
“We need to increase our ability to act autonomously and to strengthen our cooperation with our partners. We are committed to cooperating closely with Nato. A stronger Europe makes a stronger Nato,” European Council president Charles Michel told a press conference at the end of the second day of a virtual summit with EU leaders, which focused on defense and security.
The impetus behind pursuing more autonomy in defense took on more importance during the previous four years, when Donald Trump occupied the White House and threatened to destabilize the trans-Atlantic alliance.
The EU still holds onto those plans, despite an expected improvement in their relationship now that Joe Biden has taken over from Trump.
“Last week, President Biden said: ‘America is back.’ We in Europe are ready – to do our part, to be a strong and reliable partner,” Michel said.
Meanwhile the European Commission president, Ursula von der Leyen, said cooperation between the EU and Nato is “a top priority” but said that there were several “scenarios where Nato was not engaged” where the EU would need to rely on itself.
“Europe needs to develop its own capabilities,” she said. “That is why we have set up the first building blocks of the European Defense Union.”
“We have the industry, we have the knowledge. What we need is to put this innovation and these talents at the service of common European capabilities.” EFE-EPA
The Council has today requested the European Parliament’s consent to its decision on the conclusion of the EU-UK trade and cooperation agreement and a security of information agreement.
Once the European Parliament has given its consent and once all 24 language versions of the agreements have been established as authentic and definitive, the Council will be in a position to adopt the decision on the conclusion of the agreements, allowing their entry into force. This will be the last step for the EU in the ratification of the agreements.
Background
The United Kingdom left the European Union at midnight (CET) on 31 January 2020 and the Withdrawal Agreement entered into force on 1 February 2020, with a transition period running until 31 December 2020.
Negotiations on the future partnership between the EU and the UK started on 2 March 2020. Negotiators reached an agreement on an EU-UK trade and cooperation agreement and a security of information agreement on 24 December 2020.
On 29 December 2020 the Council adopted the decision on the signing of the EU-UK trade and cooperation agreement and a security of information agreement and their provisional application as of 1 January 2021. The agreements were then signed by the two parties on 30 December 2020. The agreements have been provisionally applied since 1 January 2021.
The agreements provided for a time-limited provisional application until the end of February, unless a later date was agreed by the parties. On 23 February 2021, the EU-UK Partnership Council decided, at the EU’s request, to extend the provisional application until 30 April 2021 to allow sufficient time to complete the legal-linguistic revision of the agreements in all 24 languages.
Croatia is expected to receive a good wealth of EU funds in the coming years. However, the strategic priorities doesn’t appear very bold and clear, and the plan for the use of the Recovery Fund is not ready yet
(This article was originally published by H-Alter, as part of the European Data Journalism Network)
Even more than this summer’s hot sun, the good news warmed the hearts of Prime Minister Andrej Plenković, his ministers, economists and journalists. 22 billion euros of EU development funds were secured for Croatia for the 2021-27 period.
This comprise about €12.7 billion intended for development, coming from the EU Multiannual Financial Framework (MFF), and about €9.4 billion of pandemic-related transfers from the fund called “Next Generation EU”. There is an additional €683 million from the EU Solidarity Fund, meant at helping Croatia to rebuild after this spring’s earthquake in Zagreb. How Croatia plans to spend such huge sums of money is not much clearer today, months after the happy news of their approval.
In November 2020, the Croatian Ministry of Regional Development and EU Funds released its National Development Strategy for public discussion. The document, entangled in bureaucracy since 2017, is claimed to be the basis for future decisions on the aforementioned €12.7 billion of EU funds. In addition to the National Strategy, there is also the so-called National Recovery and Resilience Plan concerning the €9.4 billion from the “Next Generation EU” fund. Going by the prime minister’s latest announcements , this plan will be “ready at the beginning of next year, by April at the latest”.
