Capital markets
Global capital markets regulatory developments
Since the financial crisis of 2008 regulators and others charged with oversight of the financial markets have introduced a wide range of new legislation and regulation.
On this page you can read about a selection of key developments around the world which impact the audit and the services we can provide to our clients both as an auditor and more broadly as accounting networks.
You can find more information on capitals markets issues on our capital markets home page.
IAASB agenda consultation
In December 2015, the IAASB issued a significant and broad reaching consultation that will shape its standard setting agenda for the foreseeable future. The consultation is important because it could lead to fundamental revisions to the Board’s quality control and group audit standards – standards that have a significant impact on our work.
The possible areas of focus in the ITC were drawn from input received from independent audit regulators on areas in which they identify consistent issues in their inspections, and input from audit firms and other stakeholders to the Clarity ISA post-implementation review.
In addition to the main consultation paper, the IAASB released a companion document, an Overview of the ITC, designed at obtaining feedback from investors, audit committees, and preparers. The deadline for comment on both documents was May 16, 2016. IAASB is now considering the responses.
IESBA NOCLAR consultation
In July, IESBA released its final standard, “Responding to Non-Compliance with Laws and Regulations”. The standard includes guidance for professional accountants (PA) on how to respond in situations where they become aware of or suspect NOCLAR (such as a suspected fraud). The standard applies to all categories of PAs, including auditors, other PAs in public practice, and PAs in organisations, including those in businesses, government, education, and the not-for-profit sector.
We fully support the NOCLAR standard, which clarifies the mandate and responsibilities of PAs. The standards clarify when PAs are permitted to set aside the duty of confidentiality in order to disclose NOCLAR to appropriate public authorities in certain circumstances.
EC Capital Markets Union
On 30 September 2015, the EC published its Capital Markets Union (CMU) Action Plan setting out the actions that will be taken to put the CMU in place by 2019.
Overall, we support the aims and objectives of the EC’s proposals. Read our views on how this initiative could be taken forward.
Delay of the go-live date of MiFID II
Last October, ESMA informed the EC that a delay in the technical implementation of MiFID II was unavoidable. Under the MiFID II regime, ESMA has to collect data from about 300 trading venues on almost 15 million financial instruments. The delay would only impact banks and regulators and is “strictly limited” to allowing technical work to be finished; agreed by the EU institutions, the new deadline for implementation is 3 July, 2018.
We believe it is important for companies to analyse the impact of the varied requirements on their particular business, stay informed of the latest developments, and for them to engage as appropriate with EU and national governments and with business and professional organisations to influence and inform any future measures.
MiFID II: New deadline for implementation 3rd July 2018
Digital single market
To improve access to digital goods and services, facilitate the expansion of digital networks and services, and increase the growth potential of the digital economy across Europe, the EC adopted its Digital Single Market Strategy in May 2015.
The Strategy is based on three ‘pillars’ which will underpin better access to consumers, creation of the right conditions and level playing field for digital networks and services, and maximise growth potential.
A core element of implementation of the new ‘market’ was agreement of new legislation on data protection. This included a General Data Protection Regulation (to give consumers more control over how their data is used and retained) and a new directive on data transfers for policing and judicial purposes. The new rules will take effect two years after publication.
Shareholders rights directive
To improve corporate governance within the EU, in 2014 the EC put forward proposals to revise the shareholders’ rights directive. The European Parliament (EP) is currently in negotiations with the Council of the Member States (Council) and the European Commission (EC) on the drafting of the final text of the legislation. The Council decided that the public country-by-country (CBCR) reporting provisions introduced as amendments by the European Parliament to the Directive proposal will not be integrated in the final compromise package.
The EC published a proposal on public CBCR in March 2016 which is being currently considered by the European Parliament and the Council of Ministers. The proposal amends the Accounting Directive and the requested amendments by the EP on CBCR to the Shareholders’ rights Directive should be incorporated here according to the Council.
The EC proposals to revise the shareholder rights directive include: 1. Provisions to ensure that listed companies can identify their shareholders. 2. Transparency rules for proxy advisors, asset managers and institutional investors, such as pension funds and insurance companies. 3. Provisions to increase transparency and influence of shareholders on “related party” transactions.
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Contact us
Paul Grosvenor
Director - Global Public Policy & Regulatory Affairs, PwC United Kingdom
Tel: +44 (0) 207 583 5000
Jacomien van den Hurk
EU Public Policy & Regulatory Affairs, Director, PwC Belgium
Tel: +32 (0)2 5880492
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