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Regulatory updates

We have an ongoing regulatory watch system

Management Solutions compiles new regulations published in recent weeks by different regulatory and supervisory authorities (with a focus on the financial industry).

Relevant publications


Resolution and leverage ratio

(24/04/2019) Fed/FDIC/OCC – Proposed rule on modifications to resolution plan requirements / Proposed rule on revisions to the Supplementary Leverage Ratio to exclude certain central bank deposits of banking organizations predominantly engaged in custody, safekeeping and asset servicing activities
The Fed and the FDIC have issued a Proposed rule on modifications to resolution plan requirements in order to address the amendments to the Dodd-Frank Act made by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). In particular, this document includes a proposal to establish risk-based categories for determining the application of the resolution planning requirement to certain U.S. and foreign banking organizations, and a proposal to extend the default resolution plan filing cycle, allow for more focused resolution plan submissions, and improve certain aspects of the rule. Moreover, the Fed, the FDIC and the OCC have published a Proposed rule on revisions to the supplementary leverage ratio (SRL) in order to exclude from the SRL certain funds of banking organizations deposited with central banks if the banking organization is predominantly engaged in custody, safekeeping, and asset servicing activities.

Risk information Centre (CIR)

(24/04/2019) BdE – Consulta pública previa del Proyecto de Circular por el que se modifica la Circular 1/2013, sobre la Central de Información de Riesgos (CIR)
The Bank of Spain (BdE) has launched a Public consultation prior to the preparation of the Draft Circular amending Circular 1/2013 on the Risk Information Centre (CIR), with the aim to adapt the CIR to the changes introduced by the Law 5/2019. In particular, the Draft Circular pretends to adapt these changes to the new regulatory developments and to include the adjustments identified in the reported information according to the AnaCredit Regulation and in order to improve the reporting to the CIR of certain operations and additional clarifications in relation to the requirements for reporting claims to the CIR.

Prudential standards

(10/04/2019) Fed/FDIC/OCC – Proposed rules on the revision of the prudential standards applied to foreign banking organizations / Proposed rule on changes to applicability thresholds for regulatory capital requirements for certain U.S. subsidiaries of foreign banking organizations and application of liquidity requirements to foreign banking organizations, certain U.S. depository institution holding companies, and certain depository institution subsidiaries
The Fed, the FDIC and the OCC have published a Proposed rule that would revise the framework for applying the enhanced prudential standards applicable to foreign banking organizations under the Dodd-Frank Act as well as a Proposed rule that would apply regulatory capital and standardized liquidity requirements with respect to the U.S. operations of foreign banking organizations. In particular, both documents aims to review the regulatory framework that would more closely match the rules for foreign banks with the risks they pose to the U.S. financial system.


(09/04/2019) ECB – Results of the 2018 SREP (SSM SREP Methodology Booklet - 2018 SREP decisions applicable in 2019)
The ECB has published its SSM Supervisory Review and Evaluation Process (SREP) Methodology Booklet, which covers the results of the 2018 SREP. In particular, this document provides results regarding capital (CET1), liquidity measures and other qualitative measures, as well as the evolution of SREP scores in 2018. Further, it also identifies the key risks for SSM banks for 2019.


(05/04/2019) Gobierno – Proyecto de Real Decreto, de régimen jurídico de los servicios de pago y de las entidades de pago
The Spanish Government has published the Draft Royal Decree on the legal regime of the payments services and payment institutions, which completes the transposition of the PSD2 through the several provisions regarding: i) the legal regime of the payment institutions; ii) the cross-border activity of payment institutions; iii) the agents’ regime and the delegation of functions; iv) guarantee and own funds’ requirements, and operational limits of payment accounts; v) hybrid payment institutions and creation of a separate payment institution; vi) other provisions regarding the legal regime of the payment services; and vii) penalty and supervisory regime of the payment services providers.

Materiality threshold

(05/04/2019) BdE – Proyecto de Circular sobre el umbral de significatividad de las obligaciones crediticias en situación de mora.
The Bank of Spain (BdE) has published a Draft Circular on the materiality threshold for credit obligations past due that defines such threshold applicable to less significant institutions. In particular, this Draft Circular covers the definition of the materiality threshold referred in the CRR with the aim to ensure a consistent application of the prudential requirements regarding the calculation of credit risk and to improve the comparability of the own funds’ requirements

Stress test

(04/04/2019) ESMA – Methodological framework for its third EU-wide CCPs stress test.
The European Securities and Markets Authority (ESMA) has published the Methodological framework for its third EU-wide CCPs stress test with the aim to assess the resilience of CCPs, identify any potential shortcomings in the CCPs resilience, and issue recommendations as appropriate. In particular, this CCP stress test includes a new component to the exercise on concentration risk, in addition to assessments on credit and liquidity risks.




