Regulatory alerts for the quarter

We have an ongoing regulatory watch system

Management Solutions compiles new regulations published by regulators of the financial services industry on a global level (BCBS, FSB), a supranational one (with a focus on Europe), and on some local geographies (USA, UK and Spain).


Relevant publications

 

IRRBB

(28/05/2021) EBA – Consultation Paper on draft ITS on IRRBB disclosure

The European Banking Authority (EBA) has published a Consultation Paper on draft Implementing Technical Standards (ITS) on interest rate risk on positions not held in the trading book (IRRBB) disclosure, which seeks to ensure stakeholders are informed about institutions' interest rate risks in the non-trading book and provide comparable disclosures that should help institutions comply with the requirements laid down in the CRR.

Management Commentary

(28/05/2021) IASB – Exposure Draft Management Commentary

The International Accounting Standards Board (IASB) has published a proposed framework for companies preparing management commentaries which would enable entities to bring together in one place the information investors need to assess an entity's long-term prospects.​

Business plan

(24/05/2021) PRA – Business Plan 2021/22

The Prudential Regulation Authority (PRA) has adopted the Business Plan 2021/22 which sets out its eight strategic objectives for the coming year. This strategy will be achieved in close co-operation with other parts of the bank of England (BoE), the Financial Conduct Authority (FCA) and international counterparts.

Pilot exercise

(21/05/2021) EBA – EU-wide pilot exercise on climate risk

The European Banking Authority (EBA) launched in 2020 a pilot exercise on climate risk focused on the identification and quantification of exposures from a climate perspective on transition risk. Following the exercise, the EBA has published the results of EU-wide pilot exercise. Its main objective is to explore data and methodological challenges to categorise exposures on the basis of selected climate risk factors.​

Climate Change

(21/05/2021) Cortes Generales – Ley 7/2021 de cambio climático
The General Courts has approved Law 7/2021 on climate change and energy transition with the aim of ensuring compliance with the objectives of the 2015 Paris Agreement and facilitating the decarbonization of the Spanish economy.​

Digital Programme

(11/05/2021) EP/C​ouncil – Regulation establishing the Digital Europe Programme
The European Parliament (EP) and the Council have published the Regulation establishing the Digital Europe Programme laying down a financial envelope for the Programme for the period 2021-2027. The general objectives of the Programme should be to support the digital transformation of industry and to foster better exploitation of the industrial potential of policies on innovation, research and technological development, for the benefit of citizens and businesses across the EU.

Stress test

(07/05/2021) EIOPA – 2021 Insurance Stress Test
The European Insurance and Occupational Pensions Authority (EIOPA) has launched the 2021 stress test exercise which aims to assess the resilience of the participants to the adverse scenarios by a capital and liquidity perspective in order to provide supervisors with information on whether these insurers are able to withstand severe but plausible shocks.​

Resolution

(30/04/2021) SRB – Guidance on liquidity and funding in resolution
The Single Resolution Board (SRB) has published the Guidance on liquidity and funding in resolution which focuses on the estimation of liquidity needs, and aims to enhancing banks' resolvability and preparedness for a potential resolution.​

Climate Taxonomy

(21/04/2021) EC – EU Taxonomy Climate Delegated Act / Proposal for a Corporate Sustainability Reporting Directive (CSRD) / Amending Delegated Acts on sustainability preferences, fiduciary duties and product governance
The EC has published the EU Taxonomy Climate Delegated Act which supports sustainable investment by making it clearer which economic activities most contribute to meeting the EU's environmental objectives. Furthermore, the EC has published a proposal for a Corporate Sustainability Reporting Directive which will allow financial firms, investors and the broader public to use comparable and reliable sustainability information. Finally, it has published six amending Delegated Acts on fiduciary duties, investment and insurance advice which will ensure that financial firms, e.g. advisers, asset managers or insurers, include sustainability in their procedures and their investment advice to clients.​

COVID-19

Economic downturn

(07/04/2021) PRA – CP7/21 – Credit risk: The identification of the nature, severity, and duration of an economic downturn for the purposes of Internal Ratings Based (IRB) models
The PRA has published the Consultation Paper (CP) 7/21 on the identification of the nature, severity, and duration of an economic downturn for the purposes of Internal Ratings Based (IRB) models, which sets out the PRA proposed approach in this aspect.

