IOSCO published two updated reports on peer reviews of the implementation of incentive alignment recommendations for securitization and on the regulation of money market funds or MMFs. The reports describe progress by IOSCO members in FSB jurisdictions in adopting legislation, regulation, and other policies covering securitization and money market funds, both of which are the G20 priority reform areas. The securitization report covers two topics—incentive alignment arrangements and disclosure requirements; the report finds that, overall, progress remains mixed across participating jurisdictions in implementing the recommendations for incentive alignment for securitization.
The securitization report sets out the findings of the 2018 Update Review, where IOSCO members from 24 participating FSB member jurisdictions were asked to provide information on regulatory developments in these areas as of August 30, 2018. Out of the 24 participating jurisdictions, 12 jurisdictions had final adoption measures in force for implementation of incentive alignment regimes (unchanged since 2017) while 10 jurisdictions had final adoption measures in force for disclosure requirements for issuers (unchanged since 2017). However, 5 EU jurisdictions had final adoption measures published but not taken or in force, showing an improvement from 2017. It was found that changes in implementation status were warranted for EU member jurisdictions (France, Italy, the Netherlands, Spain, and the United Kingdom) in both areas. The review also found that reforms were underway in Argentina, Australia, Brazil, China, Indonesia, Russia, and Saudi Arabia; however, these did not warrant a change in implementation status.
The money market funds report sets out the findings of the 2018/2019 Update Review, where IOSCO members from 24 participating FSB member jurisdictions were asked to provide information on the relevant regulatory reforms as of March 31, 2019. The report covers three topics: valuation, liquidity management, and money market funds that offer a stable Net Asset Value. The review finds that most jurisdictions have implemented the fair value approach for the valuation of money market fund portfolios, but progress in liquidity management is less advanced and less even. On money market funds that offer a stable Net Asset Value, further work was needed. In 2019, the implementation status changed for two jurisdictions: Hong Kong and Republic of Korea. In Hong Kong, the final implementation measures came into force in the two remaining reform areas: liquidity management and money market funds that offer a stable Net Asset Value. For the Republic of Korea, draft implementation measures were published in the two remaining reform areas: valuation and liquidity management. Overall, implementation of the reported reform areas is most advanced in 12 participating jurisdictions (approximately 78% of the global market), including three of the largest markets (U.S., China, and Japan).
These reports summarize the ongoing efforts of IOSCO to monitor implementation of reforms for money market funds and securitization, since IOSCO published the first two peer reviews in September 2015. The reports contain updated tables summarizing the implementation status of each participating jurisdiction in areas covered by the Update Reviews. The reports also take note of the new regulations yet to come into force or to be applied in various jurisdictions. The reports set out the background, methodology, and findings that were reported to the G20 leaders in 2018 and 2019 and were included in the Annual Reports on implementation and effects of the G20 financial regulatory reforms.
Keywords: International, Banking, Securities, Insurance, Peer Review, Securitization, G20, Money Market Funds, Regulatory Reform, FSB, IOSCO
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
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.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
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.
The European Council published a draft Commission Delegated Regulation to amend the regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
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.
The Monetary Authority of Singapore (MAS) published amendments to Notice 635, which sets out requirements that a bank in Singapore has to comply with when granting an unsecured non-card credit facility to individuals.
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.