Other publications of interest


Economic bulletin

(25/04/2019) ECB – Economic Bulletin Issue 3/2019
The ECB has published the Economic Bulletin 3/2019, which provides a comprehensive analysis of the economic and monetary developments, including an evaluation of macroeconomic projections by Eurosystem experts. In particular, this document covers the following aspects: i) external environment, ii) financial developments, iii) economic activity, iv) prices and costs, and v) money and credit.


(24/04/2019) EBA – Opinion on the nature of passport notifications for agents and distributors of e-money
The European Banking Authority (EBA) has published an Opinion on the nature of passport notifications of payment institutions (PIs) and electronic money institutions (EMIs) using agents and distributors located in another Member State. In particular, this Opinion provides clarity on the criteria that national competent authorities (NCAs) should use for determining when the use of an agent or distributor triggers an establishment of the appointing institution in the host Member State or falls under the free provision of services.

Internal governance

(23/04/2019) Fed – Proposed rule on control and divestiture proceedings
The Fed has published a Proposed rule on control of banking organizations in order to simplify and increase the transparency of the Fed’s rules for determining such control. In particular, this Proposed rule lays out several factors and thresholds that the Fed will use to determine if a company has control over a bank (e.g. company's total voting and non-voting equity investment in the bank; director, officer, and employee overlaps between the company and the bank; and the scope of business relationships between the company and the bank), and therefore what combination of those factors would and would not trigger control.


(15/04/2019) EIOPA - Peer Review on supervisory practices with respect to the application of the Prudent Person Rule for institutions for occupational retirement provision (IORPS)
The European Insurance and Occupational Pensions Authority (EIOPA) has published the findings of its peer review conducted among 27 NCAs from 24 European Economic Area (EEA) countries examining how NCAs ensure that institutions for occupational retirement provision (IORPs) comply with the Prudent Person Rule. In particular, this Peer Review identified six best practices in relation to the supervisory assessment processes adopted by some NCAs (e.g. thematic review to identify potential vulnerabilities, quantitative indicator to assess quality asset management, and intranet application for recordkeeping and knowledge sharing); and issued 27 recommended actions concerning the frequency and granularity of the data collected, the manner in which NCAs conduct their supervisory assessment, and the NCA’s supervisory practices with regard to IORP’s governance, among others.

Listed indices

(11/04/2019) EBA – Updated list of diversified indices
The EBA has published an update of the list of diversified indices, which is part of the ITS on the calculation of the capital requirements for position risk in equities according to the standardised rules.


(11/04/2019) EIOPA – Supervisory Statement on Solvency II: application of the proportionality principle in the supervision of the Solvency Capital Requirement
The European Insurance and Occupational Pensions Authority (EIOPA) has issued a Supervisory Statement on the application of the proportionality principle in the supervision of the Solvency Capital Requirement (SCR) due to the identification of potential divergences in the supervisory practices concerning the supervision of the calculation of immaterial SCR sub-modules. In particular, this Statement covers the following aspects: i) a proportionate approach and prudent calculation towards immaterial SCR sub-modules, ii) a risk management system and Own Risk and Solvency Assessment (ORSA), iii) a supervisory reporting and public disclosure, and iv) a supervisory review process.


(11/04/2019) ECB – Public consultation on changes to the ECB Regulation on supervisory fees
The ECB has launched a public consultation on changes to the ECB Regulation on supervisory fees. The proposed amendments mainly concern the individual fees the ECB levies on the banks it supervises and the timing of their collection. Most importantly, the proposals will result in the ECB calculating the fees based on the supervisory costs actually incurred and levying them at the end of the feeing cycle. In addition, the amendments will result in the ECB reducing the minimum fee for around half of the indirectly supervised banks, specifically the smallest ones, significantly easing their financial burden.


(10/04/2019) BdE – Nota informativa– Artículo 19 (“servicios financieros”) del Real Decreto-ley 5/2019 de medidas de contingencia ante la retirada del Reino Unido de la Unión Europea sin que se haya alcanzado el acuerdo previsto en el artículo 50 TUE
The Bank of Spain (BdE) has published a document regarding the provision set out in the Royal Decree-Law 5/2019 (RDL) on the contingency measures against the withdrawal of UK and North Ireland from the UE due to a no-deal Brexit. In particular, this article foresees plans for the financial sector in order to ensure legal certainty and safeguard financial stability and the interests of financial service customers through the establishment of a framework that ensures the continuity of financial services contracts provided in Spain by entities established in the UK.

