CMF Consults on Disclosure Requirements Under Basel Framework
CMF proposed a regulation on the disclosure requirements for banks under Pillar 3 of the Basel III framework. The proposed regulation establishes, among other aspects, the type and criteria of information to be disclosed, adoption of principles of disclosure of Basel III, the forms and tables to be used (presented in Annex), and periodicity of the information for each of the established requirements. CMF also published a regulatory report that evaluates the impact of the proposal, along with the draft Chapter 21-20 of the Updated Compilation of Rules for Banks (RAN), the frequently asked questions (FAQ) about the consultation, and a presentation on the regulatory proposal. The consultation will close on November 05, 2020 and the regulation will be published no later than December 01, 2020. As explained in the FAQ document, the regulation will become effective in December 2022, in accordance with the provisions of CMF.
In accordance with the standards and the provisions of the General Banking Act, the new Chapter 21-20 of the Updated Compilation of Rules for Banks (RAN) sets out the principles and type of information to be disclosed as well as the periodicity of publication of the Pillar 3 document. Chapter 21-20 of RAN establishes that banking institutions must publish the Pillar 3 reports quarterly. Banks must publish the Pillar 3 document, for the first time, in April 2023, with information corresponding to the January-March quarter of the same year. Subsequent publications will be made with quarterly information and in the same frequency, being published on the dates defined in the standard under consultation. CMF, through the regulations in this consultation, will require the publication of a Pillar 3 document, offering users a single publication with all available information related to the risk profile and capital structure, published on an easily accessible website. This disclosure will complement the public information currently available, thus reducing information asymmetries and encouraging standardization of the frequency of dissemination and better comparability between national and international banking institutions. This will allow the market and information users to know risk profiles of local banking institutions, including their position and capital structure—at local consolidated and global consolidated levels—in a single format.
The Pillar 3 standard provides a comprehensive package of all disclosure requirements that have been proposed by BCBS and are applicable in the local market, beyond the regulatory capital requirements, such as disclosures related to liquidity and remuneration. Banking entities must publish their Pillar 3 document independently or along with their financial statements, reporting each of the tables and forms established in the regulation under consultation. The requirements established in the said regulation will apply to all banks incorporated in Chile and branches of foreign banks operating in the local market. These entities must provide information at both the local and global consolidated levels.
Related Links
Comment Due Date: November 05, 2020
Keywords: Americas, Chile, Banking, Pillar 3, Basel, Regulatory Capital, Disclosures, Reporting, CMF
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
ISDA Proposes Collaboration Between Derivatives and SFT MarketsRelated Articles
PRA and FPC Finalize Changes to Leverage Ratio Framework in UK
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
CFPB Proposes Rule on Small Business Lending Data Collection
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
PRA Decides to Maintain O-SII Buffers for Another Year
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
FSB Report Assesses Implementation of Recommendations on Stablecoins
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
APRA Updates Loan Serviceability Expectations for Home Lending
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
CPMI and IOSCO Consult on Guidance on Stablecoin Arrangements
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
EBA and EIOPA Set Out Work Priorities for 2022
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
MFSA Issues Reporting Updates and Guidance for Banks
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
EC Publishes Decision on List of Equivalent Third Countries Under CRR
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC Rule on Contractual Recognition of Write-Down and Conversion Powers
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.
