COVID-19: Financial Services Round-Up for 6–19 April 2020


Alternative Performance Measures

On 17 April 2020, ESMA published a new Q&A on the application of alternative performance measures (“APMs”) in the context of the COVID-19 pandemic (here). The new Q&A considers how issuers should present the impact of COVID-19 for the purpose of the APM.


On 9 April 2020, ESMA published a statement to promote coordinated action by national competent authorities regarding the timeliness of fulfilling external audit requirements for interest rate benchmarks under the Benchmarks Regulation (here).

ESMA expects national competent authorities (“NCAs”) not to prioritise supervisory actions against administrators and supervised contributors relating to the timeliness of fulfilling those audit requirements where the audits are carried out by 30 September 2020.

ESMA also encourages NCAs to apply a risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of the Benchmarks Regulation in a proportionate manner concerning the timeliness of fulfilling the audit requirements.

Nevertheless, administrators and supervised contributors are expected to inform their NCA where they anticipate that the fulfilment of the audit requirements will be delayed.

Capital Requirements

On 16 April 2020, the ECB published a press release, announcing a temporary reduction in capital requirements for market risk (here).  As well as smoothing procyclicality, the reduction aims to maintain banks’ ability to provide market liquidity and to continue market-making activities. The ECB will review the decision after six months.

Central Bank COVID-19 Communications

The Central Bank of Ireland (“CBI”) has published links to various communications to regulated financial service providers regarding its prudential regulatory flexibility measures in light of COVID-19 on a webpage (here).

The communications set out details of applicable extensions and postponements as well as details of the CBI’s application of relevant announcements made by the European Supervisory Authorities.  The CBI will continue to review its approach towards regulatory flexibility and provide further updates as required.

See our related briefing, COVID-19: Central Bank of Ireland Announces Flexibility Measures for Funds, Fund Service Providers and Investment Firms (here).

COVID-19 Resources

The ECB has published a webpage setting out an overview of macro-prudential policies taken by eurozone national authorities in response to the COVID-19 pandemic (here), since 11 March 2020. It has also published an overview of measures notified to it under Article 5 of the Single Supervisory Mechanism Regulation.

The European Parliament’s Economic and Monetary Affairs Committee published an analysis of EU/Euro Area measures to mitigate the economic, financial and social effects of COVID-19 (here).

The European Systemic Risk Board (ESRB) published an overview of policy measures taken by Member States, EU institutions (including the European Supervisory Authorities) and national authorities in response to the COVID-19 pandemic (here).

The LMA launched a new COVID-19 microsite (here).  The microsite provides relevant legal, regulatory and market news, articles and digital content relating to COVID-19.

Financial Stability Board

On 14 April 2020, the Financial Stability Board (“FSB”) published a letter sent by Randal Quarles, FSB Chair, to G20 finance ministers and central bank governors ahead of their virtual meeting on 15 April 2020 (here).  

In the letter, the FSB sets out details of work it is currently undertaking to maintain financial stability and support the real economy during the COVID-19 pandemic.  This work includes assessing vulnerabilities, information sharing and coordinating policy responses.

The letter also sets out the FSB’s ongoing policy work to promote a global financial system that supports a strong recovery after the pandemic along with timescales for this work.  This work includes non-bank financial intermediation, LIBOR transition, technological innovation and promoting efficient cross-border payments.

On 15 April 2020, the FSB published a report for the G20 on financial stability implications and policy measures taken in response to the COVID-19 pandemic (here). The report sets out the principles that have underpinned the official community’s response to support the real economy, maintain financial stability and minimise the risk of market fragmentation.


On 10 April 2020, Insurance Ireland published a press release announcing various measures to assist customers during COVID-19 (here).  For business customers, measures include:

  • Insurers will allow up to 28 days after renewal for payment.
  • Insurers will reduce premiums for business customers to reflect reduced level of exposure as a result of COVID-19 restrictions for employer liability/public liability and commercial motor.
  • Cover will be maintained for unoccupied commercial buildings/ premises not in use due to COVID-19 restriction (max. 90 days). Appropriate supervision and security of the premises is required. 
  • Insurers will support requests for a change of property use during the crisis for business impacted by COVID-19 restrictions.

For personal customers, measures include:

  • Renewal grace period extended to 28 days (following contact with the customer or broker to confirm the extension).
  • No cancellation fees or missed direct debit fees.
  • Extension of credit facilities with relevant brokers.

The press release also responds to two specific issues relating to business interruption raised by the CBI and the Minister for Finance.

The Minister for Finance has also published related press releases on the response of the insurance sector to COVID-19 (here and here).

Investment Funds

On 9 April 2020, ESMA published a public statement on actions to mitigate impact of COVID-19 on deadlines for publication of periodic reports by fund managers (here).  The statement concerns the following entities (“Fund Managers”):

  • UCITS management companies
  • self-managed UCITS investment companies
  • authorised AIFMs
  • non-EU AIFMs marketing AIFs pursuant to Article 42 of the AIFMD
  • EuVECA managers
  • EuSEF managers

Fund Managers have an obligation to publish annual and half yearly reports in respect of funds they manage, in relation to reporting periods ending from 31 December 2019 to 30 April 2020 inclusive.  ESMA is aware that measures taken by Member States to prevent COVID-19 contagion present significant difficulties and challenges for Fund Managers and auditors in preparing their periodic reports for a publication within the regulatory deadlines.