 

 

Other publications of interest

 

Risks

(03/06/2021) ESMA - ESMA sees a prolonged period of risk from market corrections

The European Securities and Markets Authority (ESMA), has published its first Risk Dashboard (RD) for 2021 covering the first quarter of the year. The ESMA anticipates a prolonged period of risk to institutional and retail investors of further market corrections and sees very high risks across its whole remit.

NPL

(03/06/2021) PRA - CP10/21 - Implementation of Basel standards: Non-performing loan securitisations

The Prudential Regulation Authority (PRA), has published the Consultation Paper which sets out the PRA's proposed rules in respect of the implementation of prudential standards agreed by the Basel Committee on Banking Supervision (BCBS) for non-performing loan (NPL) securitisations in the context of the UK having left the EU.

Internal approaches

(03/06/2021) EBA – EBA updates technical standards in view of its 2022 benchmarking of internal approaches

The EBA has published an update to its Implementing Technical Standards (ITS) on benchmarking of internal approaches. The benchmarking exercise covers approved internal approaches used for own funds requirements calculation of credit and market risk, as well as internal models used for IFRS9.  These ITS include clarifications on the Consultation Paper that was published in December 2020.

LIBOR

(02/06/2021) FSB - FSB issues statements to support a smooth transition away from LIBOR by end 2021

The Financial Stability Board (FSB) has published a set of documents to support a smooth transition away from LIBOR by the end of 2021. The statements and reports published by the FSB include: i) an updated global transition roadmap; ii) a paper reviewing overnight risk-free rates and term rates; iii) a statement on the use of the  Swaps and Derivatives Association (ISDA) spread adjustments; iv)  a statement on smooth and timely transition away from LIBOR.

MIFIDII/MIFIR

(01/06/2021) ESMA – ESMA publishes final Report on the MIFID II/ MIFIR obligations on market data

The ESMA has published its Final Report on Guidelines on the MiFIDII/MiFIR obligations on market data. The Final Report sets out guidelines on the requirements to publish market data on a reasonable commercial basis and to make market data available free of charge 15 minutes after publication.

Transfer of funds

(01/06/2021) Fed – Federal Reserve Board invites public comment on proposed rule to govern funds transfers over the Federal Reserve Banks' FedNow Service

The Federal Reserve Board (Fed) invited comment on a proposed rule to govern funds transfers over the Federal Reserve Banks' FedNow Service. The proposed rule would establish a new and comprehensive set of rules governing funds transfers over the FedNow Service and set out the legal rights and obligations of the Reserve Banks and FedNow Service participants.

SFDR

(01/06/2021) CNMV – CNMV publica criterios para la aplicación de la nueva normativa europea en materia ambiental, social y de gobernanza en los servicios financieros

The Comisión Nacional del Mercado de Valores (CNMV) has published some interpretative criteria that will guide its authorisation and supervisory actions in the application of the European regulation on environmental, social and governance issues, known as ESG, contained in the Regulation on sustainability disclosures in financial services (SFDR).

Cross-border payments

(31/05/2021) FSB – FSB seeks feedback on its proposals for quantitative targets for enhancing cross-border payments

The Financial Stability Board (FSB) has published a public consultation on global targets for addressing the four challenges of cross-border payments. The proposed targets set goals for improving cost, speed, transparency and access for cross-border payments in the coming years through the actions taken under the Roadmap.

Investment firms

(31/05/2021) EBA/ESMA – EBA and ESMA publish provisional list of instruments and funds for the smallest investment firms under the Investment Firms Regulation

The EBA, jointly with the ESMA, published a provisional list of additional instruments and funds that competent authorities may allow to use as own funds for some of the smallest investment firms. The latter include only non-legal persons or joint‐stock companies, or those which meet the conditions for qualifying as small and non‐interconnected investment firms as defined in the Investment Firm Regulation (IFR).

Resolution

(28/05/2021) PRA – SS4/19 - Resolution assessment and public disclosure by firms

The PRA has published the Supervisory Statement (SS) 4/19 on Resolution assessment and public disclosure by firms. This SS sets out how UK banks and building societies should comply with the rules to assess their preparations for resolution, submit a report of their assessment, and publish a summary of their report.

