UK regulators publish accountability rules. The UK Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) published the final rules for the Senior Managers Regime, the Certification Regime and new Conduct Rules. The Senior Managers Regime will ensure that senior managers can be held accountable for any misconduct that falls within their areas of responsibility. The new Certification Regime and Conduct Rules aim to hold individuals working at all levels in banking to appropriate standards of conduct. (7/7/2015) FCA press release (final rules). The PRA also published a supervisory statement which sets out its approach to strengthening individual accountability in banking. The supervisory statement applies to all Relevant Authorized Persons. (7/7/2015) PRA press release. The FCA also opened a consultation on amendments to the rules for the certification of individuals involved in wholesale activity, such as traders. The proposal would expand the certification regime to ensure that individuals working in wholesale markets at relevant firms who could pose significant harm to the firm or its customers are subject to the new accountability rules. Comments should be submitted by March 6, 2016. (7/7/2015) FCA press release (consultation).
PRA statement of policy. The PRA issued a statement concerning its policies on approving individuals under Section 59 of the Financial Services and Markets Act 2000 (FSMA), subject to conditions and time limits, and varying approvals under Section 59 of FSMA. The statement applies to banks, building societies, credit unions, and PRA-designated investment firms. (7/7/2015) PRA press release.
EBA advice on securitizations. The European Banking Authority (EBA) published the full text of its advice to the European Commission on a framework for qualifying securitization. The requirements detailed in the report propose a more risk-sensitive approach to capital regulation for long-term securitization instruments, as well as for asset-backed-commercial paper. The report illustrates how the capital charges foreseen in the newly published revision of the Basel securitization framework should be lowered so as to recognize the relative lower riskiness of qualifying products, while always keeping regulatory capital within the perimeter of a prudential surcharge. (7/7/2015) EBA press release.
Moral hazard. Bloomberg reported the European Central Bank will consider “moral hazard” as an element when it considers whether to provide emergency liquidity assistance to lenders. (7/7/2015) Moral hazard.
EBA consults on conditions for capital requirements for mortgage exposures.The EBA published draft Regulatory Technical Standards (RTS) on the conditions that Competent Authorities will consider when tightening capital requirements for mortgage exposures. The proposed RTS illustrate the conditions, as well as financial stability considerations, that would ensure a harmonized approach in setting higher risk weights and higher minimum loss given default values. Comments should be submitted by October 6, 2015. (7/6/2015) EBA press release.
EBA publishes technical standards on independent valuers. The EBA published final draft RTS setting out the general criteria against which valuers should be assessed to determine whether they comply with the legal requirement of independence for the purposes of performing valuation tasks under the Bank Recovery and Resolution Directive (BRRD). (7/6/2015) EBA press release.
UK announces changes to depositor and policyholder protections. The UK PRA announced changes to depositor and policyholder protections provided by the Financial Services Compensation Scheme (FSCS). For the majority of depositors currently covered by the FSCS, the existing level of deposit protection (£85,000) will be maintained for six months before changing to £75,000 after December 31, 2015. (7/3/2015) PRA press release.
UK FCA Pension Wise policy statement. The FCA issued a policy statement making recommendations to the designated guidance providers delivering Pension Wise, which was introduced to assist consumers make informed decisions on the use of their pension savings. (7/3/2015) FCA press release.
European regulators consult on the acquisition of qualifying holdings. The three European Supervisory Authorities (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) opened a public consultation on updated Guidelines for the prudential assessment of acquisitions of qualifying holdings. The Guidelines define common procedures based on the assessment criteria laid down in the European Union legislative framework that establishes how acquisitions and increases of qualifying holdings by natural or legal persons in financial institutions should be assessed. The Guidelines aim to harmonize supervisory practices in the financial sector across the EU and to provide more clarity to proposed acquirers on how they should notify the competent supervisory authorities. Comments should be submitted by October 2, 2015. (7/3/2015) ESMA notice.
EBA publishes final RTS on the BRRD. The EBA published final draft RTS on the Minimum Requirement for Own Funds and Eligible Liabilities, and on the contractual recognition of bail-in. (7/3/2015) EBA press release.
EBA defines functioning of EU banking resolution colleges. The EBA published final draft RTS that specify the operational functioning of the resolution colleges established for those groups that operate on a cross-border basis in the European Economic Area (EEA). The RTS have been developed within the framework established by the BRRD and specify how resolution colleges should function. (7/3/2015) EBA press release.
EBA issues final standards on processes for notifying that a banking institution is failing. The EBA published its final draft RTS on notifications and notice of suspension. The RTS aim at harmonizing the process and content of notifications, as well as the notice of suspension, to be followed when a banking institution operating in the EU is failing or likely to fail. (7/3/2015) EBA press release.
UK FCA annual report. The FCA issued its annual report, which summarizes the agency’s key achievements and challenges from the last year. (7/2/2015) FCA press release.
UK regulator seeks broad deal data. According to Reuters, the FCA will proceed with a controversial request for information from financial institutions concerning their equity and bond deals for the last five-years. Although the final data request has been amended in response to industry objections, many still believe that the information requested is onerous and over-broad. (7/2/2015) Data request.
