| Source/Date | Brief description |
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European Securities and Markets Authority (ESMA) January 16, 2023 |
ESMA and NCAs to investigate marketing of financial products ESMA is launching a common supervisory action (CSA) with the national competent authorities (NCAs) on the application of MiFID II disclosure rules in relation to marketing communications across the EU. As part of the CSA, NCAs will review whether marketing communications are fair, clear and non-misleading, and how firms select their target audience, especially in the case of riskier and more complex investment products. The CSA will also review marketing and advertising through distribution channels including apps, websites and social media. Finally, the CSA will also be an opportunity to gather information on possible greenwashing. The overall aim of the initiative is to ensure consistent implementation of EU rules and improve investor protection. More information is available here. |
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European Banking Authority (EBA) January 13, 2023 |
EBA publishes its report on liquidity measures The EBA published its report on liquidity measures, which monitors and assesses the liquidity coverage requirements currently in place in the EU. The report shows that the liquidity coverage ratio (LCR) of EU banks decreased in the first half of 2022 but is still above the minimum requirement. The evolution of banks’ LCR levels is particularly relevant given the uncertain economic outlook with high inflation and the process of monetary policy normalization. More information is available here. |
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EBA (European Banking Authority) January 11, 2023 |
EBA publishes peer review on authorization under the Payment Services Directive The EBA published its peer review on authorization of payment institutions and e-money institutions under the revised Payment Services Directive (PSD2). The review generally found increased transparency and consistency of the information required in the authorization process. However, it also identified significant divergences in how national competent authorities (NCAs) assess and how much scrutiny is applied in the authorization process. The report shows, for example, that the average duration of the NCAs’ overall approval process varies widely, ranging from four to 20 months or longer. Therefore, the review also sets out a series of measures to address these divergencies and to harmonize the regulatory framework. |
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European Central Bank (ECB) January 1, 2023 |
Croatia introduces the euro With the introduction of the euro in Croatia, the number of EU member states using the European single currency is now 20. With Croatia joining the euro area, Hrvatska narodna bank, the country’s national central bank, becomes a member of the Eurosystem and a full member of the Single Supervisory Mechanism (SSM). As such, the ECB is now responsible for the direct supervision of the country’s five most significant institutions and responsible for licensing banks and assessing the buyers of qualifying holdings in all banks in Croatia. More information is available here. |
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European Insurance and Occupational Pensions Authority (EIOPA) December 22, 2022 |
EIOPA publishes supervisory statement on inflation EIOPA published a supervisory statement on inflation that addresses inflation-related issues in (re)insurance from a supervisory perspective. The statement supports consistent Solvency II calculations by raising awareness of the main effects of higher inflation that (re)insurance companies should consider. It focuses on the impact of inflation on technical provisions, investments, solvency capital requirements and other elements. National competent authorities (NCAs) are expected to monitor the assessment of the impact of inflation as part of the regular supervisory review. |
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European Insurance and Occupational Pensions Authority (EIOPA) December 20, 2022 |
EIOPA publishes annual report on sanctions under the Insurance Distribution Directive in 2021 EIOPA published its third annual report on administrative sanctions and other measures imposed by national competent authorities (NCAs) under the Insurance Distribution Directive (IDD) in 2021. According to the report, NCAs imposed a total of 1,621 sanctions in a total of 18 member states, a slight decrease compared to with previous years. The vast majority were imposed for violations of the professional and organizational requirements in Article 10 of the IDD, which governs the basic formalities for admission to and maintenance of the profession, as well as ongoing requirements. More information is available here. |
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European Securities and Markets Authority (ESMA) December 15, 2022 |
ESMA provides guidance to applicants under the DLT pilot regime ESMA published a final report with guidelines on standard templates, forms and formats for applying for permission to operate digital ledger technology (DLT) market infrastructure. This includes templates to be used by market participants to apply for specific permissions to operate any type of DLT market infrastructure under the DLT Pilot Regulation (DLTR). The national competent authorities (NCAs) should publish instructions on their website on how to submit this information. ESMA encourages applicants to anticipate the formal entry into force of the Guidelines, which will be on March 23, 2023. More information is available here. |
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European Securities and Markets Authority (ESMA) December 14, 2022 |
