Management Solutions compiles new regulations published by regulators of the financial services industry on a global level (BCBS, FSB), a supranational one (with a focus on Europe), and on some local geographies (USA, UK and Spain).
Relevant publications
Cybersecurity
(09/03/2022) SEC – Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure
The Securities Exchange Commission (SEC) have proposed new rules on Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure to enhance and standardize disclosures regarding cybersecurity risk reporting by public companies that are subject to the reporting requirements of the Securities Exchange Act of 1934. The proposed rules would require current and periodic reporting of material cybersecurity incidents. Additionally, they would require periodic disclosures about a registrant’s policies and procedures to identify and manage cybersecurity risk, including the impact of cybersecurity risks on the registrant’s business strategy and management’s and board of directors’ cybersecurity expertise.
Social taxonomy(01/02/2022) PSF – Final Report on Social Taxonomy
The Platform on Sustainable Finance has published a Final Report on Social Taxonomy that summarises the main initial observations and recommendations on the task mandated by the EC to work on extending the taxonomy to social objectives. The report sets out these objectives, as well as metrics to be taken into account.
Consumers and users
(01/02/2022) Cortes Generales – Ley 4/2022, de 25 de febrero, de protección de los consumidores y usuarios frente a situaciones de vulnerabilidad social y económica
The General Courts have approved Law 4/2022, of 25 February, on the protection of consumers and users in situations of social and economic vulnerability, which adopts urgent measures to address certain situations of vulnerability affecting consumers and users. Specifically, the essential modification lies in the inclusion, for the first time in state consumer protection legislation, of the figure of the vulnerable consumer, which has made it necessary to adapt the law's protection regime to this figure.
Non-financial information
(01/02/2022) CNMV – Informe sobre la supervisión por la CNMV de los EINF del ejercicio 2020 y principales áreas de revisión de las cuentas del ejercicio siguiente
The Comisión Nacional del Mercado de Valores (CNMV) has published a Report on the supervision of NFIS and main areas of review for the next financial year. The document describes the supervisory work carried out by the CNMV in relation to 2020 NFIS of issuers of securities traded on regulated markets in the EU. It also includes certain priority areas for the CNMV's supervision of 2021 NFIS.
Credit risk and Market Benchmark
(23/02/2022) EBA – Report on the 2021 credit and market risk benchmarking exercise
The European Banking Authority (EBA) has published two reports on the consistency of the Risk Weighted Assets (RWAs): a Report on the results from the 2021 high and low default portfolios (HDPs and LDPs) credit risk benchmarking, and a Report on the results from the 2021 market risk benchmarking exercise.
Corporate Sustainability Due Diligence
(23/02/2022) EC – Proposal for a Directive on Corporate Sustainability Due Diligence
The European Commission (EC) has published the Proposal for a Directive on Corporate Sustainability Due Diligence. This Directive aims to ensure that companies active in the internal market contribute to sustainability transition of economies and societies through the identification, prevention and mitigation, bringing to an end and minimization of potential or actual adverse human rights and environmental impacts connected with companies’ own operations, subsidiaries and value chains.
Data Act
(23/02/2022) EC – Proposal on Data Act.
The European Commission (EC) has published the proposal on Data Act, second main legislative initiative resulting from the February 2020 European strategy for data. The Data Act addresses the legal, economic and technical issues that lead to data being under-used.
SREP
(10/02/2022) ECB – Results of 2021 SREP
The European Central Bank (ECB) has published the outcome of its 2021 Supervisory Review and Evaluation Process (SREP) which reflect the resilience of Europe’s banking sector and the challenges that lie ahead. The findings of that annual assessment indicate that significant institutions have maintained solid capital and liquidity positions, with most banks operating at capital levels above those dictated by capital requirements and guidance.
