Commission adopts nine RTS to implement the single rule book in banking

13 March 2014

The nine RTS define the ways in which competent authorities and market participants must, i.a., handle disclosures linked to securitisation instruments, and measure potential losses from derivative positions and counterparty failure. They also specify the types of instruments for paying bonuses.

The European Commission has adopted a package of Regulatory Technical Standards (RTS) needed to implement important provisions of the Capital Requirements Regulation and Directive (CRR/CRD). The nine RTS define the ways in which competent authorities and market participants must, inter alia, handle disclosures linked to securitisation instruments, measure potential losses from derivative positions and counterparty failure, as well as specifying the types of instruments that can be used for paying bonuses.

These RTS were developed by the European Banking Authority (EBA). They draw on the experience of EU Member State banking supervisors and take account of the results of stakeholder consultations. They have now been endorsed by the European Commission.

Commissioner Michel Barnier said: "The development of the single rule book in banking is a vast undertaking. Its objective is to ensure all banks comply with one set of rules across the single market. This ensures good regulation and a level playing field wherever banks are based. The adoption of the Capital Requirements package created a framework. But to reap the full benefit of the single rule book, many aspects must be further developed by technical standards, delegated and implementing acts. What we are delivering today is a decisive step in that direction thanks to the excellent cooperation between the European Banking Authority and the European Commission."

The new capital requirements rules (CRR/CRD), which apply from 1 January 2014, provide for the adoption of a large number of delegated and implementing acts to specify how competent authorities and institutions shall comply with the obligations laid down in CRR/CRD.

The RTS are a crucial building block in the construction of a stricter regulatory environment for banks and investment firms and are directly binding European rules that do not need to be transposed into national law.

Over a hundred mandates for regulatory and implementing technical standards are provided for in CRR and CRD. To date, the Commission has adopted 13 Regulatory Technical Standards (RTS) and one Implementing Technical Standard (ITS), some of them covering several mandates.

What’s next?

The European Parliament and the Council have one month to exercise their right of objection, with the possibility to extend this period for a further two months at their initiative. Following the expiry of this objection period, the RTS will be published in the Official Journal of the European Union and will enter into force on the twentieth day following the date of their publication. Their provisions will be directly applicable (i.e. legally binding in all Member States without implementation into national law) from the date of entry into force.

Press release

FAQs

• RTS further defining material exposures and thresholds for internal approaches to specific risk in the trading book
• RTS for determining what constitutes the close correspondence between the value of an institution’s covered bonds and the value of the institution’s assets
• RTS for non-delta risk of options in the standardised market risk approach
• RTS specifying the information that competent authorities of home and host Member States supply to one another
• RTS for assessing the materiality of extensions and changes of the Internal Ratings Based Approach and the Advanced Measurement Approach
• RTS for the definition of market
• RTS for determining proxy spread and limited smaller portfolios for credit valuation adjustment risk

State of Play of RTS supplementing Regulation (EU) 575/2013 (CRR) and Directive 2013/36/EU (CRD)

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