FSB publishes framework for valuing repo collateral. The Financial Stability Board published “Regulatory Framework for Haircuts on Non-centrally Cleared Securities Financing Transactions.” The Framework consists of qualitative standards for market participants to use as they calculate haircuts on the collateral they hold and numerical haircut floors that would apply to non-centrally cleared securities financing transactions in which financing against collateral other than government securities is provided to entities other than banks and broker-dealers. In publishing the Framework, the FSB proposes to apply the numerical haircut floors to non-bank-to-non-bank transactions to ensure that shadow banking activities are fully covered. Comments should be submitted by December 15, 2014. (10/14/2014) FSB press release.
Systemic test. US and UK financial industry regulators engaged in a simulated exercise to test the understanding, communication and cooperation between the two countries in the event of failure of a global, systemically important bank. (10/13/2014) FDIC press release.
Investment funds. Reuters quoted the head of the Financial Stability Board, Bank of England Governor Mark Carney, as saying that the global regulatory body will soon turn its attention to investment funds. (10/12/2014) Investment funds.
IOSCO consults on the custody of collective investment scheme assets. The International Organization of Securities Commissions published a consultation report on Principles regarding the Custody of Collective Investment Schemes’ Assets. The report is aimed at gathering the views of investment managers, custodians, institutional investors and other interested parties on the development of a set of principles for the custody of collective investment schemes’ assets. Comments should be submitted by December 10, 2014. (10/10/2014) IOSCO press release.
Basel Committee proposes revised corporate governance principles for banks. The Basel Committee published a consultation on a set of revised guidelines on corporate governance at banks. The proposed guidelines would strengthen risk governance guidance; emphasize the importance of the board’s collective competence; provide guidance for bank supervisors in evaluating the processes used by banks to select board members and senior management; and recognize that compensation systems form a key component of the governance and incentive structure. (10/10/2014) BIS press release.
Basel Committee guidance on leverage ratio. The Basel Committee issued frequently asked questions and answers on the Basel III leverage ratio. (10/7/2014)BIS press release.
Basel Committee publications on operational risk capital. The Basel Committee published for comment a revised standardized approach for measuring operational risk capital. Comments should be submitted by January 6, 2015. It also published a review of banks’ implementation of the 2011 Principles for the Sound Management of Operational Risk. (10/6/2014) BIS press release.
Basel adoption update. The Basel Committee published an updated progress report on the adoption of the Basel regulatory framework. (10/3/2014) BIS press release.
IOSCO publishes risk outlook. The International Organization of Securities Commissions published the IOSCO Securities Markets Risk Outlook 2014-2015. The Outlook is a forward-looking report focusing on identifying potential risks in securities markets. (10/1/2014) IOSCO press release.
IOSCO research note on financing solutions for SMEs. The International Organization of Securities Commissions published a research note on recent examples of capital market solutions in developed and emerging markets that have contributed to the financing of small and medium enterprises (SME) and infrastructure projects. The research note was prepared for the G20 Finance Ministers and Central Bank Governors. It describes innovative structures and products in equity capital markets, debt capital markets, securitization and pooled investment vehicles that provide practical solutions to broadly recognized challenges for financing of SMEs and infrastructure projects. (9/30/2014) IOSCO press release.