ICT risk and cybersecurity

(10/04/2019) ESAs Joint Advice on a coherent cyber resilience testing framework / Joint Advice on ICT legislative improvements
The European Supervisory Authorities (ESAs) have published two Joint Advices on the need for legislative improvements relating to Information and Communication Technology (ICT) risk management requirements in the EU financial sector, and on the costs and benefits of a coherent cyber resilience testing framework for significant market participants and infrastructures within the EU financial sector, respectively. In particular, the first document proposes to consider issuing guidelines aimed at supervisory convergence and enforcement of ICT risk management and mitigation requirements and provide the European Commission (EC) with technical advice; whereas the second document concludes that there are clear benefits of establishing a cyber resilience testing framework.

OTC derivatives

(10/04/2019) EC – Delegated Regulation (EU) 2019/565 of 28 March 2019 amending Delegated Regulation (EU) 2015/2205, Delegated Regulation (EU) 2016/592 and Delegated Regulation (EU) 2016/1178 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council as regards the date at which the clearing obligation takes effect for certain types of contracts
The EC has published the Delegated Regulation (EU) 2019/565 amending Delegated Regulations, referred to regulatory technical standards on the clearing obligation, supplementing Regulation (EU) No 648/2012 related to over-the-counter (OTC) derivatives, central counterparties and trade repositories. In particular, this Delegated Regulation introduce amendments regarding the date when a clearing obligation takes effect for certain types of contracts. Furthermore, this Delegated Regulation shall apply from the date following that on which the Treaties cease to apply to and in the UK, unless a withdrawal agreement concluded with UK has entered into force, or a decision has been taken to extend the two year period beyond 31 December 2019.

(10/04/2019) EC Delegated Regulation (EU) 2019/564 of 28 March 2019 amending Delegated Regulation (EU) 2016/2251 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council as regards the date until which counterparties may continue to apply their risk-management procedures for certain OTC derivative contracts not cleared by a CCP
The EC has published the Delegated Regulation (EU) 2019/564, amending Delegated Regulation (EU) 2016/2251 supplementing Regulation (EU) No 648/2012 as regards the date until which counterparties may continue to apply their risk-management procedures for certain OTC derivative contracts not cleared by a central counterparty (CCP). In particular, this amendment is due to the European approval of the extension of the date of the UK withdrawal from the EU.

BdE institutional report

(10/04/2019) BdE Informe Institucional 2018
The BdE has published its Institutional Report for 2018, which is intended to provide the public at large with a complete view of the BdE’s organisation and structure, the different functions it performs, as well as a summary of the most relevant activities carried out over the previous year. In particular, the 2018 version includes the following aspects: i) corporate governance report (e.g. functions, governing bodies and structure); ii) report on activities (e.g. internal organisation and administration, banking operating functions and regulatory developments); and iii) institutional responsibility report (e.g. financial education plan, international cooperation and environmental sustainability initiatives).

Basel framework

(09/04/2019) BCBS New section of the BCBS’s website / New Consolidated Basel Framework
The BCBS has launched a new section of its website that sets out a consolidated version of its global standards for the regulation and supervision of banks. In particular this new section makes easier to find which standards are currently in force or how the framework has developed over time and will develop in the future. This consolidated framework has been published in draft form, together with a consultative document to gather feedback on the website and on various proposed technical amendments to the standards.

ESAs 2018 Annual Report

(09/04/2019) ESAs Joint Committee Annual Report 2018
The ESAs have published its Annual Report 2018 which provides a detailed account of all the joint work achieved in the past year. In particular, this Report concludes that the ESAs have been focused on the following aspects: i) overseeing market developments and cross-sectoral risks; ii) safeguarding consumers across financial services and examining FinTech developments; iii) stepping up the fight against money laundering and terrorist financing; iv) managing the Single Rulebook and ensuring a level playing field; and v) monitoring of financial conglomerates.

Credit risk – IRB approach

(08/04/2019) EBA Final RTS on the conditions to allow institutions to calculate KIRB in accordance with the purchased receivables approach
The EBA has published Final RTS on the conditions to allow institutions to calculate capital requirements of the securitised exposures (KIRB) in accordance with the purchased receivable approach. In particular, these Final RTS aim at striking the right balance between the need to acknowledge the specific circumstances under which institutions calculate capital requirements in the context of a securitisation transaction and the need to maintain appropriately safe and prudent requirements on the internal modelling of capital requirements.

