EBA Revises Validation Rules, Proposes Liquidity and Onboarding Guides
The European Banking Authority (EBA) revised list of validation rules in the implementing technical standards on supervisory reporting and proposed the draft regulatory technical standards on specific liquidity measurement requirements for investment firms. EBA also proposed the guidelines on liquidity requirement exemptions for small and non-interconnected investment firms, in line with the Investment Firms Regulation, and the guidelines on use of remote customer onboarding solutions. The comment period for both the guidelines and the standards on liquidity requirements ends on March 10, 2022.
The draft regulatory standards and draft guidelines on liquidity aim to ensure consistent supervisory practices with regard to the application of liquidity requirements for investment firms across all member states in European Union. The draft regulatory standards on specific liquidity measurement set out liquidity risk elements that may raise major concern for investment firms and that competent authorities will be required to consider when setting specific liquidity requirements as a result of an investment firm’s supervisory review and evaluation process (SREP). The draft standards specify that those elements shall be considered under normal and severe, but plausible, conditions. In addition, to ensure proportionality, competent authorities should assess only a smaller set of elements for small and non-interconnected investment firms. In addition, the draft guidelines set out the criteria that competent authorities should take into account when exempting small and non-interconnected investment firms from liquidity requirements set out in the Investment firms Regulation. These guidelines specify that an exemption should be based on the assessment of the financial resource needed for an orderly wind-down of the investment firm.
The guidelines on use of remote customer onboarding solutions set out a common understanding by competent authorities of the steps financial sector operators should take to ensure safe and effective remote customer onboarding practices in line with the applicable anti-money laundering and countering the financing of terrorism (AML/CFT) legislation and the data protection framework of European Union. Once adopted, these guidelines will apply to all financial sector operators that are within the scope of the Anti-money Laundering Directive (AMLD). Given the growing demand for remote customer onboarding solutions, EBA considers it important for competent authorities and financial sector operators to understand the capabilities of these new remote solutions to make the most of the opportunities they offer, to support their sound and responsible use, to be aware of the money laundering and terrorist financing risks arising from the use of such tools, and to take steps to mitigate these risks effectively. These draft guidelines set common European Union standards on the development and implementation of sound, risk-sensitive initial customer due diligence policies and processes in the remote customer onboarding context. They set out the steps financial institutions should take when choosing remote customer onboarding tools and when assessing the adequacy and reliability of such tools, in order to comply effectively with their AML/CFT obligations.
Related Links
- Validation Rules
- Reporting Frameworks
- Liquidity Requirements Proposals
- Proposed Onboarding Guidelines
Comment Due Date: March 10, 2022
Keywords: Europe, EU, Banking, CRR, IFR, Reporting, Basel, Investment Firms, Liquidity Risk, Lending, Customer Onboarding, AML/CFT, ML/TF Risk, Implementing Technical Standards, Regulatory Technical Standards, Reporting Framework 3.1, Loan Origination, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Karen Moss
Senior practitioner in asset and liability management (ALM) and liquidity risk who assists banking clients in advancing their treasury and balance sheet management objectives
Related Articles
EC Regulation Sets Out Methods for Measuring K-Factors Under IFR
The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.
BIS Studies How Platform Models Impact Financial Stability & Inclusion
The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.
ESAs Publish List of Financial Conglomerates for 2021
The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.
APRA Licenses Two More Banks, Reduces Committed Liquidity Facility
The Australian Prudential Regulation Authority (APRA) granted license to Barclays Bank PLC and Crédit Agricole Corporate and Investment Bank to operate as foreign authorized deposit-taking institutions under the Banking Act 1959.
EU Issues SII Corrigendum; EIOPA Assesses SII Reporting Exemptions
EU published, in the Official Journal of the European Union, a corrigendum to the Delegated Regulation 2015/35, which supplements Solvency II Directive (2009/138/EC).
EBA Opines on Impact of De-Risking and Associated AML/CFT Challenges
The European Banking Authority (EBA) published an Opinion on the scale and impact of de-risking in European Union and the steps that competent authorities should take to tackle unwarranted de-risking.
French Financial Markets Authority Sets Out Priorities for 2022
The French Financial Markets Authority (AMF) published its 2022 work priorities, along with the supervisory priorities for 2022.
US Agencies Issue Statement on Community Bank Leverage Ratio Framework
The U.S. Department of the Treasury issued a determination on a request for an exemption, by RBC US Group Holdings LLC, from certain requirements of the rule implementing the qualified financial contracts (QFC) recordkeeping requirements under the Dodd-Frank Act.
FCA Informs About Changes to LIBOR Settings From End-2021
The Financial Conduct Authority (FCA) announced that publication of 24 LIBOR settings has ended and that, going forward, the 6 most widely used sterling and Japanese yen settings will be published using a changed methodology.
PBC Sets Out Fintech Development Plan for 2022 to 2025
The People’s Bank of China (PBC) formulated the recently issued Fintech Development Plan (2022 to 2025) under the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives through the Year 2035.
