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22 November 2012

This week in "Brussels"
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Banking Securities Insurance
Asset Management Corporate Governance/Accounting Financial Services Policy
European Council/Parliament Graham Bishop’s Articles and Speeches About this email

Articles from 15 November 2012 - 22 November 2012

Banking

EESC: The banking union must be set up urgently
The current crisis demonstrates that the model of fragmentation and national regulation is ineffective, which is why the EESC urges that powers be handed over in order to bring about uniform and fully reliable supervision.   View Article
FT: Banking union proposals put curbs on ECB
The European Central Bank faces checks on its powers as a single bank supervisor under the latest EU bid to break the deadlocked banking union talks by granting nervous Member States more safeguards against Frankfurt.  View Article
Douglas J Elliott: Key issues on European banking union - Trade-offs and some recommendations
The body of this paper addresses a host of detailed questions about the design of the banking union, laying out the views of different analysts and the proposals from official bodies, as well as providing Elliott's own views and recommendations.  View Article
BCBS: Basel III counterparty credit risk - Frequently asked questions (update of FAQs published in July 2012)
The Basel Committee on Banking Supervision today issued frequently asked questions (FAQs) on Basel III's counterparty credit risk rules.   View Article
Bundesbank/Dombret: Restoring confidence in the financial system
Dombret highlighted three steps necessary to make the system safer: ending too big to fail; paying greater attention to the consistency of regulation; and reviving individual responsibility. "Countries need to implement agreed policies consistently and on schedule, including in particular Basel III."  View Article
EBF response to the final report from the High-level Expert Group on reforming the structure of the EU banking sector
The European Banking Federation has actively engaged with the work of the High-level Expert Group on reforming the structure of the EU banking sector chaired by Erkki Liikanen since its establishment, and therefore welcomes the opportunity to give its input on the final report from the HLEG.  View Article
EACB: Consultation on the recommendations of the High-level Expert Group on reforming the structure of the EU banking sector
Considering that the Liikanen Report contains recommendations to the Commission, EACB has refrained from asking for clarifications and has limited itself to more general remarks, as well as specific comments on the main proposal and other recommendations.  View Article
ESBG common response to the European Commission consultation on the Liikanen Report recommendations
The European Savings Banks Group (ESBG) shared its views and opinions on the Report provided by the High-level Expert Group on banking reform chaired by Mr Liikanen - the "Liikanen Group".  View Article
ABBL comments on the report of the HLEG on reforming the structure of the EU banking sector
The Report's excellent analysis on the merits of the European universal banking model is not followed by the necessary conclusion that any split of banking activities might be counterproductive. The Report highlights the essential points of necessary reforms, most of which are already in the making.  View Article
Plenary Session: Towards common fees for card payments
Future EU rules for card payments should be modelled on those for cross-border bank transfers, to make paying cheap, easy and safe, said MEPs in a resolution adopted on Tuesday.  View Article
EBF welcomes EP motion for a resolution on the implementation of the Consumer Credit Directive
The European Banking Federation (EBF) strongly supports the positive vote of the European Parliament on the motion for a resolution on the implementation of the Consumer Credit Directive, prepared by MEP Birgit Collin-Langen.   View Article
EPC: Belgian best practice shows how to engage small and medium-sized enterprises in the SEPA migration process
There is no valid market research as regards progress among SMEs towards achieving compliance with the SEPA Regulation. The open question is whether SMEs are well aware of the need to adapt their operations in line with the requirements and by the deadlines established with the SEPA Regulation.   View Article
La Moncloa: Spanish Government approves urgent measures to protect most vulnerable mortgage debtors
The Government of Spain aims to prevent those groups most affected by the crisis and those who are evicted from losing their homes. The government also approved action to move forward on developing the asset management company that will facilitate the definitive clean-up of financial entities.  View Article

