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

 

Instant payments
(07/02/2024) EP - Agreement on more accessible instant payments in euros
The European Parliament ( EP) has reached an agreement on more accessible instant payments in euros in order to make sure that retail clients and businesses, especially small and medium enterprises (SMEs), will not have to wait for their money as well as to provide safe transfers. The agreement updates the Single Euro Payments Area (SEPA) legislation: Regulation (EU) 260/2012, on technical and business requirements for credit transfers and direct debits; Regulation (EU) 2021/1230, on cross-border payments; Directive 98/26/EC, on settlement finality in payment and securities settlement systems; Directive (EU) 2015/2366, on payment services in the internal market. According to the future Regulation, payment service providers (PSPs), such as banks, which provide credit transfer services in euro, will be obliged to offer the instant transfer service.

Financial services of BigTech
(01/02/2024) ESAs - Report on 2023 stocktaking of BigTech direct financial services provision in the EU
The European Supervisory Authorities (ESAs) have published the Report on 2023 stocktaking of BigTech direct financial services provision in the EU. As a result of the stocktake, the ESAs have identified that BigTechs have subsidiary companies carrying out financial services in the EU payments, e-money and insurances sectors and, in limited cases, the banking sector. No BigTech subsidiaries were reported as carrying out financial services in the securities and markets sector.

Guidelines under MiCA
(29/01/2024) ESMA - Consultations Papers on guidelines under MiCA
The European Securities and Markets Authority (ESMA) has published for consultation a set of guidelines: i) draft guidelines on reverse solicitation under the MiCA; ii) guidelines on the conditions and criteria for the qualification of crypto-assets as financial instruments. The aim of these consultation papers is to collect opinion from market participants on the appropriate implementation of MiCA and in particular in relation to certain mandates that have to be developed by December 2024.

Heatmap on the IRRBB standards
(24/01/2024) EBA - Heatmap following the EBA scrutiny on the Interest Rate Risk in the Banking Book (IRRBB) Standards implementation in the EU
The European Banking Authority (EBA) has published the Heatmap following the EBA scrutiny on the IRRBB standards implementation in the European Union (EU), which discloses policy aspects that will be subject to further scrutiny and corresponding actions in the short to medium and long term.

Heatmap following IRRBB implementation in the EU
(24/01/2024) EBA - Heatmap following the EBA scrutiny on the IRRBB Standards implementation in the EU
The European Banking Authority (EBA)  has published the Heatmap following the EBA scrutiny on the Interest Rate Risk in the Banking Book (IRRBB) standards implementation in the European Union (EU), which discloses policy aspects that will be subject to further scrutiny and corresponding actions in the short to medium and long term. As a short and medium-term objective, more effective supervisory and risk management tools are proposed. In the medium and long term, the EBA's objectives are regulatory issues under review, such as further analysis of the key impacts of IRRBB regulatory products.

Management of ESG risks
(18/01/2024) EBA - Consultation Paper of Draft Guidelines on the management of ESG risks
The European Banking Authority (EBA)  has published a Consultation Paper of Draft Guidelines on the management of environmental, social and governance (ESG) risks. The guidelines set requirements for the internal processes and ESG risks management arrangements that institutions should have in place, to ensure the resilience of the business model and risk profile of institutions in the short (3 years), medium (3-5 years) and long term (at least 10 years). The consultation runs until 18th April 2024. It is planned that the guidelines will be finalised by end 2024, and the application date will be aligned with the CRD6 application date.

Data collection for the benchmarking exercise in 2025
(18/01/2024) EBA - Consultation paper on amendments to the data collection for the benchmarking exercise in 2025
The European Banking Authority (EBA) has published a consultation paper amending the Implementing Regulation on the benchmarking of credit risk and market risk for the 2025 exercise. The most significant change is in the market risk framework, where the EBA is proposing brand new templates for the collection of the internal model approach (IMA) risk measures under the fundamental review of the trading book (FRTB). For credit risk only minor changes are being proposed. The consultation runs until the 27 March 2024.

