Featured Product

    FSB Publishes Framework for Information from FMI Intermediaries

    August 20, 2021

    The Financial Stability Board (FSB) published a framework for information from financial market infrastructure (FMI) intermediaries to support resolution planning. The framework seeks to help FMI intermediaries better understand which information clients and their resolution authorities may need from them. It does so by providing an overview of the baseline information that is potentially relevant for clients and resolution authorities, which they and their FMI intermediaries can then discuss, as needed, during bilateral engagement. In the framework, the terms “FMI service user” and “client” are being used interchangeably to mean a legal entity that is a financial institution (including bank) or a group that has access to critical FMI services and that is subject to a resolution regime.

    The use of a common framework for identifying certain baseline information relevant to continuity of access in resolution should help reduce the burden of information gathering and avoid unnecessary duplication. Though this framework does not set new requirements, it clarifies the topics that would typically be part of such requests. The use of the framework is voluntary but FMI intermediaries should be prepared to respond to requests from their clients and their clients’ resolution authorities, in a form they see fit. The framework covers the FMI services provided by the FMI intermediaries, conditions governing suspension or termination, phase prior to resolution, resolution phase, and cases in which an FMI intermediary is in resolution. FSB will organize an outreach webinar for stakeholders on this framework on September 16, 2021. The first experience with this framework will be evaluated during 2022. Post which, the FMI service providers and service users (clients), as well as other stakeholders, will have the opportunity to provide feedback and suggestions on the framework and the process. 

    FSB, in May 2019, had held a workshop with industry on continuity of access to FMIs for firms in resolution, to discuss possible actions to assist authorities and firms in implementing the 2017 FSB guidance; this guidance sets out arrangements and safeguards to facilitate continuity of access to FMI services for a firm in resolution, with a view to maintaining the firm’s critical functions that rely on the continued access to FMI services. As part of implementing the guidance, authorities and firms develop plans to facilitate continuity of access in resolution; this requires information about the nature of the FMI service user’s relationship with both FMIs and FMI intermediaries on the arrangements and safeguards that would affect an FMI service user’s access to FMI services in the run-up to, and during, its resolution. In August 2020, FSB had published a questionnaire for FMIs, which had been developed in consultation with the FMIs and banks. The purpose of this was to reduce the “many to one” nature of inquiries from FMI participants and authorities to FMIs for resolution planning and streamline the provision of this information from FMIs to firms and authorities.

    Following an evaluation of stakeholders’ first experiences with the process via an online survey in April 2021, FSB has now updated the questionnaire. All FMIs are encouraged to complete the questionnaire and to publish their responses, or to make them available in other ways to FMI service users and resolution authorities to inform their resolution planning. The questionnaire covers general information on the FMI and its legal structure; information on the rulebook/contractual provisions regarding termination; the phases prior to resolution, during signs of distress at the FMI participant, and the resolution phase; and arrangements and operational processes to facilitate continued access in resolution. FSB emphasizes that if an FMI chooses not to complete the questionnaire, it should be prepared to respond to its clients’ and their resolution authorities’ information requests within reasonable deadlines, as mutually agreed. 

     

    Related Links

    Keywords: International, Banking, FMI, Resolution Framework, Resolution Planning, FMI Intermediaries, Questionnaire, FSB

    Related Articles
    News

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    EP Reaches Agreement on Corporate Sustainability Reporting Directive

    The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).

    June 21, 2022 WebPage Regulatory News
    News

    PRA Consults on Model Risk Management Principles for Banks

    The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.

    June 21, 2022 WebPage Regulatory News
    News

    EC Regulation Amends Standards for Calculating Credit Risk Adjustments

    The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News
    News

    BCBS Issues Climate Risk Principles while HKMA Expresses Its Support

    The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.

    June 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8280