BANKING

Final EBA guidelines on security measures for operational and security risks under PSD2

The EBA has published its final report on guidelines on the security measures for operational and security risks under the Directive on payment services in the internal market (PSD2). The guidelines are set out in chapter 3 of the report and have been developed by the EBA, in close co-operation with the European Central Bank, under a mandate set out in Article 95(3) of PSD2. The guidelines aim to ensure that payment service providers have in place appropriate security measures to mitigate operational and security risks and will apply from 13 January 2018.

EBA, 12 December 2017

 

PRA policy statement on Pillar 2A capital requirements and disclosure

The PRA has published a policy statement which sets Pillar 2A capital for risks that are not captured, or not fully captured, under the Capital Requirements Regulation (CRR). The statement is relevant to banks building societies and PRA-designated investment firms. The policy statement adjusts the Pillar 2A capital framework to set a clear market-wide expectation and provide a greater level of clarity, transparency and consistency. The changes will take effect from 1 January 2018.

Two appendices have also been published: a statement of policy updating  the PRA's methodologies for setting Pillar 2 capital and an update on 'The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP.

Bank of England, PRA, 12 December 2017

 

European Commission proposes new EU-wide penalties for money laundering

The Civil Liberties Committee of the European Parliament has agreed new measures to tackle money laundering and narrow the scope of organised crime. Put forward by the EU Commission in December 2016, the proposal is part of a larger legislative package aimed at fighting terrorism financing as well as other forms of organised crime. In addition to setting minimum rules for the making of money laundering a crime across the EU, the proposal introduces EU-wide definitions of money laundering related crimes and seeks an EU-wide minimum term of imprisonment of at least two years in cases with aggravating factors, such as organised crime.

European Commission, 11 December 2017

INSURANCE

PRA consults on Solvency II Internal models

The PRA has published a consultation paper prooposing updates to its guidance on the model change process under the Solvency II Directive, model change policies and reporting of minor model changes. Proposals include:

  • An update to its supervisory statement on changes to internal models used by UK insurance firms to introduce an additional annual reset of minor model change accumulations for minor model change accumulations
  •  Clarification of its expectation relating to the scope of firms' model change policies by updating its supervisory statement on Solvency II: internal models – assessment, model change and the role of non-executive directors.
  • Changes to the requirements on minor model change reporting.

The consultation closes on 20 March 2018.

Bank of England, PRA, 12 December 2017

 

EIOPA publishes template Insurance Product Information Document EIOPA has published an editable template for the insurance product information document (IPID or PID). From February 2018, the IPID will have to accompany all non-life insurance policies. The new rules will ensure consumers are able to make informed decisions when buying non-life insurance products such as car, travel or house insurance.

EIOPA, 12 December 2017

               INVESTMENT AND FUNDS

European Commission announces action plan on green finance

The European Commission has published a speech given by Vice President Valdis Dombrovskis, European Commissioner for Financial Stability, Financial Services and Capital Markets Union (CMU), which includes an announcement that the Commission will present an action plan to promote green finance. The action plan will include a number of initiatives including introducing a common classification system to sustainable finance, to help investors choose green products. A press release has also been published which details a further initiative of the action plane, to incorporate social, environment and governance factors into the mandate of supervisory authorities, to enable them to monitor how financial institutions identify, report, and address environmental, social and governance risks.

European Commission, 12 December 2017

 

FCA Market Watch issue 55

The FCA has published its December issue of Market Watch, its newsletter covering market conduct and transaction reporting issues. Market provides reminders to firms on the following areas:

  • Transaction reporting at the block or allocation level
  • Applicable Legislation
  • DRSP Supervision forms
  • Application of the Market Abuse Regulation to Emission Allowance Market Participants

FCA, December 2017

 

GFMA key principles for cybersecurity penetration testing framework

The Global Financial Markets Association (GFMA) has published a set of principles to guide the development of a commonly accepted framework for cybersecurity penetration testing. GFMA states that penetration testing allows firms to evaluate their systems and the controls to identify and remedy vulnerabilities, thereby strengthening their infrastructure against cyber threats

GFMA, 12 December 20167