Latest news of financial regulation
Commission implementing regulation (EU) 2016/165 has been published in the Official Journal of the EU
09 February 2016
Commission implementing regulation (EU) 2016/165 of 5 February 2016 laying down technical information for the calculation of technical provisions and basic own funds for reporting with reference dates from 1 January until 30 March 2016 in accordance with Directive 2009/138/EC of the European Parliament and of the Council (Solvency II) has been published in the Official Journal of the EU.
This Regulation shall enter into force on 29 February 2016.
05 February 2016
The European Securities and Markets Authority (ESMA) published translations of its Guidelines on complex debt instruments and structured deposits.
08 February 2016
The European Securities and Markets Authority (ESMA) and the European Central Bank (ECB) concluded a Memorandum of Understanding (MoU) that will allow the exchange of information and cooperation to help both authorities in fulfilling their respective mandates.
This MoU describes in general terms how the authorities will cooperate with one another in the performance of their respective tasks and mandate under European Union law including in relation to financial institutions and markets. The framework proposed by the MoU covers cooperation in the field of statistics, risk management, supervision, market infrastructures and regulation.
04 February 2016
The European Securities and Markets Authority (ESMA) issued an update of its Question & Answers (Q&A) on practical questions regarding the European Markets Infrastructure Regulation (EMIR).
The updated Q&A includes new answers regarding CCP’s default management, competent authorities’ access to trade repository data and reporting of notional in position reports.
EBA issues an opinion expressing its dissent over EC proposed amendments to the MREL technical standards
09 February 2016
The European Banking Authority (EBA) issued an opinion to the European Commission expressing its dissent over some of its proposed amendments to the EBA final draft Regulatory Technical Standard (RTS) on the criteria for setting the minimum requirement for own funds and eligible liabilities (MREL) and encouraging the prompt adoption of the standard.
04 February 2016
The European Banking Authority (EBA) published an opinion specifying the general principles and timelines for the implementation of the regulatory review of the internal ratings-based (IRB) approach. The aim of the opinion is to provide guidance and clarity to both Competent Authorities and institutions on the planned review and its implementation. The opinion is supported by a report, which summarises the feedback received from the public consultation on the EBA discussion paper on the future of the IRB approach.
09 February 2016
The Commission proposed a one year extension to the entry into application of the revised Markets in Financial Instruments Directive, or MiFID II. This is to take account of the exceptional technical implementation challenges faced by regulators and market participants.
The new deadline is 3 January 2018.
EBF Comments on the Public Consultation on Impacts of Maximum Remuneration Ratio under Capital Requirements Directive 2013/36/EU (CRD IV), and Overall Efficiency of CRD IV Remuneration Rules
Complying with the maximum ratio rule generates problems of competitiveness in many cases for a banking group. The uneven playing field leads to distorted competition which affects not only highly specialised banking positions but also positions in control and support functions which are important for the firm’s regulatory stability such as finance, risk or legal. The regulatory constraints of the financial services sector push highly skilled professionals to migrate to unregulated industries and firms.
EBF Comments on the BCBS Consultative Document on Capital Treatment for "Simple, Transparent and Comparable" Securitization
The European Banking Federation (EBF) welcomes the initiative of the Basel Committee on Banking Supervision (BCBS) to adjust the capital treatment for “simple, transparent and comparable” (STC) securitisation. As stated in our comments on the consultation paper to criteria for identifying STC securitisation, developed jointly by the BCBS and the International Organization of Securities Commissions (IOSCO), a functioning securitisation market is essential to support economic development, and for providing sufficient credit to companies. To ensure a functioning securitisation market it is of great importance that a securitisation with lower structural risk gets a lower capital surcharge.
EIOPA publishes an opinion on the application of a combination of methods to the group solvency calculation
27 January 2016
The European Insurance and Occupational Pensions Authority (EIOPA) published an Opinion on the application of a combination of methods to the group solvency calculation.
According to the Solvency II Directive, the group solvency calculation can be carried out on the basis of a consolidation method (Article 320), a deduction and aggregation method (Article 233) or a combination of both methods, subject to the group supervisor’s approval.
The Opinion is of relevance for insurance groups that use the combination of methods, in particular those comprising undertakings situated in third countries whose solvency regimes are considered equivalent to Solvency II.
The Opinion aims to clarify certain issues related to the application of the combination of methods, such as the determination of the basis for tier limits used in the assessment of the own funds' eligibility or certain aspects to be taken into account by the group supervisor when deciding on the use of a combination of methods.
ESMA launches a consultation on MAR guidelines regarding market soundings and delayed disclosure of inside information
28 January 2016
The European Securities and Markets Authority (ESMA) launched a public consultation on draft guidelines clarifying the implementation of the Market Abuse Regulation (MAR).
MAR strengthens the existing market abuse framework by extending its scope to new markets, platforms and trading behaviours. It contains prohibitions for insider dealing and market manipulation, and provisions to prevent and detect these.
ESMA is seeking stakeholder’s feedback on draft guidelines:
- for persons receiving market soundings (MAR introduces a detailed regime for “market soundings”);
- on legitimate interests of issuers to delay disclosure of inside information (MAR provides the possibility, under certain circumstances, to delay the disclosure of insider information) and on situations in which the delay of disclosure is likely to mislead the public.
Consultation will run until 31 March 2016.
02 February 2016
The European Securities and Markets Authority (ESMA) published a statement providing details of its work on closet index tracking funds.
