Management Solutions compiles new regulations published in recent weeks by different regulatory and supervisory authorities (with a focus on the financial industry).
MREL in UK
(28/07/2017) PRA – Consultation Paper 15/17 on the minimum requirement for own funds and eligible liabilities (MREL) – buffers
The Prudential Regulation Authority (PRA) has published a Consultation Paper (CP) that proposes to update the Supervisory Statement (SS16/16), setting out the PRA’s proposed expectations with regard to the relationship between MREL and buffer requirements, as well as the consequences of not meeting these. This CP is relevant to all PRA-regulated banks, building societies and PRA-designated investment firms.
Authorisation of credit institutions
(14/07/2017) EBA – RTS on the information to be provided for the authorisation of credit institutions, the requirements applicable and obstacles, and ITS on standard forms, templates and procedures for the provision of the information
The EBA has published Final RTS on the information that applicants shall provide to competent authorities (CAs) when applying for authorisation as credit institutions, which cover the following aspects: i) a comprehensive list of information to be provided; ii) the requirements applicable to shareholders and members with qualifying holdings; and iii) obstacles which may prevent effective exercise of the supervisory functions of the CA. Along with these RTS, the EBA has published Final ITS on the form (template) to be used by undertakings seeking to obtain the authorization.
(14/07/2017) EBA – Consultation Paper on Guidelines on uniform disclosures under the proposed draft Article 473a of Regulation (EU) No 575/2013 as regards the transitional period for mitigating the impact on own funds of the introduction of IFRS 9
The EBA has published a consultative document on Guidelines on disclosure of IFRS 9 transitional arrangements, which specify a uniform disclosure format to be applied by institutions in order to increase consistency and comparability of information disclosed during the transitional period.
Pillar 2 in uk
(13/07/2017) PRA – Consultation Paper: Pillar 2A capital requirements and disclosure
The PRA has published a Consultation Paper on Pillar 2A capital requirements and disclosure that sets out proposed adjustments to the PRA Pillar 2A capital framework. In particular, this consultation paper covers three areas: i) setting Pillar 2A capital as a requirement, rather than as guidance, and introducing the term Total Capital Requirement (TCR); ii) revising the capital disclosure policy; and iii) clarifying when and how Pillar 2A capital requirements may be set at individual level.
(12/07/2017) EIOPA – Opinion on supervisory convergence in light of the United Kingdom withdrawing from the European Union
The EIOPA has issued an Opinion on 5 principles to support supervisory convergence in light of the UK withdrawing from the EU, addressed to the 27 national competent authorities (NCAs) which supervise undertakings falling under the Solvency II framework. In particular, these principles are related to i) authorisations and approvals, ii) governance and risk management, iii) outsourcing of critical and important activities, iv) on-going supervision, and v) monitoring by EIOPA.
Risk information centre
(10/07/2017) BdE – Circular 1/2017, por la que se modifica la Circular 1/2013, sobre la Central de Información de Riesgos (CIR)
Following the consultation launched in April 2017, the BdE has published the Circular 1/2017 amending Circular 1/2013 on the CIR, which aims to adapt the CIR to the information requirements established by AnaCredit.
(07/07/2017) FSB – Guiding Principles on the Internal TLAC of G-SIBs
The FSB has published Guiding principles on the internal TLAC of G-SIBs, which aim to assist home and host authorities in the implementation of internal TLAC mechanisms consistent with the TLAC standard.
(03/07/2017) BdE – Proyecto de Circular a entidades de crédito, sobre normas de información financiera pública y reservada y modelos de estados financieros
The BdE has published a Draft Circular on public and confidential financial information standards and formats, that will supersede Circular 4/2004, aimed to adapt the current accounting framework of the Spanish credit institutions to the accounting standards IFRS 9 and IFRS 15, that modify the criteria for recognising financial instruments and revenues, respectively.
(28/07/2017) ECB – Public guidance on information on transactions which go beyond the contractual obligations of a sponsor institution or an originator institution under the CRR
The ECB has published a Guidance on information regarding transactions which go beyond the contractual obligations of a sponsor institution or an originator institution which specifies how the ECB expects to be notified. In particular, this Guidance covers the information to be provided by a significant supervised entity acting as a: i) originator institution or ii) sponsor institution.
(28/07/2017) ESAs – Joint Technical Advice on the packaged retail and insurance-based investment products (PRIIPs) with environmental or social objectives
The ESAs have published Technical Advice on the packaged retail and insurance-based investment products with environmental or social objectives (EOS PRIIPs), which manufacturers of these type of products should comply with to ensure that they offer products that meet the retail investors' needs.