ESMA proposes inclusion of exchange-traded derivatives in CCP interoperability arrangements. The European Securities and Markets Authority (ESMA) issued a final report on interoperability arrangements between EU-based clearing houses required under the European Markets Infrastructure Regulation (EMIR) and related Guidelines and Recommendations. In its report, ESMA recommends the extension of the EMIR provisions related to interoperability arrangements to exchange-traded derivatives (ETDs). A further extension to over-the-counter derivatives will be assessed at a later stage. (7/2/2015) ESMA notice.
ESMA AML guidance. ESMA issued guidance in the form of frequently asked questions and answers regarding the application of rules on anti-money laundering and terrorist financing to investment-based crowdfunding platforms. (7/1/2015) ESMA notice.
ESMA opinion on Israeli prospectus regime. ESMA published an Opinion on the equivalence of the Israeli prospectus regime. (7/1/2015) ESMA notice.
ESMA draft RTS on prospectus related issues. ESMA published the final report and draft RTS on prospectus related issues under the Omnibus II Directive. The report includes a summary of the main responses received to ESMA’s Consultation Paper on these issues. The draft RTS included in the report specify procedures for the approval of prospectuses, publication of approved prospectuses and dissemination of advertisements and other information relating to an offer or admission of securities to trading. (7/1/2015) ESMA notice.
Bank of England publishes Financial Stability Report. The Bank of England’s Financial Policy Committee (FPC) published its semi-annual Financial Stability Report. The report identified the main risks facing the financial system in the United Kingdom as: the global environment; the reduction in market liquidity in some markets; the United Kingdom’s current account deficit; the housing market in the United Kingdom; consequences of misconduct in the financial system; and cyber attack. Some risks, particularly around Greece and emerging market economies, have increased since December. Some other risks have declined. Notably, some risks associated with low growth in advanced economies moderated as growth prospects in the euro area improved following actions by the European Central Bank. (7/1/2015) Bank of England press release.
FCA statement on FATF’s notice on de-risking. The FCA issued a statement concerning the Financial Action Taskforce’s (FATF) June 26, 2015 notice concerning de-risking. Banks will be particularly interested in the section of the FATF statement about due diligence for correspondent banking relationships. (7/1/2015) FCA press release.
FCA policy developments. The FCA issued a policy development update which notes publications issued since the last edition, provides information about recent Handbook-related and other developments and advises of updated timetables for forthcoming publications. (7/1/2015) FCA press release.
UK pension reform update. The FCA provided an update which summarizes recent pension reforms and possible next steps. The FCA also advised that it has sent all pension and retirement income providers a request for information about any barriers faced by consumers who are seeking to access their pension savings. (7/1/2015) FCA pension reform update.
ESMA reports on MiFID II-MiFIR technical standards. ESMA published its final report on MiFID II-MiFIR draft technical standards on authorization, passporting, registration of third country firms and cooperation between competent authorities. The final report addresses the majority of the draft regulatory technical standards and implementing technical standards on investor protection topics which ESMA is expected to develop. The remaining draft technical standards ESMA is required to develop under MiFID II and MiFIR will be published by the end of 2015. (6/30/2015) ESMA notice.
ESMA guidelines on using alternative performance measures. ESMA published its Final Guidelines on Alternative Performance Measures (APMs) for listed issuers. The final guidelines set out the principles that issuers should follow when presenting APMs in documents which qualify as regulated information and address their labelling, calculation, presentation and comparability. The guidelines are effective from July 3, 2016. (6/30/2015) ESMA notice.
ESMA consults on central securities depositories. ESMA published its second consultation paper on central securities depositories (CSD). The consultation is limited to the provisions contained in the draft RTS concerning the buy-in process. Comments should be submitted by August 6, 2015. (6/30/2015) ESMA notice.
PRA 2015-16 fee rates. The PRA published a policy statement which sets out fee rates to meet the PRA’s 2015-16 Annual Funding Requirement; fee rates for the Special Project Fee (SPF) for Solvency II; fee rates for the SPF for restructuring; and the PRA’s revised Financial Penalty Scheme. (6/30/2015) PRA press release.
FCA discussion paper on smarter consumer communications. The FCA published a discussion paper on how to improve communications between financial firms and consumers. Comments submitted in response to the paper will be considered and feedback published later this year. Comments will also be used to inform the FCA’s interactions with the EU and other UK regulators where appropriate. The FCA will consult later in the year on proposed changes to some of the Handbook disclosure provisions discussed in the paper. Comments should be submitted by September 25, 2015. (6/25/2015) Discussion paper; FCA press release.
EBA issues amended technical standards on reporting of liquidity coverage ratio. The EBA published updated Implementing Technical Standards (ITS) on supervisory reporting of liquidity coverage ratio (LCR) for EU credit institutions. The ITS include templates and instructions to update the LCR reporting framework following the European Commission’s adoption of the Delegated Act on the liquidity coverage requirement. (6/24/2015) EBA press release.
FCA fees and levies policy statement. The FCA published rules for its 2015-16 regulatory fees and levies, the pensions guidance levy, the Financial Ombudsman Service general levy, and the Money Advice Service. (6/23/2015) FCA press release.
ESMA credit rating agency reporting guidelines. ESMA published the guidelines on periodic information to be submitted to ESMA by credit rating agencies registered in the EU. The guidelines will be effective in two months. (6/23/2015) ESMA notice.