The regulatory framework for solar photovoltaic plants in Italy is constantly evolving. Plant owners, asset managers and investors need to stay informed in order to adapt to developments in this sector and avoid adverse outcomes. The following highlights the key updates in this market in the last 12 months.

Read the full article.

Italy is reported to have given formal notice to withdraw from the Energy Charter Treaty (ECT).

Rumours of Italy’s intention to leave the ECT had been circulating since last autumn. IAReporter now revealed that Italy has delivered its official notice of withdrawal in January 2015.

According to the journal, Italy’s decision to withdraw, is to save on costs associated with its membership. This is certainly an unusual justification for a developed country’s withdrawal from a multilateral investment protection treaty.

Pursuant to article 47 of the ECT, Italy’s withdrawal will take effect upon the expiry of one year after the date of notification, thus in January 2016. However, the provisions of the Treaty will continue to apply to investments made in Italy before such date for a period of further 20 years.

As a consequence:

  • With respect to past energy investments, investors can continue to bring their claims against Italy until January 2036. In particular, Italy’s withdrawal from the ECT does not prevent PV investors from bringing a claim for last year’s feed-in tariff cuts.
  • With respect to future energy investments, investors should (i) either ensure the investment is made before January 2016 or (ii) consider to structure the investment so as to obtain protection under a suitable bi-lateral investment treaty (BIT).

Owners of early generation Conto Energia I photovoltaic (PV) plants are currently receiving letters from the Gestore dei Servizi Energetici (GSE) announcing that it will adjust the Feed-in Tariff (FiT) downwards and claim reimbursement of, or set-off with, the excess payments it made in past years. An example of one of these letters is attached here.

Background

The Ministerial Decree of 28 July 2005 (the original version of the Conto Energia I) provided for an annual adjustment of the FiT to account for inflation. The Ministerial Decree of 6 February 2006 removed this adjustment for inflation with retrospective effect. This even applied to PV plants that had already qualified for the FiT under the original version of the Conto Energia I.

At first instance, in 2008, the Administrative Court of Milan and the Highest Administrative Court (Consiglio di Stato) ruled the Ministerial Decree of 6 February 2006 null and void, stating that it violated not only the general principle of legal acts not being retroactive (Article 11 of the preliminary provisions of Civil Code), but also the general principles of certainty of laws and legitimate expectation of the citizens (Regional Administrative Court of Milan, Sez. IV, 10 November 2006 n. 2125, as confirmed by Cons. Stato, Sez. VI, 4 April 2008 no. 1435). Based on these rulings, the GSE continued to publish the inflation-adjusted FiT rates for early generation Conto Energia I plants year by year until 2012.

In a parallel proceeding, however, the Consiglio di Stato decided not to follow its own 2008 decision and submitted the question to the Plenary Chamber. In May 2012, the Chamber ruled the opposite of the Consiglio di Stato’s 2008 decision and confirmed the legitimacy of the retrospective abolition of the inflation adjustment relating to early generation Conto Energia I plants. The Consiglio di Stato argued that the Ministerial Decree of 6 February 2006 did not actually modify a previous legal provision but only interpreted it in a different, and acceptable, manner (Cons. Stato, A.P., 4 May 2012, no. 9).

It took until 26 March 2013 for the GSE to react to the Plenary Chamber’s reversal of the Consiglio di Stato’s decision. On that date, it released the news bulletin, in which it stated it would no longer adjust the Conto Energia I FiT rates in line with inflation. The GSE did, however, continue to pay the increased rates that had already been generated by the inflation adjustments.

Current Situation

The GSE has now sent out the letters referred to above, informing early generation Conto Energia I plant owners that the GSE will i) readjust the FiT to its original amount, prior to any adjustment for inflation, and ii) claim reimbursement of, or set-off with, all excess payments made until now. The GSE also invites recipients of these letters to submit comments and observations within 10 days.

There are a number of questions that can be legitimately raised with respect to the GSE’s latest move:

  • Could PV plant owners have legitimately relied on the inflation adjustment after the 2008 decision, at least until the second decision of the Consiglio di Stato in 2012 – meaning it might be illegal for the GSE to claim back the excess amounts paid until 2012?
  • Could PV plant owners have also legitimately relied on the fact that the GSE would not claim back the excess amounts, after it only declared in 2013 that it would stop any further inflation adjustment and did not mention the prospect of PV plant owners having to reimburse the GSE?
  • PV plant owners have paid taxes on the excess amounts that should now be reimbursed in full. How will these taxes be reimbursed to them?

