Management Solutions compiles new regulations published in recent weeks by different regulatory and supervisory authorities (with a focus on the financial industry).
(23/11/2016) ECB – Consultation paper on Draft Guidance on leveraged transactions
The ECB has launched a public consultation on a Draft Guidance on leveraged transactions that summarises key supervisory expectations concerning these transactions, and the ongoing monitoring of both syndication risk and the fundamental credit quality of leveraged exposures.
Reform of the financial system
(23/11/2016) EC – Proposal for a Directive amending the CRD IV / Proposal for a Regulation amending the CRR and EMIR / Proposal for a Directive amending the BRRD on loss-absorbing and recapitalisation capacity of credit institutions and investment firms / Proposal for a Directive amending the BRRD as regards the ranking of unsecured debt instruments in insolvency hierarchy / Proposal for a Regulation amending the SRMR
The EC has published a reform package of the financial system, whereby is proposing to amend the Capital Requirement Directive (CRD IV), the Capital Requirement Regulation (CRR), the Bank Recovery and Resolution Directive (BRRD), the Single Resolution Mechanism Regulation (SRMR), and the Regulation on EMIR.
(22/11/2016) EBA – Final draft RTS on the specification of the assessment methodology for competent authorities regarding compliance of an institution with the requirements to use internal models for market risk and assessment of significant share
The EBA has published the Final RTS on the assessment of the significance of positions included in the scope of market risk internal models, and on the assessment methodology for the Internal Model Approach (IMA) for market risk, being mindful of the Fundamental Review of the Trading Book (FRTB) that the BCBS published in January 2016.
G-SIBs / G-SIIs
The FSB has published the 2016 list of G-SIBs and the 2016 list of G-SIIs. In parallel with these publications, the BCBS has released additional information regarding the assessment methodology used for the purpose of the list of G-SIBs.
PD and LGD estimation
The EBA has published a Consultation Paper on Guidelines (GL) on PD and LGD estimation and on the treatment of defaulted assets, which are focused on the definitions and modelling techniques used in the estimation of risk parameters for both non-defaulted exposures (PD and LGD) and defaulted exposures (best estimate of expected loss (ELbe) and LGD-in defaulted).
Operational risk and sovereign exposures
(14/11/2016) EBA – Consultation Paper on Draft ITS amending Implementing Regulation (EU) No 680/2014 with regard to operational risk and sovereign exposures / Annex I – Templates for reporting on own funds and own funds requirements (changes showing) / Annex II – Instructions for reporting on own funds and own funds requirements
The EBA has published a Consultation Paper on ITS amending Regulation 680/2014 with regard to sovereign exposures and operational risk. In particular, these ITS proposes new requirements as regards the reporting of information on sovereign exposures, and changed requirements as regards the reporting of operational risk information.
(14/11/2016) ECB – Draft guide to fit and proper assessments
The ECB has launched a public consultation on a Draft guide to fit and proper assessments of members of the management bodies of significant credit institutions, with the objective of explaining in greater detail the policies, practices and processes applied by the ECB when assessing the suitability.
G-SIIs / O-SIIs
The BdE has published the updated list of institutions that are considered G-SIIs and O-SIIs in 2017 in Spain, specifying their relevant capital buffers.
Counterparty credit risk and market risk
The EBA has published a Report on the impact of the implementation in the EU of the new frameworks proposed by the BCBS for counterparty credit risk (SA-CCR) and for market risk (based on the FRTB). This report includes recommendations regarding their implementation that are addressed to the EC.
Options and discretions
(03/11/2016) EBA – Draft Guideline on the exercise of options and discretions available in Union law by NCAs in relation to less significant institutions / Draft Recommendation on common specifications for the exercise of some options and discretions available in Union law by NCAs in relation to less significant institutions
The ECB has launched a public consultation on a Guideline and a Recommendation concerning the exercise of options and discretions (O&Ds) for less significant institutions (LSIs). On the one hand, the Guideline (legally binding act once approved), lays out how NCAs should exercise 7 O&Ds of general application for LSIs; on the other hand, the Recommendation (a non-legally binding act) aims to harmonise 43 O&Ds that are not of general application but are assessed on a case-by-case basis for each institution.
ICAAP / ILAAP
(03/11/2016) EBA – Final Guidelines on ICAAP and ILAAP information collected for SREP purposes
The EBA has issued Final Guidelines to facilitate the consistent approach to the assessment of institutions’ ICAAP and ILAAP under the SREP. In particular, the Guidelines specify what information regarding ICAAP and ILAAP competent authorities (CAs) should collect from the institutions, and set general criteria for CAs to organise collection of ICAAP and ILAAP information from institutions and use such information for the purposes of their assessments of other SREP elements.
(28/10/2016) EBA – Consultation Paper Draft Guidelines on internal governance
The EBA has published a Consultation Paper on draft Guidelines on internal governance that updates GL 44 and puts more emphasis on the duties and responsibilities of the management body in its supervisory function in risk oversight.
(28/10/2016) EBA/ESMA – Consultation paper on the assessment of the suitability of members of the management body and key function holders under the CRD IV and MiFID II / Annex I – Template for the assessment of collective suitability
The EBA and the ESMA have published a Consultation Paper on Guidelines (GL) on the assessment of the suitability of the members of the management body and key function holders, in accordance with the requirements introduced under the CRD IV and MiFID II. Along with these GL, the EBA and the ESMA have published a template (‘suitability matrix’) which institutions may use to self-assess periodically the collective suitability of the members of the management body.