A law on the earthquake reconstruction of Zagreb and surroundings was passed by the Croatian parliament in September. 60 percent of the funds for the renovation of private housing will be provided by the state, 20 percent by the City of Zagreb and the counties, and 20 percent by their owners. The estimated amount needed for reconstruction is just over €1.1 billion , half of which should come from the EU Solidarity Fund.
The minister of Construction, Darko Horvat, announced that the renovation of the buildings will start only in the spring, a full year after the earthquake, dismissing complaints that twelve whole months will have been wasted by then. Reconstruction is a hot topic ahead of the local elections, also due to take place in the spring, with populists trying to buy off voters with public and EU funds.
The National Development Strategy
The National Development Strategy itself has largely disappointed those who believed that it would be key to decisions over the aforementioned €12.7 billion from the MFF. In the public debate so far, the document has been seen as rhetorically ambitious but essentially conservative, a compilation of hollow phrases that its authors believe will have a place in EU forums. Important issues such as immigration policy are completely omitted from it. €4.5 million was nonetheless paid out to the authors of the text.
The document lists 13 strategic goals, including “a competitive and innovative economy”, “an educated and employed populace”, “an efficient and effective judiciary”, “global recognition of Croatia”, “healthy, active and quality life”, “demographic revitalization and stronger families”, national security or “Security for sustainable development”, climate neutrality” to be achieved by “ecological and energy transition”, “food self-sufficiency and development of the bioeconomy”, ” sustainable mobility”, “the digital transition”, development of so-called “assisted areas and areas with development specifics” and “strengthening regional competitiveness”, meaning investment in the development after decades of neglect in the Croatian provinces.
Throughout the document the COVID-19 pandemic is cast regularly as a cause of the slowdown following the “positive trends” that preceded it, such as the alleged fall in unemployment and high economic growth.
Not much to add
This strategy document would probably not exist if its very existence were not a precondition for drawing EU funds. “We want 37 percent of the projects that we will present to be financed out of the European Green Plan, while another 20 percent of them relates to digitalization,” Prime Minister Andrej Plenković said succinctly , demonstrating that the real “development strategy” was in his head and is not too sophisticated.
It turns out that the most interesting part of the Croatian Development Strategy is its analytical part, entitled “Description of development needs and development potentials”. Not a cent of the €4.5 million spent on the shaping of the strategy was invested in researching the statistics here: they were mostly taken from the World Bank, the European Commission, Eurostat and similar bodies. In the cold language of figures and graphs, the section shows how far Croatia lags behind the other EU countries economically and socially.
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As the UK drifts further away from Europe, one of French President Emmanuel Macron’s closest aides wants to convince people in Britain and France that the EU is always the best option.
That involves championing cities such as Frankfurt, Amsterdam and, most of all, Paris as they try to seize as many of the jobs leaving the UK as possible.
So far, the predicted flood of financial jobs has not materialised, though some banks have made a move. “We can do better,” Clement Beaune, junior minister for EU affairs, said in an interview on Wednesday. “It’s not over.”
For Macron and Beaune, the president’s trusted lieutenant for nearly a decade, exploiting Brexit is not just about boosting the French economy. It is about demonstrating to voters the benefits and strengths of the EU at a key moment.
The French leader is gearing up for a fight in next year’s election and with the traditional right and left parties still in disarray, far-right leader Marine Le Pen may well be his main opponent again. Beaune has been leading the attacks against her.
She calls him “the anti Le Pen junior minister.”
EU supporter
Le Pen may have abandoned her unpopular pledge to leave the euro since the last time she and Macron faced off in 2017, but while the president is an ardent EU supporter with a sweeping agenda to enhance integration, Le Pen remains a staunch critic of the bloc. And she is seeking to capitalise on unhappiness over its sluggish vaccine rollout and disorganised response to border closures during the initial stages of the coronavirus crisis.
The debate over the EU is indeed live in France, with one recent poll showing 58% of the French having lost confidence in the union.
