Share trading obligation and derivatives trading obligation
In late October ESMA published a statement clarifying the scope of the EU share trading obligation (STO). It said that trading in a third country of shares with an International Securities Identification Number (ISIN) issued by a European Economic Area country would be considered to comply with the MiFIR STO provided the transactions were in the country’s local currency. AMAFI welcomed the clarification, which it had been requesting for several months (AMAFI / 20-55). In early November the UK Financial Conduct Authority also released a statement on the scope of the STO, indicating that it will use its Temporary Transitional Power to allow UK investment firms to continue trading all shares on EU platforms.
On the DTO, ESMA published a statement on 25 November indicating that existing rules will continue to apply as there are no risks to financial stability. ESMA stressed nonetheless that the absence of an equivalency decision for UK venues could pose problems for some European entities, particularly UK-based branches. However, the risk that financial flows could be diverted remains, since US venues are currently the only ones capable of meeting a potential dual UK/European obligation.
Extending AMF certification equivalency
In late October the AMF published a news release announcing that it would extend certification equivalency through to 12 December 2022. Under the framework, professionals demonstrating that they have appropriate qualifications recognised by the UK regulator are granted equivalency with the AMF’s certified examination of basic knowledge.
Originally set up in late 2017, equivalency was initially granted until 12 December 2020 to employees of UK-based investment services providers or their branches who had fulfilled certain duties in Britain and could provide evidence of being appropriately qualified to do so, and who were then appointed to hold specific positions in France as part of a Brexit transfer. With this decision, the AMF responded to calls from AMAFI, which had asked the regulator to consider extending equivalency given the challenges arising from the health crisis and continued uncertainty about Brexit implementation.