Set of rules under DORA
(17/01/2024) ESAs - First set of rules under DORA for ICT and third-party risk management and incident classification
The European Supervisory Authorities (ESAs) have published the first set of first set of rules under the Digital Operational Resilience Act (DORA) for Information Communication Technologies (ICT) and third-party risk management and incident classification. This final draft technical standards aimed at enhancing the digital operational resilience of the European Union (EU) financial sector by strengthening financial entities’ ICT and third-party risk management and incident reporting frameworks. The expected date of implementation of the RTS document on ICT risk management framework is 17 January 2025.

Prudent valuation framework
(16/01/2024) EBA - CP on the amendments draft RTS on the prudent valuation framework
The European Banking Authority (EBA) has published a consultation paper where it proposes amendments to the draft Regulatory Technical Standards (RTS) on prudent valuation framework, to address targeted implementation issues. In addition, this document includes a proposal for how to address the mandate introduced by the legislative proposal amending the Capital Requirements Regulation (CRR3). The consultation runs until 16th April 2024.

ML/TF risk factors
(16/01/2024) EBA - Final report on amending GL on ML FT risk factors extending the scope to crypto-asset service providers
The European Banking Authority (EBA) has issued the final report on amending Guidelines on money laundering or terrorist financing (ML/TF) risk factors. The new Guidelines highlight ML/TF risk factors and mitigating measures that crypto-asset service providers (CASPs) need to consider, representing an important step forward in the European Union’s fight against financial crime. The Guidelines will apply from 30 December 2024.

Reporting requirement for market risk
(11/01/2024) EBA - Amendments to the reporting requirements for market risk
The European Banking Authority (EBA) has published amendments to the reporting requirements for market risk. As the implementation of the Fundamental Review of the Trading Book (FRTB) in the EU approaches, the EBA revised the information to be reported on the own funds requirements under the alternative approaches and adds reporting on reclassifications of instrument between the regulatory books. The draft amending implementing technical standards will be submitted to the Commission for endorsement before being published in the Official Journal of the European Union. The technical standards are expected to apply for the first time for the reporting as of 31 March 2025.

Enhancing special resolution regime
(11/01/2024) Gov UK - Enhancing the Special Resolution Regime
The UK Government has published a consultation outlining the UK government's intention to enhance and update the Special Resolution to effectively manage the failure of small banks and minimize risks to public funds. In light of the collapse of Silicon Valley Bank UK in 2023, the Government considers the existing regime to be robust but warns of the need for greater flexibility. The proposal suggests introducing a new mechanism that could transfer a failing small bank to a Bridge Bank or a willing buyer, reducing the reliance on insolvency. The mechanism aims to utilize funds from the banking sector, administered by the Financial Services Compensation Scheme (FSCS), to cover resolution costs, thereby safeguarding taxpayers. The government emphasizes that this enhancement would complement existing resolution powers and depositor protection measures, without imposing upfront financial burdens on banks. The consultation period concludes on March 7, 2024.

Supervisory activities on MiFID II
(11/01/2024) ESMA - ESMA and NCAs to coordinate supervisory activities on MiFID II pre-trade controls
The European Securities and Markets Authority (ESMA) has launched a Common Supervisory Action (CSA) with National Competent Authorities (NCAs), with the objective of assessing the implementation of pre-trade controls (PTCs) by European Union (EU) investment firms using algorithmic trading techniques. PTCs are used by investment firms to carry out checks at order entry to limit and prevent sending erroneous orders for execution to trading venues. Following the May 2022 flash crash, ESMA and NCAs have focused their attention on the implementation of PTCs in the EU, gathering evidence through questionnaires submitted to a sample of EU investment firms.