Securities

Plenary Session: Shadow banking - Balance benefits and risks, say MEPs
Better prudential oversight is needed to reduce shadow banking's systemic risks, without stifling its benefits to the economy, said MEPs in a resolution voted on Tuesday.  View Article
ECON Committee: MEPs asked to back more transparency and regulation for shadow banking
A report by Belgian Social Democrat MEP Saïd El Khadraoui calls for more transparency and regulation. MEPs will debate it in plenary on 19 November and vote on it the following day.  View Article
Greens/EFA: Shadow banking cannot continue to slip under the radar, say MEPs
The EP today adopted a report on shadow banking, calling for tougher EU regulation and more transparency from the sector. The Greens, who have pushed for stricter rules, welcomed the vote. (Includes list of proposals.)  View Article
FSB publishes for consultation initial integrated set of recommendations to strengthen oversight and regulation of shadow banking
These recommendations comprise: (i) An Integrated Overview of Policy Recommendations; (ii) Policy Framework for Strengthening Oversight and Regulation of Shadow Banking Entities; and (iii) Policy Recommendations to Address Shadow Banking Risks in Securities Lending and Repos. Deadline: 14.1.13.  View Article
Spiegel: Beyond regulators' grasp - how shadow banks rule the world
Hedge funds, special-purpose entities and money market funds have all benefited from the low interest rates offered by central banks.   View Article
IOSCO publishes recommendations for securitisation regulation
The International Organisation of Securities Organisations (IOSCO) has published a final report on Global Developments in Securitisation Regulation, which proposes a series of recommendations aimed at ensuring that securitisation markets develop, but on a sound and sustainable basis.  View Article
Bundesbank/Dombret: Introductory statement to the panel discussion, "New regulation on trading with OTC derivatives"
Dombret said that European and national legislators had made good progress in regulating the OTC derivatives markets, but the G20 goal to trade standardised derivatives on exchanges or electronic trading platforms and clear all standardised OTC derivatives through a CCP by end 2012 would not be reached.  View Article
NYT: A step back for derivatives regulation
The American Treasury contends that the market for the exempted derivatives is already stable and transparent enough, and that the new rules could be dangerously disruptive.  View Article
FSA/Wheatley: Improving trust - Client assets and markets regulation in the FCA
Mr Wheatley said that the FCA will also be the UK's securities markets regulator, overseeing billions of pounds of equity and debt funding raised by companies every year through primary markets and the subsequent trading of securities.  View Article

Insurance

EIOPA/Bernadino: Opening speech at EIOPA's second annual conference, "Reflecting on the achievements and preparing for the new challenges"
Bernadino focused in his speech on pensions, insurance regulation and financial stability, and then went on to talk about EIOPA's achievements and challenges.  View Article
EIOPA publishes Guidelines on Complaints-Handling by Insurance Undertakings, translated into all the official EU languages
This publication triggers a transitional period of two months until 15 January 2013, within which national supervisors have to declare whether they intend to comply with the Guidelines or otherwise explain the reasons for non-compliance.  View Article
Insurance Europe publishes key messages on proposed Directive to establish framework for recovery and resolution of credit institutions
Insurance Europe has called on the European Commission to limit the potential use of the proposed "bail-in" mechanism, under which authorities could write down the claims of unsecured creditors of a failing credit institution.   View Article
EIOPA Chair Bernardino interviewed by Patrick Eisele, Portfolio Institutionell (Germany)
Bernadino answered questions i.a. on the Solvency II delay. EIOPA's message, Bernadino said, was that: "We need Solvency II to be implemented. But we also need to bring clarity and certainty to the process".  View Article
CRE: EIOPA still open to Solvency II rule changes for captives
Delays to Solvency II should be viewed as an opportunity to engage with regulators and EIOPA about the implementation of the new rules, especially in relation to captives, according to the executive director of EIOPA, Carlos Montalvo.  View Article
Bloomberg: EU splits leave single insurance rules plan on sidelines
The European Union's 12-year push to introduce a common set of rules for the region's insurance industry is close to being sidelined, as some of the biggest Member States prepare to introduce the regulations piecemeal.  View Article
CRE: Captives still in the dark over Solvency II
"Everything is still uncertain." This is probably not what you want to hear at the start of a captive insurance conference session. But given that it was on 'Solvency II—An update on current developments', it is not altogether surprising, comments Tony Dowding.   View Article
Insurance ERM: Dutch insurers to use ORSA ahead of Solvency II
Dutch insurers will be encouraged to use their own risk and solvency assessment (ORSA) in 2013, before Solvency II is implemented, according to the regulator.  View Article
BMA delays Solvency II capital rules implementation
The Bermuda Monetary Authority (BMA) has said it will delay implementing Solvency II rules on group capital for an undetermined time.  View Article
Risk.net: Calls for EIOPA to clarify non-life catastrophe risk SCR technical specifications
The European Insurance and Occupational Pensions Authority (EIOPA) is facing calls to amend the technical specifications for calculating the non-life catastrophe risk solvency capital requirements (SCR), following concerns that the new specifications are unclear.  View Article
AMICE: European Commission takes mutuals seriously
AMICE welcomes the Commission's recently published "Study on the current situation and prospects of mutuals in Europe” which provides an extensive overview of the role that mutuals play in Europe, and of challenges and barriers that mutuals face in their operations.  View Article
CRE: Environmental risk climbs agenda but mitigation remains muted, finds survey
Environmental issues are the number one emerging risk for mid-sized companies across Europe and a growing concern for all firms, according to research by ACE. But its survey suggests that companies are not on top of the threat and that mitigation efforts remain underwhelming.  View Article
State aid: Commission approves amendments to the restructuring plan of ING
Following an agreement between the European Commission and the Netherlands, the Commission has approved an amended restructuring plan of the Dutch-based financial institution ING under EU state aid rules.   View Article