It is of the view that the burdens placed on Fund Managers should be taken into account by national competent authorities (“NCAs”) in a co-ordinated way.  ESMA expects NCAs to adopt a risk-based approach and not prioritise supervisory actions against these market participants in respect of the upcoming reporting deadlines.  It also reminds Fund Managers that certain funds continue to be subject to the disclosure obligations laid down in Article 17 of the Market Abuse Regulation. In particular, these funds must continue to disclose any inside information as soon as possible.


On 8 April 2020, the International Organization of Securities Commissions (“IOSCO”) published a press release announcing that it has reprioritised its 2020 work programme in light of the COVID-19 pandemic (here).

IOSCO is redeploying resources to focus on matters that are directly impacted by COVID-19.  These include addressing areas of market-based finance which are most exposed to heightened volatility, constrained liquidity and the potential for pro-cyclicality.  These include examining investment funds, as well as margin and other risk management aspects of central clearing for financial derivatives and other securities.

The press release states that work being delayed or paused includes IOSCO’s analysis of the use of artificial intelligence and machine learning by market intermediaries and asset managers, the impact of the growth of passive investing and potential conduct-related issues in index provision, issues around market data, outsourcing and implementation monitoring.

Work will continue on IOSCO’s good practices for deference as well as other projects that are near completion.  IOSCO will also examine any specific investor protection issues, market integrity or conduct risks that may arise in the context of the COVID-19 crisis.


On 9 April 2020, ESMA published a press release announcing that it has decided to further extend the response date for the consultation on the MiFID II/MiFIR review report on the transparency regime for non-equity instruments and the trading obligation for derivatives to 14 June 2020 (here).

ESMA also published a statement announcing that it is postponing the publication dates of the annual transparency calculations for non-equity instruments and for the quarterly systematic internaliser data under MiFIR (here). The changes are as follows:

  • Transparency calculations. Publication of the calculations including the liquidity assessment and the determination of the pre-trade and post-trade large in scale and size specific to the instrument thresholds for derivatives, exchange traded commodities (“ETCs”), exchange traded notes (“ETNs”), emission allowances and structured finance products will be postponed from 30 April 2020 to 15 July 2020 and their application from 1 June 2020 to 15 September 2020.  The transitional transparency calculations will continue to apply until and including 14 September 2020.
  • Systematic Internalisers.  ESMA will publish the data for the performance of the SI test for derivatives, ETCs, ETNs, emission allowances and structured finance products by 1 August 2020. The mandatory SI regime for derivatives, ETCs, ETNs, emission allowances and structured finance products will apply from 15 September 2020.
  • Bonds.  The publication and application of the annual transparency calculations for bonds remain unchanged and the new pre-trade and post-trade large in scale and size specific to the instrument thresholds will be applicable from 1 June 2020.


On 17 April 2020, EIOPA published a statement on principles to mitigate the impact of COVID-19 on the occupational pensions sector (here). The statement focuses on the following:

  • Business continuity and operational risks
  • Liquidity position
  • Funding situation and pro-cyclicality
  • Protection of members and beneficiaries
  • Communication

Shareholders’ Rights Directive

Certain parts of the revised Shareholders’ Rights Directive are due to enter into force in September 2020, namely provisions relating to shareholder rights in traded plcs.  On 9 April 2020, the International Securities Lending Association (“ISLA”) working in collaboration with AFME, AFTI, AGC, ASSOSIM, EACB, EBF, ECSDA, EI, ESBG, & SMPG, submitted a joint letter to the European Commission (here) seeking a one year delay in this implementation deadline for these parts due to challenges posed by COVID-19.

The letter highlights both the areas where implementation of the Directive has been challenged prior to the COVID-19 pandemic, and how the pandemic will further strain the industry’s capacity to implement the Directive prior to the September 2020 deadline.

Supervisory Reporting Measures

On 15 April 2020, the ECB published a statement on supervisory reporting measures in the context of the COVID-19 pandemic (here).  In the statement, the ECB acknowledges the operational challenges faced by banks as a result of COVID-19 and supports the EBA statement on supervisory reporting and Pillar 3 disclosures.

Euro area significant institutions falling under the direct supervision of the ECB will be allowed to delay submission of their supervisory data (under the implementing technical standards (“ITS”) on supervisory reporting and the ITS on benchmarking of internal approaches) by one month for remittance dates between March 2020 and May 2020. It excludes the following from its decision:

  • the LCR and ALMM templates, which have been identified as a priority and should be reported as planned; and
  • the information on funding plans, submission of which can be delayed by two months.

The ECB expects euro area significant institutions to apply the EBA harmonised reporting framework version 2.9 with the reference date 31 March 2020, in accordance with the adopted Implementing Act amending Regulation (EU) No 680/2014.

The ECB has also decided to postpone the remittance dates for most ECB-specific recurring requests falling between March 2020 and May 2020 by one month.  Updated remittance calendars will be communicated to banks.  The same grace period of one month should be granted to less significant institutions that are subject to EBA and ECB reporting obligations under the ITS, the ECB FINREP regulation and other rules.

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The McCann FitzGerald website has a dedicated COVID-19 section containing FAQs, briefings and guidance on a range of legal and business issues that may need to be addressed (here).

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.