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08 September 2016

This week in "Brussels"

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  Articles from 28 July 2016 - 08 September 2016

EBA publishes 2016 EU-wide stress test results
From a starting point of 13.2% CET1, the stress test demonstrates the resilience of the EU banking sector to an adverse scenario with an impact of 380 bps CET1 on average.  View Article
EBF: EBA stress test shows resilience of EU banking sector
The European Banking Federation stated that the EBA's 2016 European Union-wide stress test results clearly demonstrate that the recapitalisation effort that European banks have made in recent years is bearing fruit.  View Article
Basel III implementation: Basel Committee reports to G20 Leaders
The Basel Committee on Banking Supervision has published a report for the G20 Leaders at their Summit in Hangzhou.   View Article
BIS: Frequently asked questions on the revised Pillar 3 disclosure requirements
The Basel Committee on Banking Supervision has issued frequently asked questions (FAQs) on the Basel framework's Pillar 3 disclosure requirements.  View Article
FSB publishes further guidance on resolution planning and fifth report to the G20 on progress in resolution
The guidance papers contribute to the removal of impediments to the orderly and effective resolution of firms.  View Article
EBA publishes an Opinion on the Commission's proposal to bring virtual currency entities in the scope of the Anti-Money Laundering Directive
The EBA welcomed the Commission's proposal to bring virtual currency exchange platforms and custodian wallet providers within the scope of the 4th Anti-Money Laundering Directive. The Authority also makes several recommendations aimed at supporting the proposals.  View Article
EBA provides input based on the Single Rulebook Q&As to the European Commission's CRR-CRD review
The EBA published the outcome of a review of its Single Rulebook Q&As, which provides an overview of possible errors, inconsistencies as well as fundamental issues in relation to the CRR and the CRD observed via the Single Rulebook Q&A tool managed by the ЕВА.  View Article
EBA recommends introducing the Leverage Ratio in the EU
The EBA published its report on the impact assessment and calibration of the Leverage Ratio (LR), recommending the introduction of a LR minimum requirement in the EU to mitigate the risk of excessive leverage.   View Article
EBA publishes RTS on preferential treatment in cross-border intragroup financial support
These RTS further specify the additional criteria listed in the in the context of the liquidity coverage ratio (LCR) Delegated Act for the application of the preferential treatment.  View Article
EBA amends technical standards on benchmarking of internal approaches
The EBA published an amended version, submitted to the EU Commission, of its ITS on benchmarking of internal approaches, for running the 2017 exercise .   View Article
EBA publishes indicators from 36 global systemically important institutions (G-SIIs)
The EBA published indicators from 36 large institutions in the EU, as provided for in the ITS and Guidelines on disclosure rules applicable to institutions whose leverage ratio exposure measure exceeds 200 billion Euro.  View Article
IPE: PensionsEurope warns of unintended consequences of bank capital rules
EU bank capital rules should be amended to address the unintended negative consequences they have for pension schemes using derivatives, the European occupational pensions association has told the European Commission.  View Article
European Parliamentary Research Service: The cost of banking – Recent trends in capital requirements
As the European Banking Authority gets set to release the results of the latest stress tests on 51 major EU banks, EPRS looks at the developing rules on capital requirements for financial institutions in the EU.  View Article
ECB: Addendum to the ECB Guide on options and discretions available in Union law
The Addendum addresses eight options and discretions and is a further step in harmonising supervision of significant banks in the euro area.  View Article
British Bankers’ Association: Correcting a leverage ratio imbalance
The Bank of England reduced interest rates to 0.25 per cent and issued a number of proposals to support the UK’s economy as it faces a period of uncertainty in the wake of the UK’s decision to leave the EU. The importance of one aspect of the proposals, though, has been largely overlooked.  View Article
British Bankers’ Association: Two reasons why a rate cut and quantitative easing may only be part of the story
Rebecca Harding, Chief Economist at BBA, reacted to the BoE's decision to cut interest rates in UK, saying that "policymakers have clearly been troubled by what they see in the immediate aftermath of the referendum result."  View Article
EBA consults on strong customer authentication and secure communications under PSD2
EBA’s consultation paper on draft technical standards will ensure appropriate levels of security, while at the same time maintaining fair competition between all payment service providers and allowing for the development of user-friendly, accessible and innovative means of payment.  View Article
EBA publishes final draft technical standards on separation of payment card schemes and processing entities under the IFR
The EBA published its final draft RTS specifying the requirements with which payment card schemes and processing entities must comply to ensure the independence of their accounting, organisation, and decision-making processes.   View Article
Financial Times: FCA considers approving blockchain businesses
UK consumers are one step closer to using products underpinned by blockchain technology after the financial watchdog said it was considering approving a “small but significant number of firms” using the process behind bitcoin, the cryptocurrency.  View Article
British Bankers’ Association: Liquidity in Pillar 2 proposals: industry response
On top of Pillar 1 liquidity minimum requirement there are other liquidity risks that the PRA believes should be considered as part of the Pillar 2 process, three of which were the subject of the consultation paper. These risks are debt buyback, non-margined derivatives and intraday risk.  View Article
British Bankers’ Association: Strengthening Tax Avoidance Sanctions and Deterrents: what does this mean for the banking sector?
