21 July - 25 July 2014

Regulatory and Legislative Developments from Across the Globe

World View

BIS Issues Report on International Banking Statistics
The Monetary and Economic Department of the Bank for International Settlements issued a Report on International Banking Statistics at End-March 2014.  
Report | Press Release

IOSCO Releases Report on Regulating Social Media and Automated Advice by Intermediaries
The International Organization of Securities Commissions released a Report on the IOSCO Social Media and Automation of Advice Tools Surveys. The report “presents the results of four surveys on the use of social media and automated advice tools in capital markets, and how regulators oversee the use of these tools.”
Report | Press Release

IOSCO Reviews Implementation of Benchmarks by Interest Rate Administrators
The International Organization of Securities Commissions released a report entitled “Review of the Implentation of the IOSCO’s Principles for Financial Benchmarks by Administrators of Libor Euribor, and Tibor.” The report “assesses the three major interest reference rates against the internationally agreed and endorsed IOSCO Principles for Financial Benchmarks.” 

IMF Releases Working Paper on Insurance Sector Stress Testing
The International Monetary Fund released a Working Paper entitled "Macroprudential Solvency Stress Testing of the Insurance Sector." The paper “reviews the current state of system-wide solvency stress tests for insurance based on a comparative review of national practices and the experiences from Fund’s FSAP program with the aim of providing practical guidelines for the coherent and consistent implementation of such exercises.”
Working Paper

IMF Releases Working Paper on the Role of Macroprudential Policies in Mitigating Liquidity Traps
The International Monetary Fund released a Working Paper entitled "Liquidity Trap and Excessive Leverage."
Working Paper  

FSB Releases Reports on Reforming Major Interest Rate Benchmarks
The Financial Stability Board (FSB) has published proposals for the reform and strengthening of existing major interest rate benchmarks and for additional work on the development and introduction of alternative benchmarks. The proposals are based upon a review of interest rate benchmarks carried out by a high-level Official Sector Steering Group of regulators and banks, in response to an FSB request in June 2013.
The review consisted of two major strands of work: (i) a review of the standards and principles for sound benchmarks, including an assessment of major benchmarks against the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks; and (ii) a report by a market participants group (MPG) of private sector experts on additional benchmark rates and analysis of transition issues arising in the event of a move to an alternative rate.
FSB Report | Market Participants Group Report | FSB Press Release | Market Participants Group Press Release

ACER Consults on TRUM and RRM Requirements for REMIT Transactions Reporting
The Agency for the Cooperation of Energy Regulators (ACER) has published two consultation papers on draft implementing acts under Regulation (EU) No 1227/2011 on wholesale Energy Market Integrity and Transparency (REMIT). The consultations relate to ACER’s proposals for a transaction reporting user manual (TRUM) and requirements for registered reporting mechanisms (RRMs). The deadline for responses is 2 September 2014.
Consultation Paper

EBA Releases Draft Consultation on Assessing Systemically Important Institutions
The European Banking Authority released a Consultation Paper on Guidelines on the Criteria to Determine the Conditions of Application of Article 131(3) of Directive 2013/36/EU in Relation to the Assessment of Other Systemically Important Institutions (O-SIIs). The Guidelines outline “criteria to identify institutions that are systemically important either at Member State or Union level, the so called ‘other systemically important institutions' (O-SIIs).” Comments are due by October 18, 2014.
Consultation Paper | Press Release

EBA Releases Final Draft Technical Standards and Guidelines on Recovery Plans
The European Banking Authority (EBA) has published two final draft Regulatory Technical Standards (RTS) specifying (i) the information to be included in a recovery plan; and (ii) criteria that competent authorities should apply when assessing the recovery plan of an institution or group. Guidelines have also been published which set out the scenarios to be used to test recovery plans. The RTS and guidelines will form part of the European Single Rulebook in banking. The final draft RTS and guidelines have been developed according to Articles 6(8) and 5(7) of the Bank Recovery and Resolution Directive (2014/59/EU) (BRRD).Content of Recovery Plans Standards | Assessment of Recovery Plans Standards | Guidelines | Press Release

EBA Releases Opinion on France’s Draft Banking Separation Measure
The European Banking Authority released an Opinion on a Structural Measure Notified by the French Republic Pursuant to Article 395(6) of Regulation (EU) No 575/2013. The opinion assesses “the measures laid down in the French legal framework and [finds] that such measure is consistent with the general principles governing the EU internal market.”
Opinion | Press Release

EBA Releases Peer Review on the Implementation of Credit Concentration Risk Guidelines
The European Banking Authority released a Report on the Peer Review of the EBA Guidelines on the Management of Concentration Risk Under the Supervisory Review Process (GL 31). The review “shows that National Competent Authorities (NCAs) largely comply with the assessed guidelines (GL31) and credit concentration risk forms an integral part of NCAs' risk assessment system.”
Peer Review | Press Release

ESMA Issues Technical Advice on Assessing Sovereign Debt
The European Securities and Markets Authority issued Technical Advice to the European Commission in Accordance with Article 39(b)2 of the CRA Regulation Regarding the Appropriateness of the Development of a European Creditworthiness Assessment for Sovereign Debt.  The advice touches on “the independence of the rating process, the review function of rating methodologies, the confidentiality of all rating sensitive,” and the resources needing to ensure rating quality.
Technical Advice | Press Release