In our opinion, PV plant owners who have received these letters from the GSE should respond to the GSE and should also consider whether or not to file an appeal before the Regional Administrative Court.

by Carsten SteinhauerSabine KonradAnna VescoArne Fuchs and Riccardo Narducci

On 25 June 2014, Law Decree no. 91 /2014 (the “Decree”) regarding among others “urgent measures … for the limitation of costs applied to electricity prices” has entered into force. The Parliament has now 60 days to confirm and convert the Decree into law—possibly with amendments—or to repeal it. A repeal is unlikely, considering that these measures are politically strategic to the Renzi Government, which has invested its credibility in the reduction of electricity bills for small and medium-sized enterprises through a reduction in the annual cost of PV incentives. Please click here to read the full article.

by Simone Goligorsky and Robert Coward

In October 2011, the European Commission released a proposal to amend and extend the Markets in Financial Instruments Directive (MiFID), referred to as MiFID II. The MiFID II proposals consist of revisions to MiFID, along with the introduction of the Markets in Financial Instruments Regulation (MiFIR).

Whilst MiFID sought to increase competition and consumer protection, the purpose of MiFID II is to make financial markets more efficient, resilient and transparent and to improve investor protection, with the reform being driven by commitments made by the EU to tackle less regulated and more opaque parts of the financial system at the G20 summit in Pittsburgh in 2009.

MiFID II will impose a series of changes, including, inter alia:

  • creating of a new type of trading venue, the organised trading facility (OTF);
  • extending the scope of products and activities that are subject to regulation;
  • prohibiting the use of inducements for discretionary asset management and ‘independent’ advice;
  • introducing stricter corporate governance requirements; and
  • extending market transparency and transaction reporting requirements.

On 13 May 2014, the Council of the European Union announced that MiFID II had been adopted, following on from the adoption of MiFID II in April 2014 by the European Parliament. Both MiFID II and MiFIR are expected to be published in the Official Journal of the European Union in the second quarter of 2014 and will, for the most part, become applicable 30 months later. It is expected that the European Securities and Markets Authority (ESMA) will publish a discussion paper on the technical standards shortly. Following the responses to the discussion paper, ESMA will publish a consultation paper on draft technical standards later in 2014 or early in 2015. Market participants are encouraged to respond both to the discussion paper and the consultation paper.

MiFID II is being introduced in a climate of wider regulatory reform, and implementation will overlap with numerous other legislative changes, including the Capital Requirements Directive IV, the proposals for Benchmarks regulations, the European Market Infrastructure Regulation and the Market Abuse Directive II. Given this comprehensive spread of regulatory reform, and the magnitude of commercial and operational impacts that MiFID II will have, successful implementation will require early involvement and a thorough impact assessment.

by Prajakt Samant and Simone Goligorsky

Following the European Securities and Markets Authority’s (ESMA’s) approval and registration of the first four trade repositories (TRs) in November 2013, counterparties to all types of over-the-counter (OTC) and exchange-traded derivatives contracts will be required, from 12 February 2014, to report certain details of their trades to a registered or recognised TR.

All counterparties, even those exempt from the clearing obligation, should take note that they will not be exempt from the reporting obligation. To facilitate the process, counterparties will, however, be permitted to delegate trade reporting requirements to third parties or their respective counterparties.

Background

The reporting obligation forms part of the requirements imposed by the EU Regulation on OTC derivative transactions, central counterparties (CCPs) and TRs (Regulation 648/2012), also known as the European Market Infrastructure Regulation or EMIR. EMIR aims to establish within the European Union the G-20 leaders’ commitment to improve transparency in derivatives markets, mitigate systemic risk and prevent market abuse.

The primary obligations imposed by EMIR relate to clearing, reporting and risk mitigation of derivatives trades. Such obligations are imposed on both financial counterparties (FCs) and non-financial counterparties (NFCs), to varying degrees.

Whilst the scope of these obligations is aimed at EU entities, non-EU entities should not ignore EMIR’s territorial application, as they may still be caught by its requirements. In particular, a non-EU entity may be required to comply with obligations under EMIR where either its trading counterparty is established in the European Union, or the derivatives transaction has a direct, substantial and foreseeable effect within the European Union.

