This week in "Brussels"
13 December 2018
Basel III disclosure requirements, Andrea Enria appointed head of the ECB's supervisory board, PSD2, ISDA paper on trends in the size and composition of OTC derivatives markets, temporary equivalence and recognition for UK CCPs, EMIR refit, latest double volume cap data, PRIIPs, IFRS 17 and more.
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Articles from 06 December 2018 - 13 December 2018 |
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Banking Union |
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Basel Committee publishes updated Basel III disclosure requirements
These updated Pillar 3 disclosure requirements, together with the updates published in January 2015 and March 2017, complete the Pillar 3 framework. View Article |
Financial Times: As European banks regulator retires, challenges remain
Despite the SSM’s achievements, the eurozone banking sector looks far from healthy, writes Patrick Jenkins. View Article |
European Council appoints Andrea Enria head of the ECB's supervisory board
The Council adopted a decision appointing Andrea Enria as head of the supervisory board of the European Central Bank. He will hold the position for a period of five years, starting from 1 January 2019. View Article |
Financial Times: Weaning European banks off ECB support
The ECB has used TLTRO-II program to pump well over €700bn into the continent's financial institutions over the last few years. It is responsible for 99% of the ECB's total lending to banks. Analysts at UBS have taken a closer look at what will happen when this funding expires in 2020/21. View Article |
EBA publishes an Opinion on the use of eIDAS certificates under PSD2
In the Opinion, the EBA clarifies specific aspects on the use of qualified certificates for electronic seals (QSealCs) and qualified certificates for website authentication (QWACs) for the purpose of identification of payment service providers (PSPs) under the RTS, the content of these certificates, and the process for their revocation. View Article |
European Council: Agreement on new rules to fight non cash payment fraud
The Council and Parliament negotiators reached an agreement on the directive on combating fraud and counterfeiting of non-cash means of payment. This provisional political agreement will now have to be confirmed by the two institutions. View Article |
FCA publishes findings on long-term mortgage arrears
The Financial Conduct Authority (FCA) published findings on how mortgage lenders treat customers who have long-term mortgage arrears and provide forbearance to affected customers. View Article |
VoxEU: Markets, banks, and shadow banks
The current financial system is characterised by the coexistence of direct market finance, regulated banks, and shadow banks. This column looks at what gives rise to each of these sources of finance as well as the effect of bank capital regulation on the financing that flows through them. View Article |
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Capital Markets Union |
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ISDA: Key trends in the size and composition of OTC derivatives markets
ISDA has published a new research paper that analyzes recent trends in the size and composition of over-the-counter derivatives markets, using the latest data from the Bank for International Settlements and ISDA. View Article |
ISDA Letter to European Commission on temporary equivalence and recognition for UK CCPs
The letter states that abrupt cessation of access to UK CCPs has the potential to introduce widespread disruption for EEA markets. View Article |
ISDA: Letter to EC on extension of deferred dates for clearing of intragroup transactions
ISDA asks the European Commission to endorse ESMA’s proposed regulatory technical standards without amendments while also calling for actions regarding the need for regulatory forbearance. View Article |
ISDA - Forbearance request to ESMA for reporting historical transactions: EMIR refit
A request has been made to ESMA to issue a statement to NCAs that, in the event that the EMIR Refit is not in effect before February 12, 2019, supervisory action will not be taken against CCPs that have not reported all details of historical derivatives transactions by that date. View Article |
MIFiD II: ESMA issues latest double volume cap data
ESMA updates include DVC data and calculations for the period of 1 November 2017 to 31 October 2018 as well as updates to already published DVC periods. View Article |
FCA proposes permanent measures for retail CFDs and binary options
The Financial Conduct Authority (FCA) is proposing rules to address harm to retail consumers from the sale of certain complex derivative products with the publication of two consultation papers. View Article |
CEPS and ECMI launch a joint Task Force on “Rebranding the Capital Markets Union”
The new Task Force will be presided by Mr Vítor Constâncio, former ECB Vice President and current President of the Council of the Lisbon School of Economics & Management. View Article |
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Clients Union |
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Insurance Europe: PRIIPs: Real solutions, not superficial quick fixes, needed to fix problems with the Key Information Document
