Latest news of financial regulation
Bank capital requirements: The EBA publishes the responses to the consultation on draft ITS on additional liquidity monitoring metrics
The EBA published the responses to the consultation on draft Implementing Technical Standards (ITS) on additional liquidity monitoring metrics. This ITS aims at developing additional metrics other than those used to report liquidity coverage and stable funding requirements with a view to providing supervisors with an adequate toolkit to assess liquidity risk and to facilitate their work in performing reviews of Internal Liquidity Adequacy Assessment Processes (ILAAP).
The OECD publishes the summary report on effective approaches to support the implementation of the G20 high-level principles on financial consumer protection
The OECD published the ninth final version of the summary report on effective approaches to support the implementation of the G20 high-level principles on financial consumer protection. It is based on several meetings of the G20/OECD task force on financial consumer protection, subsequent written consultation with members jurisdictions and other relevant bodies and standard setter bodies (SSB) vice chairs, sub-groups and an informal/public consultation with key stakeholders; including consumer and industry associations.
The ESMA published guidelines on key concepts of the Alternative Investments Fund Managers Directive. The purpose of these guidelines is to ensure common, uniform and consistent application of the concepts that comprise the definition of
The OECD publishes the report of the G20/OECD high-level principles on long-term investment financing by institutional investors
The OECD published the eighth version report of the G20/OECD high-level principles on long-term investment financing by institutional investors developed by the OECD Task Force on Institutional Investors and Long-Term Financing. The Task Force is open to OECD, G20, FSB, APEC members and includes several international organizations.
G-20 Summit: The BCBS publishes its fourth report on progress made in the implementation of Basel III regulatory reforms
The BCBS published its fourth report to G20 Leaders on progress made in the implementation of Basel III regulatory reforms. The report has been prepared for the G20 Leaders' Summit in St Petersburg on 5-6 September.
Full, timely and consistent implementation of Basel III has been accorded high priority by the G20 Leaders. This latest report notes substantial progress with respect to:
the adoption of the Basel standards by Basel Committee member jurisdictions;
the harmonisation of capital regulations across member jurisdictions; and
the finalisation of remaining post-crisis reforms that form part of the Basel regulatory framework.
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G-20 Summit: The FSB publishes a progress report on the oversight and governance framework for financial benchmark reform
The FSB published a progress report on the oversight and governance framework for financial benchmark reform. The FSB has established an Official Sector Steering Group of regulators and central banks to coordinate reviews of existing interest rate benchmarks and to guide the work of a Market Participants Group which will examine the feasiblity and viability of adopting additional reference rates and potential transition issues. The report describes the initial progress and outlines the future work programme.
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The FSB published a report by the FSB Chairman to the G20 Leaders summarising progress in over-the-counter (OTC) derivatives reforms, together with the sixth of the FSB
The FSB published a report prepared for the upcoming G-20 Summit on progress and next steps towards ending
The CPSS and the IOSCO publish implementation of the principles for financial market infrastructures - Level 1 assessment report
The CPSS and the IOSCO published implementation of the principles for financial market infrastructures (PFMIs) - Level 1 assessment report.
The report reviews jurisdictions' progress towards implementing the PFMIs, published by CPSS-IOSCO in April 2012 and which includes risk management standards for financial market infrastructures (FMIs) such as central counterparties, payment systems and securities settlement systems, and trade repositories. This report reviews jurisdictions' progress towards adopting legislation and other regulations and policies that will allow authorities to completely implement the PFMIs into their regulatory frameworks for market infrastructures. This report includes jurisdictions' self-assessments of progress towards adoption. The report indicates that most jurisdictions have begun the process of implementation.
The CPSS and the IOSCO published for public comment a consultative report on the recovery of financial market infrastructures. The report provides guidance to financial market infrastructures such as CCPs on how to develop plans to enable them to recover from threats to their viability and financial strength that might prevent them from continuing to provide critical services to their participants and the markets they serve. It also provides guidance to relevant authorities in carrying out their responsibilities associated with the development and implementation of recovery plans and tools.
Comments should be sent by 11 October 2013.
The FSB publishes a progress report and a peer review report on national implementation of the FSB principles for reducing reliance
The FSB published a progress report on reducing reliance on, and strengthening the oversight of, credit rating agencies (CRAs). The progress report is accompanied by the interim peer review report on national implementation of the FSB principles for reducing reliance on CRA Ratings. The progress report includes a summary of the main findings and recommendations of the peer review, describes ongoing work by standard-setting bodies to reduce references to CRA ratings in international standards, and provides an update on work by the IOSCO to improve transparency and competition among CRAs.
The FSB publishes the second progress report on the implementation of the FSB principles for sound compensation practices and their implementation standards
The FSB published the second progress report on the implementation of the FSB principles for sound compensation practices and their Implementation standards (P&S) by FSB jurisdictions.
