On the domestic front:
Central Bank – Macro-Financial Review
The Central Bank has issued "Macro-Financial Review 2013". This Review contains an overview of the current state of the macro-financial environment and an assessment of key risks to financial stability in Ireland.
The aim of the Review is twofold: (i) to help the public, financial-market participants and international and national authorities better evaluate financial risks; and (ii) to promote informed dialogue on the financial system’s strengths and weaknesses and efforts to strengthen its resilience.
The Review is available on the Central Bank website.
Central Bank – Annual Performance Statement – Financial Regulation
The Central Bank has issued its "Annual Performance Statement on Financial Regulation 2012-2013".
This report contains updates in relation to: Financial Institutions Supervision, markets supervision; consumer protection; enforcement and regulatory actions; policy and risk; regulatory transactions; internal audit; and organisational changes.
The Annual Performance Statement is available on the Central Bank website.
Central Bank – Intermediary Times
The Central Bank has issued:
- Issue 2 of Intermediary Times – a special edition newsletter for brokers/retail intermediaries. This newsletter covers topics including (i) the forthcoming amendment to the professional indemnity insurance (PII) levels that insurance/reinsurance intermediaries are required to hold; and (ii) clarification in relation to the inclusion of a specified retroactive date on a PII policy.
- Issue 3 of Intermediary Times - this newsletter covers the changes to the Annual Return, an update on Ireland’s EU Presidency, Regulatory Notices for firms and details of the Central Bank's next Roadshow.
Department of Jobs, Enterprise and Innovation – Consultation on Implementation of Consumer Rights Directive
The Department of Jobs, Enterprise and Innovation have published a Consultation paper on the implementation of the Consumer Rights Directive (2011/83/EU) (the Directive). The Directive must be transposed into national law by EU Member States by 13 December 2013 and must be applied in Member States from 13 June 2014.
Most of the provisions of the Directive apply only to off-premises contracts (contracts concluded away from the trader's premises, such as in the consumer's home or workplace), and distance selling contracts (contracts concluded by means of distance communication, such as contracts concluded online, over the telephone, or by post).
The Directive, subject to a few minor exceptions, is a maximum harmonisation instrument. This means that Member States cannot go beyond, or add to, the Directive's harmonised provisions in national legislation.
On the international front:
PRA – New webpages for authorisations and supervision sections
The Prudential Regulatory Authority has issued new webpages for authorisation and supervision. The "Authorisations" webpage contains information such as new firm authorisations; approved persons; passporting and variation of permissions.
The "Supervision" webpage contains information on supervisory approach; credit unions; supervisory activities and regulatory action.
PRA – Consultation Paper – Consolidation of Credit Risk Internal Ratings Based Approaches
The Prudential Regulation Authority has issued a consultation paper on the consolidation of legacy Financial Services Authority material relating to internal ratings based (IRB) approaches into a Supervisory Statement.
Key issues covered by the consultation paper include the IRB approach in respect of the following topics: definition of default; probability of default; loss given default; exposure at default; income-producing real estate portfolios; unrated exposures; notification and approval of changes to approved models.
PRA – Updated Webpage on Working with the Financial Conduct Authority
The Prudential Regulation Authority has published an updated webpage on regulatory data and working with the Financial Conduct Authority. The PRA and the FCA work together to ensure the regulatory reporting processes for dual-regulated firms is efficient.
FCA – New Rules for the Platforms Industry
The Financial Conduct Authority has published a policy statement in relation to payments to platform service providers and cash rebates from providers to consumers.
The rules will make the way that investors pay for platforms more transparent. In the future, platforms, in both the advised and non-advised market, will not be allowed to be funded by payments (commonly described as ‘rebates’) from product providers. Instead, a platform service must be paid for by a platform charge which is disclosed to and agreed by the investor.
European Savings Bank Group: Perspectives for EU Financial Instruments for Microfinance and Small & Medium Enterprises
The ESBG has issued a policy briefing which summarises the existing financial instruments of the European Union for Microfinance and SMEs and lay out the perspectives for these instruments to be renewed and enhanced in the 2014-20 period.
The briefing is available on the ESBG website.
European Commission – Consultation on Review of the European System of Financial Supervision
The European Commission has published a consultation on the review of the European System of Financial Supervision.
