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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


Exposures to be associated with high risk

(18/01/2019) EBA – Final Guidelines on specification of types of exposures to be associated with high risk under Article 128(3) of the CRR
The EBA has published Final Guidelines (GL) on specification of types of exposures to be associated with high risk under Article 128 of the CRR aiming to clarify the criteria for identifying investments in venture capital firms and private equity as particularly high risk exposures (both are included in the article 128 of the CRR), and to specify which other types of exposures should be considered as high risk and under which circumstances. These Final GL also sets out notification requirements for institutions regarding those exposures carrying a particularly high risk of loss, other than those identified according to these GL.

Market risk

(15/01/2019) BCBS – Minimum capital requirements for market risk / Explanatory note on the minimum capital requirements for market risk
The BCBS has published a Standard on the minimum capital requirements for market risk which aims at addressing those issues that have been identified in the course of monitoring the implementation and impact of the standard published in 2016. In particular, amendments are introduced to the following aspects: i) scope of application, ii) internal models, iii) standardised approach, and iv) simplified alternative to the standardised approach.

Benchmarking exercises

(10/01/2019) EBA – Report on the results from the 2018 market risk benchmarking exercise / Report on the results from the 2018 low and high default portfolios exercise
The EBA has published two reports on the consistency of RWAs, a Report on the results from the 2018 market risk benchmarking exercise as well as a Report on the results from the 2018 high and low default portfolios (HDPs and LDPs) credit risk benchmarking. In particular, the objective of the market risk report is to assess the level of variability observed in risk-weighted assets (RWAs) for market risk produced by banks’ internal models whereas the HDPs and LDPs report assesses not only the overall level of variability in RWAs but also examine and highlight the different drivers of the dispersion observed.

Stress test

(10/01/2019) Fed – Proposed rule on amendments to the company-run and supervisory stress test rules
The Fed has published a Proposed rule on amendments to the company-run and supervisory stress test rules that introduce changes to these rules regarding the minimum asset threshold for state member banks, the frequency of stress testing for these banks, the removal of adverse scenarios for state member banks, the removal of adverse scenario for all other stress testing requirements, the review of stress testing processes by board of director, and the review of the scope of applicability of the company-run stress testing requirements for certain savings and loan holding companies.


Other publications of interest


Capital markets

(23/01/2019) BIS – Report on establishing viable capital markets
The Bank for International Settlements (BIS) has published a Report on viable capital markets, which examines trends in capital market development and identifies the factors that foster the development of robust capital markets. In particular, this Report presents conclusions on the establishment of viable capital markets, and highlights, among others, the importance of macroeconomic stability, market autonomy, strong legal frameworks and effective regulatory regimes in supporting market development. Further, it also sets out recommendations across six broad areas in order to support the development of robust and efficient markets (e.g. promoting greater respect for market autonomy).


(23/01/2019) FCA – Consultation Paper CP19/3 on Guidance on cryptoassets
The Financial Conduct Authority (FCA) has published the Consultation Paper (CP19/3) on Guidance on cryptoassets, which provides regulatory clarity for market participants carrying on activities in this space. In particular, this CP sets out the overarching concepts relating to the categorization of cryptoassets, an overview of the UK market and the assessment of harm (e.g. harm to consumers or harm through financial crime) alongside with the actions to mitigate these harms. Moreover, the CP also sets out how cryptoassets can be subject to FCA regulation (as a financial instruments such as transferable securities under MiFID II).

Market abuse regulatory framework

(22/01/2019) CNMV – Statement addressed to issuers of listed securities regarding the new European market abuse regulatory framework
The Comisión Nacional de Mercados y Valores (CNMV) has published a Statement on the new European market abuse regulatory framework in order to recall some of the most relevant changes that have taken place in this field from the perspective of listed companies and other issuers, as well as to underline some aspects that these should bear in mind. In particular, this Statement stands out that the most relevant changes are, among others, the removal of the rule requiring issuers to made the information public immediately after the execution of a relevant contract; or the requirement that the issuer be in a position to ensure confidentiality must be assessed particularly strictly by issuers.