SFTR

(28/05/2021) ESMA – ESMA consults on Guidelines for data transfer between trade repositories under EMIR and SFTR

The ESMA has launched a consultation on amendments to its Guidelines on data transfer between Trade Repositories (TRs) under EMIR, as well as on Guidelines regarding data transfer between TRs under Securities Financing Transactions (SFTR).​

AML/CFT

(27/05/2021) EBA –EBA consults on new Guidelines on cooperation and information exchange in the area of anti-money laundering and countering the financing of terrorism

The EBA has launched a public consultation on its new Guidelines that set out how prudential supervisors on anti-money laundering and countering the financing of terrorism (AML/CFT) supervisors and financial intelligence units (FIUs) should cooperate and exchange information in relation to AML/CFT, in line with provisions laid down in the Capital Requirements Directive (CRD). This consultation runs until 27 August 2021.

Provisions

(27/05/2021) EBA – EBA provides a comparison of provisioning in the United States and the European Union in the context of the COVID-19 pandemic

The EBA has published a thematic note comparing provisioning practices in the US and the EU during the peak of the COVID-19 pandemic. The note looks into the differences in the macroeconomic impact of the pandemic, in banks' loan portfolios, and in accounting rules that might explain why the cost of risk (CoR) of US banks was much higher compared to their EU peers in the first half of 2020.

Cross-Border Distribution of Funds

(27/05/2021) ESMA – ESMA publishes guidance on funds' marketing communications

The European Securities and Markets Authority (ESMA) has published the final report on the guidelines on marketing communications under the Regulation on cross-border distribution of funds.

Securitizations

(27/05/2021) ESMA – ESMA consults on synthetic securitizations RTS and amendments to STS templates

The ESMA has published a Consultation Paper (CP) on draft regulatory technical standards (RTS) implementing the amended Securitisation Regulation (SECR). The CP specifies the content and the format of the standardised templates for simple, transparent and standardized (STS) notification of on-balance sheet synthetic securitisations.

Financial indicators

(26/05/2021) ECB – EU structural financial indicators: end of 2020

The ECB has updated its dataset of structural financial indicators for the banking sector in the European Union (EU) for the end of 2020. This annual dataset comprises statistics on the number of branches and employees of EU credit institutions, data on the degree of concentration of the banking sector in each Member State and data on foreign-controlled institutions in national banking markets.

Commodities

(26/05/2021) ESMA – ESMA consults on commodity derivatives technical standards as part of MIFIDII recovery package

The ESMA has launched a consultation, as part of the post-Covid MiFID II Recovery Package, seeking input from market participants on its draft Technical Standards for commodity derivatives. The Consultation Paper also contains ESMA's proposals for technical standards on position management controls. Comments can be sent before 23 July 2021.

Rating agencies

(26/05/2021) ESMA – ESMA consults on disclosure requirements for initial reviews and preliminary ratings

The ESMA has launched a Public Consultation on Disclosure Requirements for Initial Reviews and Preliminary Ratings. The purpose of this Consultation Paper is to propose guidance that will address inconsistencies in the interpretation of the provisions contained in the Credit Rating Agencies (CRA) Regulation.

Own funds

(26/05/2021) EBA – EBA publishes final draft technical standards on own funds and eligible liabilities

The EBA has published its final draft Regulatory Technical Standards (RTS) on own funds and eligible liabilities after running a public consultation till August 2020. The Final Draft hasn't contain significant changes with respect to the consultation paper. With the revised Capital Requirements Regulation (CRR) introducing new criteria and requirements for eligible liabilities, these amended RTS capture several aspects of eligible liabilities as well as the changes to the own funds framework.

Climate and insurance

(25/05/2021) IAIS - IAIS and SIF set out key recommendations for insurance supervisors to strengthen efforts to address climate-related risks

The International Association of Insurance Supervisors (IAIS) has published an Application Paper on the Supervision of Climate-related Risks in the Insurance Sector which provides recommendations and examples of good practice for insurance supervisors to manage the challenges arising from climate change. The recommendations are related to: i) role of the supervisor; ii) corporate governance; iii) risk management; iv) investment policy; v) disclosures

SFTR

(25/05/2021) ESMA – Guidelines on the calculation of positions under SFTR

The ESMA has published the Final Report on Guidelines on the calculation of positions in Securities Financing Transactions (SFTs) by Trade Repositories (TRs) under the Securities Financing Transactions Regulation. The Guidelines aim to ensure consistency of position calculation across TRs, with regard to the time of calculations, the scope of the data used in calculations, the data preparation, the recordkeeping of data and the calculation methodologies..

