Tracker, Financial Services Regulation & Compliance - Banking Sept 2017


DOMESTIC:

Central Bank publishes Consultation Paper proposing enhanced measures to aid mortgage switching

The Consultation Paper was published following research into consumer perceptions and attitudes towards mortgage switching by the Central Bank in late 2016. The consultation proposes amending the Consumer Protection Code to:

  • provide enhanced transparency measures for fixed rate mortgages, variable mortgage rates based on LTV and incentives related to mortgages;
     
  • introduce transparency measures on potential switching savings;
     
  • standardise switching information for consumers; and
     
  • impose on lenders a time-bound switching process.

The consultation will run until 1 November 2017.

Central Bank publishes case studies to assist the preparation of AnaCredit Reporting Templates

Seventeen case studies have been published by the Central Bank to assist entities with the preparation of reporting templates which they will be required to submit reports once the AnaCredit Regulation (EU) 2016/867 take effect. The sample cases studies are similar to those produced in the European Central Bank (ECB) AnaCredit Reporting Manual but have been amended from a national perspective. Sample completed reports have been published in conjunction with the case studies.
 

EUROPEAN:

European Central Bank publishes guidance on AnaCredit Validation Checks

In order to ensure that data collected, pursuant to the AnaCredit Regulation, is of a sufficient standard to be sent to AnaCredit validation checks will be carried out by national central banks. To this end, the ECB has published a document setting out how the checks will be performed and which also provides clarification on the categories of the validation checks which will be carried out, including referential integrity, completeness and consistency. The guidance supports the AnaCredit Reporting Manual but is not legally binding.

The ECB also published the first version of Questions and Answers on the AnaCredit Reporting Manual. There are thirteen questions and the ECB set out that the document will be further updated.

European Central Bank publishes amendments to ECB Regulation (EU) 2015/534 on reporting of supervisory financial information

The amendments to the ECB Regulation on reporting of supervisory financial information have been implemented following a public consultation which was held in early 2017. The amendments mainly incorporate changes introduced by implementing Regulation (EU) No 680/2014 on supervisory reporting in order to ensure that reporting on financial information (FINREP) is in line with the new reporting standards for financial instruments, the IFRS9 standards. The amended regulation will come into effect on 1 January 2018.

European Central Bank impose first administrative penalty pursuant to the SSM

The ECB exercised their power to impose administrative sanctions for the first time, pursuant to Article 18(7) of the Single Supervisory Mechanism Regulation (EU) No 1024/2013 (SSM Regulation), on Permanent tsb Group Holdings for breaching two liquidity directions. The ECB imposed fines totalling €2.5million for the breaches but they also noted that the breaches have been fully remediated. The responsibility for the supervision of 'significant' institutions was extended to the ECB in November 2014 pursuant to the Single Supervisory Mechanism.

European Banking Authority issues opinion on measures to address macroprudential risk

Following the receipt of a notification from the Finnish Financial Supervisory Authority (Finnish FSA) of its intention to amend capital requirements pursuant to the Capital Requirements Regulation (CRR), due to increased macroprudential risk, the European Banking Authority (EBA) has published an opinion in relation to the measures which the Finnish FSA propose adopting. The EBA highlighted questions to be considered by the European Commission, including the choice of measure proposed and the impact of the measure proposed, prior to the implementation of the measures by the Finnish FSA.

Commission Implementing Regulation (EU) 2017/1443 is published in the Official Journal

Commission Implementing Regulation (EU) 2017/1443 of 29 June 2017 amending Implementing Regulation (EU) No 680/2014 laying down implementing technical standards with regards to supervisory reporting of institutions according to Regulation (EU) No 575/2013 was published in the Official Journal on 17 August 2017. The Implementing Regulation updates reporting templates and instructions arising from the implementation of the IFRS9 standards. The Implementing Regulation has entered force on 7 September 2017 and will apply from 1 January 2018.

Commission Delegated Regulation amending Regulation (EU) No 575/2013 as regards the waiver on own funds requirements for certain covered bonds is adopted

The Commission has now adopted a Commission Delegated Regulation amending the CRR as regards the waiver on own funds requirements for certain covered bonds. The Delegated Regulation will enter force 20 days after its publication in the Official Journal of the EU and will apply from 1 January 2018.

Commission Implementing Regulation (EU) 2017/1486 is published in the Official Journal

Commission Implementing Regulation (EU) 2017/1486 of 10 July 2017 amending Implementing Regulation (EU) 2016/2070 as regards benchmarking portfolios and reporting instructions was published in the Official Journal on 31 August 2017. The amendments have been made in order to reflect changes to the focus of assessments being carried out by competent authorities which require exposures or positions that are included in benchmarking portfolios, and reporting requirements, to be adapted. The Regulation will force on 20 September 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:

  • Third countries considered to have supervisory arrangements equivalent to EU (Aticle 11);
     
  • C 22.00 (Market Risk FX) - Scope of Memorandum Items (Article 99);
     
  • EBA validations APPEAR to be relevant to IFRS and GAAP though they only include a GAAP template (F 04.06) (Article 99);
     
  • FINREP (IAS 39), Validation rules v5014_m (Article 99);
     
  • FINREP, F 31.02 vs F 02.00 - dividend income from joint ventures and associates (Article 99);
     
  • Inconsistency between Annex II C 14.00, column 190 and DTS categorisation of COREP C 14.00, ei86 measure (Article 99);
     
  • Partial and Total-Write-Offs in FINREP IFRS 9 templates F 04.03.1 and F 04.03.2 (Article 99);
     
  • Reconciliation of FINREP and COREP with regard to goodwill (Article 99);
     
  • Reporting of own funds requirements for non-continuous options (Article 99);
     
  • Template C 07.00, column 230: of which: with a credit assessment by a nominated ECAI (Article 99);
     
  • Validation rule v4795_m, C 13.00 – Securitisations (Article 99);
     
  • v4835_m - C 19.00 column 610 calculation (Article 99);
     
  • Asset encumbrance Reporting vs. Finrep Reporting - Definition of equity instruments not aligned (Article 99 and 100);
     
  • Asset Encumbrance Reporting for firms with Accounting Reference Date other than 31 December (Article 100);
     
  • Definition of encumbrance relating to retained interest of the issuer of securitisations  (Article 100);
     
  • High income OECD countries and Liquid asset classifications (Article 137);
     
  • Consideration and representation within the LE templates in case of existing indirect exposure resulting out of credit risk mitigation (CRM) - here unfunded credit protection under a guarantee between two partners within a Group of connected clients (GCC) (Article 394);
     
  • LE reporting - reporting of exposures exempted under Article 400(1)(c) - exposures carrying explicit guarantees of central governments (Article 394);
     
  • Reporting of individual exposures relating to a group of connected institutions for which there is a cash pooling agreement, where some creditor nostri accounts are offsetting debtor nostri balances (Article 394);
     
  • Reporting of outflows and Inflows arising from secured lending transaction where collateral is not Level 1, Level 2A and Level 2B asset on DA LCR templates C 73.00 and C 74.00 (Article 415); and
     
  • Liquid assets underlying sold call options (Article 417).

For further information please contact a member of the Financial Regulation team.

Date published: 07 September 2017