Asset Management

ESMA publishes an opinion on the interpretation of Article 50(2)(a) of the UCITS Directive
ESMA's opinion is that UCITS may only invest in units or shares of collective investment undertakings as defined in Article 50(1)(e) of the UCITS Directive.   View Article
ALFI's reply to EC consultation on UCITS product rules, liquidity management, depositary, money market funds and long-term investments
In ALFI's view, there is no need to review the scope of assets and exposures that are deemed eligible for a UCITS fund or the extent of the existing framework for EPM techniques.  View Article
IMA: Investors must be protected from mis-selling of UCIS
The Investment Management Association has expressed its support for proposals to protect investors from being sold inappropriate products in its response to the FSA's consultation, "Restrictions on the retail distribution of unregulated collective investment schemes (UCIS) and close substitutes".  View Article
JAC response to FSA Consultation on restrictions on the retail distribution of UCIS and close substitutes
The Joint Associations Committee on Retail Structured Products (JAC) welcomes the opportunity to comment on the proposals set out in the Consultation Paper.  View Article
AFME submission to FSA on restrictions on the retail distribution of UCIS and close substitutes
AFME says that improving the health of the securitisation market and encouraging more retail investors to increase their participation in it will be crucial to the financial stability and funding capabilities of the banking sector in providing much-needed finance to the real economy.  View Article
Deloitte: FSA consultation affects how EU Directive applies to UK investment managers
As the FSA launches a two-part consultation to transpose the Alternative Investment Fund Managers Directive (AIFMD) into UK law, Deloitte says that the policy positions taken will affect how the Directive applies to investment trusts, hedge fund managers and private equity (PE) managers.  View Article
EIOPA clarifies role of holistic balance sheet for occupational pensions
Chairman Bernardino argued that the HBS approach for occupational pensions should be seen as a prudential supervisory assessment tool rather than a usual balance sheet based on generally agreed accounting standards, and called for the development of a common third pillar in Europe.  View Article
IPE: Request for preliminary QIS results unfeasible
According to EIOPA's executive director, the European Commission cannot expect EIOPA to release the preliminary results on the first quantitative impact study (QIS) for the revised IORP Directive by the end of January 2013.  View Article
IPE: Pensions funds should consider utility company inflation swaps
Consultancy Redington has said that pension funds need to widen their investment options in the current low-yield environment, and has cited the possible acquisition of inflation-linked swaps previously signed between utility companies and banks.  View Article
IMA says good governance is essential to protect pension savers
The Investment Management Association (IMA) has submitted written evidence to the Work and Pensions Select Committee saying that now more than ever, good scheme governance is critical to ensure the success of auto-enrolment.  View Article
IPE: UK pensions regulation should move from nudging to shoving
Pension regulation in the UK should transition "from nudging to shoving" in an effort to guarantee sizeable pension savings, the parliamentary select committee for work and pensions has been told.  View Article
IPE: Solvency II could cost UK pensions industry £400 billion
The UK pensions minister, Steve Webb, has claimed that Solvency II measures in the revised IORP Directive will end any prospect of risk-sharing among UK companies, while the total cost to the local pensions industry could reach as high as £400 billion.   View Article
IPE: France lagging far behind European counterparts on pensions reform
Pensions experts have claimed that France remains "far behind" its European counterparts when it comes to implementing long-term, sustainable pensions reform, and the current economic environment will "inexorably" lead to the failure of the country's social system.  View Article
IPE: Opaque Dutch pension system shifting towards DC
Casper van Ewijk, deputy director of the Bureau for Economic Policy Analysis (CPB), said that the Dutch pension system will transition to a defined contribution system within five years if the industry is unable to improve transparency of pension rights.  View Article
IPE: Financial crisis too big for Central, Eastern Europe's second pillars
The financial crisis and resulting downturn in economic output was "too big" for the second pillar to survive unscathed in Central and Eastern European (CEE) countries, the World Bank has argued.  View Article