The Reporting Obligation

Despite a request from ESMA that the reporting obligation in respect of exchange traded derivatives be delayed by one year, in order to give market participants sufficient time to put in place the necessary systems and procedures, the reporting obligation will come into full effect on 12 February 2014.

Under Article 9 of EMIR, all counterparties to all derivatives contracts and CCPs are required to report particular details of any derivatives contract they have concluded, modified or terminated (including lifecycle events such as give-ups and partial terminations), to a TR. ESMA guidance suggests that, in respect of terminations, a report is only required to be made where termination takes place on a date different to that originally provided for in the relevant contract.

Whilst the clearing and risk mitigation obligations are restricted to OTC derivatives contracts, the reporting obligation applies to all derivatives contracts, irrespective of whether they are traded on-exchange or OTC. In addition, although the clearing obligation only applies to FCs and non-financial counterparties that exceed the relevant clearing threshold (NFC+s), the reporting obligation also applies to non-financial counterparties below the clearing threshold (NFC-s). The clearing threshold, as prescribed in the technical standards to EMIR, differs depending on type of derivative contract. The clearing thresholds are as follows:

  • Credit derivatives: €1bn in gross notional value
  • Equity derivatives: €1bn in gross notional value
  • Interest-rate, currency and commodity derivatives: €3bn in gross notional value.

Intragroup derivatives trades that are exempt from the clearing or risk mitigation obligations must still be reported. The reporting obligation will not affect natural persons, nor will it affect non-EU entities that are not caught under EMIR.

Delegated Transaction Reporting Arrangements

EMIR requires both counterparties to a derivatives contract to report the necessary information to a registered or recognised TR. A counterparty is, however, permitted, by prior arrangement, to delegate its reporting obligation to its respective counterparty or to an agent or any third party capable of fulfilling the reporting function, e.g., a CCP, exchange, trading platform or service provider, to report on its behalf. It should be noted, however, that the original delegating counterparty remains liable for any deficiencies or failure by the other counterparty/agent/third-party service provider to comply with the requirements of the reporting obligation under EMIR. For this reason, the UK’s Financial Conduct Authority (FCA) has advised that delegating counterparties should carry out reasonable checks to ensure reports are submitted in compliance with EMIR.

Where a counterparty delegates its reporting obligation, the relevant report must make this clear. In addition, an agent or third-party service provider can report on behalf of both counterparties. In this instance, the relevant report must contain the same information as would have been reported, had each report been submitted separately.

Timings

From 12 February 2014, counterparties will have to submit reports to a TR no later than the working day following the conclusion, modification or termination (as above) of the relevant derivatives contract.

Counterparties to derivatives contracts that were entered into on, or after, 16 August 2012 and are still outstanding on 12 February 2014 will have until 13 May 2014 to report to TRs. Conversely, those counterparties to derivatives contracts that were entered into before 16 August 2012, and are still outstanding on 12 February 2014, will have until 11 February 2017. Counterparties to derivatives contracts that were entered into on, or after, 16 August 2012, and are no longer outstanding on 12 February 2014, will also have a reporting deadline of 11 February 2017.

Finally, the reporting of exposures information, i.e., collateral and market-to-market or market-to-model information, will undergo a transitional period until 11 August 2014, and must be reported on a daily basis thereafter.

Information to be Reported

The specific information that must be included in reports to TRs is set out in a technical standard to EMIR, and relates to specific counterparty and common information between the counterparties, covering over 80 fields of information, some of which may not be applicable to particular reports. The FCA has advised that Pre-Legal Entity Identifiers (LEIs) should be used wherever available and applicable. In the absence of an LEI, a counterparty’s Business Identifier Code should be used.

Key information in respect of counterparty information includes the identities of the counterparties, the beneficiary of the rights and obligations arising from the contract, the broker used (if any), the clearing member (in the case of cleared contracts), the counterparty’s trading capacity, information as to the nature of the trade, valuation updates and collateral information. Key information in respect of common information includes the main details of the contract, the transaction type, the notional value, maturity, price and settlement date.