The European System of Financial Supervision (ESFS) has been in operation for two years. The regulations establishing the European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB) include provisions for the Commission to review their structure and performance within the ESFS and the ESFS as a whole.
The purpose of this consultation is to gather responses to questions about the effectiveness and efficiency of the ESFS and its constituent agencies and also requests suggestions to improve the existing structure.
The Consultation is open until 19 July 2013.
European Parliament - Banking Union: The Single Resolution Mechanism
The European Parliament has issued notes on Banking Union: The Single Resolution Mechanism which is one of the main pillars of the Banking Union project.
The notes examine options for a possible future design of a SRM in more detail and put this mechanism into a broader context.
EBF – Serious Concerns of Europe's Banks re Proposal for an EU Bank Account Directive
The European Banking Federation has published a press release in relation to concerns raised by banks in Europe in relation to the proposal for an EU bank account Directive. This proposal would introduce new rules relating to access to basic payment accounts, transparency and comparability of bank account fees and bank account switching.
The EBF Chief Executive, Guido Ravoet has urged Commissioners to first “determine the effectiveness of the instruments already in place before considering any further legislative interventions and in any case to remain within the boundaries of a what is actually needed by customers.”
EC – Consultation Paper – Reforming the Structure of the EU Banking Sector
The European Commission has published a consultation paper on reforming the structure of the EU banking sector.
The Consultation states that the general objectives of the reform are to establish a stable and efficient banking system that serves the needs of EU citizens and the economy, increases economic growth by reducing instability and improving resource allocation, and provides an EU-coordinated response to enhance the internal market functioning.
The consultation focuses on the key attributes of the structural reform; i.e. the scope of activities, the strength of separation, and the possible institutional scope and is open to all stakeholders.
The Consultation period runs to 3 July 2013.
EC – Webpage in Relation to Proposal for a Directive on Bank Resolution
The European Commission has published a webpage in relation to the Economic and Financial Affairs Council discussions in regards to a proposal for a directive on bank resolution. The webpage, to date, includes details of comments by Commissioner Barnier together with a link to the proposed directive which was issued last June 2012.
FCA – Covered Bond Issuers – Factsheet
The FCA has published a factsheet on covered bond issuers. The factsheet explains the role of the FCA in supervising regulated covered bond programmes and regulated covered bonds, highlights key features of the regime and provides an overview of the FCA’s stress testing of regulated covered bond programmes.
ESMA – Survey on the Review of the European System of Financial Supervision
ESMA has published a survey on the review of the European System of Financial Supervision. The purpose of the survey is to get stakeholder views on the work of the European Supervisory Authorities (European Banking Authority, European Insurance and Occupational Pensions Authority and European Securities and Markets Authority). The survey is available on the ESMA website and the deadline for responses is 21 June 2013.
European Parliament – Press Release – Banking Supervisory System Plans
The European Parliament has published a press release which backs EU banking supervisory system plans.
Under the draft laws which were recently approved, the European Central Bank will supervise the Eurozone's largest banks directly and have a say in supervising other banks.
EBA - Recommends Supervisors Conduct Asset Quality Reviews and Adjust the next EU-wide Stress Test Timeline
The EBA has agreed on recommendations to supervisors to conduct asset quality reviews on major EU banks.
Bank capital positions have been significantly strengthened under the EBA’s recapitalisation exercise but the objective of the asset quality exercises is to review banks’ classifications and valuations of their assets so to help dispel concerns over the deterioration of asset quality due to macro-economic conditions in Europe.
In its statement, the EBA has underlined the importance of taking into account and supporting the work on the review of banks’ assets and, in particular, of ensuring alignment in methodologies and timeline with the balance sheet assessment of the Single Supervisory Mechanism (SSM) to be conducted under the aegis of the European Central Bank.
The set of EBA recommendations and the timeframe for the asset quality reviews and the EU-wide stress test will be published once the timeline of the SSM’s balance sheet assessment is known.
EBA Consultation – Draft Guidelines on Capital Measures for Foreign Currency Lending
The EBA has launched a consultation on draft Guidelines on capital measures for foreign currency lending (FX lending) aimed at providing guidance to national competent authorities on how to deal with the specific risk of FX lending to unhedged borrowers.