ESMA provides guidance for supervision of cross-border activities of investment firms ESMA published a supervisory briefing to ensure EU-wide convergence in the supervision of cross-border activity of investment firms. ESMA previously published a peer review report, on March 10, 2020, in which ESMA noted that home-country supervisors need to significantly improve their approach to licensing, ongoing supervision and enforcement in relation to investment firm’s cross-border activities to retail clients. The current supervisory briefing will help promote supervisory convergence across the EU in line with ESMA’s recommendations in its peer review report. More information is available here. |
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EBA (European Banking Authority) December 13, 2022 |
EBA publishes its roadmap on sustainable finance The EBA published its roadmap outlining the objectives and timeline for the implementation of the mandates and tasks in the area of sustainable finance and ESG risks. The roadmap explains the EBA’'s sequential and comprehensive approach over the next three years to integrate ESG risk considerations into the banking framework and support the EU’'s efforts to transition to a more sustainable economy. As the banking package (CRR/CRD) is currently being revised, the EBA expects to have additional mandates in the area of ESG risks arising from these revised pieces of legislation. These planned new or amended mandates are included in the roadmap to the extent they are expected, based on the legislative proposals. |
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European Insurance and Occupational Pensions Authority (EIOPA) December 13, 2022 |
EIOPA’s first IORPs climate stress test shows material exposure to transition risks EIOPA published the results of its climate stress test of European Institutions for Occupational Retirement Provisions (IORPs) – which manage collective retirement schemes for employers to provide retirement benefits to their employees. In the sector’s first climate stress test, EIOPA sought to assess the resilience of IORPs to a climate change scenario simulating a sudden, disorderly transition to a green economy as a result of delayed policy implementation. The results indicate that IORPs are significantly exposed to the risks of such transition. More information is available here. |
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European Supervisory Authorities (ESAs) December 12, 2022 |
ESAs publish joint advice to the EU Commission on the review of the securitization prudential framework The three ESAs published a joint advice in response to the European Commission’s October 2021 Call for Advice, which is part of the Commission’s capital markets union action plan. The Call seeks advice on the performance of the rules on capital requirements for banks and (re)insurers and on the liquidity requirements for banks relative to the framework’s original objective of contributing to the revival of the EU securitization market on a prudent basis. The ESAs’ proposals in the advice are primarily aimed at improving the consistency and risk sensitivity of the capital framework for banks, while the liquidity framework for banks and the prudential framework for (re)insurance should be maintained in their current form. The ESAs welcome the current review as an opportunity to assess the performance of the current framework and to support the objective of revitalizing the EU securitization market. More information is available here. |
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European Securities and Markets Authority (ESMA) December 8, 2022 |
ESMA publishes its assessment of the Brexit relocation processes ESMA published its peer review report on how the national competent authorities (NCAs) are handling of the relocation of firms to the EU in the context of the UK’s withdrawal from the EU. During the Brexit transition period, ESMA has worked closely with NCAs to provide guidance through opinions, supervisory briefings, and Q&As to support market participants and manage relocation consistently across EU member states. ESMA’s initiatives aimed to increase convergence in NCAs’ individual assessments of relocation activities and authorization applications from relocating firms, including investment firms, trading venues, and fund managers. ESMA will continue to facilitate and coordinate further convergence work at the EU level and expects that work will also be undertaken at the national level to address the findings and recommendations found in the report. A follow-up assessment will be conducted in two years to see how the situation has evolved. More information is available here. |
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European Insurance and Occupational Pensions Authority (EIOPA) December 5, 2022 |
EIOPA outlines approaches to assess the prudential treatment of insurers’ sustainable assets and activities EIOPA published its discussion paper on the regulatory treatment of sustainability risks and is now seeking stakeholder comments on the approaches presented. As sustainability risks can have a material impact on the investment and underwriting activities of insurance undertakings, EIOPA considers it important to ensure that Solvency II adequately reflects sustainability risks. EIOPA is therefore taking a step-by-step approach to assessing whether specific regulatory treatment of assets and activities related to environmental or social objectives would be justified under Solvency II. More information is available here. |
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European Insurance and Occupational Pensions Authority (EIOPA) November 24, 2022 |
EIOPA consults on cyber component in its insurance stress testing framework EIOPA published a discussion paper on methodological principles for insurance stress testing focused on cyber risk, which provides a set of theoretical and practical approaches to support the design phase of potential future insurance stress tests with a focus on cyber risk. EIOPA aims to provide the basis for assessing insurers’' financial resilience under severe but plausible cyber- incident scenarios. Stakeholders are invited to submit their feedback by February 28, 2023, which will be considered in the development preparation of a final methodological paper. |
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European Securities and Markets Authority (ESMA) November 18, 2022 |