External audit

(17/01/2019) IOSCO – Report on good practices for audit committees in supporting audit quality
The Board of the International Organization of Securities Commissions (IOSCO) has published a Report on good practices for audit committees of listed companies, in order to support external audit quality. In particular, this Report outlines several good practices regarding the appointment of an auditor, the assessment of potential and continuing auditors, audit fees, the audit process, the assessment of the auditor’s independence, the communication with the auditor, and the assessment of audit quality.

Code of conduct

(16/01/2019) ECB – Single Code of Conduct for high level ECB Officials
The ECB has published a single Code of Conduct for all ECB decision-makers and high-level officials in order to strengthen and refine its good governance and integrity frameworks. In particular, this Code which is addresses to the Governing Council, Executive Board and Supervisory Board members of the ECB, improves the management of potential conflicts of interest by introducing specific rules for post-employment activities, private financial transactions and relations with interest groups.

Market abuse

(16/01/2019) ESMA – Report to the Commission on the application of accepted market practices
The European Securities and Markets Authority (ESMA) has published its Annual Report on the application of accepted market practices (AMPs) in accordance with the Market Abuse Regulation (MAR). In particular, this Report provides an overview on the establishment and application of AMPs in the EU, with particular reference to the AMPs established on the basis of the Market Abuse Directive (MAD) and which were still in force when MAR became applicable, and the AMPs which have been established under MAR. Moreover, it includes ESMA’s views on the application of AMPs together with recommendations to National Competent Authorities (NCAs).


(15/01/2019) ESAs – Multilateral agreement on the practical modalities for exchange of information on AML/CFT between the ECB and CAs
The European Supervisory Authorities (ESAs) have published the Multilateral Agreement on the practical modalities for exchange of information on anti-money laundering and countering the financing of terrorism (AML/CFT) between the ECB and all competent authorities (CAs). In particular, this Agreement contains provisions regarding the type of information and underlying process for exchanging it; confidentiality and data protection provisions; means of communication and language used in the information exchange; the signing process; and the settlement of disputes procedures.

Work programme

(14/01/2019) BCBS – Work programme for 2019-2020
The BCBS has published its work programme for 2019-2020, which focuses on four key themes: i) finalising ongoing policy reforms, and pursuing targeted new policy initiatives where needed; ii) evaluating and monitoring the impact of post-crisis reforms and assessing emerging risks; iii) promoting strong supervision; and iv) ensuring full, timely and consistent implementation of the BCBS’ post-crisis reforms.


(09/01/2019) EBA – Report with advice for the European Commission on crypto-assets
The EBA has published a Report on crypto-assets regarding the results of its assessment of the applicability and suitability of EU law to crypto-assets. In particular, this Report examines: i) the application of current EU banking, payments, e-money and anti-money laundering laws to crypto-assets; ii) crypto-asset custodian wallet providers and crypto-asset trading platforms; and iii) credit institutions, investment firms, payment institutions and electronic money institutions' activities involving crypto-assets and regulatory and supervisory issues. According to the results, the EBA has identified a number of actions that it will take in 2019 to enhance the monitoring of financial institutions' crypto-asset activities and consumer-facing disclosure practices.

Licence applications

(09/01/2019) ECB – Guide to assessments of licence applications - Licence applications in general
The ECB has published a consolidated version of the Guide to assessments of license applications, which is intended as a practical tool to support those involved in the process of authorisation and to ensure a smooth and effective procedure and assessment, although is not legally binding. In particular, this Guide promotes a level playing field throughout the euro area and reduces the risk that entities will circumvent banking regulation and supervision, as well as awareness and enhances the transparency of the assessment criteria and processes for establishing a credit institution in the euro area. Furthermore, the document applies to all licence applications to become a credit institution within the meaning of the CRR, including, among others, applications from Fintech companies.