Private funds and cybersecurity risks
(09/02/2022) EC – Standardisation Strategy / Proposal for an amendment to the Regulation on standardization
The Securities Exchange Commission (SEC) have a proposed new rules on Private Fund advisers; Documentation of registered investment adviser compliance reviews which amends Investment Advisers Act. This proposed rules increase visibility into certain practices, establish requirements to address certain practices that have the potential to lead to investor harm, and prohibit adviser activity that is contrary to the public interest and the protection of investor. Furthermore, the SEC has proposed new rules on Cybersecurity Risk Management for Investment Advisers, Registered Investment Companies, and Business Development Companies amending the Investment Advisers Act and the Investment Company Act. These new rules address cybersecurity risks for advisers and funds, enhance disclosure of information regarding cybersecurity risks and significant cybersecurity incidents, and require the reporting of significant cybersecurity incidents to the SEC.
Stress Test
(09/02/2022) Fed – 2022 Stress Test Scenarios
The Federal Reserve (Fed) has released the hypothetical scenarios for its 2022 bank stress tests in which 34 significant institutions will be stress-tested against a scenario of a severe global recession with heightened stress in commercial real estate and corporate debt markets.
Credit financial institutions
(03/02/2022) BdE – Circular a los establecimientos financieros de crédito, sobre liquidez, normas prudenciales y obligaciones de información, y que modifica a la Circular 1/2009 y la Circular 3/2019.
The Bank of Spain (BoS) has launched Circular 1/2022, to financial credit establishments, on liquidity, prudential rules and reporting obligations, which amends Circular 1/2009 and Circular 3/2019. The document sets the liquidity regulations applicable to financial credit institutions, and adapts the reporting obligations of credit institutions in matters of solvency and shareholder structure to the activity, business model, size and relative importance of financial credit institutions.
Standardisation Strategy
(02/02/2022) EC – Standardisation Strategy / Proposal for an amendment to the Regulation on standardization
The European Commission (EC) has presented a Standardisation Strategy which includes a proposal for an amendment to the Regulation on standardization. This strategy aims to develop new standards in strategic sectors and to strengthen the innovation and transparency of the European standardisation system so that it can continue to be a global reference.
Climate Taxonomy
(02/02/2022) EC – Taxonomy Complementary Climate Delegated Act
The European Commission (EC) has published the Taxonomy Complementary Climate Delegated Act. This regulation amends the Taxonomy Climate Delegated Act setting out the technical screening criteria for climate change mitigation and climate change adaptation for economic activities in the natural gas and nuclear energy sectors which were not included in the Taxonomy Climate Delegated Act. Moreover, to enhance market transparency and the information of investors, this Delegated Act provides for specific disclosure requirements for the natural gas and nuclear energy sectors by amending the Taxonomy Disclosures Delegated Act.
ESG information disclosure
(24/01/2022) EBA – Draft ITS on Pillar 3 disclosures on ESG risks.
Following the publication of the consultation paper in March 2021, the European Banking Authority (EBA) has published draft implementing technical standards (ITS) on Pillar 3 disclosures on ESG risks with the strategic objective of defining a single, comprehensive Pillar 3 framework under the Capital requirements regulation (CRR) that should integrate all the relevant disclosure requirements. These ITS put forward the tables, templates and associated instructions that institutions must use in order to disclose relevant qualitative information on ESG risks, and quantitative information on climate-change-related risks, including transition and physical risks and mitigating actions.
Resolvability and transferability
(13/01/2022) EBA – Final Report on Guidelines on improving resolvability for institutions and resolution authorities / Consultation Paper on Guidelines on transferability to complement the resolvability assessment for transfer strategies
The European Banking Authority (EBA) published its Final Report on GL on improving resolvability for institutions and resolution authorities. These guidelines aim to implement existing international standards on resolvability and take stock of the best practices so far developed by EU resolution authorities on resolvability topics. Complementing this GL in order to cover more precisely separability in the context of the application of transfer tools, the EBA has also launched its CP for GL on transferability to complement the resolvability assessment for transfer strategies.
Other publications of interest
Investment firms
(10/03/2022) ESMA – ESMA finds shortcomings in supervision of cross-border investment activities and issues specific recommendations to cysec
The European Securities and Markets Authority (ESMA) has published its peer review report on the supervision of cross-border activities of investment firms. In the report, the ESMA identifies the need for home National Competent Authorities (NCAs) to significantly improve their approach in the authorisation, ongoing supervision and enforcement work, relating to investment firm’s cross border activities. This includes calibrating their supervisory work to the nature, scale and complexity of those firms’ activities.
