General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
November 09, 2017

EBA published an opinion and a report on matters related to the other financial intermediaries (OFIs) and the regulatory perimeter issues under the Capital Requirements Directive/Regulation (CRD IV/CRR). These matters include the use of Articles 2(5) and 9(2) CRD IV (Directive 2013/36/EU) and the interpretation of the terms “financial institution” and “ancillary services undertaking,” as defined in the CRR (Regulation (EU) No 575/2013). The EBA opinion is addressed to the European Parliament, Council, and the EC.

The opinion is based on the results of a detailed assessment, across the EU, of the prudential treatment of OFIs—that is, the entities carrying out credit intermediation activities that are not credit institutions nor other specified types of financial entity. The report published by EBA includes the results of the assessment of the use of Articles 2(5) and 9(2) CRD IV; the prudential treatment of OFIs under national law; the definitions of ancillary services undertaking and financial institution; and Annex I to the CRD IV. EBA's findings are relevant to the consideration of the legislative proposals to amend the CRD IV/CRR.

EBA undertook a comprehensive analysis of issues related to the regulatory perimeter further to the 2014 EBA Opinion and Report on the perimeter of credit institutions. This is in view of the need for the regular monitoring of credit intermediation activities outside the traditional banking sector and other developments such as the emergence of fintech. In terms of the overall scope of the CRD IV/CRR, EBA observes that Article 2(5) CRD IV remains valid and requires minor update. Also Article 9(2) CRD IV also appears to continue to have relevance in the member states and any amendment thereto ‎should be substantiated by a prior and thorough impact assessment. ‎As for the terms "financial institution" and "ancillary services undertaking," which are crucial for establishing the scope of prudential consolidation, EBA notes that these terms are prone to inconsistent interpretation across the EU, thus leading to potential divergences in the application of regulatory consolidation rules. EBA urges the institutions in EU to consider further possible amendments to the definitions of these terms, to ensure consistent treatment of prudential risks and to promote a level playing field.

EBA also notes a significant variation in the prudential treatment of OFIs under national laws. Although EBA is not making specific recommendations on the scope of individual prudential regulation under EU law, EBA observes the need to continue its monitoring work, including in conjunction with ESRB, as part of the annual shadow banking monitoring exercises. EBA highlights that Annex I to the CRD IV, which enlists the activities subject to mutual recognition, has been largely unchanged for 30 years and urges the EU institutions to consider clarifications and updates to the Annex.

Related Links

Keywords: Europe, EU, Banking, Regulatory Perimeter, CRD IV, CRR, OFI, EBA

Related Insights

PRA Delays Final Direction on Reporting of Private Securitizations

PRA and FCA have delayed the issuance of final direction, including the final template, on reporting of private securitizations, from January 15, 2019 to the end of January 2019.

January 15, 2019 WebPage Regulatory News

BCBS Finalizes Market Risk Capital Framework and Work Program for 2019

BCBS published the final framework for market risk capital requirements and its work program for 2019. Also published was an explanatory note to provide a non-technical description of the overall market risk framework, the changes that have been incorporated into in this version of the framework and impact of the framework.

January 14, 2019 WebPage Regulatory News

EBA Single Rulebook Q&A: First Update for January 2019

EBA published answers to 13 questions under the Single Rulebook question and answer (Q&A) updates for this week.

January 11, 2019 WebPage Regulatory News

PRA Proposes to Amend Supervisory Statement on Credit Risk Mitigation

PRA published the consultation paper CP1/19 that is proposing changes to the supervisory statement (SS17/13) on credit risk mitigation.

January 10, 2019 WebPage Regulatory News

FASB Issues Q&A on Estimating Credit Loss Reserves

FASB issued a question-and-answer (Q&A) document that addresses particular issues related to the weighted average remaining maturity (WARM) method for estimating the allowance for credit losses.

January 10, 2019 WebPage Regulatory News

FED Updates Reporting and Supplemental Instructions for Form FR Y-9C

FED published the updated reporting instructions and supplemental instructions for the FR Y-9C reporting form. The reporting frequency for FR Y-9C is quarterly, as of the last calendar day of the quarter.

January 09, 2019 WebPage Regulatory News

PRA Updates Policy on Liquidity Reporting Under FSA047/048 and PRA110

PRA published the policy statement PS1/19 that provides feedback to responses to the consultation paper CP22/18 titled "Liquidity reporting: FSA047 and FSA048" and the proposal in CP16/18, which intended to correct the level of consolidation of the PRA110 reporting requirements.

January 08, 2019 WebPage Regulatory News

FED Proposes to Amend Company-Run Stress Testing Requirements

FED proposed to modify company-run stress testing requirements to conform with the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

January 08, 2019 WebPage Regulatory News

ESMA RTS on Supervisory Cooperation Under Securitization Regulation

ESMA issued the final regulatory technical standards (RTS) for cooperation between competent authorities and ESAs under the Securitization Regulation (2017/2402).

January 08, 2019 WebPage Regulatory News

ESAs Publish Joint Report on Regulatory Sandboxes and Innovation Hubs

ESAs published a joint report providing a comparative analysis of the innovation facilitators (that is, regulatory sandboxes and innovation hubs) established to date within the EU.

January 07, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2461