The issue can cause tension on the personal level, too. Beaune’s left-wing father, an eminent scientist, is no longer happy with the EU because it is too “neoliberal” and not good enough at protecting social safety nets. Beaune dismisses the criticism, pointing to unprecedented public spending during the pandemic. It is a topic he mostly avoids at dinners.
Back in 2014, Beaune advised Macron when he was economy minister. He was later part of the presidential campaign team and in 2017 helped write the speech in which the French leader laid out his vision for enhanced European integration. Last year, Beaune was at Macron’s side to reach a Franco-German agreement that brought Europeans closer to greater fiscal unity by raising common debt — its success propelled Beaune in July from adviser to the ministerial post.
Now aged 39, Beaune is in the limelight.
Though Macron is broadly centrist, his La Republique En Marche! party includes ministers at opposite ends of the political spectrum. Beaune is seen as representing the Left-leaning faction and could appeal to voters alienated by his conservative peers, and the president’s own tack to the Right.
Beaune says he would probably quit politics if Macron does not win in April 2022, and would leave the civil service altogether if Le Pen becomes president. The risk of her being elected is real, he says. Polls show Macron winning against her in the second round, but the gap is narrower than in 2017 when he won by 32 percentage points.
Close to the president
The minister is known for being accessible as well as close to Macron, and European diplomats and CEOs often reach out to get a sense of the president’s thinking.
In his large office with a 1970s vibe at the ministry of foreign affairs on the Seine’s left bank, Beaune displays an image of Macron’s desk taken the day they negotiated the Franco-German accord.
Beaune often trolls EU critics on social media, calling Le Pen a liar, mocking the English motto of her party, “Save Europe” and reminding UK Prime Minister Boris Johnson that he once promised to protect the Erasmus programme (and did not).
He also posts weekly videos of himself on Twitter explaining how the EU works and has indulged in clubbing diplomacy with Luxembourg’s prime minister in the gay Paris neighbourhood of Le Marais.
As France takes over the rotating presidency of the EU in 2022, Beaune will be at the forefront of Macron’s campaign for the Elysee. He has to resist European demands for the French government to carry out the domestic reforms it promised to rein in public finances. These pledges — including Macron’s flagship pension reform — were halted amid the pandemic to avoid people loosing further purchasing power, and are no longer a priority in Paris.
Beaune is also there to nudge the EU commission to loosen its screening of state aid, and make sure it understands the domestic political constraints in which Macron operates, people close to him said.
Regarding so-called equivalence, Beaune said he thinks the EU may grant some form of rulings to the London financial sector that could allow it to keep operating in Europe, but warned they will be limited.
“Brexit doesn’t weigh on the UK’s competitiveness, nor on its financial sector, I don’t believe in that, but it does create uncertainty,” he said. “By contrast, the EU brings certainty and a form of stability.”
The City of London’s finance industry would be worse off than rival New York under an early draft for a cooperation agreement in financial services between Britain and the European Union, a document, seen by Reuters, showed.
FILE PHOTO: Buildings are seen in the Canary Wharf business district, as a man cycles along a path, amid the outbreak of the coronavirus disease (COVID-19), in London, Britain January 27, 2021. REUTERS/Peter Cziborra/File Photo
LONDON: The City of London’s finance industry would be worse off than rival New York under an early draft for a cooperation agreement in financial services between Britain and the European Union, a document, seen by Reuters, showed.
Britain’s financial services industry has been largely cut off from the EU, its biggest customer, since a Brexit transition period ended on Dec. 31 as the sector is not covered by the UK-EU trade deal.
Trading in EU shares and derivatives, for example, has already left Britain for continental Europe.
Both sides are committed to agreeing a memorandum of understanding (MoU) by the end of March on regular, informal talks about financial rules and market supervision.
An early draft of this document, seen by Reuters, has less substance than a deal the EU agreed with the United States in 2016, industry officials said.
“This is the start of a negotiation – the Commission proposed text is clearly more limited than the UK ambition,” said Chris Bates, a financial services lawyer at Clifford Chance.