Internal models
(10/03/2022) EIOPA – EIOPA publishes the results from its yearly study on the modelling of market and credit risk in internal models
The European Insurance and Occupational Pensions Authority (EIOPA) has published the results of its yearly study on the modelling of market and credit risk in internal models. The analysis covers close to 100% of the EUR investments of undertakings that have an approved internal model covering these risks in the European Economic Area (EEA).
Reporting
(10/03/2022) EBA – EBA releases phase 1 of its 3.2 reporting framework and updates on validation rules
The European Banking Authority (EBA) has published phase 1 of its 3.2 reporting framework. which provides standard specifications and includes the validation rules, the Data Point Model (DPM) and the XBRL taxonomies for version 3.2. The changes affect the following reporting areas: i) COREP; ii) asset encumbrance; iii) global systemically important institutions (G-SII); iv) Supervisory benchmark; v) remuneration; and vi) investment firms.
CCPs
(10/03/2022) FSB/CPMI/IOCSO – FSB, CPMI and IOSCO analysis highlights need to continue work on CCP financial resources
The Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements, and the International Organization of Securities Commissions (IOSCO) have published a report analysing existing financial resources and tools for central counterparty (CCPs) recovery and resolution, which confirmed the need for further work on CCP financial resources.
Supervision
(08/03/2022) OCC – Large Bank Supervision: Updated Comptroller’s Handbook Booklet and Rescission
The Office of the Comptroller of the Currency (OCC) has published an update to the Large Bank Supervision Booklet, which is used by examiners in their supervision of federal branches and agencies of foreign banking organizations. The updated booklet: i) clarifies differences between the annual core assessment summary and quarterly supervision updates; ii) adds “focused review” as a supervisory activity type, consistent with the OCC’s current practices; iii) includes updates for consistency with other OCC issuances.
Climate and Enviromental action
(08/03/2022) EC – Management plan 2022 – Climate Action /Management plan 2022 – Environment
The Directorate-General for Climate Action from the European Commission (EC) has published the management plan for 2022 which defines important outputs to be achieved by 2022. For example, in the second quarter of the year, the EC will publish the review of EU rules on fluorinated greenhouse gases. Furthermore, the Directorate-General for environment has also published the management plan which defines several outputs and initiatives that the EC will deliver. For example, in the second quarter it will be revised the Directive 2010/75/EU on industrial emissions.
Economy and Financial Affairs
(08/03/2022) EC – Management plan 2022 – Economic and Financial Affairs
The Directorate-General for Economic and Financial Affairs from the EC has published the 2022 management plan with the aim to pursue the objectives set in the EC work programme 2022 in relation to achieving the following policies priorities: i) an Economy that Works for People, ii) a European Green Deal, iii) a Europe Fit for the Digital Age, and v) a Stronger Europe in the World. The plan includes several initiatives and reports from the EC (e.g. Report from the Commission to the European Parliament and the Council concerning authentication of euro coins and handling of euro coins unfit for circulation).
(02/03/2022) EBA – EBA recommends adjustments to the proposed EU Green Bond Standard as regards securitisation transactions
The European Banking Authority (EBA) has published a Report which analyses the recent developments and challenges of introducing sustainability in the EU securitisation market. the Report explores: i) whether and how the EU regulations on sustainable finance, including the EU Green Bond Standard, the EU Taxonomy, and the Sustainable Finance Disclosure Regulations could be applied to securitization; ii) the relevance of a dedicated regulatory framework for sustainable securitisation and; iii) the nature and content of sustainability-related disclosures for securitisation products.
Transparency
(01/03/2022) ESMA – ESMA makes available the results of the annual transparency calculations for equity and equity-like instruments
The European Securities and Markets Authority (ESMA) has published the results of the annual transparency calculations for equity and equity-like instruments. The calculations made available include, among others: i) the liquidity assessment; ii) the determination of the most relevant market in terms of liquidity; iii) the determination of the average value of the transactions and the related the standard market size.
