| Source/Date | Brief description |
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European Central Bank (ECB) August 21, 2023 |
ECB consults on rules for financial conglomerate reporting of significant risk concentrations and intra-group transactions The draft guide aims to provide consistency, coherence, effectiveness and transparency regarding the approach that the ECB will take once it has been appointed coordinator of a financial conglomerate. In particular, the guide is intended to assist financial conglomerates in setting up the necessary internal processes for reporting significant risk concentrations and intra-group transactions using the templates provided, and to establish technical implementation standards for the supervisory reporting of risk concentrations and intra-group transactions. More information is available here. |
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European Central Bank (ECB) July 28, 2023 |
ECB publishes the results of its 2023 stress test The ECB’s stress test shows that the banking sector in the euro area can withstand a severe economic downturn. The exercise covered 98 (57 large and 41 medium-sized) banks under direct ECB supervision and showed that three years of severe economic stress would cut CET1 ratio of ECB-supervised banks by 4.8 percentage points to 10.4%. Improved asset quality and profitability helped banks stay resilient amidst highly adverse conditions. More information is available here. |
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European Securities and Markets Authority (ESMA) July 27, 2023 |
ESMA and EBA assess implementation of the revised Shareholder Rights Directive (SRD2) In response to a request by the EU Commission, ESMA and EBA published a joint report, in which they assessed the implementation of SRD2. ESMA and EBA identified areas for further progress and provided suggestions for policy action in relation to the Directive’s effectiveness, difficulties in practical application and the appropriateness of the scope of application. Overall, ESMA notes that the current framework for proxy advisors has proven to be robust. At the same time, further efforts need to be made towards common definitions and transparency to streamline communication along the investment chain. More information is available here. |
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European Banking Authority (EBA) July 21, 2023 |
EBA updates on the monitoring of Additional Tier 1, Tier 2 and TLAC/MREL eligible liabilities instruments of EU institutions The EBA’s updated report merges the information of two previous separate reports in this field and adds new recommendations for certain contractual clauses of the corresponding documentation. Overall, the EBA has observed convergence and standardization in terms of drafting of the terms and conditions of the instruments and issuance programs, also as a result of the implementation of previous EBA recommendations. The EBA expects that forthcoming issuances will continue to retain a high level of standardization in their terms and limit complexity. More information is available here. |
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European Insurance and Occupational Pensions Authority (EIOPA) July 20, 2023 |
Supervisors across Europe continue to strengthen POG supervision EIOPA published today a peer review report on product oversight and governance (POG). The peer review has found that most national competent authorities (NCAs) have adapted their supervisory approaches and processes to the supervision of POG requirements in line with the provisions introduced by the Insurance Distribution Directive (IDD) and the POG Delegated Regulation. Based on the peer review, EIOPA issued a set of recommended actions to national supervisors with the objective of building on the existing foundations to further strengthen POG supervision. Considering that several NCAs were already in the process of improving their POG framework, EIOPA expects significant progress to be already visible when going back to NCAs for the initial follow-up after six months. More information is available here. |
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European Banking Authority (EBA) July 19, 2023 |
EBA publishes final guidance on overall recovery capacity in recovery planning The EBA’s new guidelines establish a consistent framework for institutions to assess their financial recovery capability (ORC) during crises. Competent authorities use this assessment to gauge an institution’s ability to recover from various crisis scenarios. The aim is to harmonize ORC practices, improve recovery plans, and enhance crisis preparedness. The guidelines have two sections: one for institutions to set up a reliable ORC framework and one for competent authorities, harmonizing assessment elements both quantitatively and qualitatively. More information is available here. |
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European Securities and Markets Authority (ESMA) July 12, 2023 |
ESMA finds no evidence to ban pre-hedging but warns of associated risk In response to a call for evidence on pre-hedging from 2022, ESMA published its final report on the feedback received. It concludes that pre-hedging is a voluntary market practice which might give rise to conflicts of interest or abusive behaviors but the practice does not warrant a ban at this stage. More information is available here. |
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European Securities and Markets Authority (ESMA) July 12, 2023 |