The EBA has developed these draft guidelines on the basis of the European Systemic Risk Board (ESRB) Report on FX lending, published in 2011 and has also taken into account the final compromise on the Capital Requirements Regulation and Capital Requirements Directive (CRR/CRD).
The consultation period runs until 23 August 2013.
EBA Consultation – Draft Regulatory Technical Standards on Own Funds
The EBA has launched a consultation on Draft Regulatory Technical Standards (RTS) on own funds (Part III) related to criteria to define broad market indices, the calculation of minority interest and the deduction of indirect and synthetic holdings.
This is the third set of RTS published (Part I was published for consultation in April 2012 and Part II in November 2012). The objectives of this set of RTS are in relation to (i) deduction of indirect and synthetic holdings and (ii) broad market indices.
The consultation period will run until 18 July 2013.
EBA Consultation – Draft Regulatory Technical Standards on Criteria to Identify Categories of Staff whose Professional Activities Materially Impact on an Institutions Risk Profile
The EBA has launched a consultation paper on draft Regulatory Technical Standards (RTS) on criteria to identify categories of staff whose professional activities have a material impact on an institution’s risk profile.
The final comprise on the Capital Requirements Regulation and Capital Requirements Directive (CRR/CRD) provides a mandate for the EBA to set out qualitative and quantitative criteria for the definition of material risk takers, also called “identified staff”.
Staff shall be identified as material risk takers if they meet one or more of the following criteria: (i) Standard qualitative criteria: related to the role and decision-making power of staff members; and (ii) Standard quantitative criteria: related to the level of variable or total gross remuneration in absolute or in relative terms.
The draft Regulatory Technical Standards shall be submitted to the European Commission by the end of March 2014. The consultation runs until 21 August 2013.
ECB Publication - Opinion on the Protection from risks and Separation of Banking Business
The European Central Bank has published an opinion (CON/2013/28) on the protection from risks and separation of banking businesses.
This opinion has been published in response to a request from the German Federal Ministry of Finance and is available on the ECB website.
IOSCO - Final Report on Principles for the Valuation of Collective Investment Schemes
The Board of the International Organization of Securities Commissions (IOSCO) has published the final report on "Principles for the Valuation of Collective Investment Schemes" which contains a list of Principles intended to serve as a basis for both industry practitioners and regulators to assess the quality of regulation and industry practices regarding the valuation of collective investment schemes (CIS).
This final report also emphasizes the importance of independent oversight in the establishment and application of the policies and procedures in order to mitigate the conflicts of interests that CIS operators face.
The key objective underlying the CIS valuation "Principles" is that all investors should be treated fairly.
AFME - Response to Transparency Paper and Position Paper on MiFID Key Council Proposals
The Association for Financial Markets in Europe has responded to a discussion paper on Transparency and a position paper on MiFID key council proposals.
In relation to the Transparency Paper, the AFME state that its members support the regulatory intention to carry out work ”in a way that is as open and accountable as possible” and welcome the general approach to increased transparency in areas such as product information, the manner in which the regulator carries out its functions and the effectiveness of that regulatory activity. The AFME has set out responses to the individual questions posed.
In relation to MiFID Key Council Proposals, AFME has issued responses in relation to reference price waivers; approach to calibration; trading obligation for equities; own capital and matched principal.
Financial Conduct Authority - Statement on Consultation Paper on Restrictions of Unregulated Collective Investment Schemes
The Financial Conduct Authority has published a statement in relation to a consultation paper on restrictions on the retail distribution of unregulated collective investment schemes and close substitutes.
This statement is an on the approach of the FCA to last August’s consultation on proposed restrictions to the marketing of unregulated collective investment schemes (UCIS) and close substitutes. The FCA are working towards publishing a final policy statement as soon as possible this year and will take account of the later publication date when setting the implementation date for any new rules.
Council of the European Union – Latest Compromise Proposals for Markets in Financial Instruments
The European Council has published a note which details the state of play and the legislative package. The issue of access to trading venues and central counterparties (CCP) is still proving contentious.