ESMA Issues Updated Q&A on AIFMD
The European Securities and Markets Authority issued an updated set of questions and answers on the Application of the Alternative Investment Fund Managers Directive. The updates seek to clarify reporting obligations and obligations regarding leverage calculation. The new Q&As relate to the reporting obligations of AIFMs under articles 3, 24 and 42 AIFMD; the rules governing depositaries of AIFs; and the calculation of leverage when determining an AIF’s exposure.
Updated Q&A | Press Release

ESMA Releases Discussion Paper on Counterparty Risk Calculation Methods for UCITS OTC Derivatives Subject to Central Clearing
The European Securities and Markets Authority (ESMA) published a discussion paper on the calculation of counterparty risk by undertakings for collective investment in transferable securities (UCITS) which enter into over-the-counter (OTC) derivatives transactions that are required to be centrally cleared under the European Markets Infrastructure Regulation. Under the UCITS Directive (2009/65/EC) investments in OTC derivatives are subject to counterparty risk exposure limits. The deadline for comments is 22 October 2014.
Discussion Paper

ESMA Releases Draft Discussion Paper on OTC Clearing Counterparty Risk for UCITS
The European Securities and Markets Authority released a Discussion Paper on Calculation of Counterparty Risk by UCITS for OTC Financial Derivative Transactions Subject to Clearing Obligations. The Discussion Paper examines “the impact of a default of a clearing member or of other clients of that member on UCITS that enter into centrally cleared OTC derivative transactions.” Comments are due by October 22, 2014.
Discussion Paper | Press Release

FCA Releases Report on Insurance Add-Ons
The Financial Conduct Authority released a Final Report on General Insurance Add-Ons: Confirmed Findings of the Market Study. The study found “that selling a product as an add-on often lead to consumers purchasing products that were of poor value and not what they needed.”
Report | Press Release

FCA Consults on Removing Requirement to Publish Interim Management Statements
The FCA has published consultation paper CP14/12 on proposals to remove the requirement to publish interim management statements set out in the Transparency Directive Amendment Directive (TDAD) (2013/50/EC). The TDAD entered into force on 26 November 2013 and is required to be implemented within 24 months of that date. The deadline for responses is 4 September 2014. The FCA intends to publish feedback later in 2014.
Consultation Paper

FPC Consults on Design of Leverage Ratio Framework
The Financial Policy Committee (FPC) has announced an extension of the deadline for responses to its consultation on the design of a leverage ratio framework for the UK, as part of its review of the role of the leverage ratio within the capital framework for banks. The FPC is seeking responses from the industry to the proposals set out in the consultation paper and these will inform the FPC’s final review. The deadline for comments is 12 September 2014, amounting to a response period of nine weeks in total (four weeks longer than previously). The final review is intended to be published in November 2014.
Consultation Paper

HKMA and SFC Release Joint Consultation on Mandatory Reporting and Related Record Keeping Rules for the OTC Derivatives Market
The Hong Kong Monetary Authority and the Securities and Futures Commission began a one-month consultation on the detailed requirements relating to the mandatory reporting and related record keeping obligations under the new over-the-counter (OTC) derivatives regime.
Consultation Paper | Press Release

Joint Committee Releases Draft Consultation on Financial Conglomerates Risk Concentration and Intra-Group Transactions
The Joint Committee, consisting of the European Securities and Markets Authority, the European Banking Authority and the European Insurance and Occupational Pensions Authority, released a Consultation Paper on Draft Regulatory Technical Standards on Risk Concentration and Intra-Group Transactions Under Article 21a (1a) of the Financial Conglomerates Directive. The draft RTS aim to “clarify which risk concentrations and intra-group transactions within a financial conglomerate should be considered as significant.” Comments are due by October 24, 2014.
Consultation Paper | ESMA Press Release | EBA Press Release | EIOPA Press Release

MAS Proposes Stronger Safeguards for Investors
The Monetary Authority of Singapore released a consultation paper on proposals to enhance its regulatory framework for safeguarding investors' interests. The public is invited to participate in the consultation exercise on the proposed changes over a six-week period from 21 July to 1 September 2014.
Press Release

RBI Releases Final Report of the Internal Working Group on Implementation of the Countercyclical Capital Buffer Framework in India
The Reserve Bank of India released the Report of the Internal Working Group on Implementation of Countercyclical Capital Buffer in India.
Press Release

Andrew Gracie Speaks on Regulation
Andrew Gracie, Executive Director, Resolution, Bank of England, delivered a speech entitled” Making resolution work in Europe and beyond – the case for
gone concern loss absorbing capacity” at the Bruegel Breakfast Panel Event in Brussels. He stressed “the importance of internationally-agreed standard that establishes a common framework, like MREL, outside Europe and ensures that G-SIBs have sufficient appropriately loss absorbing capacity should they fail in order to be able to implement an orderly, effective resolution of any firm and therefore end ‘Too Big to Fail.’”

Grant Spencer Speaks on Financial Regulation
Reserve Bank of New Zealand Deputy Governor Grant Spencer delivered a speech entitled "Taking Stock of Financial Sector Regulation " To the New Zealand Banker’s Association in London. Spencer said that while New Zealand’s regulatory regime performed well during the crisis, constant work to improve the regulatory framework is still needed. 

Jon Cunliffe Speaks on Leverage Ratio
Bank of England Deputy Governor of Financial Stability Sir Jon Cunliffe delivered a speech entitled "The Role of the Leverage Ratio and the Need to Monitor Risks Outside the Regulated Banking Sector" at the Financial Reporting Council annual conference in London. Cunliffe stressed the importance of continued regulatory vigilance and adaptation in an era of rapid financial industry evolution.


GFMA & GFMA - Affiliate News & Events

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