Featured Product

    FINMA Specifies Disclosure Requirements for Banks and Insurers

    May 31, 2021

    FINMA published the amended circulars on disclosure requirements for banks (Circular 2016/1) and insurers (Circular 2016/2), in an effort to increase transparency with respect to the climate-related financial risks. Initially only the large banks and insurance companies (supervisory categories 1 and 2) will fall under the scope of the disclosure obligations for climate-related financial risks. The disclosure obligations are principles-based and thus allow flexibility in implementation. The revised circulars will enter into force on July 01, 2021.

    FINMA has based the disclosure rules on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). FINMA notes that the following principles-based elements should be covered and disclosed:

    • Governance. Describe how the Board of Directors exercises its overall supervision with regard to climate-related financial risks.
    • Strategy. Describe and identify the major climate-related financial risks (short, medium, and long-term risks) as well as their impact on the business strategy, business model, and financial planning.
    • Risk management. Describe the process for identification, assessment, and management of climate-related financial risks.
    • Quantitative information. Provide information on climate-related financial risks and the associated methodologies.

    FINMA had conducted a public consultation on climate risk disclosures for banks and insurers from between November 10, 2020 and January 19, 2021. All participants in the consultation fundamentally welcomed the clarification of disclosure obligations and deemed it appropriate to base these on the TCFD reference framework. A number of voices demanded further measures from FINMA, such as for the scope of application to be extended to include medium-size and small institutions, more detailed rules for scenario analyses, or the specification of key figures for quantitative disclosure. As promised in the consultation, FINMA will review, as part of an ex-post evaluation, whether and to what extent amendments would be appropriate to the disclosure practices on of climate risks. Certain requests from the consultation participants, such as establishing transparency in relation to the climate impact, are outside the mandate of FINMA and therefore have not been not considered.

     

    Related Links (in English and German)

    Effective Date: July 01, 2021

    Keywords: Europe, Switzerland, Banking, Insurance, Proportionality, Climate Change Risk, ESG, Governance, TCFD, Disclosures, FINMA

    Featured Experts
    Related Articles
    News

    OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities

    The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.

    May 17, 2022 WebPage Regulatory News
    News

    EBA Proposes Standards to Support Secondary NPL Markets

    The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.

    May 17, 2022 WebPage Regulatory News
    News

    EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution

    The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).

    May 13, 2022 WebPage Regulatory News
    News

    EBA Issues Standards for Crowdfunding Service Providers Under ECSPR

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.

    May 13, 2022 WebPage Regulatory News
    News

    EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution

    The European Securities and Markets Authority (ESMA) published a paper that examines the systemic risk posed by increasing use of cloud services, along with the potential policy options to mitigate this risk.

    May 12, 2022 WebPage Regulatory News
    News

    EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA

    The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.

    May 11, 2022 WebPage Regulatory News
    News

    EC Mandates ESAs to Propose Amendments to SFDR Technical Standards

    The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.

    May 11, 2022 WebPage Regulatory News
    News

    EBA Examines Supervisory Practices, Issues Deposits Reporting Template

    The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),

    May 11, 2022 WebPage Regulatory News
    News

    SNB Updates NSFR Forms and FINMA Consults on Operational Risk Circular

    The Swiss National Bank (SNB) published Version 1.2 of the reporting forms (NSFR_G and NSFR_P) on the net stable funding ratio (NSFR) of banks, along with the associated documentation.

    May 10, 2022 WebPage Regulatory News
    News

    US Agency Publications Address Basel, Reporting, and CECL Developments

    The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances

    May 09, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8191