SRB MREL Dashboard

(26/05/2021) SRB -  MREL dashboard Q4.2020

The Single Resolution Board (SRB) has published its minimum requirement for own funds and eligible liabilities (MREL) dashboard covering the reporting period Q4.2020. Some key findings are that: i) MREL issuances amounted to EUR 44.5 bn, with banks showing some differences in the volume of issuances. Overall, in 2020, banks have issued EUR 275.2 bn of MREL eligible instruments; ii) the average final MREL target represented 22.82% of the total risk exposure amount (TREA). ​

Contract Amendments

(20/05/2021) BoE - Derivatives clearing obligation – modifications to reflect interest rate benchmark reform: Amendments to BTS 2015/2205
The Bank of England (BoE) has published the Consultation Paper 2015/2205 which sets out the Bank of England's proposal to modify the scope of contracts which are subject to the derivatives clearing obligation to reflect the ongoing reforms to interest rate benchmarks.This CP is relevant to financial and non-financial counterparties that are subject to the clearing obligation under EMIR, and to central counterparties (CCPs).

Digital Assets

(17/05/2021) FDIC - FDIC Issues Request for Information on Digital Assets
The Federal Deposit Insurance Corporation (FDIC) announced that it is gathering information and soliciting comments from interested parties about insured depository institution' current and potential digital asset activities. Given that banks are increasingly exploring the emerging digital asset ecosystem, the FDIC is issuing this request for information to help inform its understanding of the industry's and consumers' interests in this area.

Securitisation Regulation

(17/05/2021) ESAs -  ESAs report on the implementation and functioning of the Securitisation Regulation
The Joint Committee of the European Supervisory Authorities has published today its analysis of the implementation and the functioning of the EU Securitisation Regulation (SECR). This analysis includes recommendations on how to address initial inconsistencies and challenges, which may affect the overall efficiency of the current securitisation regime.

Consumer Duty

(14/05/2021) FCA - CP21/13: A new Consumer Duty

The Financial Conduct Authority (FCA) has issued a Consultation Paper 21/13 which contains the FCA´s proposals on a new Consumer Duty, that would set higher expectations for the standard of care that firms provide to consumers. For many firms, this would require a significant shift in culture and behavior, where they consistently focus on consumer outcomes, and put customers in a position where they can act and make decisions in their interests. ​

MIFID II/MIFIR

(12/05/2021) ESMA -  Consults on its MIFID II/MIFIR annual report
The European Securities and Markets Authority (ESMA) has launched a consultation on its MIFIDII /MIFIR Annual Review Report under the European Comission (EC) Delegated Regulation on ma​rkets in financial instruments. The Consultation Paper provides for the Annual Assessment of the operation of the thresholds for the liquidity determination of bonds and the trade percentiles determining the pre-trade SSTI-threshold which is currently subject to a a four-stage phase-in regime under RTS 2.

EURIBOR

(11/05/2021) ECB - Private sector working group on euro risk-free rates publishes recommendations on EURIBOR fallbacks
The European Central Bank (ECB) has published today its recommendations addressing events that would trigger fallbacks in EURIBOR-related contracts, as well as euro short-term rate based EURIBOR fallback rates. While there is currently no plan to discontinue EURIBOR, the development of more robust fallback language addresses the risk of a potential permanent discontinuation and is in line with the EU Benchmarks Regulation (BMR).

Taxes

(10/05/2021)  FDIC - Tax Allocation Agreements
The Office of the Comptroller of the Currency (OCC),  the Board of Governors of the Federal Reserve System (Fed), and the Federal Deposit Insurance Corporation (FDIC) are inviting comment on a proposed rule under section regarding safety and soundness of the Federal Deposit Insurance Act that would establish requirements for tax allocation agreements between institutions and their holding companies in a consolidated tax filing group.

Risk review

(10/05/2021)  FDIC – 2021 RISK REVIEW
The FDIC has developed a Risk Review which provides a summary of risks that may ultimately affect FDIC-insured institutions and the FDIC's Deposit Insurance Fund. Much of the discussion in the report focuses on risks that may affect community banks, as FDIC is the primary federal regulator for the majority of these banks in the United States. The Risk Review contributes to the FDIC's mission to maintain stability in the nation's financial system and commitment to building trust and confidence through openness and accountability.​

Risk Analysis 

(06/05/2021) EIOPA – Risk Dashboard based on the fourth quarter of 2020 Solvency II data
The European Insurance and Occupational Pensions Authority (EIOPA) has published its updated Risk Dashboard based on the fourth quarter of 2020 Solvency II data. The results show that insurers' exposures to macro risks remain at high level while all other risk categories remain at medium level. On the other hand, the European supervisors expect an increase in credit risk over the next 12 months, reflecting concerns over corporate indebtedness.

