Featured Product

    FIN-FSA Amends Rules and Guidelines on Reporting of Funding Plans

    July 07, 2020

    FIN-FSA amended regulations and guidelines 6/2014 on the reporting of funding plans and these will be effective from December 31, 2020. The regulations and guidelines have been amended to incorporate the updated EBA guidelines on harmonized definitions and templates for funding plans of credit institutions (EBA/GL/2019/05). Additionally, the FIN-FSA Board decided, at a meeting on June 29, 2020, that the countercyclical capital buffer (CCyB) requirement will remain at 0%. Considering the challenges posed by the COVID-19 pandemic, the FIN-FSA Board also decided that the maximum loan-to-collateral ratio will be adjusted and brought back to the statutory standard level of 90%. The Board also repealed its decision of March 28, 2018 on the reciprocation of the systemic risk buffer of 1.0% imposed by Bank of Estonia (Eesti Pank) on June 30, 2016. Finally, FIN-FSA is requesting all entities under the preparedness obligation to draw up an entity-specific preparedness plan and submit the plan to FIN-FSA by December 31, 2020.

    Amendments to FIN-FSA Regulations and Guidelines on Reporting of Funding Plans

    In the updated EBA guidelines (EBA/GL/2019/05) on reporting of funding plans, the definitions and breakdowns have been aligned with those used in FINREP reporting. The guidelines introduce a more detailed breakdown of market-based funding according to seniority, along with certain simplifications for small and non-complex institutions to enhance proportionality. According to the updated guidelines, the first reporting reference date is December 31, 2020, with the deadline for submitting the reports set for March 15, 2021. The FIN-FSA regulations and guidelines have been revised as follows:

    • Paragraph (1) of section 2.2 referring to the EBA guidelines on the reporting of funding plans (EBA/GL/2019/05) has been amended, and a new paragraph (2) has been added to the section.
    • A new section 2.3 on the decision of ECB has been added, and as a result the numbering of section 2.4 has changed.
    • The reporting period under paragraph (4) of section 3.1 has been changed. It states that supervised entities shall submit the data collection concerning funding plans in accordance with the EBA guidelines (EBA/GL/2019/05) on an annual basis. Credit institutions shall submit the reports on their funding plans in accordance with these guidelines by March 15, with the reporting reference date being December 31 of the previous year.

    The FIN-FSA regulations and guidelines 6/2014 apply to credit institutions which are identified as significant institutions in accordance with the criteria provided in the Regulation on the Single Supervisory Mechanism (SSM Regulation) and the SSM Framework Regulation, and which hence fall within the scope of direct supervision by ECB. This scope of application fulfills the recommendation of the ESRB that the data collection be applied to credit institutions covering at least 75% of the banking system’s total consolidated assets. 

    Preparedness Plans

    FIN-FSA is requesting all entities under the preparedness obligation to draw up an entity-specific plan on how to ensure or intend to ensure the operability of critical services from an end-customer to an end-customer in circumstances where foreign service provision is completely unavailable. FIN-FSA announced that the Ministry of Finance is developing a regulation on the preparedness of the financial markets to be more unambiguous and better aligned with the requirements of the current operating environment. The entity-specific plan must describe, for example, how it is ensured that the payer is able to submit a payment order to its payment service provider and how the payment service provider processes the payment and transfers the payment to the payee's payment service provider and on to the payee's account. The plan must be based on a scenario where no inter-entity or entity-internal payment or securities system, function or data warehouse located abroad is available for months. The preparedness plan must be clear and detailed enough to enable the assessment of its feasibility and regulatory compliance. If the report includes actions to be taken in the future, their schedule and content must be presented in exact terms. The plans submitted to the FIN-FSA will be assessed by financial market authorities responsible for preparedness issues—that is, the Ministry of Finance and the Bank of Finland together with the FIN-FSA. 

     

    Related Links

    Keywords: Europe, Finland, Banking, Securities, COVID-19, Reporting, Funding Plans, FINREP, Proportionality, CCyB, Loan to Collateral Ratio, Macro-Prudential Instruments, Credit Risk, Systemic Risk Buffer, Preparedness Plan, Operational Risk, Eesti Pank, Basel, FIN-FSA

    Featured Experts
    Related Articles
    News

    APRA Sets LAC for D-SIBs, Proposes to Enhance Crisis Preparedness

    APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).

    December 02, 2021 WebPage Regulatory News
    News

    EC to Review Macro-Prudential Rules while ESRB Assesses Policy Stance

    The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).

    December 01, 2021 WebPage Regulatory News
    News

    FSB Sets Out Good Practices for Crisis Management Groups

    The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.

    November 30, 2021 WebPage Regulatory News
    News

    APRA Penalizes Heritage Bank for Incorrect Reporting of Capital

    The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Releases Annual Report 2021-2022

    The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Updates Timeline for Implementation of Certain Basel Rules

    Through a letter addressed to the banking sector entities, the Office of the Superintendent of Financial Institutions (OSFI) announced deferral of the domestic implementation of the final Basel III reforms from the first to the second quarter of 2023.

    November 29, 2021 WebPage Regulatory News
    News

    EC Defers Adoption of Regulatory Standards for Disclosures Under SFDR

    EIOPA recently published a letter in which EC is informing the European Parliament and Council that it could not adopt the set of draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR) within the stipulated three-month period, given their length and technical detail.

    November 29, 2021 WebPage Regulatory News
    News

    FCA Releases MIFIDPRU Application Forms and Third Set of Rules on IFPR

    The Financial Conduct Authority (FCA) published the third in a series of policy statements that set out rules to introduce the UK Investment Firm Prudential Regime (IFPR), which will take effect on January 01, 2022.

    November 29, 2021 WebPage Regulatory News
    News

    APRA Finalizes Capital Adequacy Standards for Banks

    The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.

    November 29, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Seek Comments on Access to Central Clearing and Portability

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.

    November 29, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7751