Insurance Europe is seriously concerned by the quick-fix approach taken by the ESAs in their proposals for changes to the Key Information Document for Packaged Retail Investment and Insurance Products which Insurance Europe does not believe will be of benefit to consumers. View Article |
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Insurance |
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ECB: Euro area insurance corporation statistics: third quarter of 2018
Total assets of euro area insurance corporations amounted to €7,984 billion in the third quarter of 2018, €16 billion higher than in second quarter of 2018. Total insurance technical reserves of euro area insurance corporations amounted to €6,034 billion in third quarter, down €17 billion from second quarter View Article |
Insurance Europe: IFRS 17: Global insurance bodies say one-year delay not enough to fix problems and implement standard properly
A group of 11 insurance associations from around the world has written a joint letter to the IASB chair calling for a two-year delay to IFRS 17, which covers insurance contracts. The letter follows the IASB’s decision to propose a one-year deferral of the effective date of the standard. View Article |
BIS: Proportionality in the application of insurance solvency requirements
This paper outlines various regulatory approaches to proportionate solvency regulation. It is based on a survey of 16 insurance authorities, of which eight have adopted a proportionate approach, allowing certain insurers to apply simplified regulatory requirements. View Article |
Insurance Europe: 2018 Solvency II review: EC proposal lacks serious ambition to unlock investment the economy needs
Insurance Europe has raised serious concerns in its response to a consultation by the European Commission on its draft proposals for the 2018 review of the Solvency II Delegated Regulation. View Article |
Commercial Risk Europe: IAIS introduces changes to improve executive committee representation
The International Association of Insurance Supervisors (IAIS) has announced a number of changes designed to ensure representation from the major insurance markets, and the views of non-supervisory members of the IAIS. View Article |
FCA: Milestone for insurers as they come under the Senior Managers and Certification Regime
The Senior Managers and Certification Regime (SM&CR) has been extended to all insurers regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority. View Article |
EIOPA’s Cross-border platform on collaboration on Qudos Insurance A/S
The EIOPA supported the work of the Finanstilsynet by the set-up of a cross-border Platform of Collaboration for Qudos Insurance A/S in August 2018 to facilitate and coordinate discussions between and supervisory measures taken by the respective home and host National Supervisory Authorities. View Article |
BIS: Regulating and supervising the clouds: emerging prudential approaches for insurance companies
This paper outlines the emerging regulatory and supervisory approaches in selected jurisdictions to cloud computing activities in the insurance sector. Authors analyse the regulatory and supervisory approaches of 14 authorities worldwide and present key insights on the emerging prudential treatment of cloud computing in the insurance industry. View Article |
EIOPA calls for experts to join Network on Catastrophe Risks
The EIOPA issued a call for experts to join a Technical Expert Network on Catastrophe Risks with the aim to strengthen and complement EIOPA's expertise with regard to the modelling and mitigation of (natural) catastrophe risks and climate change risks. This initiative is part of EIOPA's work on sustainable finance. View Article |
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Asset Management |
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ALFI response to ESA consultation on targeted amendments to the PRIIPs KID
Even though ALFI welcomes the ESA’s initiative to review the PRIIPs KID rules, ALFI cautions the supervisory authorities to conduct a review which only targets certain aspects, and which may have significant consequences for the existing UCITS KIID rules. View Article |
ESMA publishes the responses to its Consultation on stress testing guidelines for Money Market Funds
ESMA has published the responses received to the Consultation Paper on draft guidelines on stress test scenarios under the MMF Regulation. View Article |
FCA response to the CMA’s final report on its investigation of investment consultancy and fiduciary management services
The Competition and Markets Authority (CMA) published the final report and remedies for its market investigation of investment consultancy and fiduciary management services. View Article |
PLSA comments on Competition and Markets Authority report
Caroline Escott, Policy Lead Investment and Stewardship, PLSA, has commented on the Competition and Markets Authority (CMA) Investment Consultants Market Investigation Final Report. View Article |
FCA proposes changes to facilitate investment in patient capital
The Financial Conduct Authority has proposed changes to further enable retail investors to invest in patient capital through unit-linked funds. The FCA is also exploring how UK authorised funds can be used to invest in patient capital. View Article |
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Corporate Governance/Accounting |
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IASB's Hoogervorst: Are we ready for the next crisis?