Climate Change
(27/03/2022) IPCC – Climate Change 2022: Impacts, Adaptation and Vulnerability
The Intergovernmental Panel on Climate Change (IPCC) has published the Climate Change 2022 which recognizes the interdependence of climate, ecosystems and biodiversity , and human societies and integrates knowledge more strongly across the natural, ecological, social and economic sciences than earlier IPCC assessments.
(25/02/2022) OCC – Short Position and Short Activity Reporting by Institutional Investment Managers
The Securities and Exchange Commission (SEC) is proposing a new rule designed to provide greater transparency through the publication of short sale related data to investors and other market participants. Under the rule, institutional investment managers that meet or exceed a specified reporting threshold would be required to report on a monthly basis, using the proposed form, specified short position data and short activity data for equity securities.
CSRD
(25/02/2022) Council – Council adopts its position on the corporate sustainability reporting directive (CSRD)
The Council agreed its position on the European Commission proposal for a corporate sustainability reporting directive (CSRD). Among the main changes introduced by the Council, a definition of net turnover for credit institutions and insurance companies has been added in order to take their specific features into account. In addition, the presentation of information is provided for in a clearly identifiable section in the management report, in order to facilitate the readability and identification of sustainability reporting. This proposal is expected to be debated by the European Parliament (EP) by spring 2022.
Guidelines on the PSD2
(24/02/2022) EBA – EBA publishes final Guidelines on the limited network exclusion under the Payment Services Directive
The European Banking Authority (EBA) has published its final Guidelines on the limited network exclusion under the Payment Services Directive (PSD2). These guidelines clarify how national competent authorities should assess whether a network of service providers or a range of goods and services are considered "limited" and therefore not subject to the Directive. Payment instruments that could benefit from this exclusion include: i) shop cards; ii) fuel cards; iii) public transport cards and iv) meal vouchers.
Overhang during COVID-19
(22/02/2022) FSB – FSB seeks views on policy approaches and market practices to support a smooth transition out of debt overhang issues
The Financial Stability Board (FSB) has published a paper on the problems of non-financial corporate over-indebtedness in the context of COVID-19. According to the FSB, this situation could dampen jurisdictions' economic recovery and pose risks to financial stability. The paper seeks the public's views on the practical scope of over-indebtedness problems in a post-Covid-19 environment and to facilitate a dialogue between financial authorities and external stakeholders.
Basel III monitoring report
(21/02/2022) BCBS – Basel III Monitoring Report
The Basel Committee on Banking Supervision (BCBS), has published a report presenting the results of the Committee's supervisory exercise based on June 30, 2021 data. Risk-based capital ratios remained broadly stable, but leverage ratios decreased from the previous period. The largest decline, of 1.1 percentage points, occurred in the Americas. This was due to a significant increase in the leverage ratio exposure measure.
IIC
(17/02/2022) CNMV – CNMV publica el informe sobre las características de la IIC españolas sostenibles en 2020
The Comisión Nacional del Mercado de Valores (CNMV) has published a working paper on the characteristics of sustainable Spanish collective investment undertakings (CIIs) in 2020. This document performs a descriptive analysis showing that at the end of 2020 the average annual return of sustainable CIIs was higher than that of all investment funds and SICAVs registered with the CNMV.
Pensions dashbooard
(16/02/2022) FCA – CP 22/3 Pensions dashboards: proposed rules for pension providers
The Financial Conduct Authority (FCA) has published consultation paper 22/3 which sets out proposals to implement the duty placed on us by the Pension Schemes Act 2021, to make rules requiring FCA regulated pension providers to provide and facilitate the provision of information about personal and stakeholder pensions to pensions dashboards.
MMFs
(14/02/2022) ESMA - ESMA proposes reforms to improve resilience of money market funds
The European Securities and Markets Authority (ESMA) has issued an Opinion containing proposed reforms to the regulatory framework for EU Money Market Funds (MMFs) under the Money Market Funds Regulation (MMFR). The proposals will improve the resilience of MMFs by addressing in particular liquidity issues and the threshold effects for constant net asset value (CNAV) MMFs.