Brussels can grant direct market access for foreign financial companies if it deems their home market rules are as robust as the EU’s own standards, a system known as “equivalence.”
A person familiar with Britain’s negotiating position said the UK focus is on making sure the MoU provides transparency and appropriate dialogue when it comes to adopting, suspending and withdrawing equivalence decisions.
Currently, the EU can in theory scrap equivalence decisions with just 30 days’ notice.
Under the U.S. deal with the EU, equivalence is treated as “outcomes-based”.
Britain has called for EU equivalence also to be outcomes based, which would ensure that the focus would be on whether financial rules in Britain and the EU produce the same result.
But there is no mention of outcomes-based equivalence in the draft EU-UK memorandum.
The EU text is deliberately more unambitious that the U.S. agreement and does not reflect even the current depth of relationship with bilateral MoUs already signed between individual regulators in Britain and the EU, one financial sector source said.
But industry officials also said that even the draft document now circulating would be a start in rebuilding trust between both sides.
“It is important to establish some framework for a regulatory dialogue even if there are low expectations of any movement on new equivalence decisions any time soon,” Bates said.
The financial industry wants Britain to include a provision for consultations with industry as part of the regulatory dialogue, the first source said.
“The MoU is on the lighter side of what the City wants,” a second financial sector source said, adding that this might make little difference given that Britain is likely to get only limited equivalence.
The European Commission declined to comment on the document. The UK finance ministry had no immediate comment.
Brussels has already made it clear that even an agreed MoU will not automatically lead to more EU access for London’s finance industry beyond time-limited permission to clear EU derivatives trades.
The EU executive is meeting with banks on Friday to ask how they can justify continuing to clear derivatives in London.
Bank of England Governor Andrew Bailey said this week that Britain would resist any EU attempts to arm-twist banks into shifting trillions of euros in derivatives clearing from Britain to the bloc.
(Reporting by Huw Jones. Editing by Jane Merriman)
The EIB Group, consisting of the European Investment Bank and the European Investment Fund, mark a clear acceleration in its SME financing in The Netherlands.
From 2018 to 2020 around €3 billion was made available to Dutch SMEs, which, through a leverage effect from banks and private intermediaries, mobilised some €12.5 billion investments.
Vice-President Kris Peeters indicates that the EIB Group will continue along this line: “The current times call for continued support with access to finance for SMEs, something the EIB Group is definitely committed to.”
The European Investment Bank (EIB) and the European Investment Fund (EIF) see a clear acceleration in European financing aimed at Dutch SMEs. In the years between 2018 and 2020 around €3 billion was made available through intermediary banks and funds in The Netherlands. This European financial injection made sure that, thanks to a leverage effect through the intermediaries, a total of approximately €12.5 billion of financing was allocated to Dutch SMEs.
Especially the EIF, which traditionally focuses on SME financing, saw a significant acceleration in 2020 by making available a record figure of €1,3 billion in guarantees (with a.o. Beequip, Invest-NL), fund investments (e.g. Shift Invest, Rubio Impact Fund) and inclusive finance (Triodos, Qredits). The EIB itself also saw a rise in ‘green’ credit lines, specifically meant for sustainable SMEs, such as the “impact loan” facilities done with Rabobank. Next to this, the Group collaborated with ING to allocate one of the largest credit lines ever, which made available € 1.1 billion in new SME-lending in the country.
Earlier this year, the EIB Group already announced it had signed a record volume in financing for Dutch projects in 2020. By putting the focus on SMEs, Vice-president Kris Peeters wants to signal to Dutch entrepreneurs that Europe is there for them: “Traditionally the EIB finances transport, energy and climate projects, but since the financial crisis the focus on SMEs has been further reinforced. In these difficult times, we wanted to do more, for example through special pan-European initiatives like the European Guarantee Fund. Europe is there for Dutch entrepreneurs, not only through the internal market, but also through very tangible, advantageous financing made available by the EIB Group through local intermediaries. The current times call for continued support with access to finance for SMEs, something the EIB Group is definitely committed to.”