(24/11/2016) EBA – Second impact assessment of IFRS 9 on EU banks
The EBA has launched a second impact assessment of IFRS 9, which builds on the results of its first exercise published on 10 November 2016. In particular, it will assess the estimated impact of IFRS 9 on regulatory own funds, the interaction between IFRS 9 and other prudential requirements and the implementation issues relating to IFRS 9.
EU-wide transparency exercise
(24/11/2016) EBA – Timing for publication of 2016 EU-wide transparency exercise data
The EBA has announced that its annual risk assessment report accompanied by detailed individual data for the banks participating in the 2016 EU-wide transparency exercise will be published on Friday 2 December 2016.
(23/11/2016) BCBS – Revisions to the annex on correspondent banking
The BCBS has published a proposal on revisions to annexes 2 (Correspondent banking) and 4 (General guide to account opening) of the BCBS’s guidelines on Sound management of risks related to money laundering and financing terrorism.
The EBA has published a report on the application of the proportionality principle to the remuneration which covers, among others, a detailed overview by Member State on the applicable framework regarding the principle of proportionality, an analysis of the number of institutions and staff currently benefitting from waivers in the area of remuneration, etc.
The 2016 annual review of the significance of credit institutions by the ECB brings the number of banks and banking groups directly supervised by the ECB to 127. As a result of increased size, Citibank Holdings Ireland Ltd. has been identified as significant and will be directly supervised by the ECB from 1 January 2017.
(18/11/2016) EBA – List of public sector entities for the calculation of capital requirements
The EBA has published the list of public sector entities (PSEs) that may be treated as regional governments, local authorities or central governments in the area of credit risk, in accordance with the CRR.
Anti-money laundering and terrorist financing
(16/11/2016) ESAs – Joint Guidelines on the characteristics of a risk-based approach to anti-money laundering and terrorist financing supervision, and the steps to be taken when conducting supervision on a risk-sensitive basis
The ESAs have published its final Guidelines on the characteristics of a risk-based approach to anti-money laundering and terrorist financing supervision and the steps to be taken when conducting supervision on a risk-sensitive basis.
The EBA has launched for consultation a proposal to review its Implementing Technical Standards (ITS) on additional monitoring metrics for liquidity, which mainly consists of reintroducing a maturity ladder.
Institutional protection schemes
(15/11/2016) ECB – Guideline on the principles for the coordination of the assessment and the monitoring of institutional protection schemes including significant and less significant institutions / Guideline on the approach for the recognition of institutional protection schemes for prudential purposes by national competent authorities
The ECB has published two guidelines on how to assess institutional protection schemes (IPSs) and coordinate the activities of the ECB and national competent authorities (NCAs). They ensure that the ECB and NCAs assess new IPS applications in a harmonised way and consistently monitor IPSs’ ongoing adherence to the legal requirements.
(09/11/2016) EC – Proposal for a Regulation of the European Parliament and of the Council on key information documents for packaged retail and insurance-based investment products as regards the date of its application
The EC has proposed an extension to the date of application of the Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs).
Authorisation of credit institutions
(08/11/2016) EBA – Consultation paper on Draft RTS on the information to be provided for the authorisation of credit institutions, the requirements applicable to shareholders and members with qualifying holdings and obstacles which may prevent the effective exercise of supervisory powers, and on Draft ITS on standard forms, templates and procedures for the provision of the information required for the authorisation of credit institutions
The EBA has launched a consultation on (i) regulatory technical standards (RTS) on the information to be provided to Competent Authorities for the authorisation of credit institutions and (ii) implementing technical standards (ITS) on the templates and procedures for the provision of such information.
(04/11/2016) ECB – Results of the 2016 comprehensive assessment
The ECB has published the results of a Comprehensive Assessment conducted on four banks: i) Abanka d.d. (Slovenia); ii) Akciju sabiedrība “Rietumu Banka” (Latvia); iii) Banca Mediolanum S.p.A. (Italy); and iv) Citibank Europe plc (Ireland). This Comprehensive Assessment included an asset quality review and a stress test
(03/11/2016) EBA – Consultation Paper Draft Guidelines on the information to be provided for the authorization as payment institutions and e-money institutions and for the registration as account information service providers
The EBA has launched a consultation on its draft Guidelines specifying the information to be provided by applicants intending to obtain authorisation as payment and electronic money institutions as well as to register as account information service providers under the revised Payment Service Directive (PSD2).
(03/11/2016) ECB – Economic bulletin 7/2016
The ECB has published the Economic Bulletin 7/2016 which provides a comprehensive analysis of the economic and monetary developments, including an evaluation of macroeconomic projections by Eurosystem experts.
(03/11/2016) BdE – Informe de Estabilidad Financiera
The BdE has published the Financial Stability Report. This report analyses the risks that the Spanish financial system may face, and also the profitability and solvency of the Spanish financial institutions. In addition, the report presents the policy and macroprudential measures from the Bank of Spain.
Resolution financing arrangements
The EBA has published its final report on the reference point for the target level of national resolution financing arrangements. In the report, the EBA recommends changing the basis from covered deposits to a total liabilities-based measure and, in particular, total liabilities (excluding own funds) less covered deposits.
© GMS Management Solutions, S.L., 2016. All rights reserved. The information contained on this publication is of a general nature and does not constitute a professional opinion or an advisory service. The data used in this publication come from public sources. GMS Management Solutions, SL assumes no liability for the veracity or accuracy of such data.