Empresas de servicios de inversión
(11/02/2022) EBA - EBA issues an Opinion on the European Commission’s proposed amendments to the EBA final draft technical standards on fixed overheads requirements
The European Banking Authority (EBA) has published an Opinion on the amendments proposed by the European Commission (EC) as regards the EBA final draft Regulatory Technical Standards (RTS) specifying the methodology for calculating the fixed overheads requirements for investment firms in the context of the implementation of the Investment Firms Regulation (IFR).
Sustainable finance
(11/02/2022) ESMA – ESMA prioritises the fight againsy greenwashing in its new sustainable finance roadmap
The European Securities and Markets Authority (ESMA) has published its Sustainable Finance Roadmap 2022-2024 in which there are identified three priorities: i) tackling greenwashing and promoting transparency; ii) building National Competent Authorities’ (NCAs) and ESMA’s capacities in the sustainable finance field; and iii) monitoring, assessing and analysing ESG markets and risks.
Capital
(10/02/2022) ECB - ECB will not extend capital and leverage relief for banks
In March 2020 the European Central Bank (ECB) allowed banks to operate below the level of capital defined by the Pillar 2 Guidance and the capital conservation buffer. In July 2020 the ECB committed to maintaining this full buffer flexibility until at least the end of 2022. Finally, ECB will not extend the relief for banks and Banks once again are expected to operate above Pillar 2 Guidance from 1 January 2023.
Financial risks from climate change
(09/02/2022) BoE - Bank of England launches a second round of the Biennial Exploratory Scenario (BES) exercise on financial risks from climate change
The Bank of England (BoE) has launched the second round of the Biennial Exploratory Scenario (BES) on climate change, which objective is to explore the financial risks posed by climate change for the largest UK banks and insurers. This objective is in line with the one of the first round that was launched in June 2021.The deadline for participants’ second round submissions will be the 31 March 2022 and the BoE expects to publish results from the Climate BES in May 2022.
Convergence plan
(09/02/2022) EIOPA - EIOPA publishes its Supervisory Convergence Plan for 2022
The European Insurance and Occupational Pensions Authority (EIOPA) has published its Supervisory Convergence Plan for 2022. The priorities of the plan revolve around three main areas: i) common supervisory culture and tools; ii) risks to the internal market and level playing field; and iii) supervision of emerging risks.
Capital markets
(08/02/2022) EC – Equivalence decision granting access to UK CCPs for another three years / Targeted public consultation and a call for evidence on ways to expand central clearing activities in the EU
The European Commission (EC) has adopted a decision to extend equivalence for UK central counterparties (CCPs) from 30 June 2022 until 30 June 2025. In addition, the EC has also launched a targeted public consultation and a call for evidence on ways to expand central clearing activities in the EU. Comments to the consultation can be sent before 8 March 2022.
ESG ratings
(03/02/2022) ESMA - ESMA launches call for evidence on ESG ratings
The European Securities and Markets Authority (ESMA) has published a Call for Evidence on Environmental, Social and Governance (ESG) ratings. The Call for Evidence’s purpose is to develop a picture of the size, structure, resourcing, revenues and product offerings of the different ESG rating providers operating in the EU. The call is mainly addressed to: i) ESG rating providers; ii) users of ESG ratings; and iii) entities subject to rating assessment of ESG rating providers. The call for comments is open until 11 March. Comments can be submitted to the call for proposals until 11 March.
MIFID II
(02/02/2022) ESMA - ESMA publishes supervisory briefing on the use of tied agents under MIFID II
The European Securities and Markets Authority (ESMA has published a Supervisory Briefing to ensure convergence across the EU in the supervision of firms using tied agents, in particular those based outside the EU. Furthermore, it provides indications to market participants of compliant implementation of the MiFID II provisions relating to tied agents.
