FIN-FSA conducted, via a survey, a thematic review on the organization of depository activities. The survey was sent to all depositories that have the right to operate in Finland as a depository for a common fund or an alternative investment fund. The depositories were requested to provide information on the quality and scope of their depository activities, the organization of the depository activities, and the performance of supervisory duties. The thematic review did not address how the custody of the funds’ assets was arranged.
Twelve operators responded to the survey, five of which were branches of a foreign European economic area credit institution. The responses showed that the market for depository services is highly concentrated—only ten depositories provided depository services and the majority of assets was kept in custody by the three most significant agents. FIN-FSA wishes to point depositories’ attention to adequate personnel resources in supervisory duties and to the need of developing automated systems in order that the depositories have the genuine capacity to perform all of their statutory duties.
With respect to the duties reviewed, FIN-FSA was unable to ascertain that the depositories perform statutory supervision in all circumstances with a frequency required by fund-level risk assessment. The supervisory procedures observed by a depository must be based on a risk assessment conducted by the depository, which, in the view of FIN-FSA, should be documented, for example, in a supervision plan. Depositories must also note that ESMA has provided interpretations on the application of regulation on depositories.
Keywords: Europe, Finland, Banking, Securities, Depository, Thematic Review, Supervision, ESMA, FIN-FSA
Previous ArticleAPRA Issues Corrections to Prudential Standards for General Insurers
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.