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18 December 2014

This week in "Brussels"


Headlines include: Bloomberg: Banks won’t stop EU push on prop-trading, firewall rules.

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Asset Management Corporate Governance/Accounting Financial Services Policy
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  Articles from 11 December 2014 - 18 December 2014

  Banking
 
 
Euractiv: Bank resolution authority set for launch
The Single Resolution Mechanism will be launched over the next three months, with the aim of rescuing or winding up stricken banks with minimal recourse to taxpayers’ money.
Bloomberg: Banks won’t stop EU push on prop-trading, firewall rules
Jonathan Hill said the bloc’s existing regulations don’t go far enough to tame the threat posed by the collapse of a systemic lender.
MEPs secure deal to cap card payment fees
The fees that banks charge retailers to process shoppers’ payments should be capped under uniform rules across in the EU.
European Commission adopts first equivalence decision for the purposes of credit risk weighting Regulation
The document establishes a list of third countries whose supervisory and regulatory arrangements the EU considers equivalent.
European Commission extends transitional period for Capital Requirements for exposures to CCPs
The transitional period, during which higher requirements will not be applied, will ensure a level playing field for EU CCPs.
Vox EU: Higher capital requirements: The jury is in
This column argues that the capital increases had little impact on anything but bank profitability.
Bank of England announces results of UK stress test
The stress test of eight major UK banks and building societies was designed to assess their resilience to a very severe housing market shock and to a sharp rise or snap back in interest rates
EBA publishes criteria to assess other systemically important institutions
These Guidelines aim at setting uniform parameters at EU level while taking into account specificities of Member States' individual banking sectors.
EBA updates its risk dashboard for EU banking sector
This edition is the first to have own funds' positions and requirements data that is based on the supervisory reporting standards from COREP. It also includes an annex on aggregate risk parameters.
EBA issues final technical advice on criteria and factors for intervention on structured deposits under MiFIR
In line with MiFIR provisions, the EBA will now prepare a methodology to fulfil its additional mandate of monitoring the market for structured deposits distributed and sold in the European Union.
EBA invites input on passport notification requirements for mortgage credit intermediaries
The requirements will ensure that information about credit intermediaries that carry out business in one or more Member States is exchanged consistently between the competent authorities of the home Member State and of the host Member State.
EBA consults on amending ITS on LCR and LR reporting
The proposed amendments follow the European Commission's Delegated Acts specifying the LCR and the LR respectively.
EBA consults on treatment of mortgage borrowers in arrears
The Guidelines establish requirements in terms of policies and procedures, engagement with consumers, provision of information and assistance to consumers, resolution process and documentation of dealings with consumers and retention of records.
EBA consults on creditworthiness assessment under the MCD
These draft Guidelines provide details on how creditors across the EU should assess and verify consumers' creditworthiness before concluding credit agreements for immovable residential properties.
EPC published the second edition of the overview of mobile payments initiatives in SEPA and beyond
This document describes various existing and new initiatives on mobile payments and aims to create awareness on the latest developments.
 
  Securities
 
 
ESMA: Improvements needed in CRAs surveillance of structured finance credit ratings
ESMA has also identified weaknesses on the level of disclosure and transparency which could be detrimental to investor protection.
ESMA reviews supervisory practices on MiFID investor information
The peer review focused on NCAs’ organisation, supervisory approaches, monitoring and complaints handling in relation to information and marketing communications under MiFID.
ESMA report looks into extent of HFT activity in EU equity markets
Based on a sample of 100 stocks from nine EU countries in May 2013, the report finds that HFT activity ranges from 24% to 43% of equity value traded, using alternative methodologies.
European Voice: Rules put pressure on credit-rating agencies
The 'big three' credit agencies came under heavy fire for their role in both the global financial crisis and the eurozone's subsequent sovereign debt crisis.
Bloomberg: Clearing houses face EU push on too-big-to-fail risks
The European Commission will propose legislation next year to toughen regulation of clearing houses in a bid to prevent financial turmoil should one of them fail.
Financial Times: ICE urges caution on European derivatives reform
Intercontinental Exchange has urged Europe to give clearing houses leeway over what products they must accept, warning that lawmakers' plans to open up the derivatives market would remove operators' incentives for innovation.
IOSCO issues Criteria for identifying “simple, transparent and comparable” securitisations
Criteria on transparency provide investors with sufficient information on the underlying assets, the structure of the transaction and the parties involved in the transaction, thereby promoting a more thorough understanding of the risks involved.
Reuters: Wall Street scores a win in Washington, eyes more victories
Five years after President Barack Obama slammed Wall Street "fat cat" bankers, some of the nation's biggest banks this week successfully lobbied Congress to roll back a hotly debated provision in the 2010 Dodd-Frank financial reform law.
 