Own funds requirements
(02/02/2022) EBA - EBA publishes technical standards listing advanced economy countries for market risk own funds requirements
The European Banking Authority (EBA) has published its final draft Regulatory Technical Standards (RTS) on the list of countries with an advanced economy for calculating the equity risk under the alternative standardised approach (FRTB-SA). These RTS are part of the phase 3 deliverables of the EBA roadmap for the new market and counterparty credit risk approaches.
Dashboard
(01/02/2022) SRB - SRB publishes MREL dashboard Q3 2021
The Single Resolution Board (SRB) has published its minimum requirement for own funds and eligible liabilities (MREL) dashboard covering the reporting period Q3 2021. The dashboard shows that, on the whole, banks continue to make progress in building up their level of MREL, and most banks either closed or reduced their shortfalls against the 2022 intermediate target in that quarter.
(31/01/2022) SRB - Risk Dashboard shows unchanged risk levels for European insurers
The European Insurance and Occupational Pensions Authority (EIOPA) has published its past Risk Dashboad based on Solvency II data for the third quarter of 2021. The results show that insurers' exposure to macro risks remains at a high level, while for the other risk categories, they remain at medium levels such as environmental, social and governance (ESG) related risks.
AML/CTF
(31/01/2022) EBA - EBA launches today 'EuReCA', the EU's central database for anti-money laundering and counter-terrorism financing
The European Banking Authority (EBA) has launched its central database for anti-money laundering and counter-terrorist financing (AML/CFT) database, known as EuReCa. This European reporting System will be central to coordinating efforts by competent authorities and the EBA to prevent and counter ML/TF risks in the Union.
Colective investment institutions
(27/01/2022) CNMV – Guía técnica sobre la gestión y control de liquidez de las IIC
The Comisión Nacional del Mercado de Valores (CNMV) has approved the Technical Guide on the management and control of the liquidity of Collective Investment Undertakings (CIIs). The aim of the initiative is to include and group together all the relevant supervisory criteria that the CNMV has been transmitting to institutions in recent years in relation to the management and control of the liquidity of CIIs.
Climate risk stress test
(27/01/2022) ECB - ECB Banking Supervision launches 2022 climate risk stress test
The ECB has launched a supervisory climate risk stress test to assess how prepared banks are for dealing with financial and economic shocks stemming from climate risk. This is intended to identify vulnerabilities, best practices and challenges banks face when managing climate-related risk. Importantly, this is not a pass or fail exercise, nor does it have direct implications for banks’ capital levels. It will be conducted in the first half of 2022 after which the ECB will publish aggregate results. These results, will feed into the Supervisory Review and Evaluation Process (SREP) from a qualitative point of view. From March 2022, banks will submit their templates to the ECB for assessment and the ECB will ensure fair and consistent outcomes.
(27/01/2022) EIOPA - EIOPA publishes third paper on methodological principles of insurance stress testing climate risks
The European Insurance and Occupational Pensions Authority (EIOPA) has published its third paper in a series of papers on the methodological principles of insurance stress testing. The methodological paper focuses on the climate change component and is a further step in enhancing EIOPA’s stress testing framework. In particular, the paper sets out methodological principles that can be used to design bottom-up stress test exercises that aim to assess the vulnerability of insurers to climate risks.
MIFID II
(27/01/2022) ESMA - ESMA consults on the review of MIFID II suitability guidelines
The European Securities and Markets Authority (ESMA) has launched a consultation on certain aspects of suitability requirements under the Markets in Financial Instruments Directive (MiFID II), in order to update the suitability guidelines following amendments to MiFID II to integrate sustainability factors, risk and preferences into certain organisational requirements and operating conditions for investment firms. Specifically, the main amendments introduced to the MIFID II Delegated Regulation and reflected in the guidelines on the topic of sustainability regards to these topics: i) Collection of information from clients on sustainability preferences; ii) Assessment of sustainability preferences and iii) Organisational requirements.
