Tracker, Financial Services Regulation & Compliance - Banking
Key provisions of the Credit Reporting Act 2013 enter force
Pursuant to the Credit Reporting Act 2013 lenders will now be required to submit information to the Central Credit Register relating to consumer lending. Lenders will be required to submit credit applications made, and credit agreements in force, from 30 June 2017. Additionally, they will also need to provide details on existing back book customers if the credit agreements meet certain criteria and the agreements remain outstanding at the time the report is made. Information required in respect of consumer lending must be submitted by 31 December 2017. It is anticipated information relating to business lending will be collected between 31 March 2018 and 30 September 2018.
Central Bank publishes guidance on how to report AnaCredit Counterparty Files in XML
The AnaCredit Regulation requires reporting agents (i.e. credit institutions and credit unions) (RAs) to report loans to legal entities that the RAs and their Observed Agents have a role in. The guidance issued by the Central Bank discusses in further detail what RAs will be required to report, how files are to be loaded on the online reporting system (ONR), how files will be validated and how the record validating and matching process operates.
Department of Finance publishes the Small and Medium-Sized Enterprises Credit Demand Survey
The survey carried out by an independent market research company looks at the credit demand for small and medium-sized enterprises (SME) from October 2016 until March 2017. The key finding from the survey is that favourable trading conditions remain for SMEs with 84% of participants reporting a stable or increased trading performance and 61% of participants reporting a profit over the six months from October 2016 to March 2017. Additionally, 88% of credit applications completed by participants in the survey during this period were approved or partially approved.
European Banking Authority publishes final standards specifying information requirements for the authorisation of credit institutions
The European Banking Authority (EBA) have published their final draft Regulatory Technical Standards (RTS) on the information applicants shall provide to competent authorities when applying for authorisation as credit institutions and their final draft Implementing Technical Standards (ITS) related to the templates to be used for the provision of such information. The EBA are encouraging the Commission to adopt the technical standards in order to maintain a consistent and thorough assessment process for applications for authorisation, particularly in light of entities seeking to relocate because of Brexit.
European Commission consults on the development of secondary markets for non-performing loans and distressed assets and protection of secured creditors from borrowers’ default
The Commission has launched a consultation in order to determine whether a European strategy would help address the issue of non-performing loans (NPLs) affecting countries across the EU. As part of the strategy the Commission is proposing to develop a secondary market for NPLs, to implement legislation allowing creditors recover value from secured loans to corporates and entrepreneurs and the preparation of an action plan with targets, timetables and a monitoring mechanism for NPLs. The consultation will run until 20 October 2017.
European Central Bank publishes review of national regimes relating to Non-Performing Loans
The European Central Bank's (ECB) review is the second such review and all euro area countries have now been covered providing a comprehensive overview on how NPLs are treated. The review sets out that preparation should be made by credit institutions while NPL levels are manageable so that frameworks for managing NPLs are effective when NPL levels are elevated. The ECB also referred to the guidance that they recently issued on tackling NPLs, directed at significant institutions (SIs) (March 2017), and noted that the implementation of this guidance within SIs will be an important part of supervisory assessments in the future.
European Banking Authority publishes data on the Deposit Guarantee Schemes Directive 2014/49/EU
The EBA has published data on the key concepts of Deposit Guarantee Schemes (DGS) which are applicable across the EU; the available financial means and deposits covered under the DGSs. The publication of the data aims to enhance transparency and accountability of DGSs to benefit depositors, markets, policymakers and Member States. The financial means of the DGSs is in the process of being developed pursuant to a funding model that was introduced by the Deposit Guarantee Scheme Directive (DGSD).
European Banking Authority consults on methods for calculating contributions to DGSs
EBA guidelines are in place in order to calculate the risk based contributions required from banks to the applicable DGS. The EBA have launched a consultation in order to determine whether the methods outlined in the guidelines are being met in practice and to determine if the implementation of the guidelines is appropriate and consistent. The consultation will run until 28 August 2017.
Commission Delegated Regulation (EU) 2017/1230 of 31 May 2017 is published in the Official Journal
Commission Delegated Regulation (EU) 2017/1230 of 31 May 2017 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards further specifying the additional objective criteria for the application of a preferential liquidity outflow or inflow rate for cross-border undrawn credit or liquidity facilities within a group or an institutional protection scheme was published in the Official Journal on 8 July 2017. The regulation entered force on 28 July 2017.
European Banking Authority publishes questions and answers in relation to the Capital Requirements Regulation (EU) No 575/2013 in the Single Rulebook Q&A on the following topics:
- Cap on inflows for consumer finance or leasing and factoring activity (Article 33);
- Taps on callable instruments (Articles 52 and 63);
- Tier 2 instruments and incentives to redeem or repay subordinated bonds prior to their maturity / Instrument Tier II (Article 63);
- Clarification of the conditions for reduction of own funds due to Article 77 CRR and Article 28 RTS on Own funds (Article 77);
- Prior permission for repurchase of CET 1 instruments for discretionary trading activity over treasury shares for a certain predetermined amount (Article 77);
- Minority Interests (Article 81);
- Annex XI - template C 44.00 (LR5), row 040, column 010 (Article 99);
- C 07.00, validation e4894_n (validations for v2.6) (Article 99);
- F 05.00, row 010, column 030 - On demand [call] and short notice [current account] for Central Banks (Article 99);
- FINREP Templates F 30.01 and F 30.02, validation v1019_m (Article 99);
- FINREP, F 08.01: Breakdown of financial liabilities, amount contractually required to pay at maturity (Article 99);
- Group Solvency - Combined Buffer Requirements (Article 99);
- Immediate obligor and ultimate obligor concerning exposures secured by mortgages on immovable property (Article 99);
- Inconsistency between validation rules and ITS/CRR for C 07.00 (Article 99);
- Positions Subject to Capital Charge (Article 99);
- Reporting of ECB LTRO in table 2A2 (P 02.02) and validation rule v4135_m (Article 99);
- Validation Rule v3748_s partly incorrect (Article 99);
- ‘Exposure weighted average LGD’ computation in CR GB2 report (Article 99);
- Validation rules v2815_m, v2821_m vs. FINREP / AE instructions (Articles 99 and 100);
- Asset Encumbrance - Default Fund pledges (Article 100);
- Securities Lending (Article 100);
- Risk weight to apply to exposures to unrated central banks (Article 114);
- Risk weight of EURATOM debt (Article 118);
- Effective Maturity calculation for fully/nearly fully collateralised derivatives and Security Financing Transactions (Article 162);
- Computation of discount for purchased assets (Article 166);
- Derivative adjustment of the basic annual contribution through mark-to-market method (Article 274);
- Rollover of Funding (C 70.00): Treatment of maturing deposits being renewed at a different tenor (Article 415);
- Treatment of central bank reserves in third countries (Article 416); and
- Treatment of interest outflows for retail deposits (Article 421).
European Banking Authority publishes question and answer in relation to the Capital Requirements Directive 2013/36/EU in the Single Rulebook Q&A on the following topic:
- Application of the 0% floor in the calculation of the supervisory standard shock (particularly downward scenario) (Article 98).
For further information please contact a member of the Financial Regulation team.
Date published: 04 Aug 2017