Obtaining a Legal Entity Identifier

In order for counterparties entering into derivatives trades to comply with the reporting obligation under EMIR, each counterparty is required to have an LEI. There are currently 11 Local Operating Units, such as the London Stock Exchange (LSE), that are permitted to issue LEIs for the purposes of compliance with EMIR. Obtaining an LEI is a relatively inexpensive exercise. The LSE, for example, charges an initial allocation cost of £100+VAT, together with an annual maintenance of £55+VAT, per LEI.

Trade Repositories Registered With, or Recognised by, ESMA

All trade reports must be submitted to EU-TRs that have been registered with, or Non-EU-TRs that are recognised by, ESMA. There are currently five registered TRs covering all asset classes: DTCC Derivatives Repository Ltd., CME Trade Repository Ltd. and UnaVista Ltd, based in the United Kingdom; Krajowy Depozyt Papierów Wartosciowych S.A. in Poland; and Regis-TR S.A. in Luxembourg. In addition, ICE Trade Vault Europe Ltd., based in the United Kingdom, will cover commodities, credit, equities and interest rates derivatives asset classes.

Counterparties can choose whichever TR they feel best suits their needs and are permitted to report different trades to different TRs. Counterparties to a trade are under no obligation to report to the same TR. Additional TRs can be expected to be registered soon, as ESMA is currently in the process of reviewing further applications. Updated lists can be found on the ESMA website.

Intragroup Transactions Exempted From The Clearing Obligation

The FCA has encouraged all firms that are planning to take advantage of the exemption from the clearing obligation contained in Article 4(2) of EMIR (which applies to intragroup transactions), to register and submit a notification to the FCA, if they have not already done so. Applications for this exemption can be made through the FCA EMIR web portal and should receive a response within 30 days, confirming whether or not the exemption is available. Where the FCA intends to oppose an application, the FCA will provide notice in advance and give the applicant the opportunity to either withdraw the application or submit further supporting information.

Next Steps

The 12 February 2014 start date for trade reporting will be a landmark date for the implementation of EMIR obligations. The next big landmark is likely to be the commencement of the clearing obligation. Although no precise date has been set for this, it is likely to commence in 2014.

Robert Lister, a trainee in the London Office, also contributed to this article.

by Prajakt Samant and Simone Goligorsky

The European Commission announced on 14 January 2014 that the European Parliament and Council had reached an agreement in principle on revised rules for markets in financial instruments (MiFID II). Under the revised regime, limits will be placed on taking financial positions in commodity derivatives, with a view to preventing market abuse and helping to restore investor confidence following the financial crisis.

Background

The current Markets in Financial Instruments Directive (MiFID) governs the provision of investment services in financial instruments and the operation of stock exchanges and multilateral trading facilities (MTFs). MiFID has long been regarded as not being fit for purpose—both in light of the fallout from the financial crisis and the evolution of international financial markets—hence the Commission’s proposals to revise the regime.

In the wake of major changes in financial markets through new trading products and practices, coupled with issues relating to the price volatility of commodity derivatives, it was decided that a revision was required in order to, according to the Commission, increase the efficiency, resilience and transparency of protection for investors.

Agreed Revised Rules

The Commission has identified the following as the key elements of the agreed text of MiFID II:

  1. The introduction of a market structure framework to close existing loopholes, in order to ensure trading is undertaken on regulated platforms and to increase equality between Regulated Markets and MTFs. Under the revised regime, it is proposed that, inter alia, shares should be subjected to a trading obligation, certain investment firms should be authorised as MTFs, and an organised trading facility (OTF) should be created as a venue for trading non-equity instruments, such as derivatives and bonds.
  2. The creation of position limits for commodity derivatives by national competent authorities on the basis of calculation methodologies/technical standards set by the European Securities and Markets Authority (ESMA), in order to strengthen supervisory regulation and prevent market abuse. There will be a hedging exemption for positions held by, or on behalf of, a non-financial entity, that are objectively measurable as reducing risks directly related to the commercial activity of the non-financial entity.
  3. The establishment of transparency for non-equity markets and increased equity market transparency. Under MiFID II, the use of reference and negotiated price waivers for equities will be capped and the transparency regime will be broadened to include non-equities. New rules will also require trading venues to make pre- and post-trade data available on a commercial basis.
  4. Increased competition for the trading and clearing of financial instruments. The revised rules will facilitate access to trading venues and central counterparties (CCPs) and include the introduction of transition periods for smaller trading venues and new CCPs.
  5. The introduction of rules and controls relating to algorithms used in relation to high frequency trading. Under the new rules, algorithmic traders will be required to be regulated and subject to liquidity controls.
  6. Increased investor protection through client asset protection, product governance, other organisation requirements and conduct rules. The agreed text of MiFID II will also confer upon ESMA and the European Banking Authority certain powers to regulate the marketing and distribution of specified financial instruments and structured deposits.
  7. Strengthened sanctions and cooperation to aid the detection and enforcement of MiFID II breaches.
  8. The harmonisation of rules regulating access to EU markets by third-country firms, based on an equivalence regime. Under the revised rules, current national provisions will continue to apply during a transitional period of three years and following decisions as to equivalence by the Commission.