Corporate Governance/Accounting

ESMA/Maijoor: Developments in European financial reporting regulation and enforcement
Steven Maijoor, ESMA Chair, highlighted four financial reporting topics: consistent application and enforcement of IFRS in Europe; forbearance in the banking sector and the need for transparency; convergence with US GAAP; and the audit proposals published by the European Commission last year.  View Article
EFRAG: Draft comment letter on IFRS Foundation's proposal to establish an Accounting Standards Advisory Forum
EFRAG published its draft comment letter on the IFRS Foundation's Proposal to Establish an Accounting Standards Advisory Forum. Comments on the letter are invited by 7 December, 2012.  View Article
ECIIA: Corporate Governance Codes on internal audit - Current status in the EU
The ECIIA has conducted a review of the Corporate Governance Codes currently in place in its member bodies, in order to determine the extent that internal audit is considered in the governance structure of listed companies under the typical "comply or explain" regulations.   View Article
ECIIA commented on the consultation of the High Level Expert Group on EU banking structure
Overall, the European Confederation of Institutes of Internal Auditing believes that a debate on reforming the structure of the banking sector should include in its discussions the role and the scope of effective internal audit regimes as a major contributor to increased financial stability.  View Article
FRC and ICAS commission review of auditors' competencies
The FRC and the ICAS are to commission jointly a major project that will investigate the competencies and professional skills of auditors.  View Article
IASB publishes proposals for amendments under its annual improvements project
The IASB published for public comment an Exposure Draft of proposed amendments to four IFRSs under its annual improvements project. The project provides a streamlined process for dealing efficiently with a collection of narrow scope amendments to IFRSs. Comments are requested by 18 February, 2013.  View Article
EFRAG: Feedback statement on 'Put Options Written on Non-controlling Interests'
EFRAG published its feedback statement for its final comment letter on the Draft Interpretation, 'Put Options Written on Non-controlling Interests'. The feedback statement describes the main comments received on EFRAG's draft comment letter.  View Article
EBF commented on the IASB Impairment project
The EBF published its comment letter to the IASB on the Impairment project. The EBF has been contributing to the work of the IASB with the aim of developing a principle-based model that is consistent with risk management practices and capable of application to open portfolios.  View Article
EBF publishes comment letter on the review draft standard on general hedges
EBF published its comment letter to the IASB on the Revised Draft Standard on General Hedges. In addition to the comments the EBF made on the Exposure Draft, it has identified two further critical issues in the Revised Draft.  View Article
EFRAG draft comment letter on the CICA research paper regarding measurement framework
EFRAG published its draft comment letter on the CICA research paper, 'Toward a Measurement Framework for Financial Reporting by Profit-Oriented Entities'. Comments on the letter are invited by 31 December, 2012.  View Article
ACCA: Narrative reporting reform needs an integrated future
ACCA's Global Forum for Business Law has urged the Department for Business, Innovation and Skills to work towards a coherent framework for the future structure of narrative reporting in the UK.  View Article
IFAC council seminar explores integrated reporting
The IFAC held its 35th Council Meeting in Cape Town, South Africa this week. As part of the meeting, IFAC held its annual seminar, which focused this year on integrated reporting.  View Article
IASB: IFRS Foundation opens regional office in Asia-Oceania
The IFRS Foundation hosted the inauguration of its first international office. The office, based in Tokyo, will provide support to the entire Asia-Oceania region with matters related to the development, adoption and consistent application of IFRSs.  View Article

Financial Services Policy

Dutch market mulls the implications of RDR-like commission bans
New regulations changing the way remuneration flows between fund manufacturers and distributors in the Netherlands are moving closer, raising concerns about profitability in the asset management industry, according to comments heard at the InvestmentEurope Fund Selector Forum in Amsterdam.  View Article
CSFI Report: "Independent Research - Because they're worth it?"
No sooner does the independent research sector "come of age", than the market for research is threatened by the latest wave of cuts at financial institutions. This report by Vince Heaney considers how researchers in general – and independents in particular – can prove they are worth it.  View Article

Graham Bishop’s Articles and Speeches

Graham Bishop's Blog: FSA evens up the playing field between the Davids of independent research providers and the Goliath investment banks
Graham's comments on the Centre for the Study of Financial Innovation's latest report, "Independent Research: because they're worth it?"  View Article





© Graham Bishop

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