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The European Union's markets watchdog said on Tuesday it has fined credit ratings firm Moody's 3.7 million euros ($4.35 million) for breaching rules including the failure to disclose conflicts of interests.

All the breaches resulted from negligence on the part of the company, the European Securities and Markets Authority (ESMA) said, adding that the fine was for five Moody's entities based in France, Germany, Italy, Spain and Britain.

ESMA said Moody's had inadequate internal policies and procedures to manage shareholder conflicts of interest. The breaches took place between 2013 and 2017, it said.

"ESMA found that MIS (Moody's Investors Service) had no intent to infringe the EU regulation and there was no impact on the quality of any ratings," a Moody's spokesperson said in an e-mailed statement to Reuters.

Moody's, one of the three largest credit ratings agencies alongside S&P Global and Fitch, added that the regulator had recognised the steps it has taken to prevent similar infringements in the future.

ESMA said the breaches were of a rule that prevents agencies from issuing ratings on companies in which they own 10% or more of its shares, or where they have a board position.

"ESMA believes it is crucial, to ensure independent good quality ratings and to protect investors, that (ratings agencies) carefully identify and subsequently eliminate or manage and disclose conflicts of interest to avoid interference by shareholders with the rating process," the watchdog said.

Read more from the original source:
European Union fines Moody's for failing to disclose conflicts of interests - Economic Times

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Produced for LexisPSL Banking & Finance and in partnershipwith Alexander Collins and Nick Shiren ofCadwalader, Wickersham & Taft LLP

This Practice Note describes the position as at January 2021

The risk retention requirement currently applicable in the EUand the UK consists of obligations on:

This is explained in more detail below.

The objective of the risk retention requirement is to create analignment of interests between those of the suppliers of asecuritisation, ie sponsors, originators and original lenders, andthose of investors. It is sometimes referred to as the requirementfor 'skin-in-the-game'.

The introduction of the risk retention requirement reflected thecriticism of the securitisation markets following the globalfinancial crisis. There was widespread concern about the'originate to distribute' model in which banks did not holdthe loans that they originated, but repackaged and securitisedthem. It was thought by global policymakers that some of theparticipants in the securitisation chain were incentivised toengage in behaviour which, while furthering their own interests,was not in the interests of others in the securitisation chain orof the broader market. In the 'originate to distribute'model lenders did not have an incentive to apply stringent creditgranting standards, since they knew that the related risks wouldeventually be sold to third parties. A consequence of thesemisaligned incentives or conflicts of interest led to a weakeningof due diligence along the securitisation chain. This resulted inpoorly-underwritten assets being securitised by originators andthose securities being bought by investors who did not alwaysunderstand the extent of the risks that they were acquiring. TheG20 Leaders' statement from the 2009 Pittsburgh Summittherefore recommended that securitisation 'sponsors ororiginators should retain a part of the risk of the underlyingassets, thus encouraging them to act prudently'.

A 5% risk retention requirement was first introduced in the EU(including, at the time, the UK) by way of the Capital RequirementsDirective II to new securitisations issued on or after 1 January2011. These provisions were superseded by an equivalent requirementin the Capital Requirements Regulation (EU) No 575/2013 (EU CRR) andsimilar to those in the EU CRR, in the Solvency II regime inrelation to insurers and in the Alternative Investment FundManagers Directive (AIFMD) regime in relation to certainalternative fund managers.

Commission Delegated Regulation (EU) No 625/2014 (the CRR RiskRetention RTS) supplements and provides further detail in respectof the risk retention requirement in the EU CRR by way ofregulatory technical standards including providing further detailon the modes of risk retention, the fulfilment of the retentionrequirement through a synthetic or contingent form (eg a totalreturn swap (TRS)), and on multiple originators, original lenders,or sponsors.