BEIJING, Feb. 26 (Xinhua) — China’s Ministry of Commerce on Friday stressed that China and the European Union (EU) are partners rather than rivals, and the cooperation between the two sides is far greater than any competition.
China wishes to work together with the EU to safeguard and develop a multilateral trading system, the ministry said via a press release in response to a trade policy document released by the European Commission on Feb. 18.
China appreciates that the EU will continue to advocate multilateralism and a rules-based international order, support trade policies that feature openness and engagement, and attach importance to economic and trade relations with China as always, as stated in the document, said the statement.
However, it must be pointed out that the EU’s claim that China pursues “a distinct state-capitalist model,” which “poses increasing challenges for the established global economic governance system,” is not true, the ministry said.
It is also groundless to say that a key driver of the crisis the World Trade Organization (WTO) faces is that China’s accession to the organization has not led to its transformation into a market economy.
China firmly rejects such claims and accusations, said the ministry.
China has been building a socialist market economy in an all-round way, letting the market play a decisive role in resource allocation and giving full play to the role of the government.
History has shown that the country’s economic governance system contributes Chinese wisdom to global economic governance, said the press release.
The ministry said China has always been an active participant, firm supporter and important contributor to the WTO. The root causes of the current WTO crisis are unilateralism and protectionism.
At a time when the WTO faces serious challenges, China and the EU should work together to safeguard the authority and representativeness of the multilateral trading system, and strengthen solidarity and enhance trust among WTO members, said the commerce ministry.
According to the document, the EU will adopt stricter restrictions in foreign investment screening, export control, public procurement and foreign subsidies.
China hopes that the EU will increase its policy transparency, maintain fairness, justice and non-discrimination, and avoid hindering normal international trade and investment, the ministry said, adding that different social systems and economic models should not prevent the two sides from carrying out mutually beneficial cooperation.
China is ready to work with the EU to strengthen dialogue, deepen cooperation and properly handle differences to push for the steady and long-term development of China-EU economic and trade relations.
China hopes that the EU will continue to adhere to free trade and multilateralism, work with China to oppose unilateralism and protectionism, and facilitate the recovery of the world economy at the earliest possible date, said the ministry.
Athens [Grecce], February 25 (ANI): December 2020, European Union (EU) landmark trade deal – the Comprehensive Agreement on Investment (CAI) with China, that aims to liberalise trade between Beijing and Brussels, may prove to be a dangerous move for Europe.
Since the signing of the deal by Chinese Premier Xi Jinping, there is a mounting concern in the European Parliament over China’s human rights record on issues, including alleged forced labour camps and a crackdown in Hong Kong against anti-government protestors, reported Greek City Times.
The trade deal raises questions over the credibility of the European Union as the champion of human rights as it has overlooked China’s human rights violations and security aspects in signing the deal. It has handed China an important victory.
The deal with the European Union is being hailed in China as a great success for President Xi Jinping before the 100th anniversary of the Chinese Communist Party and confirmation of its power in the world, reported Greek City Times.
The European Parliament’s demands for the deal to contain a clause binding China to international agreements on modern slavery were also ignored.
Instead, the deal only contains a non-binding commitment by China “to make continuous and sustained efforts” to ratify the International Labour Organisation’s conventions on forced labour, reported Greek City Times.
The concerns were echoed in a letter sent by a group of European Union MEPs to European Commission President Ursula von der Leyen.
The appeal, signed by a dozen civil rights groups, underlined that the CAI sent a signal that the European Union was pushing for closer cooperation with China “regardless of the scale and severity of human rights abuses carried out by the Chinese Communist Party.”They also opined that there was little opening for European nations to take advantage of the said deal by entering into the Chinese market as the overall winner was China as they had successfully inked the deal during the power transition phase in the United States, reported Greek City Times.