The report finds that, while good progress continues to be made, more work needs to be done by national authorities and firms to ensure that implementation of the P&S is effectively leading to more prudent risk-taking behaviour. This will take time, and there is still some way to go before the improvements in compensation practices can be deemed effective and sustainable. The report describes some of the key challenges and evolving practices in the areas of ex ante risk adjustment, alignment of compensation with performance (including maluses and claw-back mechanisms), and the identification of material risk-takers.
The BCBS published FAQs on Basel III monitoring. This document provides answers to technical and interpretive questions raised by supervisors and banks during the Committee
The PRA published a consultation paper on changes to its rules required to implement the EU
The FCA published a consultation paper which sets out proposed changes to the FCA Handbook as a result of the transposition of CRD IV in relation to a large number of investment firms prudentially regulated by the FCA and subject to the CRD.
The proposals in this CP apply principally to the following FCA authorised firms:
- investment firms that are currently subject to the CRD including:
firms that benefit from the current exemptions on capital requirements and large exposures for specialist commodities derivatives firms; and firms that only execute orders and/or manage portfolios, without holding client money or assets.
- Other firms in the investment sector exempt-CAD firms, management companies
Financial Markets: The Financial Conduct Authority publishes guidelines for investment firms using Trade Data Monitors
The Financial Conduct Authority published guidelines for investment firms using Trade Data Monitors. Firms intending to use trade publication arrangements for post-trade reporting are under an obligation to verify that the systems:
- ensure that information to be published is reliable, monitored continuously for errors, and
corrected as soon as errors are detected;
- facilitate the consolidation of data with similar data from other sources;
- make the information available to the public on a non-discriminatory commercial basis at
a reasonable cost.
Alternative Investment Fund Managers: The ESMA issues opinion on practical arrangements for the late transposition of the directive
The ESMA published an opinion on arrangements for the late imposition of the AIFMD.
The deadline for the transposition of the AIFMD into national legislation was 22 July 2013. However, some Member States (MS) may not have fully transposed the Directive by that date. Late transposition can create difficult situations where some competent authorities may not have the legislative framework in place to allow a proper implementation of the rights and obligations provided for in the Directive.
ESMA has identified the following issues which could be addressed via practical arrangements between competent authorities:
- An AIFM in a MS where the Directive has been transposed may not be able to manage an EU AIF established in another MS that has not transposed the Directive.
- AIFMs and competent authorities in MS that have transposed the Directive may have difficulties notifying the marketing of EU AIFs (including AIFs established in a MS other than the home MS of the AIFM) to relevant competent authorities if the host MS has not transposed the Directive.
The ESMA published questions and answers on implementation of the Regulation on OTC derivatives, central counterparties and trade repositories (EMIR).
The purpose of this document is to promote common supervisory approaches and practices in the application of EMIR. It provides responses to questions posed by the general public, market participants and competent authorities in relation to the practical application of EMIR.
Corrigenda to the Capital Requirements Regulation and the Capital Requirements Directive (CRD IV) have been published in the Official Journal. The corrigenda amend the transposition/application dates for the legislative package and the deadlines for the submission by the EBA of technical standards to the European Commission.
The EBA released its second interim report on the regulatory consistency of risk-weighted assets (RWAs) for credit risk in the banking book. This report illustrates the outcomes of the next stage in the EBA's review into RWA consistency in sovereigns, institutions and large corporate exposures, generally referred to as low default portfolios (LDP).
Following the first top down analysis which identified the most obvious drivers of differences, this comparative analysis, conducted with a benchmarking portfolio exercise, found relevant differences in:
- the scope of the application of internal models to LDP counterparts;
- the probabilities of default and the loss given defaults parameters for the same exposure to a counterparty;
- the definition of default and the computation of the default rate used for the calibration of the internal models;
- the computation of risk weights and expected losses on defaulted assets.
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The EBA launched a consultation on draft guidelines on retail deposits subject to different outflows aimed at providing greater harmonisation in the reporting of retail deposits in the EU banking sector.
The proposed Guidelines, which are addressed to institutions and competent Authorities, set out the criteria for identifying retail deposits subject to different outflows during the next 30 days for the purpose of liquidity reporting under the Capital Requirements Regulation (CRR).
The consultation runs until 1 October 2013.
The EBA published a discussion paper on possible treatments of unrealised gains of assets and liabilities measured at fair value, other than including them in Common Equity Tier 1 without adjustment. The input gathered from this discussion paper will assist the EBA in providing its technical advice to the European Commission on this topic.
The consultation runs until 27 September 2013.
- Last Update: Wednesday 11 December 2013, 15:10.