June 07, 2019

ESMA published a draft amendment to the regulatory technical standards on the European Single Electronic format (ESEF) to update the core taxonomy to be used for ESEF reporting. The core taxonomy currently included in the regulatory technical standards on the ESEF is the 2017 IFRS Taxonomy. This draft amendment aims to replace that version with the most recent one published by the IFRS Foundation in March 2019. This update is a purely technical amendment to the original regulatory technical standards on the ESEF.

  • The information to be provided by a third party seeking authorization to assess the compliance of securitizations with the STS criteria provided for in Securitization Regulation should enable a competent authority to evaluate whether and, to what extent, the applicant meets the conditions of Article 28(1) of the Securitization Regulation. An authorized third party will be able to provide STS assessment services across EU. The application for authorization should, therefore, comprehensively identify that third party, any group to which this third party belongs, and the scope of its activities. With regard to the STS assessment services to be provided, the application should include the envisaged scope of the services to be provided as well as their geographical scope, particularly the following:

    • To facilitate effective use of the authorization resources of a competent authority, each application for authorization should include a table clearly identifying each submitted document and its relevance to the conditions that must be met for authorization.
    • To enable the competent authority to assess whether the fees charged by the third party are non-discriminatory and are sufficient and appropriate to cover the costs for the provision of the STS assessment services, as required by Article 28(1)(a) of Securitization Regulation, the third party should provide comprehensive information on pricing policies, pricing criteria, fee structures, and fee schedules.
    • To enable the competent authority to assess whether the third party is able to ensure the integrity and independence of the STS assessment process, that third party should provide information on the structure of those internal controls. Furthermore, the third party should provide comprehensive information on the composition of the management body and on the qualifications and repute of each of its members.
    • To enable the competent authority to assess whether the third party has sufficient operational safeguards and internal processes to assess STS compliance, the third party should provide information on its procedures relating to the required qualification of its staff. The third party should also demonstrate that its STS assessment methodology is sensitive to the type of securitization and that specifies separate procedures and safeguards for asset-backed commercial paper (ABCP) transactions/programs and non-ABCP securitizations.

    The use of outsourcing arrangements and a reliance on the use of external experts can raise concerns about the robustness of operational safeguards and internal processes. The application should, therefore, contain specific information about the nature and scope of any such outsourcing arrangements or use of external experts as well as the third party's governance over those arrangements. Regulation (EU) 2019/885 is based on the draft regulatory technical standards submitted by ESMA to EC.

     

    Related Links

    Effective Date: June 18, 2019

    Press Release
  • Proposed Rule 1
  • Proposed Rule 2
  • Proposed Rule 3
  • Presentation on Regulatory Framework (PDF)
  • Presentation on Resolution Plan Rules (PDF)
  • These regulatory technical standards published by ESMA amend the Delegated Regulation (EU) 2018/815, which was published in the Official Journal of the European Union on May 29, 2019. The ESEF taxonomy is based on the IFRS Taxonomy. As the IFRS standards and taxonomy evolve, the regulatory technical standards on ESEF need to evolve accordingly to provide preparers with the most relevant ESEF taxonomy for tagging IFRS consolidated financial statements. This will promote electronic reporting that is up-to-date with the applicable reporting standards, thus facilitating implementation of the tagging requirements and ensuring the highest comparability of filings for end-users at the European and global levels. The regulatory technical standards on ESEF will be amended annually to reflect updates to the IFRS Taxonomy published by the IFRS Foundation. ESMA submitted the final report on the regulatory technical standards to EC and EC has three months to decide whether to endorse the technical standard. 

    The regulatory technical standards on ESEF will be amended on a yearly basis to reflect updates to the IFRS Taxonomy published by the IFRS Foundation. Based on article 4(7) of the revised Transparency Directive, ESMA had developed the draft regulatory technical standards specifying the single electronic reporting format in which issuers should prepare their annual financial reports from January 01, 2020. The regulatory technical standards on ESEF established that the taxonomy to be used to mark-up IFRS consolidated financial statements shall be an extension of the IFRS Taxonomy, which is prepared and annually updated by the IFRS Foundation. 

     

    Related Links

    Keywords: Europe, EU, Banking, Insurance, Securities, Taxonomy, Regulatory Technical Standards, ESEF, Reporting, IFRS, ESMA

    Related Articles
    News

    EBA Consults on Guidelines for Loan Origination and Monitoring in EU

    EBA launched a consultation on the guidelines on loan origination and monitoring in EU.

    June 19, 2019 WebPage Regulatory News
    News

    OCC Bulletin on Risk Management Guidance for Home Mortgage Lending

    OCC published Bulletin 2019-28 on risk management guidance for higher-loan-to-value (LTV) lending activities in communities targeted for revitalization.

    June 19, 2019 WebPage Regulatory News
    News

    IFRS to Discuss Phase II of IBOR Reform at July Meeting of ASAF

    IFRS published agenda papers for the Accounting Standards Advisory Forum (ASAF) meeting to be held on July 11–12, 2019.

    June 19, 2019 WebPage Regulatory News
    News

    EC Amends Regulation Supplementing Solvency II Directive

    EC published the Delegated Regulation (EU) 2019/981 that amends the Regulation (EU) 2015/35, which supplements Solvency II Directive (2009/138/EC) on the taking-up and pursuit of the business of insurance and reinsurance.

    June 18, 2019 WebPage Regulatory News
    News

    IOSCO Report Examines Application of International Cyber Standards

    IOSCO published a final report that examines the application of the three internationally recognized cyber standards and frameworks by IOSCO member jurisdictions.

    June 18, 2019 WebPage Regulatory News
    News

    PRA Launches 2019 Stress Test Exercise for Life and General Insurers

    PRA has launched the biennial insurance stress test and is asking the largest regulated life and general insurers to provide information about the impact of a range of stress tests on their business.

    June 18, 2019 WebPage Regulatory News

    SRB Outlines Upcoming Changes in Context of CRR2 and BRRD2

    SRB published presentations made at the 8th Industry Dialogue in Brussels.

    June 18, 2019 WebPage Regulatory News
    News

    EC Publishes Guidelines on Climate-Related Information Reporting

    EC published the guidelines and associated frequently asked questions (FAQs) on corporate climate-related information reporting, as part of its sustainable finance action plan.

    June 18, 2019 WebPage Regulatory News
    News

    PRA Finalizes Reporting Amendments to Pillar 2 Liquidity Framework

    PRA published the final Policy Statement PS13/19 on regulatory reporting amendments and clarifications to the Pillar 2 liquidity framework for banks in UK.

    June 17, 2019 WebPage Regulatory News
    News

    FSB Assesses Implementation of Compensation Standards and Principles

    FSB published the sixth progress report on the implementation of its principles and standards for sound compensation practices in financial institutions.

    June 17, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3276