EMIR
(27/01/2022) ESMA - ESMA consults on CCP anti-procyclicaity measures
The European Securities and Markets Authority (ESMA) has launched a consultation paper to review the European Market Infrastructure Regulation’s (EMIR) requirements on anti-procyclicality (APC) margin measures for central counterparties (CCPs). The ESMA is seeking input from stakeholders on a potential review of its Regulatory Technical Standards (RTS) with the aim of harmonising the existing APC margin measures for CCPs as well as specific anti-procyclicality tools. The deadline for responses to the consultation paper is 31 March 2022.
Consumers protection
(24/01/2022) EIOPA – Consumer Trends Report 2021/Risk heat-map
The European Insurance and Ocuppational Pensions Authority (EIOPA) has published the Consumer Trends Report 2021 along with the risk heat-map. Both documents provide a snapshot of the impact of the COVID-19 crisis on the insurance and pension sector from a consumer protection perspective, highliting a fast-forwarded digitalisation trend with underlying opportunities, but also some concerns from a consumer protection perspective.
CRD IV amendments to the remuneration framework
(21/01/2022) EBA – EBA consults on draft Guidelines on remuneration and gender pay gap benchmarking exercise for banks and investment firms
The European Banking Authority (EBA) has launched a consultation to update its Guidelines on the remuneration benchmarking exercise under the Capital Requirements Directive (CRD), which was originally published in 2012 and updated for the last time in 2014. The review integrates additional requirements introduced by CRD V regarding the application of derogations to the requirement to pay out a part of variable remuneration in instruments and under deferral arrangements and the benchmarking of the gender pay gap. In addition, the review also includes guidance on how to harmonise the benchmarking of approvals granted by shareholders to use higher ratios than 100% between the variable and fixed remuneration. A separate and specific set of Guidelines is provided for investment firms under Investment Firms Directive (IFD). The consultation runs until 21 March 2022.
(21/01/2022) EBA – EBA consults on updates to its Guidelines on data collection exercises regarding high earners
The European Banking Authority (EBA) has launched a consultation on updates to its Guidelines on the data collection exercise on high earners, which were originally published in 2012 and revised for the last time in 2014. The review of the data collection exercises reflect the amended remuneration framework laid down in the Capital Requirements Directive (CRDV), including the introduction of derogations to pay out a part of the variable remuneration in instruments and under deferral arrangements. In addition, the need to update these Guidelines stems from the specific remuneration regime that has been introduced for investment firms and is laid down in the Investment Firms Directive (IFD) and Investment Firms Regulation (IFR). The consultation runs until 21 March 2022.
Insurance stress test
(20/01/2022) PRA – Insurance Stress Test 2022 – Request for technical input
The Prudential Regulation Authority (PRA) has published the second request for technical input regarding the insurance stress test that PRA will be conduction for the largest regulated life and general insurers from May 2022. This request includes the following documents: i) updated scenarios together with the scenario calibration, specifications, and guidance; ii) quantitative data templates; and iii) qualitative report which will complement the quantitative results. Participants can submit their feedback until Thursday 17 March 2022.
Retail banking
(20/01/2022) FCA – Strategic Review of Retail Banking Business Models
The Financial Conduct Authority (FCA) has published a final report on Strategic Review of Retail Banking Business Models, that updates their previous Strategic Review publication in 2018, allowing to explore developments from 2015 to 2021. It uses business model analysis based on detailed financial information, data and documents from many deposit-taking institutions. This includes the largest banks and building societies and a selection of smaller banks and specialist firms. This helps the FCA understand how firms currently make money, as well as the strategic factors they consider when making decisions, such as which products to offer, their price, which channels to use and which customer segments to serve.
Market integrity
(18/01/2022) ESMA – ESMA issues 2021 report on accepted market practices under MAR
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published the annual report on the application of accepted market practices (AMPs) in accordance with the Market Abuse Regulation (MAR). As a brief summary, the number of liquidity contracts and the volumes traded under the AMPs has decreased from June 2020 to June 2021 for the four national competent authorities (NCAs) that have them in place: Comisión Nacional del Mercado de Valores (CNMV), Comissão do Mercado de Valores Mobiliários (CMVM), Commissione Nazionale per le Società e la Borsa (CONSOB) and the French Autorité des Marchés Financiers (AMF). There has only been a marginal number of contracts operational under the Italian and Portuguese AMPs.
