Citi 2018 FinReg Outlook

On the FinReg Radar Keeping an eye on potential FinReg issues on the horizon. Beyond the big regulatory milestones and policy debates this year, a number of issues continue to boil in the background. Some may become hot items in 2019, while others may simply disappear into the ether. Here are some of the key issues on which we are keeping a watchful eye. SEAN TUFFY Head of Market and Regulatory Intelligence, EMEA, Custody & Fund Services FTT: Still in Limbo The EU’s proposed Financial Transaction Tax (FTT) — which would impose a tax of 0.1% on share and bond transactions, and 0.01% for derivatives — turns five this year. Yet there is still no sign of it coming to fruition. Last year the coalition of ten EU countries pursuing the FTT again missed a pair of self- imposed deadlines for completing a deal. With countries vying to capture jobs and firms that move out of the UK due to Brexit, the FTT suddenly seems less attractive. Yet, despite the lack of clear progress and wavering support amongst some the participating countries, the FTT seems to live on. So, more likely than not, the FTT will exist in a state of regulatory purgatory, neither advancing nor being abandoned. The Pan-European Personal Pension Product (PEPP) is part of the EU’s ongoing attempt to encourage retail participation in the capital markets, and increase the retirement savings of EU households. The PEPP will be an individual retirement account, similar in vein to the US Individual Retirement Account or UK Individual Savings Account. One of the proposal’s main benefits is that the PEPP would be portable, enabling EU residents to take their PEPP with them if they move to a new EU country. There is still a long way to go; the EU Parliament, Council, and Commission all have to agree on the final proposal. Still, in theory, the PEPP should be a great opportunity for asset managers and insurers to develop new products to support this initiative. Global PEPP: Potential Product 47 46 Citi Custody & Fund Services – FinReg Outlook 2018