Featured Product

    EU Finalizes Rules on Sustainability-Related Disclosures

    December 09, 2019

    EU finalized the regulation (2019/2088) on sustainability‐related disclosures in the financial services sector and this regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Regulation 2019/2088, which shall apply from March 10, 2021 with certain exceptions, lays down harmonized rules for financial market participants and financial advisers on transparency with regard to the integration of sustainability risks and the consideration of adverse sustainability impact in the processes and the provision of sustainability‐related information with respect to financial products. Also published was the regulation (2019/2089) on EU Climate Transition Benchmarks, EU Paris-Aligned Benchmarks, and sustainability-related disclosures for benchmarks. Regulation (EU) 2019/2089 amends the Benchmarks Regulation (2016/1011) and shall enter into force on the day following that of its publication in the Official Journal of the European Union.

    In the absence of a harmonized framework to ensure the accuracy and integrity of the main categories of low-carbon benchmarks used in individual or collective investment portfolios, it is likely that differences in member states’ approaches will create obstacles to the smooth functioning of the internal market. To maintain the proper functioning of the internal market for the benefit of investors, to further improve the functioning of the internal market, and to ensure a high level of consumer and investor protection, it is appropriate to amend the Benchmarks Regulation by introducing a regulatory framework that lays down minimum requirements for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks at the EU level. It is important that such benchmarks should not significantly harm other environmental, social, and governance (ESG) objectives.

    Introducing a clear distinction between EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks and developing minimum standards for each of those benchmarks would contribute to consistency among those benchmarks. The EU Paris-aligned Benchmark should be in line with the objectives of the Paris Agreement at the index level. To enable market participants to make well-informed choices, all benchmark administrators, with the exception of administrators of interest rate and foreign exchange benchmarks, should be required to disclose in their benchmark statement whether or not their benchmarks or families of benchmarks pursue ESG objectives and whether or not the benchmark administrator offers such benchmarks. 

    To ensure continued adherence to the selected objective of climate-change mitigation, administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks should review their methodologies regularly and inform users of the applicable procedures for introducing any material change to those methodologies. When introducing a material change, benchmark administrators should disclose the reasons for that change and explain how that change is consistent with the initial objectives of the benchmarks. The Benchmarks Regulation introduced a transitional period in which index providers providing benchmarks on June 30, 2016 are to apply for authorization by January 01, 2020. The discontinuation of a critical benchmark could impact market integrity, financial stability, consumers, the real economy, and the financing of households and businesses in member states. The maximum period of the mandatory administration of critical benchmarks and the maximum period for mandatory contributions to such benchmarks should be extended to five years. Therefore, the Benchmarks Regulation has been amended accordingly.

     

    Related Links

    Effective Date: December 29, 2019 (2019/2088); December 10, 2019 (2019/2089)

    Keywords: Europe, EU, Banking, Insurance, Securities, Pensions, Disclosures, Climate Benchmarks, Paris Agreement, ESG, Regulation 2019/2088, Regulation 2019/20189, Sustainable Finance, Climate Change Risk, ESAs, EC

    Related Articles
    News

    EC Adopts Financial Reporting Changes Arising from Benchmark Reforms

    EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.

    January 14, 2021 WebPage Regulatory News
    News

    BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk

    BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.

    January 14, 2021 WebPage Regulatory News
    News

    HMT Updates List of Post-Brexit Equivalence Decisions in UK

    HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Issues Erratum for Technical Package on Reporting Framework 3.0

    EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.

    January 14, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets

    APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for Third Quarter of 2020

    EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro

    ECB concluded the public consultation on the introduction of a digital euro in EU.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Finalizes Guide on Supervisory Approach to Bank Consolidation

    ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.

    January 12, 2021 WebPage Regulatory News
    News

    SRB Chair Outlines Work Priorities for 2021

    The SRB Chair Elke König published an article setting out work priorities for 2021.

    January 11, 2021 WebPage Regulatory News
    News

    FDIC Selects Companies to Compete in Final Phase of Tech Sprint

    FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.

    January 11, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6417