ESMA launches consultation for the use of ESG or sustainability-related terms in funds’ names ESMA is looking for input on draft guidelines on the use of ESG or sustainability-related terms in fund names. Therefore, ESMA considers that ESG and sustainability-related terms in fund names should be substantially supported by evidence of sustainability characteristics or objectives that are appropriately and consistently reflected in the fund’s investment objectives and policy in order to not mislead investors. In particular, ESMA is seeking stakeholder feedback on the introduction of quantitative thresholds for the minimum percentage of investments sufficient to support ESG or sustainability-related terms in fund names. More information is available here. |
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European Securities and Markets Authority (ESMA) November 17, 2022 |
ESMA consults on rules for passporting for investment firms ESMA is seeking input on the review of technical standards under Article 34 of MiFID II, which covers the provision of investment services across the EU. Key proposed changes include information that investment firms are required to provide at the passporting stage. The request for input follows an increase in cross-border activities to retail clients provided under the MiFID II free provision of services regime. This increase also requires NCAs to increase their focus on the supervision of cross-border activities and cooperation. The consultation ends on February 17, 2023, and ESMA is expected to publish a final report by the end of 2023. More information is available here. |
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European Supervisory Authorities (ESAs) November 15, 2022 |
ESAs issue joint Call for Evidence on greenwashing The three ESAs issued a Call for Evidence (CfE) on greenwashing to gather stakeholder input on understanding the key characteristics, drivers, and risks associated with greenwashing and to collect examples of potential greenwashing practices. Greenwashing is the unsubstantiated claim to mislead consumers that a company’s products are environmentally friendly or have a better positive environmental impact than they actually do. The CfE is primarily targeted at financial institutions that fall under the supervision of the three ESAs, as well as other stakeholders ranging from retail investors and consumer associations to non-governmental organizations and academia. Submissions should focus on greenwashing risks and incidents that occur in the financial sector and affect financial products or services. The submission deadline is 19 January 19, 2023, and input will be incorporated into the ESA’'s final report, due in May 2024. More information is available here. |
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EBA (European Banking Authority) November 14, 2022 |
EBA publishes final RTS on the measurement of liquidity risks for investment firms The EBA published its final Regulatory Technical Standards (RTS) on specific liquidity measurement for investment firms under the Investment Firms Directive (IFD). These RTS will ensure that all NCAs follow the same harmonized approach when deciding to impose further liquidity requirements on an investment firm. In particular, competent authorities must assess all elements specific to each service provided by the investment firm under the Markets in Financial Instruments Directive (MiFID), as well as other elements that could have a material impact, such as external factors, group structure, operational or reputational risks. |
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EBA (European Banking Authority) November 9, 2022 |
EBA reasserts its commitment to contribute to a more resilient and sustainable financial system The EBA published its environmental statement in the context of the 2022 United Nations Climate Change Conference, highlighting its work to enhance sustainability in the banking sector by improving market transparency and discipline, and by implementing sustainability considerations in risk management practices and supervision. The EBA also presented its priorities and activities to ensure sound management of ESG (environmental, social and governance) risks and appropriate supervision. More information is available here. |
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European Insurance and Occupational Pensions Authority (EIOPA) November 4, 2022 |
EIOPA’s Risk Dashboard indicates overall resilience among insurers EIOPA published its Risk Dashboard based on Solvency II data from the second quarter of 2022. The Risk Dashboard summarizes the main risks and vulnerabilities of the EU insurance sector and is based on data collected from insurance groups and insurance undertakings. The results show that insurer’s exposures to macro and market risks are currently the insurance sector’s biggest concern. In particular, market risks are currently at high levels, with bond and equity market volatility remaining above last year’s average. All other risks categories, such as profitability and solvency, climate as well as digitalization and cyber risks stay at medium levels. |
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European Central Bank (ECB) November 2, 2022 |
ECB sets deadlines for banks to deal with climate risks The ECB published the results of its thematic review, which shows that despite improvements, banks still need to better identify and adequately manage climate and environmental risks. As a result, the ECB is now setting staggered deadlines for banks to progressively meet all the supervisory expectations it previously set out in its guide to climate-related and environmental risks in 2020. By the end of 2023, the ECB expects banks to include climate and environmental risks into their governance, strategy, and risk management. As a final step, by the end of 2024, banks are expected to meet all remaining supervisory expectations related to climate and environmental risks, including full integration into the Internal Capital Adequacy Assessment Process (ICAAP) and stress testing. More information is available here. |
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