Risk exposures in real estate
(10/01/2024) ESMA - ESMA explores risk exposures to real estate in EU securities markets and investment funds
The European Securities and Markets Authority (ESMA) has published its first analysis of the exposures the European Union (EU) securities and markets and asset management sector have to real estate. The analysis suggests that i) debt levels in the real estate sector are elevated with wider risk implications from non-bank financial market players and that ii) interlinkages with the banking system are important and arise through entity exposures and activities, the impacts of which on the sector can be transmitted throughout the EU financial system.

Draft documents on the implementation of ESRS
(09/01/2024) EFRAG - Publication of the 3 draft EFRAG ESRS IG documents (EGRAF IG 1 to 3)
The European Financial Reporting Advisory Group (EFRAG) has published for consultation three documents with guidelines for the implementation of the European Sustainability Reporting Standards (ESRS) relating to the following aspects: 1) dual materiality; 2) value chain; 3) detailed reporting requirements (datapoints). Stakeholders can provide feedback by accessing the relevant surveys by 2 February 2024.

Consultation on draft implementing standards
(09/01/2024) ESAs - ESAs consult on draft implementing technical standards specifying certain tasks of collection bodies and certain functionalities of the European Single Access Point
The European Supervisory Authorities (ESAs) have published a Consultation Paper on the draft Implementing Technical Standards (ITS) regarding the tasks of the collection bodies and the functionalities of the European Single Access Point (ESAP). These ITS and the requirements they set out are designed to enable future users to be able to effectively harness the comprehensive financial and sustainability information centralized on the ESAP. Interested parties can submit comments until 8 March 2024 and ESAs should publish a Final Report and submit the draft ITS by 10 September 2024.

Cyber resilience Stress Test
(03/01/2024) ECB - ECB to stress test banks’ ability to recover from cyberattack
The European Central Bank (ECB) is set to conduct a cyber resilience stress test on 109 banks under its supervision in 2024. The scenario assumes a cyberattack that disrupts daily operations, testing banks' emergency procedures, contingency plans, and their capability to restore normal operations. A subset of 28 banks will undergo an enhanced assessment, submitting additional information on their response to the cyberattack. The insights gained will inform the wider supervisory assessment in 2024, with findings discussed during the Supervisory Review and Evaluation Process. The results are expected to be communicated in the summer of 2024.

National Security Framework for 5G Networks and Services
(03/01/2024) MINECO - Public hearing on the draft royal decree approving the national security framework for 5G networks and services
The Ministry of Digital Transformation (MINECO) has released the draft Royal Decree approving the National Security Framework for 5G Networks and Services. This Royal Decree aims to ensure a trustworthy environment for the development and adoption of 5G networks and services, as well as to guarantee the continuous and secure operation of the network and services. Through this publication, specific requirements are established for network and service operators, a diversified market of suppliers is promoted, and the protection of national security is strengthened. Additionally, measures are put in place for the comprehensive and global treatment of network and service security.

 

 

Other publications of interest

 

Delay in upcoming CSRD related standards 
(07/02/2024) EP/Council - Council and Parliament agree to delay sustainability reporting for certain sectors and third-country companies by two years. 
The Council and the European Parliament have reached a provisional deal on a directive on the time limits for the adoption of sustainability reporting standards for certain sectors and for certain third-country undertakings amending the Corporate Sustainability Reporting Directive (CSRD). This agreement will give more time for companies to prepare for the sectorial European Sustainability Reporting Standards (ESRS) and for specific standards for large non-EU companies, which will be adopted in June 2026, two years later than the originally scheduled date. 

Technical package for reporting framework 
(06/02/2024) EBA - The EBA releases technical package for its 3.4 reporting framework
The European Banking Authority (EBA) has published a technical package for version 3.4 of its reporting framework. This package provides the standard specifications that include the validation rules, the Data Point Model (DPM) and the XBRL taxonomies to support the amendments to the reporting and disclosure technical standards on minimum requirement for own funds and eligible liabilities and total loss absorbing capacity (MREL/TLAC), as well as some minor corrections to the technical package on the interest rate risk in the banking book (IRRBB). The DPM Query Tool has also been updated to reflect the current release. 