Financial promotion
(19/01/2022) FCA – Strengthening our financial promotion rules for high risk investments, including cryptoassets
The Financial Conduct Authority (FCA), has published a Consultation Paper (CP) on the strengthening of the financial promotion rules for high risk investments, including cryptoassets, which aims to ensure the financial promotion regime is robust and remains fit for purpose. To this end, changes are proposed to: i) the classification of high-risk investments; ii) the consumer journey into high-risk investments; iii) strengthen the role of firms approving and communicating financial promotions; iv) apply the financial promotion rules to qualifying cryptoassets.
Amendments to SAREBs regulation
(19/01/2022) Gobierno España – Real Decreto-ley 1/2022, de 18 de enero
The Spanish Government has published a Royal Decree introducing some changes to laws and regulations on bank restructuring. The reason for the amendments is the need to adapt the legal regime of the Sociedad de Gestión de Activos procedentes de la Restructuración Bancaria (SAREB), following its reclassification in the National Accounts as a unit belonging to the general government sector. Some of the main changes it introduces are: (i) the removal of limitations on the State's shareholding in SAREB; (ii) the updating of SAREB's tax and supervisory regime; and (iii) the possibility of disposing of assets under the general principle of sustainability and respecting SAREB's corporate purpose.
EBA risk dashboard
(10/01/2022) EBA – Asset quality has further improved, but cyber risk remains a source of concern for EU banks
The European Banking Authority (EBA) has published the third quarter Risk Dashboard of 2021. In this quarter, bank capital ratios remain well above regulatory requirements. Asset quality has further improved and Profitability has stabilised at levels above those seen before the pandemic. Furthermore, the majority of banks expect a rise in operational risks mainly due to elevated cyber risks.
IDD
(06/01/2022) EIOPA – EIOPA publishes report on the application of the Insurance Distribution Directive
The European Insurance and Occupational Pensions Authority (EIOPA) has published its first report on the application of the Insurance Distribution Directive (IDD), which regulates how insurance products are designed and distributed in the EU. Amongst others, this report examines: i) any changes in the insurance intermediaries' market structure; ii) the improvement of quality of advice and selling methods and the impact of the IDD on insurance intermediaries which are small and medium-sized enterprises; and iii) whether competent authorities are sufficiently empowered and have adequate resources to carry out their tasks.
MAR
(06/01/2022) ESMA – ESMA published Guidelines on delayed disclosure under MAR
The European Securities and Markets Authority (ESMA) has published its Final Report on the amendment of the Market Abuse Regulation (MAR) guidelines on delayed disclosure in relation to prudential supervision. The Guidelines are aimed at providing clarity, enhancing legal certainty and fostering supervisory convergence.
Investment funds
(04/01/2022) IOSCO – IOSCO Investment Funds Statistics Report
The Board of the International Organization of Securities Commissions (IOSCO) has published its Investment Funds Statistics Report, which provides new insights into the global investment funds industry and the potential systemic risks this industry may pose to the international financial system. The report will be an annual exercise that aims to facilitate the regular collection and analysis of investment fund data, enabling regulators to share information and observe trends regarding trading activities, leverage, liquidity management, markets and funding in this sector.
MIFID II
(03/01/2022) ESMA – ESMA publishes guidance on appropriateness and execution-only requirements under MIFID II
The European Securities and Markets Authority (ESMA) has published the final report on its Guidelines on certain aspects of the MiFID II appropriateness and execution-only requirements, which constitute an important element of investor protection in the provision of investment services other than investment advice or portfolio management. The purpose of the Guidelines is to enhance clarity and to foster convergence in the application of the appropriateness and execution-only requirements. In addition, the report contains comments from the public consultation conducted by ESMA in February 2021.
Regulatory news from previous periods or FYs can be found in the Quarterly Regulatory Reports, section for current year reports, or the Annual Regulatory Reports section for previous year reports.