(27/07/2017) EBA – Guidelines on major incident reporting under the PSD2
The EBA has published Final Guidelines on major incident reporting which set outs the criteria, thresholds and methodology to be used by payment service providers in order to determine whether an operational or security incident should be considered major and, therefore, be notified to the competent authority in the home Member State.
(27/07/2017) ECB – Consultation document on a draft guide to on-site inspections and internal model investigations
The ECB has launched a public consultation on a draft guide to on-site inspections and internal model investigations which aims at explaining how the ECB conducts inspections.
Insurance distribution directive (IDD)
(26/07/2017) EC – Draft Delegated Regulation on supplementing IDD with regard to product oversight and governance requirements for insurance undertakings and insurance distributors / Draft Delegated Regulation on supplementing IDD with regard to information requirements and conduct of business rules applicable to the distribution of insurance-based investment products
The European Commission (EC) has published two documents supplementing the IDD: i) a draft Delegated Regulation on product oversight and governance requirements (POG), which details the criteria for the application of the POG rules to manufacturers and insurance distributors; and ii) a draft Delegated Regulation on information requirements and conduct of business rules applicable to the distributions of insurance-based investment products (IBIPs), specifying the application of the rules on conflicts of interest, inducements and assessment of suitability and appropriateness.
Reporting of pension funds
(26/07/2017) ECB – Draft Regulation on statistical reporting requirements for pension funds
The ECB has launched a public consultation on a Draft Regulation on statistical reporting requirements for Pension funds (PFs). Although this Draft Regulation is primarily addressed to PFs, complete information on the assets of PFs may not be directly available from PFs, and it is therefore necessary to include other entities, namely pension fund managers, in the actual reporting population.
(26/07/2017) EIOPA – Consultation Paper on EIOPA’s regular information requests towards national supervisory authorities (NSAs) regarding the provisions of occupational pensions information
The EIOPA has published a Consultation Paper on the provision of occupational pensions information in order to increase efficiency and to further strengthen the monitoring and analysis of the European occupational pensions sector through a single framework for regular information requests for the provision this type of information.
(24/07/2017) EBA – Consultation Paper on the draft RTS setting technical requirements on development, operation and maintenance of the electronic central register and on access to the information contained on and ITS on the details and structure of the information entered by competent authorities in their public registers
The EBA has published a Consultation Paper on draft RTS and ITS on the EBA electronic central register under the PSD2, which respectively set requirements on the development, operation and maintenance of the register and the information to be contained in it.
Covered funds in USA
(24/07/2017) Fed – Guidelines on procedures for a Banking Entity to Request an Extension of the One-Year Seeding Period for a Covered Fund
The Fed has published Guidelines on the procedures for submitting an application for an extension of the one-year seeding period for a hedge fund or private equity fund (referred to as a ‘covered fund’). These Guidelines apply to all banking entities, including those banking entities with $10 billion or less in consolidated assets that are subject to the Volcker Rule.
IDD in UK
(24/07/2017) FCA – Insurance Distribution Directive (IDD) implementation – Consultation Paper 2
The Financial Conduct Authority (FCA) has published a second Consultation Paper on the implementation of the IDD in the UK. In particular, this document proposes changes to the FCA’s rules to implement the IDD requirements for life insurance business (including information provision requirements and additional requirements related to the distribution of IBIPs) and to implement requirements in the IDD that apply to life and non-investment insurance business (including POG, and professional and organisational requirements).
External Credit Assessment Institutions (ECAIs)
(18/07/2017) EBA/ESAs – Roadmap to strengthen the monitoring of ECAIs / Decision on unsolicited credit assessments / Consult on amendments to technical standards on the mapping of ECAIs
The EBA has published several documents on the External Credit Assessment Institutions (ECAIs): i) the EBA’s future work plan on ECAIs to strengthen, among others, the monitoring and quality of ECAIs’ mapping used for the determination of capital requirements; ii) a Decision on the quality of unsolicited credit assessments of certain ECAIs for the assignment of risk weights; and iii) a consultative document proposing along with the other supervisory authorities amendments to the RTS on the mapping of ECAIs.
Supervisory reporting for insurance undertakings
(17/07/2017) EIOPA – Implementing Technical Standards on reporting and disclosure and final Taxonomy version 2.2.0
The EIOPA has published explanatory notes on the Variation Analysis Templates which are part of the regular reporting process to provide more granular explanations of the templates and reporting items, examples of reporting, particularly directed to non-life insurance undertakings, and FAQs. They also include potential improvements of the instructions of the reporting items defined in the European Commission’s reporting ITS.
(13/07/2017) EBA – Report on results from the second EBA impact assessment of IFRS 9
The EBA has published the second report on the impact assessment of the implementation of IFRS 9 in the EU, which includes the qualitative and quantitative observations obtained and some recommendations on the qualitative aspects.