The Government's consultation explores the options for increased penalties for the enablers of failed tax avoidance schemes, which the Government committed to look at during Budget 2016.  View Article
ESMA sees risk outlook deteriorate for EU securities markets
The risk outlook has deteriorated following the result of the UK referendum on EU membership.  View Article
ALFI response to ESMA Discussion Paper on the Distributed Ledger Technology Applied to Securities Markets
ALFI responded to ESMA's position paper on The Distributed Ledger Technology applied to Securities Markets.  View Article
FSB publishes progress reports on implementation of reforms to the OTC derivatives market and on removal of barriers to trade reporting
The reports show that although progress continues to be made, further action is required, particularly on implementing margin requirements and platform trading commitments, and on removing legal barriers to trade reporting and authorities’ access to data held by trade repositories.  View Article
ESMA issues overview of European prospectus activity
ESMA published statistical data on the number of prospectuses approved and passported by the National Competent Authorities of the European Economic Area within the EU prospectus regime.  View Article
FSB publishes discussion note on Essential Aspects of CCP Resolution Planning and progress report on CCP workplan
The Financial Stability Board published its discussion note on Essential Aspects of CCP Resolution Planning, which seeks comment on aspects of central counterparty resolution that are considered core to the design of effective resolution strategies.  View Article
Reports from CPMI-IOSCO advance regulatory agenda on central counterparties
Reports - on the financial risk management and recovery practices of 10 derivatives CCPs and on resilience and recovery CCPs - are aimed at enhancing the resilience of central counterparties.  View Article
ISDA publishes 2016 Variation Margin Protocol
The ISDA 2016 Variation Margin Protocol enables counterparties to quickly and efficiently put contractual documentation in place with multiple counterparties in order to implement the requirements, or to make changes to existing collateral agreements to bring them into compliance.  View Article
Hedgeweek: Direct clearing in futures trading is reshaping role of FCMs
Exchanges are recognising the changing futures commission merchant (FCM) landscape and are willing to look to new and innovative ways to serve their client base, according to a report by TABB Group.  View Article
EBF: TARGET Working Group response to the ESMA discussion paper – The distributed ledger technology applied to securities markets
The TARGET Working Group (TWG) limited its response to issues relevant to the TWG scope and to Target 2. Given the nature of its comment, the TWG deliberately did not answer specific questions in the Discussion Paper but merely sought to ensure that its comments contain a clear rationale.  View Article
Harmonisation of the Unique Product Identifier - Second consultative report issued by CPMI-IOSCO
The consultative report makes proposals for the harmonised global UPI, whose purpose is to uniquely identify over-the-counter derivatives products that authorities require to be reported to trade repositories.  View Article
Hedgeweek: Bats Europe encourages industry harmonisation for MiFID II order record keeping
Bats Europe has made available for testing on its platform its MiFID II compliant process for order record keeping, which the exchange is proposing as the industry approach to encourage harmonisation.  View Article
IOSCO Good Practice for CIS Fees and Expenses seeks to enhance market efficiency
IOSCO published its final report on Good Practice for Fees and Expenses of Collective Investment Schemes, which aims to identify common international examples of good practice that can be applied to CIS fees and expenses.  View Article
IPE: EC heeds pension concerns on EMIR sovereign-bond collateral rule
Pension schemes could be exempt from a diversification requirement relating to the use of sovereign bonds as collateral for non-centrally cleared derivatives, after the European Commission said the obligation should be scrapped.  View Article
ESMA updates its EMIR Q&A
ESMA issued an update of its Q&A on practical questions regarding the European Markets Infrastructure Regulation.  View Article
Insurance Europe: Services passport consultation - Ability to facilitate cross-border insurance questioned
Insurance Europe has responded to a European Commission consultation on a proposed EU services passport for the single market.  View Article
EIOPA consults on the presentation format of the Insurance Product Information Document
The EIOPA published a Consultation Paper on draft Implementing Technical Standards (ITS) standardising the presentation format of the Insurance Product Information Document (IPID).  View Article
Insurance Europe: Comment on publication of EIOPA IPID consultation
Insurance Europe commented on the publication of a EIOPA's consultation regarding the format of a standardised insurance product information document (IPID).  View Article
Bank of England: Solvency II: Remuneration requirements