Collective investment institutions

(08/04/2019) CNMV – Circular 1/2019, por la que se modifica la Circular 1/2009 sobre categorías de instituciones de inversión colectiva (IIC) en función de su vocación inversora
The Comisión Nacional del Mercado de Valores (CNMV) has issued the Circular 1/2019 amending Circular 1/2009 on the categorisation of collective investment schemes (ICC) according to their investment objective. In particular, this Circular adapts the Spanish regulation to EU provisions on money market funds by: i) amending the current definitions of short-term money market funds and money market funds; ii) creating a new ICC category breaking down this category into two sub-categories: short-term Euro fixed income and Euro fixed income; and iii) breaking down the category passive management ICC into index-tracking ICC, and non-guaranteed specific return target ICC.


(05/04/2019) ESMA – Update of its recognition of UK CCPs and CSD
The ESMA has adopted new recognition decisions for three UK CCPs (LCH Limited, ICE Clear Europe Limited and LME Clear Limited) and the Central Securities Depository (CSD) that will be recognised to provide their services in the EU as third country CCPs under EMIR, in the event of a no-deal Brexit, reflecting an extension of the UK’s withdrawal period.


(05/04/2019) Gobierno de España –Consulta Pública sobre la transposición de la Directiva (UE) 2018/1673, relativa a la lucha contra el blanqueo de capitales mediante el Derecho penal 
The Spanish Government has issued a public consultation on the transposition of the European Directive on anti-money laundering through criminal law. In particular, this consultation will seek the opinion of the stakeholders and most representative organisations affected by this Directive, in order to establish a legal framework for the EU that harmonises measures on anti-money laundering as well as impose sufficient and coherent penalties at cross-border level and other of special severity.


(04/04/2019) ESMA – MIFID II Supervisory briefing on appropriateness
The ESMA has published an updated version of its supervisory briefing on MiFID II appropriateness requirements in order to promote common supervisory approaches and practices in the application of the MiFID II appropriateness rules. In particular, this document provides information for determining situations where the appropriateness assessment is required; obtaining information from clients; assessing the appropriateness; warning to clients; qualifying of firm’s staff; and record keeping.

Credit institutions and payment services

(04/04/2019) BdE – Circular 2/2019, sobre los requisitos del Documento Informativo de las Comisiones y del Estado de Comisiones, y los sitios web de comparación de cuentas de pago, y que modifica la Circular 5/2012, a entidades de crédito y proveedores de servicios de pago, sobre transparencia de los servicios bancarios y responsabilidad en la concesión de préstamos
The Bank of Spain (BdE) has issued the Circular 2/2019 on the Document of Commissions and Commissions Status requirements, and the compared payment accounts websites, as well as modifying the Circular 5/2012 concerning credit institutions and service suppliers, with the aim of enhance the transparency and comparability of commissions that different payment services suppliers charge for services associated to payment accounts. In particular, this Circular covers, among others, the following aspects: i) objective and scope; ii) the glossary of the most representative services associated to payment accounts that the BdE must publishes and updates; and iii) reinforcement of format and content of the responsible statement from operators different to BdE that  intend to establish websites to compare commissions attached to services associated to payments accounts must submit to the BdE before starting their activity.

Retail investor protection

(02/04/2019) IOSCO – Final Report on the application of behavioural insights to retail investor protection
The International Organization of Securities Commissions (IOSCO) has published a Final Report on behavioral insights aiming to improve the effectiveness of retail investor protection when making financial investment decisions. In particular, this Report describes behavioral biases and how they affect retail financial markets showing: how emotions and psychological experiences can influence investment decisions; how a rule of thumb can lead to incorrect beliefs; and how a partial assessment of information can lead to a different decision than a complete assessment.

Risks in the EU financial system

(02/04/2019) ESAs – Joint Report on risks and vulnerabilities in the EU Financial system – Spring 2019
The European Supervisory Authorities (ESAs) have published a Report on Risks and Vulnerabilities in the EU Financial System that concludes how banking, insurance, pensions and securities sectors continue to face a range of risks. In particular, this Report highlights certain risks that are potential sources of instability, such as, uncertainties around the terms of the UK's withdrawal from the EU; and further repricing of risk premia and asset price volatility, which could be aggravated in conjunction with a less favourable macro-economic environment and the materialisation of a no-deal Brexit scenario.