Requirements when publishing investment recommendations on social media 
(06/02/2024) ESMA - Requirements when posting investments recommendations on social media 
When posting on social media, transparency and accuracy are key to mitigate the risk of market manipulation, especially when making investment recommendations. That's why, if you're a financial influencer, a technical expert, or someone with an interest in financial investments, it's necessary to know the rules established under the Market Abuse Regulation (MAR) and to be able to recognize when you're making an investment recommendation in order to comply with the rules established in the MAR. Failure to do so may result in National Competent Authorities imposing administrative or criminal sanctions that may vary according to the member state for certain types of infringements.

Third country insurers 
(06/02/2024) EC - Prolongation of US provisional equivalence decision (Solvency II) 
The European Commission (EC) has published a draft act that pertains to the renewal of the provisional equivalence determination for the solvency regime in the United States (US) under Solvency II. It highlights that the factual statements regarding the US solvency regime have not changed since the initial decision in 2015, and regular dialogues between US and EU authorities confirm that the criteria for equivalence continue to be met. The decision proposes a renewal of the provisional equivalence from 2026 to 2035, emphasizing the need for regular monitoring and potential reviews based on relevant developments. Additionally, it mentions the EC´s intention to renew provisional equivalence decisions for other third countries after receiving assessments from European Insurance and Occupational Pensions Authority (EIOPA). This draft act is open for feedback until the 5th of March. 

EU´s green industry 
(06/02/2024) EP/Council - Net-Zero Industry Act: Council and Parliament strike a deal to boost EU’s green industry 
The Council and the European Parliament have reached a provisional deal on the regulation establishing a framework of measures for strengthening Europe’s net-zero technology products manufacturing ecosystem, better known as the net-zero industry act (NZIA). The regulation aims at boosting the industrial deployment of net-zero technologies needed to achieve EU’s climate goals, using the strength of the single market to reinforce Europe’s leadership in industrial green technologies. 

Regulation on ESG rating activities 
(05/02/2024) EP/Council - Environmental, social and governance (ESG) ratings. Council and Parliament reach agreement 
The European Council and Parliament have reached a provisional agreement on regulation for ESG ratings to enhance investor confidence in sustainable products. This regulation aims to strengthen transparency and integrity among ESG rating providers and mitigate conflicts of interest. Under the new rules, ESG rating providers will be authorized and supervised by the European Securities and Markets Authority (ESMA), and a lighter registration regime will be introduced for small businesses. The provisional agreement is pending final approval from the Council and Parliament, with the regulation set to take effect 18 months after approval.

Vulnerabilities in the residential real estate 
(01/02/2024) ESRB - ESRB publishes follow-up report on residential real estate sector vulnerabilities 
The European Systemic Risk Board (ESRB) has published a follow-up report on vulnerabilities in the residential real estate (RRE) sectors of European Economic Area (EEA) countries. The ESRB assesses vulnerabilities in the RRE sectors regularly because of their importance for financial and macroeconomic stability. In 2016, 2019 and 2021, the ESRB conducted systematic, forward-looking assessments of such vulnerabilities in the EEA. The most recent assessment focuses on changes in financial stability risks related to RRE markets and macroprudential policy responses adopted since the last assessment at the end of 2021. 

Capital structure 
(01/02/2024) BdE - Circular 1/2024, on capital structure reporting, addressed to banks, credit unions and other supervised institutions 
The Bank of Spain (BdE) has issued a circular comprising five rules, one transitory provision, one repealing provision, and two final provisions, with two appendices. Chapter I establishes the objectives and scope, focusing on information requirements regarding stakes in entities and their capital, applicable to banks, cooperatives, etc. Chapter II regulates the submission of information on these stakes and capital structure. Chapter III sets out rules for presenting this information to the BdE. 