MiFID II will sit alongside other Eurozone legislation, including the European Market Infrastructure Regulation and the Regulation of Wholesale Energy Market Integrity (REMIT).

Definition of Commodity Derivatives

Many commentators have focused on the scope of MiFID. In particular, the definition of commodity derivatives that will be subject to the obligations imposed by MiFID II has been extended to physically settled contracts traded on OTFs, other than wholesale energy products that are covered by REMIT, i.e., natural gas and electricity.

Next Steps

Before the revised rules can become law, Members of the European Parliament and finance ministers will be required to approve the agreement, following any further changes pursuant to technical meetings.

It has been suggested that MiFID II may be in force by the end of Q3 or Q4 2014, requiring compliance by all EU Member States before the end of 2016. The European Securities and Markets Authority is expected to publish a paper on MiFID II in May or June 2014.

by Caroline Lindsey

The Department of Energy and Climate Change (DECC) in the United Kingdom published its response to its “Consultation on proposals to enhance the sustainability criteria for the use of biomass feedstocks under the Renewables Obligation (RO)” on 22 August 2013 (the Response). The original consultation was published on 7 September 2012.

In the Response, the UK Government confirms that it will proceed with its proposals to revise the content and significance of the sustainability criteria applicable to the use of solid biomass and biogas feedstocks for electricity generation under the Renewables Obligation (RO). The RO is currently the principal regime for incentivising the development of large-scale renewable electricity generation in the United Kingdom. Eligible electricity generators receive renewables obligation certificates (ROCs) for each megawatt hour (MWh) of renewable source electricity that they generate. Biomass qualifies as renewable source electricity, subject to some conditions.

Changes to the criteria

The sustainability criteria associated with the RO is broadly divided into greenhouse gas (GHG) lifecycle criteria, land use criteria and profiling criteria. There will be changes to all of the criteria, but the significant changes relate to the first two criteria, and will take effect from 1 April 2014.

In general terms, the GHG lifecycle criteria are designed to ensure that each delivery of biomass results in a minimum GHG emissions saving, when compared to the use of fossil fuel. The savings are measured in kilograms (kg) of carbon dioxide equivalent (CO2eq) per MWh over the lifecycle of the consignment (sometimes referred to as “field or forest to flame”). The UK Government has confirmed that all generating plants using solid biomass and / or biogas (including dedicated, co-firing or converted plants and new and existing plants) will be on the same GHG emissions trajectory from 1 April 2020 (200 kg CO2eq per MWh). In the meantime, new dedicated biomass power will be placed on an accelerated GHG emissions trajectory (240kg CO2eq per MWh). All other biomass power will remain on the standard GHG emissions trajectory (285kg CO2eq per MWh) until 1 April 2020.

Changes to the land use criteria will also be introduced. In particular, generating plants using feedstocks which are virgin wood or made from virgin wood will need to meet new sustainable forest management criteria based on the UK Government’s timber procurement policy principles.

The land use criteria set out in the European Union (EU) Renewable Energy Directive 2009 (RED) will continue to apply to the use of all other solid biomass and biogas, with some specific variations for energy crops. As is the current position, the land use criteria will not apply to the use of biomass waste or feedstocks wholly derived from waste, animal manure or slurry.

The new sustainability criteria will be fixed until 1 April 2027, except if the EU mandates or recommends specific changes to the sustainability criteria for solid biomass, biogas or bioliquids, or if changes are otherwise required by EU or international regulation.

Making compliance mandatory

Currently, whilst generators using solid biomass and / or biogas have to report on their compliance with the sustainability criteria, their compliance with such criteria is not linked to their eligibility for ROCs. This will change, on a phased basis.