(13/07/2017) ESMA – Consultation Paper on guidelines on certain aspects of the MiFID II suitability requirements
The ESMA has published a consultation paper on draft guidelines regarding the suitability requirements under the MiFID II, which includes proposals in order to consider recent technological developments of the advisory market, give relevance to the results of supervisory activities conducted by national competent authorities (NCAs) on the suitability requirements, incorporate some insights of studies in the area of behavioural finance, and provide additional details on aspects that were already set out in the current guidelines.
UK withdrawing from the EU
(13/07/2017) ESMA – Opinion to support supervisory convergence in the area of investment firms in the context of the UK withdrawing from the EU / Opinion to support supervisory convergence in the area of investment management in the context of the UK withdrawing from the EU / Opinion to support supervisory convergence in the area of secondary markets in the context of the UK withdrawing from the EU
The ESMA has published three opinions setting out sector-specific principles in the areas of investment firms, investment management and secondary markets, aimed at fostering consistency in authorisation, supervision and enforcement related to the relocation of entities, activities and functions from the UK.
Pillar 2 in uk
(13/07/2017) PRA – Consultation Paper on Pillar 2 liquidity – CP13/17
The PRA has published a Consultation Paper on Pillar 2 liquidity which sets out the PRA’s proposals on a cashflow mismatch risk (CFMR) framework and other PRA methodologies for assessing firms’ liquidity risk. In particular, the PRA proposes, inter alia, to assess CFMR on both a consolidated currency and single currency basis, and to introduce a new liquidity reporting template (PRA110) to monitor CFMR.
(13/07/2017) FCA – Consultation Paper on Revised Payment Services Directive (PSD2) implementation: draft authorisation and reporting forms – CP17/22
The Financial Conduct Authority (FCA) has published a consultation paper on PSD2 implementation, which proposes, among others, to introduce new reporting and record keeping requirements for payment service providers.
(11/07/2017) EBA – Final Guidelines on authorisation and registration under PSD2
The EBA has published its final Guidelines on 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 (AISP) under PDS 2. In particular, the information requirements include, among others, details on the applicant's programme of operations, its business plan, evidence of initial capital, etc.
Deposit guarantee schemes
(11/07/2017) EBA – Deposit Guarantee Schemes Data
The EBA has published data relating to two key concepts in the Deposit Guarantee Schemes Directive (DGDS): available financial means and covered deposits. In particular, this data provides an overview of the level of pre-funded resources available to each Deposit Guarantee Scheme (DGS) in the EU to cover its potential liabilities to depositors.
(10/07/2017) ESMA – Final Report on draft technical standards on data to be made publicly available by TRs under Article 81 of EMIR
The ESMA has issued final RTS regarding the aggregation and publication of derivatives data by trade repositories (TRs), which establish general rules by defining the frequency and timeliness of publication, the general technical aspects of aggregation for the purposes of publication, and the details of aggregations for the purposes of benchmarks’ and commodities’ thresholds.
(07/07/2017) EBA – Final Guidelines on Professional Indemnity Insurance under PSD2
The EBA has published its final Guidelines on the criteria on how to stipulate the minimum monetary amount of the professional indemnity insurance (PII) or other comparable guarantee for payment initiation services (PIS) and account information services (AIS).
(07/07/2017) ESMA – Consultation Paper on the evaluation of certain elements of the Short Selling Regulation
The ESMA has issued a consultation paper on the Short-Selling Regulation (SSR), which aims to seek the views of market participants on the three main elements of its advice to the European Commission: i) the scope and functioning of the exemption for market making activities; ii) the procedure for imposing a short term ban on short-selling in case of a significant fall in price of a financial instrument; and iii) the transparency of net short positions, and the related reporting and disclosure requirements.
(06/07/2017) BCBS – CP on Capital treatment for simple, transparent and comparable short-term securitisations
The BCBS has released a consultative document on securitisations that sets out additional guidance and requirements for the purpose of applying preferential regulatory capital treatment for banks acting as investors in or as sponsors of simple, transparent and comparable (STC) short-term securitisations.
Reporting in UK
(06/07/2017) PRA – PS18/17 on IFRS 9: Changes to reporting requirements and SS34/15 ‘Guidelines for completing regulatory reports’ - update
The Prudential Regulation Authority (PRA) has published a Policy Statement (PS) on IFRS 9, which sets out final rules intended to update regulatory reporting requirements, and expectations, in light of the introduction of IFRS 9 from 1 January 2018. Further, the PRA has also issued Guidelines for completing regulatory reports that establish PRA’s expectations for how firms should complete the reporting data items.
