The Financial Sector Supervisory Commission of Luxembourg (CSSF) published circulars on adoption and application of certain guidelines of the European Banking Authority (EBA), issued a circular on 2022 ex-ante contributions to the Single Resolution Fund, and published a Law on the State guarantee for credit lines contracted by the Luxembourg Deposit Guarantee Fund.
Below are the key details of the recent updates:
- CSSF published circular CSSF 22/809 on the adoption of EBA guidelines on criteria for the use of data inputs in the risk-measurement model referred to in the Capital Requirements Regulation or CRR (575/2013). CSSF has integrated the guidelines into its administrative practice and regulatory approach with a view to promoting supervisory convergence in this field at the European level. The circular shall apply, with immediate effect, to all less significant institutions, to all CRR investment firms incorporated under Luxembourg law, and to all Luxembourg branches of credit institutions and of CRR investment firms having their registered office in a third country.
- CSSF published circular CSSF 22/808 on the application of EBA guidelines on recovery plan indicators under the Bank Recovery and Resolution Directive or BRRD (2014/59/EU). The EBA guidelines specify the minimum list of quantitative and qualitative recovery plan indicators to be included in the recovery plans developed and assessed in accordance with Articles 5 to 9 of BRRD. The guidelines also set expectations regarding the appropriate arrangements for the regular monitoring of such indicators, the points at which actions referred to in the recovery plans may be taken, and the action to be taken in relation to these indicators. This circular shall apply with immediate effect.
- CSSF published circular CSSF 22/806 on outsourcing arrangements, along with the related frequently asked questions (FAQs). The main purpose of this circular is to implement the requirements of the EBA guidelines on outsourcing arrangements (EBA/GL/2019/02). Circular 22/806 further aims at providing a transparent, homogeneous, and harmonized national framework for outsourcing arrangements. It also sets out requirements related to the information and communication technology (ICT) related outsourcing arrangements, which were previously disseminated by CSSF.
- CSSF published circular (CSSF-CODERES 22/14) on information on raising 2022 ex-ante contribution according to Articles 69 and 70 of Single Resolution Mechanism Regulation (806/2014). The Single Resolution Board (SRB) has determined the 2022 ex-ante contribution for all institutions as defined in Article 2 of the SRMR (Annex 1). The amounts are due by June 07, 2022. The individual invoices (Annex 2) will be distributed by CSSF in the coming days.
- According to the Law on Deposit Guarantee Fund, the government has authorized to grant, in return for adequate remuneration, a State guarantee for credit lines contracted by the Luxembourg Deposit Guarantee Fund up to a total maximum amount of EUR 1 billion, pursuant to the Law on the failure of credit institutions and certain investment firms.
- Circular on Risk-Measurement Model
- Circular on Recovery Plan Indicators
- Circular and Related Annexes on Ex-ante Contributions
- Circular and FAQs on Outsourcing Arrangements
- Law on Deposit Guarantee Fund
Keywords: Europe, Luxembourg, Banking, CRR, Basel, Less Significant Institutions, BRRD, Recovery Plan, Resolution Framework, SRMR, Ex-Ante Contributions, Outsourcing Arrangements, Deposit Guarantee Fund, EBA, Outsourcing Service Providers, SRF, SRB, CSSF
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.