RTS on residual risk 
(01/02/2024) EBA - The EBA consults on draft technical standards on residual risk add-on hedges under the Fundamental Review of the Trading Book 
The European Banking Authority (EBA) consults on draft technical standards on residual risk add-on hedges under the Fundamental Review of the Trading Book (FRTB). The EBA launched a public consultation on its draft Regulatory Technical Standards (RTS) on the conditions for determining whether an instrument attracting residual risk acts as a hedge. These RTS are part of the Phase 1 deliverables of the EBA roadmap on the implementation of the EU banking package in market risk. The consultation runs until 3 May 2024. 

Transition risks 
(01/02/2024) ECB - Risks from misalignment of banks’ financing with the EU climate objectives 
The European Central Bank (ECB) has published a report which focuses on the transition risks stemming from banks’ credit portfolios. Banks that fall within the scope of European Banking Authority (EBA) Implementing Technical Standards (ITS) on Pillar 3 disclosures on environmental, social and governance (ESG) risks will have to disclose the alignment of their credit portfolios by the end of 2024 at the latest, including their degree of deviation from a decarbonization pathway. The methods set out in this report provide a concrete approach for banks to follow in meeting this requirement. 

Approach to enforcement 
(30/01/2024) BoE - PS1/24 – The Bank of England's approach to enforcement 
The Bank of England's (BoE) has published a policy statement (PS) provides feedback on responses to consultation paper CP 9/23 and outlines final policies, including amendments to the Prudential Regulation Authority's (PRA) enforcement approach and procedures relevant to financial market infrastructures (FMIs). It also includes changes to decision-making allocation, supervisory approaches, and Enforcement Decision Making Committee (EDMC) Procedures. Applicable to PRA-authorised entities, senior employees under the Senior Managers and Certification Regime (SM&CR), credit unions, and professional advisers, these policies impact firms, and individuals subject to potential enforcement actions by the Bank and/or the PRA. 

EU alternative investment funds 
(30/01/2024) ESMA - ESMA steps up its monitoring of EU alternative investment funds and sees potential risks in funds exposed to leverage and liquidity mismatches 
The European Securities and Markets Authority (ESMA) has published a report on the European Union (EU) alternative investment funds (AIFs)’ market and an article on the risks posed by leveraged AIFs in the EU. ESMA confirms the risks posed by real estate (RE) funds, in a context of declining volumes of transactions and falling prices in several jurisdictions. Existing liquidity mismatches in AIFs are particularly heightened by the high share of open-ended RE funds, some of which offer daily liquidity. This vulnerability could be systemically relevant in jurisdictions where RE funds own a large share of the RE market. 
New ECB focus areas 
(30/01/2024) ECB - ECB steps up climate work with focus on green transition, climate and nature-related risks 
The European Central Bank (ECB) has decided to expand its work on climate change, identifying three focus areas that will guide its activities in 2024 and 2025: (i) the impact and risks of the transition to a green economy, especially the associated transition costs and investment needs; (ii) the increasing physical impact of climate change, and how measures to adapt to a hotter world affect the economy and (iii) the risks stemming from nature loss and degradation, how they interact with climate-related risks and how they could affect the ECB’s work through their impact on the economy and financial system. 

Exposures to ESG 
(29/01/2024) EBA -  The EBA seeks inputs from credit institutions on the classification methodologies for exposures to ESG risks
The European Banking Authority (EBA) has launched an industry survey to receive input from credit institutions on their methodologies to classify exposures to environmental, social and governance (ESG) risks, as well as on the accessibility and availability of ESG data for this purpose. The objective of the survey is to collect qualitative information on credit institutions’ current practices to inform the EBA’s work on the feasibility of introducing a standardized methodology to identify and qualify exposures to ESG risks. The deadline to respond to the industry survey is 29 March 2024. 

Compendium of market practices 
(29/01/2024) EC -  Platform on Sustainable Finance report on a compendium of market practices
The Platform on Sustainable Finance  (PSF) has published its report on a compendium of market practices. The report focuses on seven stakeholder groups (corporates, credit institutions, investors, insurers, auditors and consultants, small- and medium-sized enterprises, and the public sector), showing that the EU taxonomy and the other sustainable finance tools (e.g., the European Green Bond Standard (EUGBS)) is being used for setting transition strategies, structuring financial transactions, and reporting on sustainability efforts. 