Specifically, from 1 April 2014, all generating plants with an output of 1MW and above using solid biomass and / or biogas (except landfill gas or sewage gas) will be required to submit an annual independent audit report, which assesses their compliance with the sustainability criteria, in addition to or as part of their sustainability report.

From April 2015, this category of plants will have to meet the sustainability criteria to be eligible for ROCs. This is already the case for generating plants using bioliquids, consistent with the RED. The introduction of the mandatory requirement in 2015 is subject to the UK Government complying with its obligation to notify the sustainability criteria under the EU Technical Standards Directive.

When introduced, the changes outlined in the Response will impose what is expected to be the most stringent controls on the use of solid and gaseous biomass for energy in the world.

To view the full text of The Response click here.

by Thomas Morgan and David McDonnell 

A warning from the UK’s energy regulator, Ofgem, on 27 June 2013, that the ‘buffer’ capacity of spare electricity on the UK’s national power grid could drop to as little as 2% of national supplies by 2015, has raised concerns in relation to the possibility of widespread disruptions in service. This spare capacity currently stands at about 4%.

The warning was linked to an extensive Electricity Capacity Assessment Report, also published by Ofgem that same day. Revised studies have indicated that power supplies will shrink considerably by 2015, as electricity demand in the United Kingdom is not decreasing in the manner previously foreseen by successive governments. This is due to a variety of factors, among them, the low uptake by residential households of environmentally friendly incentives and energy-efficient practices.

Ofgem recommends the implementation of far-reaching market changes proposed by the Department of Energy and Climate Change (DECC). Among other things, DECC stated in a report, also published on 27 June 2013, that the UK electricity sector will require approximately £110 billion of capital investment in the next decade to modernise its infrastructure. This would create opportunities for investment which a range of market players are likely to monitor with interest.

DECC has also emphasised the need for a ‘Capacity Market’ – essentially an insurance policy against the possibility of future blackouts – which would work by providing financial incentives to generators to keep a certain percentage of energy capacity in reserve to cope with spikes in demand.

The British government has been quick to retort to concerns of service disruption, downplaying the risk of blackouts to domestic consumers and, while it is unlikely that blackouts reminiscent of those experienced in the United Kingdom in the 1970s will be relived, the very publication of a formal warning from Ofgem highlights the potential significance of the concern.

by Simone Goligorsky and David McDonnell

On 11 July 2013, the European Commission (EC) and the United States Commodity Futures Trading Commission (CFTC) announced a high-level joint understanding, known as the “Path Forward”, which details the shared future vision on the cross-border regulation of over-the-counter (OTC) derivatives (click here for the full announcement). This is a welcome announcement, given the concerns that many market participants had regarding the possibility of certain derivative transactions being subject to regulation on both sides of the Atlantic. The Path Forward has been produced as part of the package that was developed in order to promote the transparency of OTC derivatives markets and to lower the risks associated with them. 

At the core of the Path Forward is the objective of avoiding what was viewed by some market participants as the ‘double treatment’ of derivatives, whereby the derivatives would have been subject to the simultaneous application of both European and US legislative requirements, potentially leading to inconsistency, conflicts of law, and legal uncertainty. Considering the level of similarity between the European and US regimes, the EC and CFTC have agreed that such a duplicative approach may be, to the greatest extent possible, avoided. 

Instead, the EC and CFTC will, where appropriate, defer to the regulatory requirements in either Europe or the United States, as applicable. For example, under the European Market Infrastructure Regulation (EMIR), the EC has adopted risk mitigation rules that have a high-degree of similarity to the CFTC’s business conduct standards. Important action has been taken on bilateral, uncleared swaps, so that the regulatory rules in both jurisdictions will be viewed as comparable and as comprehensive as one another. The net result is that market participants are likely to now benefit from these equivalence rules.

In addition to the progress made to date, the EC, CFTC, and the European Securities and Markets Authority (ESMA) will continue to work together, and with other global regulators, on the harmonisation of international rules on posted margins for uncleared swaps, with a view to implementing a uniform system across as many jurisdictions as possible. 

It is worth noting that while the Path Forward heralds a significant step for enhanced cross-border regulation, market stability, and confidence, it was relatively light on concrete details. As such, market participants subject to European regulations, as well as US counterparties governed by Dodd-Frank, should continue to monitor collaboration between both regulatory authorities closely.