Closet indexing, also known as index hugging, refers to the practice of fund managers claiming to manage portfolios actively when in reality the fund stays close to a benchmark. ESMA is concerned the practice may harm investors as they are not receiving the service or risk/return profile they expect based on the fund’s disclosure documents while potentially paying higher fees compared to those typically charged for passive management.
01 February 2016
The European Securities and Markets Authority (ESMA) published a consolidated Questions and Answers (Q&A) on the application of the Undertakings for the Collective Investment in Transferable Securities Directive (UCITS).
The consolidated Q&A include new questions on additional documents funds need to provide for UCITS V.
01 February 2016
The European Securities and Markets Authority (ESMA) published draft regulatory technical standards (RTS) on settlement discipline which ESMA has to deliver for the implementation of the Central Securities Depository Regulation (CSDR).
The CSDR harmonises the authorisation and supervision of EU central securities depositories. It also introduces a mandatory buy-in and other settlement discipline measures to tackle settlement fails. ESMA’s RTS includes details on:
a. Measures for preventing settlement fails, through various processes and functionalities, such as:
- automated matching;
- partial settlement;
- hold and release mechanism.
b. Measures for monitoring and addressing settlement fails, in particular:
- the cash penalties mechanism;
- the buy-in process.
The European Commission has now three months to endorse the RTS, followed by a non-objection period of the European Parliament and Council. These rules will then enter into force two years after their publication in the Official Journal of the EU. This will give enough time to relevant stakeholders to implement the changes needed to comply with the CSDR.
Directive (EU) 2016/97 of the European Parliament and of the Council on insurance distribution has been published in the Official Journal of the EU
02 February 2016
Directive (EU) 2016/97 of the European Parliament and of the Council on insurance distribution has been published in the Official Journal of the EU.
This directive lays down rules concerning the taking-up and pursuit of the activities of insurance and reinsurance distribution in the Union. However, it is aimed at minimum harmonisation and should therefore not preclude Member States from maintaining or introducing more stringent provisions in order to protect customers.
The directive will not apply to ancillary insurance intermediaries carrying out insurance distribution activities when, for example, the insurance is complementary to the good or service supplied by a provider, where it covers damage to, or loss of, baggage and other risks linked to travel booked with that provider, or where the amount of the premium paid for the insurance product does not exceed EUR 600 calculated on a pro rata annual basis.
This Directive shall enter into force on 22 February 2016.
Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 23 February 2018.
29 January 2016
The European Securities and Markets Authority (ESMA) published its opinion on the draft Implementing Regulatory Standard (ITS) on main indices and recognised exchanges under the Capital Requirements Regulation (CRR).
The opinion details the proposed changes which it has sent for endorsement to the European Commission. The CRR requires the ESMA to define main indices and recognised exchanges as these are used in the specification of eligible collateral which in turn is important for the calculation of credit risk by the credit institutions and investment firms to which the CRR applies.
28 January 2016
The following Commission regulations under the Capital Requirements Directive (CRD IV) and Regulation (CRR) have been published in the Official Journal of the EU:
- Commission delegated regulation (EU) 2016/98 supplementing CRD IV with regard to regulatory technical standards for specifying the general conditions for the functioning of colleges of supervisors;
- Commission implementing regulation (EU) 2016/99 laying down implementing technical standards with regard to determining the operational functioning of the colleges of supervisors according to CRD IV;
- Commission implementing regulation (EU) 2016/100 laying down implementing technical standards specifying the joint decision process with regard to the application for certain prudential permissions pursuant to CRR
- Commission delegated regulation (EU) 2016/101 supplementing CRR with regard to regulatory technical standards for prudent valuation under Article 105(14)
20 January 2016
The European Banking Authority (EBA) launched a public consultation on draft Guidelines on implicit support for securitisation transactions.
The draft Guidelines propose an objective test for the definition of arm's length conditions and for assessing when a transaction is not structured to provide support. Furthermore, guidance is provided on those elements that should be considered when assessing whether a transaction is not structured to provide support and on the notification requirements applicable to such transactions. Finally, the draft Guidelines include provisions to avoid a scenario whereby support is provided on behalf of the originator by another entity.
The consultation will run until 20 April 2016.
EC publishes report on the review of the appropriateness of the definition of "eligible capital" under CRR
26 January 2016
The European Commission published report on the review of the appropriateness of the definition of “eligible capital” pursuant to Article 517 of Regulation (EU) No 575/2013 (Capital Requirements Regulation - CRR).
The report fulfils the obligation laid down in Article 517 of the CRR, according to which the Commission shall review and report to the European Parliament and the Council on the appropriateness of the definition of “eligible capital” being applied for the purposes of Title III of Part Two and Part Four of the CRR and whether deemed appropriate, submit a legislative proposal. The report is based on the opinion issued by the European Banking Authority (EBA) in consultation with national competent authorities on 17 February 2015.
EP adopts a non-legislative resolution on stocktaking and challenges of the EU Financial Services Regulation
27 January 2016
The European Parliament (EP) adopted a non-legislative resolution on impact and the way forward towards a more efficient and effective EU framework for Financial Regulation and a Capital Markets Union.
Among other things, the EP calls on the Commission services to complete the first assessment by the end of 2016 and to report on the overall impact on the following:
- The effects on the different financial sectors and on non-financial entities;
- Possible gaps and loopholes;
- The actual and expected economic effects, as well as the competitiveness of the European financial sector in the world;
- The possibilities of benefiting the real economy, including SMEs, consumers and employment.
- Last Update: Thursday 11 February 2016, 15:35.
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