ESMA - Updated report on Data on Prospectuses Approved and Passported
The European Securities and Markets Authority has published an updated report on data on Prospectuses Approved and Passported. Note that this Report is an amended version of the Report published on 25 September 2012. The previously published Report was amended on 15 May 2013 following the discovery of factual errors in the statistical information in Section III.2.
European Council - Adopts New Rules on Credit Rating Agencies
The European Council has adopted a directive and a regulation amending the EU's rules on credit rating agencies (CRAs). This development follows agreement reached with the European Parliament last November 2012 and subsequent approval by the Permanent Representatives Committee on 5 December 2012.
The directive and regulation amend existing legislation on CRAs in order to reduce investors' over-reliance on external credit ratings, mitigate the risk of conflicts of interest in credit rating activities and increase transparency and competition in the sector.
EBA – New Consultations on Passport Notifications under Articles 35, 36 and 39 of the Proposed Capital Requirements Directive
The EBA has launched two consultations on draft Regulatory and Implementing Technical Standards (RTS and ITS) on passport notifications aimed at specifying the information to be notified to the competent authorities as well as to develop standard forms, templates and procedures underlying the submission of passport notifications.
Information on the consultations is available on the EBA website and they will run until 21 August 2013.
The Council of the European Union – Publication of Proposals for Directives
The Council of the EU has published a Proposal for:
- a Directive of the EP and of the Council on markets in financial instruments repealing Directive 2004/39/EC; and
- a Proposal for a Regulation of the EP and of the Council on markets in financial instruments and amending Regulation [EMIR] on OTC derivatives, central counterparties and trade repositories.
EC - Practical Implementation of the EMIR Framework to Non-EU Central Counterparties
The EC has published a note in relation to the practical implementation of the EMIR framework to non-EU central counterparties. Issues covered in the memo include:
- what CCP's are subject to EMIR recognition approval?
- what are the benefits of being recognised under EMIR?
- how does the EMIR recognition procedure work?
- what is the process for the adoption of equivalence decisions? and
- what is the timeline?
European Commission request for ESMA technical advice under EMIR relating to trade repositories On 24 May 2013, the European Securities and Markets Authority published a request for technical advice from the European Commission on possible delegated acts relating to the procedural rules for taking supervisory measures and imposing fines on trade repositories (TRs) under the Regulation on OTC derivatives, central counterparties and trade repositories (EMIR).
ESMA has direct registration and supervisory powers over TRs under EMIR, including the power to impose fines and periodic penalty payments on TRs. It is invited to provide technical advice to assist the Commission in formulating a Regulation on rules of procedure for the exercise of those powers and on rules on limitation periods. Among other things, the mandate invites ESMA to:
- Reflect on procedures to guarantee the rights of the defence during and on completion of investigations, and advise on a reasonable time limit for submitting written submissions.
- Advise on the procedure for oral hearings.
- Advise on the procedures regarding access to the files for those subject to the investigations.
- Advise on the documents to be submitted by the investigating officer to ESMA, so that ESMA is informed of all relevant facts.
- Advise on the limitation periods for the imposition of penalties and for the enforcement of penalties.
- Reflect on the methods for collecting fines and periodic penalty payments.
ESMA has until 31 December 2013 to deliver its advice to the Commission.
European Parliament – Report on New Agenda for European Consumer Policy
The European Parliament has published a report on the new agenda for European Consumer Policy which will focus on areas including:
- strengthening awareness, enhancing knowledge, safety and consumer rights;
- improving implementation, stepping up enforcement and securing redress;
- aligning rights and key policies to economic and societal change; and
- dispute resolution and redress. EBA: Consultations on Technical Standards on the Assessment and Scenario for Recovery Plans
The European Banking Authority has published the following:
- draft regulatory technical standards on the assessment of recovery plans under the draft directive establishing a framework for the recovery and resolution of credit institutions and investment firms; and
- draft regulatory technical standards on specifying the range of scenarios to be used in recovery plans under the draft directive establishing a framework for the recovery and resolution of credit institutions and investment firms.
The proposed consultation papers are based on the draft Directive establishing a framework for the recovery and resolution of credit institutions and investment firms (the so-called Recovery and Resolution Directive - RRD) as proposed by the European Commission on 6 June 2012.
Comments on the consultations to be submitted by 20 August 2013.