ESMA consults on rules for crypto markets ESMA published its first of three consultation packages under the Markets in Crypto-Assets Regulation (MiCAR) and invites stakeholders to comment by September 20, 2023. In this package, ESMA is seeking input on respondents’ current and planned activities as well as proposed rules for crypto-asset service providers (CASPs), in particular related to their authorization, identification and management of conflicts of interests and also how CASPs should address complaints. More information is available here. |
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European Banking Authority (EBA) July 12, 2023 |
EBA consults on draft technical standards for crypto assets The EBA launched two separate public consultations. The consultation on complaints handling procedures under the Markets in Crypto-Assets Regulation (MiCAR) is intended to ensure prompt, fair and consistent handling of complaints by holders of asset-referenced tokens (ARTs) and other interested parties. The draft introduces new definitions and requirements related to complaints management, such as the procedure for investigating complaints and communicating a respective outcome. Another consultation involves EU market access for issuers of ARTs and the assessment of qualifying holdings in issuers of ARTs under MiCAR. This is aimed at regulating access to the EU market of ARTs by applicants and persons intending to exercise significant influence on these undertakings via the acquisition of qualifying holdings. |
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European Securities and Markets Authority (ESMA) July 11, 2023 |
ESMA publishes final report on revised technical standards for passporting ESMA’s proposals include targeted amendments to the existing RTS and ITS that would add new information requirements to the list of details investment firms have to provide at the passporting stage under Article 34 of MiFID II. A new investment services and activities passport notification will also provide National Competent Authorities with additional information on firms’ planned or existing cross-border activities. More information is available here. |
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European Securities and Markets Authority (ESMA) July 11, 2023 |
ESMA provides insights into expected sustainability disclosures in prospectuses ESMA issued a public statement on the sustainability disclosure that is expected to be included in prospectuses, setting out its expectations on how the specific disclosure requirements of the Prospectus Regulation in relation to sustainability-related matters in equity and non-equity prospectuses should be satisfied in respect of the Environmental, Social and Governance (ESG) transition. Among other things, ESMA emphasizes the importance of an issuer’s non-financial reporting under the Non-Financial Reporting Directive and the future sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD), especially because such disclosure may be considered material under the Prospectus Regulation and included in issuers’ prospectuses. More information is available here. |
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European Insurance and Occupational Pensions Authority (EIOPA) July 11, 2023 |
EIOPA publishes paper on methodological principles of insurance stress testing of cyber risks The aim of the paper is to set the ground for an assessment of insurers’ financial resilience under severe but plausible cyber incident scenarios. According to EIOPA, the methodological principles are built on relevant and still-evolving regulation and supervisory experience in this area and cover insurers’ own cyber resilience as well as the vulnerabilities related to cyber underwriting risk in order to help in the design phase of future insurance stress tests with focus on cyber risks excluding operational resilience testing, as required under the Digital Operational Resilience Act (DORA). More information is available here. |
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European Securities and Markets Authority (ESMA) July 6, 2023 |
ESMA highlights areas for improvement in firms’ disclosure of cost and charges under MiFID In its statement on the 2022 Common Supervisory Action and the mystery shopping exercise, ESMA identifies five shortcomings of concern. These are (i) significant differences across firms and Member States in the format and content of ex-post disclosures, (ii) differing practices and sometimes no disclosure of information on inducements, (iii) lack of disclosure of implicit costs to clients, (iv) lack of consistency in the way firms illustrate the cumulative impact of the costs and charges on the return of the investment and (v) a disclosure of cost figures only in nominal amounts and not also with corresponding percentages. More information is available here. |
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European Securities and Markets Authority (ESMA) July 6, 2023 |
ESMA and NCAs launch a Common Supervisory Action on sustainability-related disclosures and the integration of sustainability risks According to ESMA, the goal is to assess the compliance of supervised asset managers with the relevant provisions in the Sustainable Finance Disclosure Regulation (SFDR), the Taxonomy Regulation and relevant implementing measures, including the relevant provision in the UCITS and AIFMD implementing acts on the integration of sustainability risks. The main objectives include (i) an assessment of whether market participants adhere to applicable rules and standards in practice, (ii) further information on greenwashing risks in the investment management sector and (iii) the identification of further need for supervisory and regulatory intervention to address the issue. More information is available here. |
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European Central Bank (ECB) June 22, 2023 |