AML/CFT 

(06/05/2021) EBA – The EBA consults on its proposals for a central AML/CFT database
The European Banking Authority (EBA) launched a public consultation on draft Regulatory Technical Standards (RTS) on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in the EU. Information from this database will be used by individual competent authorities and the EBA to make the fight against ML/TF in the EU. The consultation runs until 17 June 2021.

MIFID II

(06/05/2021) ESMA – ESMA updates opinion on ancillary activity calculations
The European Securities and Markets Authority (ESMA) has published an updated Opinion on ancillary activity calculations. The opinion provides the estimation of the market size of commodity derivatives and emission allowances for 2020. These sizes are important to enable market participants to assess whether they exceed the ancillary activity thresholds in MiFID II and consequently would have to apply for authorisation as an investment firm.

NPL 

(04/05/2021) EBA – EBA launches discussion on NPL data templates
The EBA has published a discussion paper to facilitate the review of the standardised NPL data templates. The discussion paper invites all stakeholders and NPL market participants on the buyer and seller side to provide their input. The consultation runs until 31 August 2021.

Pensions

(04/05/2021) PRA – CP21/11: The stronger nudge to pensions guidance
The Prudential Regulation Authority (PRA) has published the Consultation Paper (CP) 21/11 on pensions guidance. The CP contains proposals for implementing a stringer nudge to pensions, and further measures to help consumers make informed decisions. The consultation runs until 29 June 2021.

Mystery shopping

(03/05/2021) EBA – The European Banking Authority publishes report on mystery shopping activities of national authorities
The EBA has published a Report on the mystery shopping activities of National Competent Authorities (NCAs). The Report covers mystery shopping initiatives of NCAs in respect of the following products: i) consumer credit; ii) mortgage credit; iii) deposits; iv) payment services; v) electronic money; and vi) payment accounts.

Interbank rates

(30/04/2021) EIOPA – EIOPA consults on Interbank Offered Rates
The EIOPA has launched a consultation on Interbank Offered Rates (IBOR) transitions. The consultation considers adjustments to EIOPA's risk-free rate (RFR) methodology and production, in light of If the EU Benchmark Regulation (EU BMR)  which requires financial benchmarks to be transparent and to measure the underlying economic reality in a representative way. EIOPA seeks to adopt a common approach, for all currencies on the transition to the new rates in order to continue producing consistent RFR term structures.​

Capital

(29/04/2021) EBA – EBA consults on draft technical standards specifying how to identify the appropriate risk weights and conditions when assessing minimum LGD values for exposures secured by immovable property
The European Banking Authority (EBA) published a consultation paper on a draft Regulatory Technical Standards specifying the types of factors to be considered for the assessment of appropriateness of risk weights and the conditions to be taken into account for the assessment of appropriateness of minimum loss given default (LGD) values for exposures secured by immovable property. The consultation runs until 29 July 2021.

(27/04/2021) Gobierno – Real Decreto-ley 7/2021, de 27 de abril, de transposición de directivas de la Unión Europea en las materias de competencia, prevención del blanqueo de capitales, entidades de crédito, telecomunicaciones, medidas tributarias, prevención y reparación de daños medioambientales, desplazamiento de trabajadores en la prestación de servicios transnacionales y defensa de los consumidores
The Government of Spain has published Royal Decree 7/2021 on the transposition of European Union directives in the areas of competition, prevention of money laundering and credit institutions. This Royal Decree contains the amendments derived from the transposition of the Directive aimed at providing the competition authorities of the Member States with the means to apply competition rules more effectively. It also introduces the necessary amendments to our domestic legislation for the correct transposition of the recent Directive on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing.

Reporting

(28/04/2021) EBA – The European Banking Authority launches public consultation to enhance proportionality in liquidity reporting
The European Banking Authority (EBA) launched a public consultation on its draft Implementing Technical Standards (ITS) on supervisory reporting with respect to Additional Liquidity Monitoring Metrics (ALMM). Following the mandate laid down in the CRR2, the EBA is proposing to introduce some proportionality considerations in ALMM reporting for small and non-complex institutions.