(02/04/2019) ESMA – Q&A on MiFID II and MiFIR transparency topics / Q&A on MiFID II and MiFIR market structures topics
The ESMA has updated its Questions and Answers (Q&As) on the market structures and transparency issues under MiFID II and MiFIR in order to promote common supervisory approaches and practices in the application of MiFID II and MiFIR. In particular, the new Q&As covers the determination of the turnover to be used for the average value of transactions (AVT) calculation; or the money market instruments (MMIs); among others.

Stress test

(02/04/2019) EIOPA – 2019 Occupational Pensions stress test exercise
The European Insurance and Occupational Pensions Authority (EIOPA) has launched its biennial stress test of the European occupational pension sector in order to assess the resilience and potential vulnerabilities of the European Defined Benefit and Defined Contribution pension sector. In particular, this exercise includes for the first time an assessment of Environmental, Social and Governance (ESG) exposures, and it also assesses the direct impact of a stressed market scenario on the sustainability and funding of Defined Benefit (DB) pension funds and on the projected future retirement income of members of Defined Contribution (DC) pension funds.


(02/04/2019) BdE – Memoria de supervisión bancaria en España 2018
The BdE has published its 2018 Banking Supervision Report, which includes a detailed description of the BdE supervisory functions, its organization, supervisory priorities and strategies, etc. In particular, the 2018 Report covers the following aspects: i) organization of supervision in Spain; ii) microprudential supervision; iii) macroprudential policy; iv) supervision of conduct from credit institutions conduct; v) sanctioning function; vi) BdE participation in regulatory and supervisory international banking institutions; vii) new supervisory regulation in Spain; and viii) internal audit report.


(02/04/2019) Fed/FDIC/OCC – Proposed rule on regulatory capital treatment for investments in certain unsecured debt instruments of Global Systemically Important U.S. Bank Holding Companies, certain Intermediate Holding Companies, and Global Systemically Important Foreign Banking Organizations
The Fed, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have published a Proposed rule on regulatory capital treatment for investments in certain unsecured debt instruments of G-SIBs to limit the interconnectedness of and reduce the impact from failure of the largest banking organizations. In particular, this Proposed rule requires GSIBs to meet the minimum Total Loss Absorbing Capacity (TLAC) and, where applicable, Long-term Debt (LTD) requirements, or unsecured debt instruments issued by G-SIBs. Further, the Fed is also proposing to require banking organizations subject to minimum TLAC and LTD requirements under the Fed regulations publicly disclose their TLAC and LTD.

2018 Annual Report

(01/04/2019) ECB – Annual Report 2018
The ECB has published its 2018 Annual Report which describes the tasks and activities of the European System of Central Banks (ESCB) and reports on the Eurosystem’s monetary policy. In particular, this Report concludes that, among other aspects, the Euro area output continued to expand in 2018 (1.8%), although at a slower pace than in 2017; the average headline inflation in the euro area increased further (1.7%), supported by higher energy prices and, to a lesser extent, higher food prices; and banks’ solvency positions remained solid, while the total value of NPLs decreased in the first three quarters of the year (- €94 bn).


(01/04/2019) EBA – Clarifications to the second set of issues raised by its Working Group on APIs under PSD2
The EBA has published clarifications to the second set of issues raised and discussed by participants of its Working Group (WG) on Application Programming Interfaces (APIs) under the PSD2. In particular, this document provides clarifications on API performance and support; the provision of a list of Third Party Providers (TPPs) interested in testing; the testing by TTPs that are not authorized; and the timelines applicable across the European Economic Area (EEA) if Account Servicing Payments Service Providers (ASPSPs) want to be exempted from the fall-back mechanism.

EBA Risk Dashboard

(29/03/2019) EBA – Risk Dashboard (Q4 2018)
The EBA has published its 4Q18 Risk Dashboard, which summaries the main risks and vulnerabilities in the EU banking sector using quantitative risk indicators based on end 2018 data. In particular, this document concludes that, among others, European banks’ capital ratios remain high with a slight decrease when compared to 4Q17; the quality of EU banks’ loan portfolio continues to improve; profitability showed only a small sign of improvement; and the leverage ratio remains stable.


(29/03/2019) ESMA – Final Report on Technical advice on minimum information content for Prospectus Exemption / Final Guidelines on risk factors under the Prospectus Regulation
The ESMA has published a Final Report on technical advice on the minimum information content of documents describing a takeover, merger or division (i.e. the offer of securities to the public or the admission to trading of securities on a regulated market; and the description and impact that a takeover, merger or division may have on the issuer’s operational and financial activities). Along with this document, the ESMA has also published Final Guidelines on how NCAs should review risk factors, as required by the new Prospectus Regulation.


© GMS Management Solutions, S.L., 2019. 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.