Post Trade Risk Reduction Services 
(26/01/2024) IOSCO - IOSCO seeks feedback on Post Trade Risk Reduction Services
The Board of the International Organization of Securities Commissions (IOSCO) has published a consultation report on Post Trade Risk Reduction Services (PTRRS), which identifies potential policy considerations and risks associated with the use and offering of PTRRS associated with over-the-counter (OTC) derivatives trades, and presents sound practices as guidance to IOSCO members and regulated users of PTRRS. IOSCO is seeking to better assess the risks associated with the increased use of PTRRS and concentration of PTRRS providers, particularly in the areas of portfolio compression and counterparty risk optimization input from market participants on the discussion question in the report as well as the proposed sound practices. Comments on the consultation report should be sent before 1 April 2024. 

FSB 2024 work pogramme 
(24/01/2024) FSB - FSB sets out 2024 work programme 
The Financial Stability Board (FSB) has published its 2024 work programme. One focus of FSB work in 2024 will be to promote the full implementation of the key attributes of effective resolution regimes for financial institutions across all sectors work on resolution, including addressing the lessons learned from the March 2023 banking turmoil. The FSB will take forward implementation of its global regulatory and supervisory framework for crypto-asset activities and continue to monitor the financial stability implications of other digital innovations, including tokenisation and artificial intelligence (AI).

Investor protection in SPACs 
(24/01/2024) SEC - Special Purpose Acquisition Companies, Shell Companies, and Projections 
The Securities and Exchange Commission (SEC) has adopted rules to enhance investor protections in in initial public offerings by special purpose acquisition companies (SPACs) and in subsequent business combination transactions between SPACs and private operating companies. These rules include disclosure requirements for compensation paid to sponsors, conflicts of interest, dilution, and board of directors’ determinations. The rule adopted deems any business combination transactions involving reporting shell companies, provides guidance on underwriter status, and updates guidance on using projections in filings, with additional disclosure requirements for SPAC-related transactions. 

AI innovation package 
(24/01/2024) EC - Commission launches AI innovation package to support Artificial Intelligence startups and SMEs 
The European Commission (EC) has launched a package of measures to support European startups and small and medium-sized enterprises (SMEs) in the development of trustworthy Artificial Intelligence (AI) that respects European values and rules. It contains: i) an amendment of the EuroHPC Regulation to set up AI Factories, ii) a decision to establish an AI Office within the Commission; iii) an EU AI Start-Up and Innovation Communication outlining additional key activities. The Commission is also establishing, with a number of Member States, two European Digital Infrastructure Consortiums (EDICs).

Digital pound 
(25/01/2024) BoE- Bank of England and HM Treasury respond to digital pound consultation 
The Bank of England (BoE) and HM Treasury have published their response to the consultation on a digital pound that was launched in February 2023. Response confirms that neither the Bank nor the Government would have access to users’ personal data. Authorities committed to maintaining access to cash for those who prefer it. 
Resource on emissions reporting
(18/01/2024) IFRS - New resource on emissions reporting using GRI and ISSB Standards 
The Global Reporting Initiative (GRI) and the International Financial Reporting Standards (IFRS) Foundation have jointly published a new analysis and mapping resource: Interoperability considerations for GHG emissions when applying GRI Standards and ISSB Standards. The publication illustrates the areas of interoperability a company should consider when measuring and disclosing Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions in accordance with both GRI 305: Emissions and IFRS S2 Climate-related Disclosures.