(26/04/2021) ECB – Guideline on statistical information to be reported on financial intermediaries other than monetary financial institutions / Guideline  on reporting requirements on payment statistics / Guideline on statistical information to be reported on consolidated banking data / Guideline on statistical information to be reported on securities issues
The European Central Bank (ECB) has published several Guidelines on Reporting requirements of financial intermediaries related to: i) the statistical information to be reported on financial intermediaries other than monetary financial institution; ii) the reporting requirements on payments statistics; iii) the statistical information to be reported on consolidated banking dada; and iv)  the statistical information to be reported on securities issues.  

Conduct

(28/04/2021) FCA  – CP 21/ 9 on changes to UK MIFID's conduct and organisational requirements
The Financial Conduct Authority (FCA) has published Consultation Paper 21/9 on changes to UK MIFID's conduct and organizational requirements. The proposal will remove the obligation on investment firms who execute orders to produce an annual report setting out the top 5 venues used for executing client orders and a summary of the execution outcomes achieved.

COVID – 19  

(27/04/2021) PRA – PRA statement on the disclosure of exposures subject to measures applied in response to Covid-19
The Prudential Regulation Authority (PRA) has published an statement that updates guidance to UK banks and building societies on the disclosure of exposures subject to Covid-19 measures published on July 2020. Firms should therefore continue to use the templates published in July 2020 up to, and including, 31 December 2021.​

IORP

(22/04/2021) EIOPA – EIOPA consults on the reporting of costs and charges of IORPs and the risk management by IORPs providing defined contribution schemes
The European Insurance and Occupational Pensions Authority (EIOPA) launched today two consultations on risk assessment by Institutions for Occupational Retirement Provisions (IORPs) providing defined contribution (DC) schemes and the supervisory reporting of costs and charges by IORPs. 

React EU

(22/04/2021) Comisión Delegada del Gobierno – Orden PCM/377/2021 por el que se establece el procedimiento para la adhesión de las Comunidades Autónomas destinatarias de los recursos adicionales de la ayuda a la recuperación para la cohesión y los territorios de España (REACTUE)
The Comisión Delegada del Gobierno para Asuntos Económicos has adopted an Agreement establishing the procedure for the accession of the Autonomous Communities receiving the additional resources of the recovery aid for cohesion and the territories of Spain (REACT-EU) to the REACT-EU Liquidity Fund compartment, as well as the financial conditions of the credit operations in 2021 and the other conditions for their availability.

Tax

(22/04/2021) Fed – Agencies invite comment on proposed rule for income tax allocation agreements
The Office of the Comptroller of the Currency (OCC),  the Board of Governors of the Federal Reserve System (Fed), and the Federal Deposit Insurance Corporation (FDIC) have invited comment on a proposed rule that updates and codifies existing guidance on income tax allocation agreements involving depository institutions and their affiliates.

Supervision and Solvency

(21/04/2021) Gobierno – Real Decreto 288/2021, de 20 de abril, por el que se modifica el Real Decreto 1060/2015, de 20 de noviembre, de ordenación, supervisión y solvencia de las entidades aseguradoras y reaseguradoras; se da nueva redacción al artículo 34 del Reglamento de Ordenación y Supervisión de los Seguros Privados
The Government of Spain has published Royal Decree 288/2021 amending Royal Decree 1060/2015 on the regulation, supervision and solvency of insurance and reinsurance undertakings. This Royal Decree includes the renewal of the biometric tables used by insurance undertakings that must contemplate both quantitative and qualitative aspects, including those related to good governance, transparency before third parties, and appropriate market conduct.

Foreign Exchange rates

(20/04/2021) IASB – IASB proposes amendments setting out accounting for when no foreign exchange rate exists
The International Accounting Standards Board (IASB) has published for public consultation proposed amendments to IAS 21 on The Effects of Changes in Foreign Exchange Rates. The proposed amendments aim to help companies determine whether a currency can be exchanged into another currency, and what accounting to apply if the currency cannot be exchanged.

Mortgage loans

(19/04/2021) PRA – PRA statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme
La PRA has published an statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme. This statement provides information on capital, notification, disclosure, and reporting requirements for loans under the Mortgage Guarantee Scheme (MGS) as set out in the relevant UK legislation.  

ORSA

(19/04/2021) EIOPA –  EIOPA issues Opinion on the supervision of the use of climate change risk scenarios in ORSA
The European Insurance and Occupational Pensions Authority (EIOPA) has issued an Opinion on the supervision of the use of climate change scenarios in the Own Risk and Solvency Assessment (ORSA) addressed to national supervisory authorities. In this Opinion EIOPA sets out expectations on the supervision of the integration of climate change risk scenarios by insurers in their ORSA.