Recovery and resolution of CCPs
(05/07/2017) FSB, CPMI, IOSCO, BCBS – CCP resilience guidance / CCP recovery guidance / CCP resolution Guidance
The FSB, the CPMI, the IOSCO and the BCBS has published three guidance documents on central counterparty (CCP) resilience, recovery and resolvability, which aims to provide further guidance, respectively, on the following aspects: i) financial risk management for CCPs (e.g. governance, credit and liquidity stress testing, etc.), ii) operationalization of recovery plans, and iii) powers for resolution authorities to maintain the continuity of critical CCP functions, loss allocation tools, etc.
(05/07/2017) EBA – Acknowledgment on the Commission adoption of amended supervisory reporting standards due to FINREP IFRS 9
The EBA has acknowledged the adoption by the European Commission (EC) of the ITS on supervisory reporting with regard to financial reporting (FINREP) following the changes in IFRS 9.
Recovery and resolution of insurers
(05/07/2017) EIOPA – Opinion on the harmonisation of the recovery and resolution framework for (re)insurers
The EIOPA has published an Opinion on the harmonisation of the recovery and resolution framework for (re)insurers to deliver increased policyholder protection and financial stability in the EU. In particular, the EIOPA proposes the following four building blocks where the definition of a common approach is key: i) preparation and planning; ii) early intervention; iii) resolution; and iv) cross-border cooperation and coordination.
Insurance sector in UK
(05/07/2017) PRA – Insurance publications
The PRA has published several documents regarding the insurance sector which cover the following aspects: i) Solvency II matching adjustment, ii) cyber insurance underwriting risk, and iii) market turning events in the general insurance sector.
(04/07/2017) FSB – Progress report on action plan to assess and address the decline in correspondent banking
The FSB has published a report on the progress to assess and address the decline in correspondent banking which highlights the actions taken since 2016 including, among others, an analysis on the decline of correspondent banking relationships, the issuance by the BCBS of revised guidelines on sound management of risks related to anti-money laundering and combating the financing of terrorism, etc.
(04/07/2017) FSB – Progress report on reducing misconduct risks in the financial sector
The FSB has published a progress report which sets out the actions that the FSB and the international standard-setters are taking to tackle misconduct risks in the financial industry. These actions intended to strengthen financial institution governance, improve the authorities’ capacity to address misconduct risk, and improve market structures and practices.
(04/07/2017) FSB – Fifth Progress Report on implementing the FSB Principles for Sound Compensation Practices and their Implementation Standards
The FSB has published the fifth annual progress report on Principles for Sound Compensation Practices and their Implementation Standards, which aim to reduce incentives for excessive risk-taking that may arise from the structure of compensation schemes in significant financial institutions.
Risk dashboard 1Q17
(04/07/2017) EBA – Risk Dashboard and parameters 1Q2017
The EBA has published a periodical update of its Risk Dashboard and parameters summarising the main risks and vulnerabilities in the EU banking sector by a set of Risk Indicators in 1Q17.
(04/07/2017) ESAs – Q&A on the PRIIPs KID
The ESAs have published the first set of Questions and Answers (Q&A) related to the Key Information Document (KID) requirements for Packaged Retail and Insurance-based Investment Products (PRIIPs). This Q&A document aims at promoting common supervisory approaches and practices in the implementation of the KID and includes answers linked with the presentation, content and review of the KID, including the methodologies underpinning the risk, reward and costs information.
(04/07/2017) EIOPA – Consultation Paper on its first set of advice to the European Commission on specific items in the Solvency II Delegated Regulation
The EIOPA has launched a consultation paper on its first set of advice to the European Commission on the Solvency II review, which addresses simplified calculations, reduction in reliance on external credit ratings, treatment of guarantees, exposure guaranteed by a third party and exposures to regional governments and local authorities, among others.
Deposit guarantee schemes
(03/07/2017) EBA – Consultation on the implementation of the methods for calculating contributions to deposit guarantee schemes
The EBA has launched a public consultation on the implementation of the EBA Guidelines on methods for calculating contributions to deposit guarantee schemes (DGSs) which assesses whether the principles outlined in these Guidelines are being met in practice.
MiFID II in UK
(03/07/2017) FCA – Policy Statement on Markets in Financial Instrument Directive II implementation (PS17/14)
The Financial Conduct Authority (FCA) has published a PS on the implementation of MiFID II, which covers mainly markets and organisational requirements. In particular, this PS sets out final rules on conduct issues, including research, appropriateness test, etc.
Knowledge of staff providing information and advice
(29/06/2017) CNMV – Guía Técnica sobre formación del personal de las entidades financieras
The CNMV has approved a Technical Guide which contains the criteria for assessing the knowledge and skills of the staff who inform and advise on sales networks of financial institutions (in particular, credit institutions, investment services companies and collective investment institution management companies), one of the new areas of MiFID II.
© GMS Management Solutions, S.L., 2017. 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.