Resolution plan for some large financial institutions
(17/01/2024) FED - Agencies extend resolution plan submission deadline for some large financial institutions 
The Federal Reserve Board and the Federal Deposit Insurance Corporation have announced that they are extending the resolution plan submission deadline for certain large financial institutions. These companies will be required to submit their resolution plans by March 31, 2025, instead of July 1, 2024. By law, certain large financial institutions must periodically submit resolution plans to the agencies. These resolution plans, also known as living wills, must describe a company's strategy for orderly resolution in the event of material financial distress or failure of the company. 

Aspects of the NSFR
(17/01/2024) EBA - The EBA publishes an analysis of specific aspects of the net stable funding ratio framework 
The European Banking Authority (EBA) has published its Report about some specific aspects of the net stable funding ratio (NSFR) framework. The Report provides an evaluation of the materiality of the specific items analysed as well as an assessment of the impact of possible changes to the current prudential treatment. The EBA conducted mostly a qualitative analysis based on expert judgement, as well as some sensitivity analysis. The items analysed are derivative contracts, securities financing transactions and unsecured transactions with a residual maturity of less than six months with financial customers, holding of securities to hedge derivative contracts. For the items for which data is available, the report provides an evaluation of the materiality of the phenomena as well as an assessment of the impact of possible changes to the current prudential treatment. 

Margin models in non-centrally cleared markets
(17/01/2024) BIS - Streamlining VM processes and IM responsiveness of margin models in non-centrally cleared markets 
The Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) have published a report on streamlining variation margin (VM) processes and initial margin (IM) responsiveness of margin models in non-centrally cleared markets, which sets out recommendations for good market practices to enhance market functioning. The consultative report sets out eight recommendations to encourage the widespread implementation of good market practices but does not propose any policy changes to the BCBS-IOSCO frameworks. The first four recommendations aim to address challenges that could inhibit a seamless exchange of variation margin during a period of stress. The other four highlight good practices for market participants to smoothly implement initiatives to ensure the calculation of initial margin is consistently adequate for contemporaneous market conditions and proposes that supervisors should monitor whether these developments are sufficient to make this model responsive enough to extreme market shocks. Consultation runs until 17 April 2024. 

Improvements in macroprudential guidance
(16/01/2024) ESRB - Improvements to the ESRB macroprudential stance framework 
The European Systemic Risk Board (ESRB) has published a report describing the progress made in the way it assesses macroprudential guidance. The assessment of macroprudential guidance is a conceptual framework for comparing systemic risks with the policy measures taken to address them. This assessment helps the ESRB determine whether the financial system has sufficient resilience and whether a country's macroprudential policy guidance is neutral, lenient, or strict in relation to the risks it seeks to address.

Initial margin in centrally cleared ecosystem
(16/01/2024) BIS - Transparency and responsiveness of initial margin in centrally cleared markets: review and policy proposals 
The Basel Committee on Banking Supervision (BCBS), the Bank for International Sttlements’ Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) jointly published a consultative report on the transparency and responsiveness of initial margin in centrally cleared markets. This consultative report includes ten policy proposals which aim to increase the resilience of the centrally cleared ecosystem by improving participants’ understanding of central cpunterparties (CCPs’) initial margin calculations and potential future margin requirements. The proposal covers: i) CCP simulation tools; ii) CCP disclosures; iii) measurement of initial margin responsiveness; iv) governance frameworks and margin model overrides; and v) clearing member transparency. The consultation runs until 16 April 2024. 

Implementation of the idd
(15/01/2024) EIOPA - EIOPA publishes second Report on the application of the Insurance Distribution Directive (IDD) 
The European Insurance and Occupational Pensions Authority (EIOPA) has published the second Report on the application of the Insurance Distribution Directive (IDD), which examines the key developments regarding the distribution of insurance products in Europe in 2022/2023. Among others, the report examines changes in the market structure of insurance intermediaries, shifts in cross-border activity patterns, any improvements in the quality of advice and selling methods as well as the overall impact of the IDD on small and medium-sized enterprises operating as insurance intermediaries. Additionally, the report looks at whether competent authorities are sufficiently empowered and equipped with adequate resources to carry out their tasks.

 

 



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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