MIFID

(19/04/2021) FCA –  A new UK prudential regime for MiFID investment firms
The Financial Conduct Authority (FCA) has published the Consultation Paper (CP) 21/7 on a new prudential regime for MIFID investment firms. This regime will streamline and simplify the prudential requirements for MiFID investment firms that are prudentially regulated by the FCA in the UK.

Work Programme

(16/04/2021) BCBS – BCBS Work Programme and strategic priorities for 2021/2022
The Basel Committee (BCBS) has published the work programme and strategic priorities for 2021/2022 that outlines the strategic priorities for its policy, supervision and implementation activities. The main priorities are focused on: i) COVID-19 resilience and recovery; ii) horizon scanning and mitigation of risks; iii) Strengthening supervisory coordination and practices; and iv) Basel III implementation.  

ESI

(16/04/2021) CNMV –  Nueva Circular sobre normas contables, cuentas anuales y estados financieros de las ESI y sus grupos consolidables, SGIIC y SGEIC
The Comisión Nacional del Mercado de Valores (CNMV) has published Circular 1/2021 of 25 March on accounting standards, annual accounts and financial statements of Investment  Firms. The purpose of this Circular is to modify the accounting regime of certain entities subject to CNMV supervision so that, in general, the general accounting framework established through the regulatory empowerment contained in the Law on the reform and adaptation of commercial legislation in accounting matters for its international harmonisation based on EU regulations is applicable to them by reference.

CRR

(15/04/2021) EBA – EBA published final draft technical standards specifying the methods of prudential consolidation

The European Banking Authority (EBA) has published its final draft Regulatory Technical Standards (RTS) specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR). The aim of these draft RTS is to ensure that the appropriate method of prudential consolidation is applied for the calculation of the CRR requirements on a consolidated basis. Compared to the Consultation Paper, the final draft RTS have been revised also to reflect the amendments introduced as part of the Risk Reduction Measures Package adopted by the European legislators.

O-SIIs

(15/04/2021) EBA – EBA updates list of Other Systemically Important Institutions

The EBA has published the list of Other Systemically Important Institutions (O-SIIs) in the EU, which, together with Global Systemically Important Institutions (G-SIIs), are identified as systemically important by the relevant authorities according to harmonised criteria laid down in the EBA Guidelines. This list is based on end-2019 data and also reflects the O-SII score and the capital buffers that the relevant authorities have set for the identified O-SIIs.

(15/04/2021) PRA – Non-systemic UK banks: The Prudential Regulation Authority's approach to new and growing banks - PS8/21

This Prudential Regulation Authority (PRA) Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 9/20 Non-systemic UK banks: The PRA's approach to new and growing banks. This PS is primarily relevant to new and growing non-systemic UK-incorporated banks, although some banks in this category will have sufficient experience and resources to be able to move quickly to the standard expected of most established banks. This determination will depend on a number of factors, notably on: i) whether the bank is part of an established domestic or international banking group; ii) the size and complexity of its activities; and iii) the extent of its available financial and non-financial resources.

CRD/CRD V

(15/04/2021) PRA – The PRA's methodologies for setting Pillar 2 capital

The PRA has published a Statement of Policy which sets out the methodologies that the Prudential Regulation Authority (PRA) uses to inform the setting of Pillar 2 capital for firms to which CRD IV applies. There are two sections: i) Section I: Pillar 2A methodologies. This sets out the methodologies PRA will use to inform the setting of a firm's Pillar 2A capital requirement for different types of risks (e.g. credit risk, market risk, operational risk or counterparty credit risk); ii) Section II: Pillar 2B. This provides information on the purpose of the PRA buffer, how it is determined and how it relates to the CRD IV buffers.

(15/04/2021) PRA – The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP)

The PRA has published a supervisory statement (SS) which (SS) is aimed at firms to which CRD applies and replaces PRA SS5/13 and PRA SS6/13. It provides further detail on the high-level expectations outlined in The Prudential Regulation Authority's approach to banking supervision. This SS should be read in conjunction with the Statement of Policy 'The PRA's methodologies for setting Pillar 2 capital.

