Featured Product

    ESMA Sees Scope for Improvement in Derivative Data Supervision by NCAs

    October 17, 2019

    ESMA published the results of a peer review it conducted into supervisory actions of six national competent authorities, or NCAs, regarding their approaches at enhancing the quality of derivative data reported under the European Market Infrastructure Regulation (EMIR). The review assessed that ESMA broadly meets the expectations of the peer review in terms of the overall supervisory approach and the integration of EMIR data within its organization. The review complements the Data Quality Action Plan of ESMA to further improve the quality and usability of derivatives data. The review period was from January 01, 2017 to December 31, 2018. The six authorities include the Netherlands Authority for the Financial Markets, the French Authority of the Financial Market, BaFin, the Central Bank of Ireland, the Cypriot Securities and Exchange Commission, and FCA. In addition, ESMA was reviewed in its role as the direct supervisor of trade repositories.

    The review was targeted at national competent authorities that supervise important derivative markets in EU and have key counterparties reporting their derivative trades to EU trade repositories. The majority of authorities had in place a supervisory approach to the EMIR data quality. The French Authority of the Financial Market, the Central Bank of Ireland, and the Netherlands Authority for the Financial Markets are broadly meeting expectations of the peer review regarding overall supervisory approaches to EMIR data quality. In addition to participating in the data quality review these three national authorities undertook onsite inspections, thematic reviews, and developed an internal methodology for data quality breaches by counterparties. However, two authorities lagged behind when it comes to integrating EMIR data quality controls into their overall supervisory approach, which negatively impacted the ability of ESMA to access, assess, and analyze EMIR data. The review also identified good supervisory practices by all these authorities.

    In terms of integration of EMIR into the overall supervisory approach of national competent authorities, the peer review identified that the French Authority of the Financial Market and the Central Bank of Ireland fully meet expectations of the review. The Netherlands Authority for the Financial Markets is broadly meeting and BaFin is partially meeting the expectations. The review also identified that Cypriot Securities and Exchange Commission and FCA are not meeting the expectations. In respect of data access, analysis, and assessment, the peer review identified that the Netherlands Authority for the Financial Markets fully meets expectations of the review while the French Authority of the Financial Market and BaFin partially meet the expectations.

    ESMA also put forward several initiatives to improve the supervision of data quality in the short and long-term. The short-term initiatives include revising the national competent authorities' annual Data Quality Review exercises and identifying how these authorities can regularly use the data as part of their overall supervisory approach. The peer review also examined the more detailed and focused aspects of data quality supervision by focusing on the intensity of supervision, the frequency of the data quality checks undertaken, and the comprehensiveness of the  approach of authorities to sampling. A follow-up review is expected in two years. 

     

    Related Links

    Keywords: Europe, EU, Banking, Securities, Peer Review, EMIR, National Competent Authorities, Data Quality, Supervisory Approach, OTC Derivatives, Reporting, ESMA

    Featured Experts
    Related Articles
    News

    Regulators Fine Goldman Sachs for Risk Management Failures

    FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).

    October 23, 2020 WebPage Regulatory News
    News

    Canada Hosts International Conference of Banking Supervisors

    BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.

    October 22, 2020 WebPage Regulatory News
    News

    FCA Proposes More Measures to Help Insurance Customers Amid Crisis

    FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.

    October 21, 2020 WebPage Regulatory News
    News

    EBA Issues Opinion to Address Risk Stemming from Legacy Instruments

    EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.

    October 21, 2020 WebPage Regulatory News
    News

    ESRB Publishes Non-Bank Financial Intermediation Risk Monitor for 2020

    ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).

    October 21, 2020 WebPage Regulatory News
    News

    HM Treasury Publishes Policy Statement Amending Benchmarks Regulation

    HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.

    October 21, 2020 WebPage Regulatory News
    News

    APRA Initiates Action Against a Bank for Liquidity Compliance Breach

    APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.

    October 21, 2020 WebPage Regulatory News
    News

    PRA Consults on Implementation of Certain Provisions of CRD5 and CRR2

    PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).

    October 20, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Rule to Reduce Impact of Large Bank Failures

    US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).

    October 20, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Rule on Net Stable Funding Ratio Requirements

    US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.

    October 20, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6004