Moreover, Beijing’s ‘Made in China 2025’ (MIC 2025) initiative, whose objective is to achieve manufacturing dominance by 2025, is the main driving force behind these deals.
MIC 2025’s overall strategy is to achieve 70 per cent self-sufficiency in high-end industries and reduce dependence on foreign technology.
Regulations and tariffs imposed by developed countries have always made it difficult for China to access advanced technology, therefore, China is on the lookout for such deals that enable a liberal trade environment to further its interests.
Attempts of China Reform Holdings to takeover Imagination Technologies, a UK-based chip design firm engaged in artificial research is a case in point.
Had it not been for the timely intelligence inputs from the MI6 and MI5, the British government could not have managed to prevent this critical acquisition, reported Greek City Times.
The European Union must understand that the threat from China does not just come from state actors. Chinese enterprises are also a tool among others used by China in international conflicts, reported Greek City Times.
The Chinese Communist Party would leverage the liberal environment created by the deal to spread disinformation and propaganda and carry out extensive espionage on European soil.
The relaxation of rules and lax surveillance of Chinese activities would only strengthen its capabilities to unleash cyber and hybrid warfare in Europe. In light of the above, the European Union should be wary of approving this deal. (ANI)
European Commission Statement Brussels, 26 Feb 2021 Josep Borrell, High Representative of the Union for Foreign Affairs and Security Policy/Vice-President of the Commission and Janez Lenarčič, Commissioner for Cr…
SAVE THE DATE – ESMA 10 YEAR ANNIVERSARY CONFERENCE – 23 MARCH 2021
As part of ESMA’s 10th year anniversary celebrations, we are hosting an online conference which will reflect on the progress the Authority has made in its first decade, as well as look to its future. The conference will take place on 23 March 2021, 15:00-18:35 CET.
Registrations are now open. Click here and save your virtual seat.
The full agenda can be downloaded here The event will gather representatives from the European Institutions, supervisors and a broad range of other stakeholders. More information about our speakers and hosts here
SOCIAL MEDIA DRIVEN SHARE TRADING? THINK TWICE.
GameStop frenzy and related phenomena
The trading in GameStop shares and related phenomena touches on several relevant regulatory and supervisory issues, across the areas of investor protection, trading, market abuse and post-trading processes.
We remember the unprecedented trading situation centred in the second half of January 2021 on the shares of firms such as US videogame retailer GameStop or US movie theatre company AMC Entertainment, which have seen their equity prices surge amid high trading volumes and extreme volatility. Large purchases of shares and of call options, combined with very high short positions created the conditions for unprecedented price increases.
The shares were heavily promoted by certain internet sites and in social media, which encouraged massive purchases by retail investors using leverage, and was amplified by forced buying from short sellers and underwriters of options, resulting in a so called “short squeeze”. As a result, GameStop and AMC share prices surged by 1,745% and 839% in January respectively, with consequent growth in their market capitalisation as well as their share traded volumes. At the end of January, when US brokers took steps to curtail activity, extreme movements in individual shares dissipated and concerns about possible contagion towards shares of other issuers diminished.
Overall, this had a significant impact on US equity trading volumes in January 2021, with volumes traded higher than in March 2020 – during the COVID-19 market stress – and twice as high compared to January 2020. However, trading activity related to GameStop or AMC shares on European venues remained marginal.
The likelihood of similar events happening in the European Union (EU) appears limited. While some EU shares were mentioned in the press as potential targets after the GameStop related events, European short positions levels are lower than in the US, with only 20 issuers with net short positions above 10% (at a maximum of 16%). This limits the risk of a GameStop style “short squeeze”. Moreover, short positions – especially large positions leading to public disclosures – have reduced markedly since the end of January. No increase in overall short-selling activity in the EU was observed in January 2021. While a few EU shares with larger short positions have seen some short-lived price spikes in the last week of January, the price increases were much more limited compared to US levels.