  Insurance
 
 
Reuters: EU insurers’ solvency is shakier than it looks
Recent stress tests by the European Insurance and Occupational Pensions Authority found that only 14 percent of insurers fell below a baseline level of capital strength under so-called “Solvency II” reforms. That’s not the end of the story, however.
Insurance Europe: European Commission request for EFRAG endorsement advice on IFRS 9
Olav Jones: “There are unresolved problems regarding the interaction of IFRS 9 and a new IFRS for insurance contracts, IFRS 4 Phase II, which the International Accounting Standards Board is still developing."
Insurance Europe: Response given to FSB critical functions consultation
When applying a common understanding of critical functions, the differences between various business models should be taken into account.
IAIS: Risk-based Global Insurance Capital Standard
This Consultation Document is the first step in a multi-year process to develop and finalise the Insurance Capital Standard.
OECD: Global insurance market trends
The insurance industry is a major component of the economy by virtue of the amount of premiums it collects, the scale of its investment and, more fundamentally, the essential social and economic role it plays by covering personal and business risks.
 
  Asset Management
 
 
EIOPA updates on key risks to financial stability
Risks for (re)insurance companies and occupational pension funds continue to be linked to the weak macroeconomic climate, prolonged low interest rate environment and sovereign credit risk.
ALFI’s reply to IOSCO’s Consultation Report on Principles regarding the Custody of Collective Investment Schemes’ Assets
ALFI agrees with the trends identified in the consultation report. In addition, it invites IOSCO to look forward in its work to how markets will look in the future.
Council of the EU agrees its stance on updated rules for occupational pension funds
The draft directive's aim is to facilitate the development of occupational retirement savings and better protect pension scheme members and beneficiaries.
IPE: European Commission to push ahead with revised IORP Directive
Hill told journalists it would be “odd” to withdraw the revised IORP Directive now, when the Council of the EU had, under the Italian presidency, agreed a number of changes over the course of four compromise drafts.
 
  Corporate Governance/Accounting
 
 
EFRAG: Draft comment letter on the classification and measurement of share-based payment transactions
EFRAG generally agrees with the IASB’s assessment of the issues and with its proposed amendments to address them, since they provide practical solutions that would reduce divergences in application.
IFAC: IAESB´s standard on professional competence of the audit engagement partner
“To protect the public interest, engagement partners need to have the necessary skills and competencies to perform their roles effectively,” said the IAESB Chair.
ACCA: Risk reporting needs to improve
Critical users argued that risk reports are too generic, are bland, too verbose and are biased towards the positive.
FEE: Comments on the IIRC papers on assurance on integrated reporting
It is encouraging that the concept of assurance on Integrated Reporting enters the debate at this stage to assess demand, explore how to meet this demand and identify any key issues that need to be addressed.
Deloitte: Comment letter on proposed amendments regarding the recognition of deferred tax assets for unrealised losses
Deloitte agrees with the proposed amendments, but suggests some enhancements to the wording to better clarify the proposals.
 
  Financial Services Policy
 
 
CEPS: Why the regulatory witch-hunt for ‘closet trackers’ is a dead-end
ESMA announced its intention to take a closer look at so-called ‘closet trackers’, with a view to identify whether there is a potential need for a coordinated pan-European policy response to these particular funds, which are supposedly actively managed but in reality closely track their benchmarks.
 

 


© Graham Bishop

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