Basel Committee reports on progress of Basel III standards adoption. The Basel Committee on Banking Supervision published its eleventh progress report on the adoption of the Basel regulatory framework, which provides an update on the adoption status of Basel III standards for each member jurisdiction. The report indicates that all member jurisdictions have final risk-based capital rules, liquidity coverage ratio regulations and capital conservation buffers in force; all but one member jurisdictions have issued final rules for the countercyclical capital buffers; nearly all have issued final or draft rules for their domestic systemically important banks framework; and 18 have issued final or draft rules for margin requirements for non-centrally cleared derivatives. (10/19/2016) BIS press release. 

FSB releases methodology for assessing the implementation of Key Attributes of Effective Resolution Regimes. The Financial Stability Board released a methodology for assessing the implementation of the Key Attributes of Effective Resolution Regimes for Financial Institutions in the banking sector. The methodology establishes criteria for adopting or reforming bank resolution regimes in accordance with the Key Attributes. (10/19/2016) FSB press release.

CPMI-IOSCO consultative report on harmonization of OTC derivatives data elements. The International Organization of Securities Commissions and the Committee on Payments and Market Infrastructures requested comments on their consultative report regarding the harmonization of critical OTC derivatives data elements other than the Unique Transaction Identifier and the Unique Product Identifier. The report continues the work of IOSCO, CPMI, and the FSB to develop guidance on harmonizing these data elements to permit the global aggregation of data from OTC derivatives contracts reported to trade repositories. Comments are due on or before November 30, 2016. (10/19/2016) IOSCO press release.

ISDA examines research on clearing for small derivatives users. The International Swaps and Derivatives Association published Key Trends in Clearing for Small Derivatives Users, a research note that analyzes publicly available data on clearing to evaluate concerns about clearing access for smaller derivatives users in the US and the EU. (10/17/2016) ISDA research note. 

Basel Committee publishes final standard on TLAC holdings. The Basel Committee issued a final standard on the regulatory capital treatment of banks’ holdings of instruments that comprise the total loss-absorbing capacity for G-SIBs. Among other things, the final standard requires banks to deduct from Tier 2 capital their holdings of TLAC instruments and certain instruments with subordinated forms of TLAC that are not already included in regulatory capital. The deduction is subject to the thresholds that apply to existing holdings of regulatory capital and an additional 5 percent threshold for non-regulatory-capital TLAC holdings only. The standard will become effective on January 1, 2019. (10/12/2016) BIS press release.

Basel Committee releases policy proposals on regulatory treatment of accounting provisions. The Basel Committee published a consultative document and a discussion paper on the policy considerations related to the regulatory treatment of accounting provisions under the Basel III capital framework. The discussion paper contains policy options for the long-term regulatory treatment of provisions under the new expected credit loss accounting standards. The consultative document proposes to retain the current regulatory treatment of provisions under the standardized and the internal ratings-based approaches for credit risk on an interim basis. Comments are due on or before January 13, 2017. (10/11/2016) BIS press release.