This PRA policy statement provides feedback to responses on Consultation Paper ‘Solvency II: Remuneration requirements’ and includes a final supervisory statement on the Solvency II remuneration requirements and a Remuneration Policy Statement reporting template.   View Article
Bank of England: Solvency II: Remuneration requirements- supervisory statement
This supervisory statement (SS) is relevant to all UK insurance and reinsurance firms and groups within the scope of Solvency (‘Solvency II firms’). The Prudential Regulation Authority (PRA) expects firms to read this statement alongside all relevant European legislation.  View Article
Commercial Risk Europe: Insurance Act ride likely to be bumpy but should usher in professionalism
The UK Insurance Act that comes into force next week is likely to initially cause a spate of legal disputes but should result in a more professional approach to insurance placement, according to David Hertzell, the former Law Commissioner responsible for drafting the legislation.  View Article
FCA: Increasing transparency and engagement at renewal in general insurance markets
In this Policy Statement FCA reports on the main issues arising from its Consultation Paper - Increasing transparency and engagement at renewal in general insurance markets - and confirms the final rules and non-Handbook guidance.  View Article
Commercial Risk Europe: Survey finds buyers content with preparedness for Insurance Act
Insurance buyers in the UK believe they and the market have risen to the challenge of the Insurance Act and are relatively well prepared for the new law, according to a poll of Airmic members.  View Article
EIOPA joins International Information Exchange Agreement
Victoria Saporta, Chair of the Executive Committee of the International Association of Insurance Supervisors (IAIS), announced that EIOPA has joined an international supervisory cooperation and information exchange agreement.   View Article
  Asset Management
ECON committee unanimously rejects Commission’s investor protection proposals
Parliament’s Economic and Monetary Committee rejected as “misleading” and flawed, proposals aimed at providing greater protection to consumers buying packaged financial products, and unanimously voted to send the proposals back to the European Commission for revision.  View Article
EFAMA wholeheartedly welcomes the adoption of the ECON Motion for a Resolution on the Commission Delegated Regulation (EU) No 1286/2014
EFAMA firmly believes that the PRIIPs KID is a powerful instrument to ensure that consumers receive the right information before making their investment choices.  View Article
AFME calls for greater harmonisation of EU regulations on Asset Segregation in new report
AFME published a new report entitled “Principles of Asset Segregation, Due Diligence and Collateral Management” which calls for greater harmonisation of asset segregation across European regulation.  View Article
IOSCO seeks public comment on its analysis of liquidity in corporate bond markets
IOSCO is seeking public comment on its consultation report entitled Examination of Liquidity of the Secondary Corporate Bond Markets. IOSCO undertook this work in response to the concerns of some market participants about liquidity in this sector.  View Article
AMF launches a consultation on the use of stress tests to help manage risk at asset management companies
The AMF has prepared a guide to help asset management companies implement and use stress tests.   View Article
IOSCO consults on good practices for the termination of investment funds in an effort to increase investor protection
The consultation report proposes a set of good practices on the voluntary termination process for investment funds.  View Article
Global private credit market growing rapidly, according to ACC/Deloitte survey
The global private credit market, an alternative source of financing for small and medium sized enterprises, is flourishing, with institutional capital supporting increased lending in Europe in particular, according to a report by ACC and Deloitte.  View Article
IPE: Negative rates confound pension fund prudent asset allocation
Negative interest rates set by central banks run the risk of making prudent asset allocation “impossible” for pension funds and other long term investors that rely on bonds for part of their portfolio, according to S&P Global.  View Article
PensionsEurope answers to European Commission’s consultation on the Net Stable Funding Ratio
PensionsEurope welcomes that the Commission is looking into the Net Stable Funding Ratio rules which are also part of the requirements that lead to the cash preferences of banks which are detrimental for pension funds and their service providers.  View Article
IPE: UK lawmakers to review powers given to Pensions Regulator
UK lawmakers are set to review the powers granted to the Pensions Regulator, as they push ahead with a broader examination of the regulatory framework.  View Article
IPE:German pension association fears EIOPA back door IORP II move
In an analysis of the revised EU Directive for IORPs, the final proposal for which was agreed in June, the association said the Directive will lead to higher standards in the areas of governance, risk management, and information.  View Article
IPE: Major European pension investors commit to UN development goals
