February 16 - Joint ICI Global/SIFMA AMG Conference Call to Discuss Update and Strategy on BRRD Expanded Moratorium Powers
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February 8, 2018 TO: Derivatives Markets Advisory CommitteeICI Global Regulated Funds Committee
Money Market Funds Advisory Committee RE: February 16 - Joint ICI Global/SIFMA AMG Conference Call to Discuss Update and Strategy on BRRD Expanded Moratorium Powers
On February 16th, from 12-1 pm ET, ICI Global will hold a joint conference call with SIFMA AMG to provide an update to members and discuss our strategy regarding the proposal to expand the special resolution moratoria in the EU under the EU Bank Recovery and Resolution Directive (BRRD). ICI Global and SIFMA AMG have been working together for some time on advocacy efforts to oppose expansion of the BRRD moratorium powers. On this call, we will provide an update regarding our advocacy efforts, recent developments in the EU regarding the proposal to expand moratorium powers under the BRRD, and discuss strategy and next steps. If you would like to participate in the call, the dial-in information is:
USA Toll Free: 1-888-701-8647
Global Toll: 1-773-799-3649
Passcode: 29877
Please find below a brief summary of recent developments in the EU regarding the proposed expansion of the BRRD moratorium powers.
European Council: The Bulgarian presidency has proposed a compromise approach that would reduce the total moratorium length under BRRD to two business days, generally consistent with BRRD I. It would, however, remove the exclusion for derivatives and for the termination of netting arrangements/financial collateral arrangements. We understand that the majority of member states have expressed concern with the Bulgarian presidency’s 2-day proposal and support maintaining the Commission-proposed 5-day approach. This issue is expected to be discussed further in the Council during a Council Working Party meeting on the Risk Reduction Measures scheduled for February 20.
European Parliament: The Parliament has published over 500 proposed amendments to the Commission’s BRRD proposal.[1] The amendments include the suggested amendments of ICI Global and SIFMA AMG that would limit the moratorium powers to those currently existing under BRRD I (see, e.g., pp. 78 and 83 of the report that includes amendments 30-190 and pp. 27-33 of the report that includes amendments 508-583). Many MEPs published amendments, consistent with those ICI Global and SIFMA AMG suggested, to delete the proposed pre-resolution moratorium power. Several MEPs also published amendments, consistent with those ICI Global and SIFMA AMG suggested, to delete the proposed in-resolution moratorium power. There was less support, however, for deleting the proposed in-resolution moratorium power, and some MEPs even proposed expanding the length of that moratorium power.
We understand the rapporteurs and shadow rapporteurs will be discussing each of the amendments to assess political support in the Parliament, and determine points of compromise. The next steps in the Parliament are a meeting of the shadow rapporteurs on February 19 to discuss the amendments, a session on February 21-22 for the ECON MEPs to consider amendments in the ECON, followed by more meetings among the shadow rapporteurs, with the goal of reaching an agreement before the ECON vote. That has not been scheduled yet, but at this point, we understand it is unlikely to be before April.
Based on these recent developments, a difference of views appears to be emerging between the Parliament and the Council on the appropriate length and scope of moratorium powers. We will discuss on next week’s call advocacy strategies in light of these developments.
Sarah A. Bessin
Associate General Counsel
endnotes
[1] Not all of the proposed amendments that were introduced will be reflected in Parliament’s final position. In some instances, inconsistent amendments have been introduced with respect to the same provision. The proposed amendments are available at:
Amendments 30-190: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&reference=PE-616.823&format=PDF&language=EN&secondRef=02
Amendments 191-507: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&reference=PE-616.824&format=PDF&language=EN&secondRef=01
Amendments 508-583: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&reference=PE-616.907&format=PDF&language=EN&secondRef=01