News from Europe
EBA publishes final technical standards on valuation in resolution.
The EBA announced that it has published its final draft Regulatory Technical Standards on valuation in resolution. (5/23/2017)
EBA publishes an Opinion on own funds in the context of the CRD CRR review proposal. The EBA announced that it has published an Opinion addressed to EU institutions expressing its views on a number of aspects related to own funds in the context of the European Commission’s proposal to amend the Capital Requirements Regulation and Capital Requirements Directive. In the Opinion, the EBA particularly calls for a possible strengthening of the Authority’s role in assessing issuances of CET1 instruments. In addition, the Opinion elaborates on restrictions on distributions in the context of capital conservation measures and suggests introducing a general anti-circumvention principle. (5/23/2017)
EBA updates on monitoring of CET1 instruments. The EBA announced that it has published its fifth updated list of capital instruments that Competent Supervisory Authorities across the EU have classified as Common Equity Tier 1. The list is for the first time accompanied by a Report, which includes additional information on the underlying objectives of the monitoring update as well as on the consequences of including or excluding instruments in or from the list. (5/23/2017)
Commission issues country-specific economic recommendations. The European Commission announced that it has set out economic policy guidance and called on Member States to pursue structural reforms, boost investment and strengthen public finances. (5/22/2017)
ESMA clarifies "traded on a trading venue" under MiFID II. ESMA announced that it has issued an opinion regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). (5/22/2017)
Euro area financial integration stalls during 2016. The European Central Bank announced that, according to its annual report on Financial Integration in Europe, overall financial integration in the euro area stalled in 2016. (5/19/2017)
EBA consults on its guidance for the use of cloud computing. The EBA announced that it has launched a consultation setting out its guidance for the use of cloud service providers by financial institutions. The EBA Recommendations intend to clarify the EU-wide supervisory expectations if institutions intend to adopt cloud computing, so as to allow them to leverage the benefits of using cloud services, while ensuring that any related risks are adequately identified and managed. The consultation runs until August 18, 2017. (5/18/2017)
ESMA finds improvements in regulators’ supervisory practices concerning MiFID rules on fair, clear and not misleading information. ESMA announced that it has published a Follow-up Report on the actions undertaken by ten National Competent Authorities in addressing deficiencies identified in the 2014 Peer Review on MiFID Conduct of Business rules relating to fair, clear and not misleading information. (5/18/2017)
EBA publishes final Guidelines on credit institutions credit risk management practices and accounting for expected credit losses. The EBA announced that it has published today its final Guidelines on credit institutions’ credit risk management practices and accounting for expected credit losses. These Guidelines aim at ensuring sound credit risk management practices associated with the implementation and on-going application of the accounting for expected credit losses. (5/12/2017)
EBA publishes final guidelines to assess ICT risk. The EBA announced that it has published its final Guidelines on the assessment of the Information and Communication Technology risk in the context of the Supervisory Review and Evaluation Process. (5/11/2017)
ESMA workshop on the European Single Electronic Format. ESMA announced that it will be holding a workshop on the European Single Electronic Format on June 6, 2017. (5/11/2017)
FCA releases findings of review of advice suitability. The UK Financial Conduct Authority published the results of its review of the suitability of pensions and investment advice. The review found that the vast majority of the advice it examined complied with the FCA’s suitability rules, while almost half of the advice it studied failed to comply with the FCA’s disclosure rules. (5/18/2017) FCA press release.
Regulation round-up. The FCA published the May 2017 edition of its Regulation round-up. (5/18/2017)
FCA consults on guidance for its approach to the review of insurance business transfers. The FCA requested comments on proposed guidance that would establish its approach to reviewing insurance business transfer schemes under Part VII of the Financial Services and Markets Act 2000. Comments are due on or before August 15, 2017. (5/15/2017) FCA press release.
PRA updates its strengthening accountability regime. The Prudential Regulation Authority published a policy statement that establishes final rule amendments to the Senior Managers and Certification Regime and Senior Insurance Managers Regime, which set out the PRA’s expectations on the duty of responsibility, apply certain Conduct Rules/Conduct Standards to those non-executive directors who are not approved persons under the regimes, and create a new streamlined regime for firms in run-off, among other changes. The PRA also updated its supervisory statements on strengthening individual accountability in banking and insurance, as well as its statement of policy on conditions, time limits and variations of approval, to reflect the amendments. (5/12/2017) PRA press release.
FCA launches strategic review of retail banking business models. The FCA announced the commencement of a strategic review of the business models used in the retail banking sector in an effort to assess the impact of changes to these models on competition and conduct. The FCA will engage with relevant financial service providers during May and June 2017 before requesting information from firms, and expects to publish an update during the second quarter of 2018. (5/11/2017) FCA press release.