A coalition of European investors, including the managers of more than €550 bn in Dutch pension assets, has made an explicit commitment to use the UN Sustainable Development Goals (SDGs) as the reference framework for an increasing amount of investments.  View Article
AIC: PwC on private equity deals in the new international tax environment
Like the American Investment Council, PwC is actively advocating on behalf of the PE industry by submitting comment papers and recommendations to the OECD addressing the BEPS proposals.  View Article
Private equity investment into Central and Eastern European companies highest amount since 2009, 2015 Invest Europe data shows
Private equity and venture capital investment in Central and Eastern Europe last year hit its highest amount since 2009, according to new data from Invest Europe.  View Article
  Corporate Governance/Accounting
ESMA published extract on enforcement decisions on financial statements
The ESMA has published an extract from its confidential database of enforcement decisions on financial statements. The extract includes a selection of 12 decisions that were taken by national enforcers in the period from February 2014 to April 2016.  View Article
IFAC: IPSASB published impairment of revalued assets and new IPSAS on employee benefits
The IPSASB has published Impairment of Revalued Assets (Amendments to IPSAS 21, Impairment of Non-Cash-Generating Assets, and IPSAS 26, Impairment of Cash-Generating Assets) and IPSAS 39, Employee Benefits, which will replace IPSAS 25, Employee Benefits.  View Article
IFAC: IPSASB publishes consultation paper on public sector specific financial instruments
The IPSASB released for comment Public Sector Specific Financial Instruments. The Consultation Paper includes three main topics related to accounting for public sector financial instruments.  View Article
IFAC: IAASB working group seeks input on the growing use of data analytics in the audit
The IAASB’s Data Analytics Working Group is furthering its work to understand how the use of technology, and specifically data analytics, is able to enhance audit quality. The IAASB released a Request for Input, Exploring the Growing Use of Technology in the Audit, with a Focus on Data Analytics.  View Article
IFAC: IAASB releases working group paper on supporting credibility and trust in emerging forms of external reporting
The IAASB’s Integrated Reporting Working Group has released a paper for public discussion, Supporting Credibility and Trust in Emerging Forms of External Reporting: Ten Key Challenges for Assurance Engagements.  View Article
ACCA calls for new ‘future looking’ Integrated Reporting culture
Two new research reports, jointly commissioned by the IIRC, the IAAER and ACCA, shed light on the progress made since the publication of the International Integrated Reporting Framework, and discuss the challenges that lie ahead as Integrated Reporting aims to become the reporting norm.  View Article
  Financial Services Policy
BIS, FSB and IMF publish elements of effective macroprudential policies
The document, which responds to a G20 request, takes stock of the international experience since the financial crisis in developing and implementing macroprudential policies and will be presented to the G20 Leaders' Summit in Hangzhou.  View Article
FSB launches peer review of the G20/OECD Principles of Corporate Governance and invites feedback from stakeholders
The overarching objective of the review is to take stock of how FSB member jurisdictions have applied the Principles to publicly listed, regulated financial institutions, identifying effective practices and areas where good progress has been made while noting gaps and areas of weakness.  View Article
FSB publishes second progress report on measures to reduce misconduct risk
The FSB’s workplan covers examining whether reforms to incentives, for instance to governance and compensation structures, are having sufficient effect on reducing misconduct; improving global standards of conduct in the FICC markets; and reforming major benchmarks.  View Article
FSB and IMF publish progress report on second phase of G20 Data Gaps Initiative
The progress report updates on work by participating countries and international organisations to address post-crisis data gaps and presents the action plans for each of the recommendations agreed for further work.  View Article
ICMA launches a consultation on the Buy-in Rules
ICMA is launching a consultation to review and potentially update the ICMA Buy-in Rules under the Secondary Market Rules & Recommendations. This is in response to feedback from members with respect to the efficiency of the existing buy-in process in the current market environment.  View Article
European Commission adopts implementing decision on EURIBOR benchmark
The European Commission adopted an Implementing Regulation establishing a list of ‘critical’ benchmarks, i.e. those indexes that are of particular importance for financial markets and consumer contracts.  View Article
G20 Leaders' Communique after Hangzhou Summit
G20 leaders adopted a communique focusing on strengthening the G20 growth agenda; pursuing innovative growth concepts and policies; building an open world economy; and ensuring that economic growth benefits all countries and people.  View Article

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