Chair of the IASB Hans Hoogervorst delivered a speech at the 2018 AICPA Conference on Current SEC and PCAOB Developments. He described the IASB’s own response to the global financial crisis—the new financial instruments Standard, IFRS 9—and discussed current risks in the global financial system. View Article |
FRC issues revised auditing standard and consults on guidance for quality bank audits
The FRC has issued an International Standard on Auditing Accounting Estimates and Related Disclosures, covering the audit of expected credit losses in banks and which reflects the increased importance and complexity of estimates in financial statements. View Article |
ESBG response to IASB on financial instruments with characteristics of equity
The ESBG has commented on the IASB's Discussion Paper - DP/2018/1 - Financial Instruments with Characteristics of Equity. The ESBG supports to the IASB in its approach to carry out a project with the outcome of establishing solid principles for the distinction between liabilities and equity. View Article |
FRC: Withdrawal of Practice Notes 25 and 27
The FRC has withdrawn the following Practice Notes: Practice Note 25 Attendance at Stocktaking and Practice Note 27 The Audit of Credit Unions in the United Kingdom. View Article |
FRC consults on client assets standard
The FRC launched a consultation to assess the effectiveness of the Client Asset Audit Standard (CASS Standard) which was introduced in 2015. View Article |
FRC: Auditors must improve their work on the ‘front end’ of company reports
Auditors’ work on the information in the front end of company reports outside of the financial statements does not meet the requirements of Auditing Standards consistently, according to a new report from the FRC. View Article |
FRC: Wates Principles to improve corporate governance standards among private companies
A new code for the corporate governance of large private companies is providing a framework to help them not only meet legal requirements but to promote long term success in this vital sector. View Article |
ECGI: May the force be with you - investor power and company valuations
The ECGI working paper shows that this logic changes in the context of staged financing where investors shift from being outsiders in their initial investment to becoming insiders in subsequent investment rounds. View Article |
Accountancy Europe: GDPR - implications for auditors
Statutory auditors regularly process personal data obtained from their clients. They are therefore directly impacted by the General Data Protection Regulation (GDPR) that entered into force in May 2018. View Article |
FRC: Lab project call for participants - reporting on the sources and uses of cash
The Financial Reporting Lab is calling for investors and companies of all sizes to participate in a new project. View Article |
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Market Structure |
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ECB's Benoît Cœuré: Euro Cyber Resilience Board for pan-European Financial Infrastructures
Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, warns that cyber threat facing the financial sector continues to be a challenge. View Article |
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Financial Services Policy |
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Financial Times: Switzerland risks EU financial sanctions over integration deal
In a decision which could have ramifications for the UK post-Brexit, the seven-strong Swiss federal council, or cabinet, declined to formally agree a proposed new “institutional framework” governing EU trading relations with Switzerland, a non-EU member. View Article |
ESBG: Risky business - ICO, crypto assets innovation
Innovation brought by the development of crypto-assets and ICOs should not allow a new era of fraud, deception, money laundering, tax evasion and financial instability, ESBG argues in a recently published position paper on the regulatory treatment of Initial Coin Offerings and crypto-assets. View Article |
IFAC: Upcoming IES 7 (Revised), Continuing Professional Development
The forthcoming International Education Standard 7 (Revised), Continuing Professional Development, introduces a number of changes relating to the standard’s requirements and structure, as well as the explanatory materials. View Article |
European Commission: The Technical expert group on sustainable finance calls for feedback on EU-wide classification system
In order to inform its work on the action plan on financing sustainable growth published in March 2018, the Commission established a technical expert group on sustainable finance (TEG) in July 2018. View Article |
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Political |
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POLITICO:Most Europeans want less migration: survey
51% of those surveyed from 10 EU countries — Greece, Hungary, Italy, Germany, Sweden, Poland, France, the Netherlands, the UK and Spain — said fewer or no immigrants should be allowed to move to their country, compared to a worldwide average of 45%, Pew Research Center found. View Article |
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Economic |
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Vox EU: The case for a central fiscal capacity in EMU
The authors of this column re-state the case for a central fiscal capacity. In essence, whilst financial union and a euro area fiscal stabilisation are substitutes in normal times, they are complementary in bad times. View Article |
EurActiv: Italy’s Conte admits defeat on budget, presents new plan to EU
Italy has admitted defeat and agreed to change its “beautiful” budget plan to avoid the opening of a EU disciplinary procedure against Rome. View Article |
EU-Japan trade agreement on track to enter into force in February 2019
The European Commission welcomes the approval in the European Parliament of the EU-Japan Economic Partnership Agreement and the EU-Japan Strategic Partnership Agreement. View Article |
Council endorses agreement on EU budget for 2019
The Council endorsed the agreement reached with the European Parliament on the EU budget for 2019. View Article |
Accountancy Europe: Modernising VAT
The fact sheet published by Accountancy Europe provides an overview of current EU VAT initiatives, for persons with a working knowledge of the European VAT system. View Article |
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Graham's tweets |
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© Graham Bishop
Banking Union