The observed extreme price volatility combined with the broad participation of retail investors raises, in the first place, investor protection concerns. In view of this, ESMA issued a Statement, on 17 February 2021, urging retail investors to be careful when taking investment decisions exclusively on the basis of information from social media and other unregulated platforms, if the reliability and quality of that information cannot be verified. While alerting them to the significant risks of investing in stocks characterised by very high price volatility, which will be even more profound for investors using leverage, ESMA stresses the importance of gathering investment information from reliable sources before taking an investment decision. Retail investors also need to clearly keep in mind one’s investment objectives, the ability to bear losses and the benefits of diversification. Financial education which can help to get better outcomes for retail investors.
ESMA closely coordinated its monitoring and assessment of the Game Stop phenomena with the National Competent Authorities (NCAs), which also issued their own clarifications, as well as with colleagues from the US Securities and Exchange Commission and the Financial Conduct Authority.
The use of new technology can help increase retail investors participation in financial markets, and thus contribute to one of the objectives of the Capital Markets Union Action Plan. However, there are concerns that specific aspects of online brokers’ business models may incentivise the adoption of risky short-term trading strategies by retail investors. Moreover, there are potentially concerns about the transparency of the fee structure. In particular, the role of online brokers’ business models in creating the recent surge in retail investor participation should be further investigated. We have observed the growing popularity of providers like RobinHood over the last 12 months, with the pandemic appearing to act as a catalyst for this increase in retail trading, against a backdrop of further digitalisation and falling trading commissions in finance.
The phenomenon of zero-commission trading needs to be looked at in more detail. To be sure, as such lower costs for retail investors are a welcome development, given the importance of costs in determining investors’ long-term returns. However, there is no such thing as a free lunch. Payments for order flow from third parties such as market makers may substitute commissions that are otherwise paid by clients, creating conflicts of interest and resulting in less transparency for retail clients. The practice of payment for order flow needs to be carefully assessed against the MiFID II requirements on conflicts of interest, best execution and inducements. Next to zero-commission trading, other practices also deserve scrutiny, such as the use of investment apps combined with a phenomenon known as the gamification of investing, potentially impacting retail investors’ risk awareness and contributing to the popularity of leveraged trading strategies.
Furthermore, from a market integrity perspective, the GameStop situation posed certain questions regarding the applicable market abuse regime requirements and prohibitions. Any trading strategy likely to give misleading signals as to the supply, demand or price of a financial instrument, or likely to secure its price at an abnormal or artificial level may represent market manipulation. While a simple intention to buy the shares of an issuer on which large short sale positions are established does not constitute market abuse, coordinated strategies to buy and sell at certain conditions and at a certain point in time with the objective to inflate the share’s price could constitute market manipulation. Moreover, posting false or misleading information about an issuer or a financial instrument on social media may also represent market manipulation.
Another set of considerations and lessons learnt relates to the suspension of buy orders on certain platforms. The sudden exclusion of retail investors from trading GameStop shares via RobinHood was argued, by the platform, as being driven by the large margin calls issued by the clearing house to cover the new positions and related risks, reflecting the heightened volatility and concentration associated with this sudden large trading activity by Robinhood clients. In the EU, from our discussion with the supervisors of EU CCPs, no major changes in margin requirements were noticed as the EU stocks that followed a similar situation did not experience as much volatility and concentration as in the US case.
ESMA will continue to monitor developments and may take further action where appropriate.
This material is based on the introductory statement given by ESMA Chair, Steven Maijoor, on 23 February at the European Parliament Committee on Economic and Monetary Affairs.
ESMA has today published 4 new Q&As and modified 11 existing Q&As. ESMA also updated reporting instructions and an XML schema for the templates set out in the technical standards on disclosure requirements.
ESMA has today launched a consultation on draft technical standards on crowdfunding under the European crowdfunding service providers regulation (ECSPR).
