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    FIN-FSA Makes Several Regulatory Announcements

    December 18, 2020

    FIN-FSA announced that Version 20.0.8 of the FIN-FSA Reporting Application (XBRL/XML) and the new Excel workbooks for EBA, EIOPA, and AIFMD data collections are available for download in the Jakelu Distribution Service. Workbooks for the EBA DPM Version 2.10 have been released in the reporting application. For remuneration reporting, the new REM and REM HE modules have been introduced. Other recent regulatory updates from FIN-FSA address loan cap and countercyclical capital buffer (CCyB) requirements for banks, recommendation on distribution of bank profits, reporting compliance breach by Aktia Bank Plc, and the foreseeable stringency in information security requirements as part of the operational risk supervision.

    The following are the key highlights of these recent regulatory developments:

    • FIN-FSA decided to maintain the housing loan cap (a maximum of 90% for other than first-home loans and 95% for first-home loans) at its standard level and will not impose a CCyB requirement on banks and other credit institutions. 
    • FIN-FSA recommended that credit institutions under its direct supervision should exercise extreme prudence in profit distribution paid in cash until September 31, 2021. The recommendation also applies to buy-backs and redemptions of shares in circumstances where the purpose of such buy-backs and redemptions would be the distribution of profits. The recommendation applies to credit institutions on their highest consolidation level. The decision is based on a recommendation issued by ECB on December 15, 2020.
    • FIN-FSA imposed an administrative fine of EUR 40,000 on Aktia Bank Plc. This is because, during October 01, 2017 to March 31, 2019, the company reported incorrect information (FINREP F19 report) on forbearance exposures in accordance with the EU Capital Requirements Regulation and the Commission Regulation adopted pursuant thereto. In addition, there have been inaccuracies in FINREP reports F20.4 Geographical breakdown of assets by residence of the counterparty and F20.5 Geographical breakdown of off-balance sheet exposures by residence of the counterparty.
    • Fin-FSA highlighted that it assesses information security in financial sector entities in several stages and the related regulation is likely to become more stringent as part of its operational risk supervision of the financial sector. In this context, Fin-FSA pointed out that, on September 24, 2020, EC issued a comprehensive Digital Finance Package containing, among others, a proposal for a regulation on digital operational resilience, the Digital Operational Resilience Act (DORA). If implemented, the Act would, for example, impose an obligation to conduct information security tests covering the ICT function. The proposed Act envisages the establishment of a separate oversight framework for critical ICT third-party service providers and supervision of outsourcing would be further tightened. The EU Directive on Security of Networks and Information systems (NIS Directive) is also under review at present.

     

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    Keywords: Europe, Finland, Banking, Reporting, Jakelu Distribution Service, FINREP, Regulatory Capital, Basel, CRR, Reporting Framework 2.10, Dividend Distribution, Macro-Prudential Policy, CCyB, Aktia Bank, FIN-FSA

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