The European Commission (EC), following review of the variousrequirements applicable to EU securitisations, published Regulation (EU) 2017/2402 on 28 December 2017(the EU Securitisation Regulation) and an accompanying Regulationamending the EU CRR (the EU CRR Amendment Regulation). Theseregulations entered into force on 17 January 2018, superseding theEU CRR, Solvency II and AIFMD risk retention requirements, largelycombining requirements applicable to EU investors and creating newrequirements in respect of originators, sponsors or originallenders of EU securitisations, and applicable to securitisations,the securities of which are issued (or where no securities areissued, the securitisation positions of which are created) on orafter the application date of 1 January 2019.

Article 6(7) of the EU Securitisation Regulation requires theEuropean Banking Authority (EBA) to develop draft regulatorytechnical standards (Securitisation Regulation RTS) to specify ingreater detail the risk retention requirement including themodalities of retaining risk, the measurement of the level ofretention, the prohibition of hedging or selling the retainedinterest and the conditions for retention on a consolidated basis.On 31 July 2018, a final draft of the Securitisation Regulation RTSwas published by the EBA. However, the draft SecuritisationRegulation RTS have not yet been adopted by the EC. Thetransitional provisions of the EU Securitisation Regulation providethat until the draft Securitisation Regulation RTS apply,originators, sponsors or the original lender shall apply ChaptersI, II and III and Article 22 of the CRR Risk Retention RTS tosecuritisations the securities of which are issued on or after 1January 2019.

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Reprinted from: LexisNexis |March 24, 2021

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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Risk Retention In EU And UK Securitisations - Finance and Banking - European Union - Mondaq News Alerts

DAKAR/BRUSSELS The United Nations World Food Programme (WFP) and the European Union (EU) today announced that they are partnering in an 18-month project to improve the production, availability and consumption of nutritious foods to prevent malnutrition among women and children in Africas Central Sahel region comprising Burkina Faso, Mali and Niger.

The project, backed with a contribution of 20 million by the EU through the European Union Emergency Trust Fund for Africa, will see WFP provide immediate assistance to reduce food insecurity and malnutrition while supporting the entire value chain for nutritious foods.

The combined effects of conflict and climate change, compounded by the socio-economic fallout from the COVID-19 pandemic, are disrupting food security and nutrition in the region. Close to 3 million children are at risk of becoming acutely malnourished across the three countries in the Central Sahel.

The EU engagement in the Central Sahel has been and will continue to be multidimensional. Along with our efforts to support governance and security, we are committed to providing essential services in remote areas, said Sandra Kramer, European Commission Director for Africa for International Partnerships Directorate General. This action with WFP will enable the production of locally produced nutritious food. It will create sustainable jobs and provide the most vulnerable with the food assistance they need to overcome the crisis at stake in the region.

We want to tackle malnutrition from the root and also ensure nutritious foods are available in a timely manner to respond to present and future shocks in the Central Sahel, said Chris Nikoi, WFPs Regional Director for Western Africa. WFP and the EU also intend to contribute to economic development through job creation by focusing on local production.

The project will include activities to reduce post-harvest losses, sharpen processing and commercialisation involving smallholder farmers, womens organizations, as well as the private and public sectors. These actions are complemented using cash-transfers that enable vulnerable women and children to access these nutritious foods in the market.

WFP and the EU recognize that long-term investments in food systems and local value chains interventions are key to ending hunger and malnutrition.

The United Nations World Food Programme is the 2020 Nobel Peace Prize Laureate. We are the worlds largest humanitarian organization, saving lives in emergencies and using food assistance to build a pathway to peace, stability and prosperity for people recovering from conflict, disasters, and the impact of climate change.

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The EU and WFP partner to improve nutrition in the Central Sahel by strengthening local food systems - Burkina Faso - ReliefWeb

April 1, 2021

The following is a press release:

On 8 April 2021, the Latvian Foreign Minister, Edgars Rinkevics, meets with the Minister for Foreign Affairs, European Union and Cooperation of Spain, Arancha Gonzlez Laya, who is coming to Latvia for a working visit on the occasion of the centenary of diplomatic relations between Latvia and Spain.

