The Joint Committee of the ESAs published its 2020 work program. The Joint Committee will continue its work in the areas of cross-sectoral risk analysis, consumer protection, financial conglomerates, securitization, accounting, and auditing. Key areas of focus include the packaged retail and insurance-based investment products (PRIIPs), sustainable finance, securitization, and financial innovation—also in relation to the fintech action plan of EC and the work of the European Forum for Innovation Facilitators (EFIF). For the EFIF, the Joint Committee will further promote coordination and cooperation among national innovation facilitators to foster the scaling up of innovation in the financial sector. The EFIF work program is also annexed to the Joint Committee work program.
The Joint Committee will continue to be an important forum for discussing key cross-sectoral trends and vulnerabilities to financial stability, with the publication of bi-annual cross-sectoral risk reports. In the area of Financial Conglomerates, the Joint Committee will further develop and finalize its work on specific reporting formats for financial conglomerates. In addition, the Joint Committee will continue to serve as an important body for addressing other cross-sectoral matters, such as the cross-sectoral mandates and questions (Q&As) stemming from the Securitization Regulation and the work to make the Joint Committee the coordination platform of data collected. The key cross-sectoral issues that have been identified are the jurisdictional scope of application, the due diligence requirements of EU institutional investors, the definition of sponsor for investment firms, and the credit granting criteria. The Joint Committee will also work on practical and operational issues in relation to supervision of the Securitization Regulation.
The Joint Committee enhances confidence and strengthens the protection of European consumers in relation to banking, insurance, and securities products. This will continue to be an area of priority for the Joint Committee in 2020. ESAs are undertaking a review of Commission Delegated Regulation 2017/653 and intend to propose amendments by February 2020 as requested by EC to allow the amendments to be scrutinized before expiry of the transitional exemption in Article 32 of the PRIIPs Regulation (No 1286/2014). Work will continue on the development of Q&As or other Level 3 tools to promote supervisory convergence and to give competent authorities and market participants further guidance on implementation of the new PRIIPs rules. ESAs will assess the phenomenon, focusing on potential consumer protection concerns and benefits associated to it. This will involve assessment of the fintech phenomenon, assessment of its benefits and risks, and, potentially, identification of any regulatory and/or supervisory measures that may need to be taken, taking into account the ongoing sectoral work that the ESAs are doing in this field.
The 2019-2020 work program of EFIF highlights that EFIF will be used to monitor developments in the design and operation of innovation facilitators, taking account of the best practices set out in the January 2019 joint report of the ESAs on regulatory sandboxes and innovation hubs. Additionally, EFIF will be used to monitor developments in the innovative products that have been identified in the context of innovation facilitator activities and to monitor the related regulatory and supervisory issues. Finally, EFIF will focus on certain thematic priorities—artificial intelligence, big data analytics, and machine learning; tokenization and distributed ledger technologies; open banking/application program interfaces; and platforms facilitating the re-aggregation of financial services (retail and institutional).
Keywords: Europe, EU, Banking, Insurance, Securities, Work Program, PRIIPs, Securitization, Fintech, Reporting, EFIF, ESAs
Previous ArticleAPRA Informs RSE Licensees About Reforms to Address Account Erosion
Next ArticleEBA Single Rulebook Q&A: First Update for July 2019
APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).
The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).
The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
Through a letter addressed to the banking sector entities, the Office of the Superintendent of Financial Institutions (OSFI) announced deferral of the domestic implementation of the final Basel III reforms from the first to the second quarter of 2023.
EIOPA recently published a letter in which EC is informing the European Parliament and Council that it could not adopt the set of draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR) within the stipulated three-month period, given their length and technical detail.
The Financial Conduct Authority (FCA) published the third in a series of policy statements that set out rules to introduce the UK Investment Firm Prudential Regime (IFPR), which will take effect on January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.