FIN-FSA published regulations and guidelines (5/2019) related to the Capital Requirements Regulation (CRR or EU Regulation No 575/2013) and they enter into force on September 01 2019. The new regulations and guidelines consist of an update of regulations and guidelines 25/2013 on capital requirements calculation and large exposures. The objective of these regulations and guidelines is to provide supervised entities with instructions, within the limits allowed by EU regulation, on the capital adequacy and liquidity risk requirements, on large exposures, and on the disclosure of information. The instructions are related to the national application of CRR as well as regulations and guidelines of EBA and ECB.
These regulations and guidelines include the FIN-FSA regulations on options and national discretions allowed in CRR. On entry into force, the regulations and guidelines 5/2019 shall repeal Regulations and guidelines 25/2013 on Capital requirements calculation and large exposures, Regulations and guidelines 10/2014 on Disclosure of encumbered and unencumbered assets, and Regulations and guidelines 4/2013 on Calculation of Stressed VaR and Incremental Risk Charge. These regulations and guidelines also repeal the FIN-FSA statement from December 31, 2013 on the regulatory options and discretions left in CRR for the competent authority. The most material changes compared to regulations and guidelines 25/2013 include:
- Change in the scope of application
- Updated positions of FIN-FSA on options and discretions under CRR
- Addition of new chapters, specifically chapter 5 on capital adequacy treatment of qualifying holdings outside the financial sector, chapter 9 on capital requirements for counterparty risk, and chapter 14 on liquidity risk requirements
- Amendments to chapter 2 on legal framework and international recommendations, chapter 6 on capital requirements for credit risk under the standardized approach, chapter 7 on capital requirements for credit risk under the internal ratings based approach, chapter 10 on capital requirements for market risk, chapter 13 on large exposures, and chapter 15 on disclosure of capital adequacy and liquidity risk information
These regulations and guidelines are applicable to supervised entities, including credit institutions, certain investment firms, central bodies of amalgamations of deposit banks, holding companies of credit institutions, holding companies of investment firms, and parent companies of financial and insurance conglomerates. These regulations and guidelines do not apply to credit institutions, the supervision of which has been transferred to ECB in accordance with the Single Supervisory Mechanism (SSM) Regulation. Parent companies of financial and insurance conglomerates are only subject to chapter 13 of these regulations and guidelines.
Effective Date: September 01, 2019
Keywords: Europe, Germany, Banking, Insurance, CRR, Regulations and Guideline 5/2019, Options and Discretions, ECB, FIN-FSA
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