The Foreign Ministers will discuss bilateral relations and current issues concerning the European Union and security policy, as well as sharing views on developments in the EU s eastern and southern neighbourhoods.

During the visit, the Spanish Minister for Foreign Affairs, European Union and Cooperation will also meet with the President of Latvia, Egils Levits, and the Speaker of the Saeima (Latvian Parliament), Inara Murniece, as well as having an online conversation with the Prime Minister, Arturs Krijanis Karin. As part of her regional visit, the Spanish Foreign Minister will also be visiting Lithuania and Estonia.

Spain recognised Latvias independence on 9 April 1921. Together with other member countries of the European Community, Spain recognised the restored independence of the Republic of Latvia on 27 August 1991. The two countries resumed their diplomatic relations on 9 October 1991.

Information for the media

14.0014.30: an online press conference of the Ministers (via Zoom, connecting by 13.50, languages Latvian, English). Photo & Video Opportunity.

Members of the media accredited with Latvian agencies and institutions are asked to register their participation not later than 10.00 on 8 April by contacting the Media Centre of the Ministry of Foreign Affairs at e-mail: media@mfa.gov.lv

Press Contacts:

Communications Group

Phone: (+371) 67016 272

Fax: (+371) 67828 121

Email: media@mfa.gov.lv

Website: http://www.mfa.gov.lv/en

Read the original here:
The Minister for Foreign Affairs, European Union and Cooperation of Spain to arrive in Latvia on a working visit | Press Releases - leta.lv

(Reuters) - Britain is close to striking a vaccine deal with the European Union as soon as this weekend that will remove the threat of the bloc cutting off supplies, The Times reported on Saturday.

FILE PHOTO: A woman holds a small bottle labelled with a "Coronavirus COVID-19 Vaccine" sticker and a medical syringe in this illustration taken October 30, 2020. REUTERS/Dado Ruvic/File Photo

Under the agreement the EU will remove its threat to ban the export of Pfizer-BioNTech vaccines to Britain, it added.

In return, the British government will agree to forgo some long-term supplies of the Oxford-AstraZeneca vaccine that had been due to be exported from a factory in Holland run by AstraZenecas subcontractor Halix, the newspaper reported.

However, the EU has never threatened a ban on the export of vaccines, but has only said it could block on a case-by-case basis specific vaccine shipments to countries with higher vaccination rates or that do not export vaccines to the EU.

We are only at the start of discussions with the UK. There are no talks over the weekend, an EU Commission source said on Saturday, adding that sending vaccines produced at Halix was not part of the talks.

A second EU source had previously said that the EU has no intention of sharing with Britain the vaccine substance from Halix, which is estimated to have already produced enough for about 15-20 million doses, and can produce the equivalent of 5 million shots per month.

The British government, Pfizer-BioNTech, and AstraZeneca were not immediately available for comment.

The EUs rebuff follows Britains repeated refusal to share with Brussels AstraZeneca doses produced at two factories in the UK.

On Friday, the European Medicines Agency approved the Halix production site in the Netherlands that makes the AstraZeneca vaccine and a facility in Marburg in Germany producing BioNTech/Pfizer shots.

The EUs clearing of the vaccine site comes as the union is banking on it boosting deliveries in the second quarter and accelerate the slow pace of inoculations in the bloc.

Europes troubled vaccine rollout has led to a quarrel with Britain, which has imported 21 million doses made in the EU, according to an EU official. Britain says it did a better job negotiating with manufacturers and arranging supply chains.

The EU says that Britain should share more, notably to help make up the shortfall in contracted deliveries of AstraZeneca shots.

Brussels and London sought to cool tensions on Wednesday, declaring they were working to create a win-win situation and expand vaccine supply for all our citizens.

Reporting by Akriti Sharma and Aakriti Bhalla in Bengaluru; additional reporting by Sabine Siebold and Francesco Guarascio in Brussels; Editing by Shri Navaratnam and Louise Heavens

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Britain nearing vaccine deal with European Union - The Times - Reuters