ESMA have today published a joint supervisory statement on the effective and consistent application and national supervision of the Regulation on sustainability-related disclosures in the financial services sector (SFDR). The statement aims to achieve an effective and consistent application and national supervision of the SFDR, promoting a level playing field and protecting investors.
ESMA has launched a consultation on draft guidelines detailing the obligations applicable to administrators that use a methodology to calculate a benchmark in exceptional circumstances under the Benchmarks Regulation (BMR).
ESMA Head of Markets and Data Reporting Department, Fabrizio Planta, addressed yesterday the Members of the European Parliament Subcommittee on Fiscal Matters regarding the “Cum-Ex/Cum-Cum” tax fraud scandal. He referred to the past and prospective role of ESMA, and the recommendations and conclusions of the Final Report on the inquiry.
ESMA has published a Questions and Answers (Q&A) regarding the understanding of Special Purpose Vehicle (SPV) aspects under the Regulation on European crowdfunding service providers for business.
The Board of Supervisors of ESMA has appointed Annemie Rombouts, Deputy Chair of the Belgian Financial Services and Markets Authority, as Chair of the Corporate Reporting Standing Committee (CRSC).
ESMA has today published the final report on Guidelines aimed at assisting competent authorities in the application of EMIR provisions that deal with the review and evaluation of central counterparties (CCPs).
ESMA Chair, Steven Maijoor, addressed today the Members of the European Parliament within the Committee on Economic and Monetary Affairs (ECON). He was invited together with the European Commission’s Director for Financial Markets, Ugo Bassi, for an exchange of views on GameStop share trading and related phenomena.
ESMA has released a statement to highlight to retail investors the risks connected with trading decisions based exclusively on exchanges of views, informal recommendations and sharing of trading intentions through social networks and unregulated online platforms. The statement is issued as part of ESMA’s investor protection objective to safeguard retail investors, whose participation is key to the development of the Capital Markets Union.
ESMA submitted questions related to the accounting for the third series of the European Central Bank’s (ECB) Targeted Longer-Term Refinancing Operations (TLTRO III) to the International Financial Reporting Standards Interpretations Committee (IFRS IC).
ESMA has issued today a call for candidates in order to renew the composition of its Consultative Working Group (CWG) which advises ESMA’s Investment Management Standing Committee (IMSC).
ESMA has today withdrawn the credit rating agency (CRA) registrations of Fitch France, Fitch Polska, Fitch Italia and Fitch Ratings España following the merger with Fitch Ratings Ireland.
ESMA is organising a workshop on CCP margins and procyclicality in times of crisis which will take place on 17 February 2021 from 2:30 to 6:00 PM (Paris time).
ESMA Chair, Steven Maijoor, addressed today senior policymakers and industry at the 5th Annual Conference on ‘FinTech and Regulation: New Challenges and New Solutions’. His speech touched upon: digitalisation: risks and opportunities; accelerating trends; and safe navigation.
The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) delivered today to the European Commission (EC) the Final Report, including the draft Regulatory Technical Standards (RTS), on the content, methodologies and presentation of disclosures under the EU Regulation on sustainability-related disclosures in the financial services sector (SFDR).
The European Supervisory Authorities – ESAs (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) submitted today to the European Commission draft Regulatory Technical Standards (RTS) on amendments to the key information document for packaged retail and insurance-based investment products (PRIIPs).
ESMA today sent a letter to the European Commission consultation on the review of the European Long Term Investment Funds (ELTIF) Regulation. ESMA highlights the key topics of the ELTIF review where we see the need to consider amendments to this framework.
ESMA has today published a final report on implementing technical standards (ITS) under the Regulation on cross-border distribution of funds. The ITS focus on the publication of information by national competent authorities (NCAs) on their websites, the notification of information by NCAs to ESMA and the publication of information by ESMA on its website.
ESMA is launching a common supervisory action (CSA) with national competent authorities (NCAs) on the application of MiFID II product governance rules across the European Union (EU). The CSA will be conducted during 2021.
