Welcome to Euro Shorts, a short briefing on some of the weeks developments in the financial servicesindustry 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 1406claire.cummings@cummingslaw.comwww.cummingslaw.com

AIFMD NPPR and changes to notification forms

The FCA has updated its webpage on the national private placement regime (NPPR) under theAIFMD. It has published the notification forms to be submitted to it concerning material changesto the information previously submitted to it by certain AIFMs using the NPPR in the UK,namely: (i) the Article 36 material change form; (ii) the Article 42 material change form; and (iii)the Small Third Country material change form. The FCA has also published a guidance note toassist firms when completing these forms.

Further ESMA consultation on MiFID II

ESMA is consulting on draft guidelines for the assessment of knowledge and competence ofnatural persons in investment firms providing investment advice or information about financialinstruments under MiFID II (ESMA/2015/753). ESMA considers that compliance with theknowledge and competence requirements requires individuals to acquire an "appropriatequalification" and gain "appropriate experience" to provide investment advice or information toclients. The draft guidelines set out the areas of knowledge and experience against whichindividuals should be assessed for these purposes. The draft guidelines are set out in Annex IV tothe consultation paper. Annex V to the consultation paper contains illustrative examples of theapplication of certain aspects of the draft guidelines. Comments are invited by 10 July 2015.

Jonathan Hill speech on CMU benefits

In a recent speech, Jonathan Hill, Commissioner for the Directorate General (DG) FinancialStability, Financial Services and Capital Markets Union (CMU) highlighted the benefits of theproposed CMU and points of interest include: (i) a more detailed action plan and timetable for the

CMU will be published by the Commission in summer 2015; (ii) the European Commission is"pushing forward" to make quick progress on early projects, like securitisation and revising theprospectus rules; (iii) support in the European Parliament for the CMU has been positive; and (iv)Lord Hill is keen for the financial industry to suggest practical actions to the Commission. LordHill used his speech to explain that the European Commission has been adapting to a newapproach towards legislation, as follows: (a) the Commission will only bring forward one fifth ofthe number of new legislative initiatives this year than was the case in a typical year in previousCommissions; (b) the Commission will also review more existing laws; and (c) there will be lessnew legislation in the future and more focus on bedding-in the reforms of recent years.

G20 communique on financial services issues

The G20 has published a communique following the meeting of finance ministers and centralbank governors in Washington last week. Among other things, in the communique, the ministersand governors state that they will: (i) identify and address gaps related to the resilience, recoveryand resolution of CCPs; (ii) enhance cross border co-operation to enable regulations to be moreeffective, particularly in the areas of resolution and OTC derivatives markets reforms, where swiftimplementation is required; and (iii) ask the Financial Stability Board to report on the progress onthe co-ordinated work plan to promote CCP resilience, recovery planning and resolvability by theG20 finance ministers meeting in September 2015.

Eurozone recovery apparent

European Central Bank executive board member, Benoit Coeure, said in an interview this weekthat although the eurozone recovery is clearly there, the recovery is still "insufficient andsomewhat unequally spread from country to country" and it is up to governments to ensure itendures. He added that the ECBs concern is that the current upturn is merely a cyclical one, thatit's merely a flash in the pan." He said that growth can be achieved long term via labour marketreforms and by more generally creating a business environment that is more conducive toinvestment. He also confirmed that the ECB would continue its QE programme for the timebeing.

ESMA call for evidence on virtual currency

ESMA has published a call for evidence on investments using virtual currency (VC) or distributedledger technology. ESMA has been monitoring and analysing VC investment over the last sixmonths to understand developments in the market, potential benefits or risks for investors, marketintegrity or financial stability, and to support functioning of the EU single market. It is nowsharing its analysis to promote wider understanding of innovative market developments. The callfor evidence requests feedback on: (i) VC products e.g. collective investment schemes orderivatives such as options and contracts for difference that have VC as an underlying or invest inVC related businesses and infrastructure; (ii) VC based assets and securities and asset transferse.g. financial assets such as shares and funds that are exclusively traded using VC distributedblock chains; and (iii) the application of the distributed ledger technology to securities andinvestments, whether inside or outside a VC environment. Comments are invited by 21 July 2015.Subject to assessing the responses received to the call for evidence, ESMA has no immediateplans to take any regulatory action.

EU Council adopts ELTIF and MLD4 Regulations

The EU Council has announced that it has adopted the Regulation on European Long-TermInvestment Funds (ELTIF Regulation), the Fourth Money Laundering Directive (MLD4) and therevised Wire Transfer Regulation (WTR) at first reading. The Council appears to have adoptedthe text of the ELTIF Regulation that it published in March 2015 and the texts of MLD4 and theWTR that it published on 10 April 2015. The Council has also published an item note toCOREPER containing statements from France, the Czech Republic and Austria setting out theirreservations about the final texts of MLD4 and the revised WTR.

Deutsche fined for manipulation of LIBOR and EURIBOR

The FCA has fined Deutsche Bank 227 million this week for attempted manipulation of LIBORand EURIBOR rates (together, IBOR) between January 2005 and December 2010 and for failingto deal with the FCA in an open and co-operative way. Deutsche Bank agreed to settle at anearly stage of the FCA investigation and qualified for a 30% discount, but the fine is still thelargest ever imposed by the FCA for IBOR-related misconduct. Deutsche was also fined by theCFTC, the US Department of Justice and the New York Department of Financial Services of $800million, $775 million and $600 million respectively on the same day. According to the FCAsfinal notice, the direct involvement of managers and senior managers in many aspects of DeutscheBank's misconduct aggravated the seriousness of the breaches.

Greece fails to make progress on reforms for debt talks

Valdis Dombrovskis, the EU Commissioner for the Euro, has said that not enough progress hadbeen made in debt talks with Greece to allow the payout of bailout funds amid demands fordeeper reforms. It was hoped that a deal would be reached at this weeks meeting of the eurozonefinance ministers, but according to Mr Dombrovkis: "Progress in technical negotiations has notbeen sufficient to reach any conclusion during this Eurogroup here in Riga". If no deal isreached, then expectations will centre around the next meeting on May 11, shortly before Greece'snext payment to the IMF is due. However, according to reports, European officials areincreasingly floating the end of the June as the real deadline, which is when Greeces currentbailout programme expires.

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SandraTypewritten TextCummingsTel: + 44 20 7585 1406Mob: + 44 7734 057 327www.cummingslaw.com24 April 2015

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