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COVID-19: FCA extends Flexibility on RTS 27 Reports and 10 Percent Depreciation Notifications

On March 19, the Financial Conduct Authority (FCA) published a statement announcing that it is establishing temporary measures on RTS 27 reports on execution quality. Commission Delegated Regulation (EU) 2017/575 contains regulatory technical standards (RTS) specifying the content, format and periodicity of the data published by execution venues on the quality of execution of transactions. The FCA refers to these RTS as RTS 27.

The next set of these reports will be based on pre-Brexit data, so the information is likely to be of limited use for market participants and may be misleading. The FCA is preparing a consultation on the RTS 27 reporting obligation, with a view to abolishing it, due to concerns about the value of these reports and the burden of producing them. On this basis, the FCA will not take action against firms who do not produce RTS 27 reports for the rest of 2021. It expects to have concluded its policy consideration for the future of these reports by the end of 2021.

The FCA also announced a further extension to a temporary COVID-19 measure applying supervisory flexibility over 10 percent depreciation notifications. The temporary measure will be extended until the end of 2021, while the FCA consults later this spring on changes to the notification requirement. The requirements apply to firms that provide portfolio management services or hold retail client accounts that include positions in leveraged financial instruments or contingent liability transactions.

The FCA informed firms in September 2020 that it would apply supervisory flexibility over 10 percent depreciation notifications until the end of March 2021.

The FCA statement announcing that it is establishing temporary measures on RTS 27 reports on execution quality.

©2021 Katten Muchin Rosenman LLPNational Law Review, Volume XI, Number 85
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About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666
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