Risk dashboard

(08/01/2019) EBA – Risk Dashboard (Q3 2018)
The EBA has published its 3Q2018 Risk Dashboard, which summarises the main risks and vulnerabilities in the EU banking sector using quantitative risk indicators and the results of its Risk Assessment Questionnaire, which includes the opinions of banks and market analysts on the risk outlook collected in autumn 2018. In particular, this document concludes that, among others, European Banks' capital ratios remain high with a modest increase since Q2 2018; the quality of the EU banks' loan portfolio has improved further; profitability in the EU banking sector needs to improve further; and loan to deposit ratio has remained broadly stable.


(07/01/2019) ESAs – Joint Report on Regulatory sandboxes and innovation hubs
The European Supervisory Authorities (ESAs) have published a Joint Report on regulatory sandboxes and innovation hubs, which sets out a comparative analysis of the innovation facilitators established to date within the EU and the best practices for the design and operation of innovation facilitators. In particular, this Report highlights that 21 EU Member States and 3 EEA States have established innovation hubs and 5 EU Member States have regulatory sandboxes in operation nowadays.

Community Reinvestment Act compliance

(03/01/2019) FDIC – January 2019 List of Banks Examined for CRA Compliance
The Federal Deposit Insurance Corporation (FDIC) has published its January 2019 list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA), covering evaluation ratings that the FDIC assigned to institutions in October 2019.
(03/01/2019) OCC – CRA performance evaluations: December 2018
The Office of the Comptroller of the Currency (OCC) has published a list of CRA performance evaluations for December 2018, containing only national banks, federal savings associations, and insured federal branches of foreign banks that have received ratings. The 31 evaluations made public this month show that three are rated outstanding and 28 are rated satisfactory.


(02/01/2019) DGSPF – Resolución de 2 de enero de 2019, por la que se publica el tipo de interés máximo a utilizar en el cálculo de la provisión de seguros de vida, de aplicación al ejercicio 2019
The Dirección General de Seguros y Fondos de Pensiones (DGSPF) has issued the Resolution of 2 of January 2019, which published the maximum interest rate to use in calculating the provision of life insurance. In particular, the maximum interest rate applicable will be a 0.98 per cent in fiscal year 2019.
(02/01/2019) DGSPF – Resolución de 2 de enero de 2019, por la que se publica el tipo de interés máximo a utilizar en los planes de pensiones respecto a las contingencias en que esté definida la prestación y para las que se garantice exclusivamente un interés mínimo o determinado en la capitalización de las aportaciones, de aplicación al ejercicio 2019
The DGSPF has issued the Resolution of 2 of January 2019, which publishes the maximum interest rate to use in pension plans with respect to the contingencies in which the provision is defined. In particular, the maximum interest rate applicable will be 1.57 per cent in fiscal year 2019.

Non-financial and diversity of information in Spain

(29/12/2018) Government of Spain – Ley 11/2018, de 28 de diciembre, por la que se modifica el Código de Comercio, el texto refundido de la Ley de Sociedades de Capital aprobado por el Real Decreto Legislativo 1/2010, de 2 de julio, y la Ley 22/2015, de 20 de julio, de Auditoría de Cuentas, en materia de información no financiera y diversidad
The Spanish Government has published the Ley 11/2018 with the aim of increasing the non-financial information included in the management report that accompanies the individual and consolidated annual accounts in large companies regarding information on social, environmental and human resources issues, on human rights (i.e. information of the relevant potential and current impacts of the company´s activity) and anti-money laundering and bribery (i.e. information on the procedures and internal control resources to prevent these behaviour).

Financial information in Spain

(29/12/2018) BdE – Circular 2/2018, de 21 de diciembre, del Banco de España, por la que se modifican la Circular 4/2017, de 27 de noviembre, a entidades de crédito, sobre normas de información financiera pública y reservada, y modelos de estados financieros, y la Circular 1/2013, de 24 de mayo, sobre la Central de Información de Riesgos
The Bank of Spain (BdE) has published the Circular 2/2018, with the aim of adapting Circular 4/2017 to International Financial Reporting Standard (EU-IFRS) 16, on leases. In particular, this Circular modifies, among others, the accounting treatment for the lessee; the individual public balance sheet ‘s frequency of remission; the public, individual and consolidated profit and loss account models. It also adds minor changes related to the Risk Information Center (RIC) in order to introduce clarifications and improvements.



© 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.