Market Data Quality

(15/04/2021) ESMA – ESMA highlights need for increased efforts on emir and SFTR data quality

The European Securities and Markets Authority (ESMA), the EU's securities markets regulator, has published its final report on the European Markets Infrastructure Regulations (EMIR) and Securitised Financing Transactions Regulation (SFTR) data quality. The report covers the progress made to date in improving EMIR data quality for regulatory and supervisory use and concludes that, while good progress has been made, additional efforts are needed by national competent authorities (NCAs) and ESMA to further improve EMIR data quality.

Climate related risks

(14/04/2021) BCBS – Climate-related risk drivers and their transmission channelsClimate-related financial risks - measurement methodologies

The Basel Committee on Banking Supervision (BCBS) has published a report on Climate-related risk drivers and their transmission channels and a report on measurement methodologies. The two reports discuss transmission channels of climate-related risks to the banking system, and the measurement methodologies of climate-related financial risks. Climate risks drivers can be captured in traditional financial risk categories, however, additional progress is needed to better estimate these risks.

COVID-19

(14/04/2021) Gobierno – Orden HAC/348/2021, de 12 de abril, por la que se concretan los criterios para asignación de ayudas directas a autónomos y empresas en aplicación de lo dispuesto en el Título I del Real Decreto-ley 5/2021

On March 13, 2021, the Spanish Government approved Royal Decree-Law 5/2021, on extraordinary measures to support business solvency in response to the COVID-19 pandemic. In relation to this Royal Decree, the Government has published the Ministerial Order specifying the criteria for the allocation of direct aid to self-employed and companies in application of the provisions of the Royal Decree.

Annual report

(14/04/2021) ECB – Annual Report ECB

The ECB has published the Annual Report for 2020, in which describes the tasks and activities of the European System of Central Banks (ESCB) and reports on the Eurosystem's monetary policy. The Report focusses on: i) the economy in the euro area; ii) the monetary policy; iii) the European financial sector; iv) the functioning of the market infrastructure and payments; v) the efforts to support market functioning and financial services provided to other institutions; vi) banknotes; and vii) ECB research priorities.

Digital Euro

(14/04/2021) ECB – ECB publishes the results of the public consultation on a digital euro

The European Central Bank (ECB) has published the results of the public consultation that launched the 12 October 2020 in relation with the Digital Euro. The analysis confirms, the initial ECB findings: what the public and professionals want the most from such a digital currency is privacy, followed by security, the ability to pay across the euro area, no additional costs and offline usability.

Listed companies

(12/04/2021) Gobierno – Ley 5/2021, de 12 de abril, por la que se modifica el texto refundido de la Ley de Sociedades de Capital, aprobado por el Real Decreto Legislativo 1/2010, de 2 de julio, y otras normas financieras, en lo que respecta al fomento de la implicación a largo plazo de los accionistas en las sociedades cotizadas

The Government of Spain has published Law 5/2021 which aims to transpose into Spanish law the Directive of the European Parliament and of the Council of 17 May 2017 amending the Directive on the exercise of certain rights of shareholders of listed companies. The main objective of this Law is for shareholders to participate more in the long term in the listed companies in which they invest. This Law comes into force twenty days after its publication in the Official State Journal (BOE). ​

OFTs

(08/04/2021) ESMA – ESMA makes recommendations for organised trading facilities under MiFID II/MiFIR
The European Securities and Markets Authority (ESMA) has published its Final Report on the functioning of Organised Trading Facilities (OTFs). The report contains recommendations and possible amendments to MiFID II/MiFIR with a view to reducing the level of complexity for market participants and making the legal framework more effective.

Trade repositories

(06/04/2021) ESMA – ESMA publishes guidelines on periodic information for trade repositories
The ESMA has published Final report and Guidelines on reporting of periodic information and material changes by Trade Repositories (TRs) supervised under EMIR and SFTR. Their introduction will, among others: i) reduce efforts to request this information sporadically and ensure that no information is omitted; ii) reduce processing time of information received; and iii) ensure a level playing field by establishing harmonised reporting templates. La Autoridad Europea de Valores y Mercados (ESMA).

Market risk

(07/04/2021) EBA – EBA consults on the list of advanced economies to determine equity risk under the new market risk regime
The European Banking Authority (EBA) launched a public consultation on its draft Regulatory Technical Standards (RTS) on the list of countries with an advanced economy for calculating the equity risk under the alternative standardised approach (FRTB-SA). The consultation runs until 2 July 2021.

 



Regulatory news from previous periods or FYs can be found in the Quarterly Regulatory Reports, section for current year reports, or the Annual Regulatory Reports section for previous year reports.

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