ECB consults on revised guide on internal models The ECB launched a public consultation on the revised guide on internal models, which clarifies how banks should include material climate-related and environmental risks in their models. It also provides clarifications for banks that wish to revert to the standardized approach for calculating their risk-weighted assets. Specifically on credit risk, the guide is supposed to help all banks to move towards a common definition of default and a consistent treatment of massive disposals. The update of the market risk chapter details how to measure default risk in trading book positions. The guide also provides clarifications regarding counterparty credit risk. The consultation ends on September 15, 2023. More information is available here. |
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European Supervisory Authorities (ESAs) June 19, 2023 |
ESAs consult on first batch of DORA policy products The three ESAs launched a public consultation on the first of two batches of policy products under the Digital Operational Resilience Act (DORA). This includes four draft regulatory technical standards (RTS) and one set of draft implementing technical standards (ITS). These technical standards aim to ensure a consistent and harmonized legal framework in the areas of information and communication technology (ICT) risk management, major ICT-related incident reporting and ICT third-party risk management. The consultation runs until September 11, 2023. More information is available here. |
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European Securities and Markets Authority (ESMA) June 17, 2023 |
ESMA publishes its annual report for 2022 In its efforts to promote market integrity, investor protection, and financial stability in the European Union, ESMA’s key achievements in 2022 according to the report include: (i) peer reviews on the supervision of cross-border services, on prospectuses and on the Brexit relocation process, (ii) responses to the geopolitical challenges of the Russian invasion and ensuing the energy crisis and (iii) the first-ever mystery shopping exercise coordinated among multiple NCAs. More information is available here. |
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European Securities and Markets Authority (ESMA) June 17, 2023 |
ESMA launches Call for Evidence (CfE) on sustainability in suitability and product governance ESMA launched a CfE on integrating sustainability preferences into suitability assessment and product governance arrangements under MiFID II. The objective of this CfE is to help ESMA (i) develop a better understanding of how MiFID II requirements are being implemented and applied by firms across the Union and the challenges firms face in their application (ii) gain a better understanding of investor experience and reactions to the inclusion of sustainability factors in investment advice and portfolio management services and (iii) collect information, views and data on main trends on aspects related to the provision of sustainable investment products and services to retail clients. More information is available here. |
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European Insurance and Occupational Pensions Authority (EIOPA) June 13, 2023 |
EIOPA publishes its annual report for 2022 EIOPA’s focus in 2022 was on consumer protection, the quality and effectiveness of supervision, financial stability, support of the transition to a more sustainable economy and the advancement of digital innovation like Open Insurance and the use of block chain. More information is available here. |
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European Supervisory Authorities (ESAs) June 1, 2023 |
ESAs put forward common understanding of greenwashing and warn on risks The three ESAs published their individual progress reports on greenwashing in the financial sector. In the reports, the ESAs put forward a common high-level understanding of greenwashing applicable to market participants across their respective—banking, insurance and pensions and financial markets. The ESAs understand greenwashing “as a practice where sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services. This practice may be misleading to consumers, investors, or other market participants”. More information is available here. |
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European Commission May 26, 2023 and June 20, 2023 |
European Commission publishes its annual activity report 2022 and management plan for 2023 The report and the management plan outline the key results and progress made by the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) towards achieving the EU Commission’s objectives and establish DG FISMA’s main priorities for the next political year, which include, for example, stronger consumer protection action, supporting sustainable and digital finance and strengthening of the EU financial system’s sovereignty and competitiveness. |
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European Supervisory Authorities (ESAs) May 23, 2023 |
ESAs publish their joint annual report for 2022 The annual report outlines the key areas of the ESAs’ joint work in addition to their respective individual work completed in 2022. Besides facilitating the discussions and the exchange of information across the three ESAs, the European Commission, and the European Systemic Risk Board (ESRB), the ESAs’ joint committee focused on issues of cross-sectoral relevance, such as joint risk assessment, sustainable finance, digitalization, consumer protection, securitization, financial conglomerates and central clearing. The Committee’s main deliverables concerned the Sustainable Finance Disclosure Regulation (SFDR) and the Digital Operational Resilience Act (DORA). More information is available here. |
