Featured Product

    CSSF Amends Circulars on ICAAP, ILAAP, and Stress Testing Program

    October 23, 2020

    CSSF published the circular CSSF 20/753, which amends CSSF 07/301 on the implementation of the Internal Capital and Liquidity Adequacy Assessment Process (ICAAP and ILAAP) and CSSF 11/506 on the principles of a sound stress testing program. CSSF has issued these amendments to provide institutions under the Capital Requirements Regulation (CRR) with updated supervisory expectations on the regulatory requirements applicable to the ICAAP/ILAAP and to stress testing programs pursuant to the EBA guideline (EBA/GL/2018/04). The application date for the circular is October 31, 2020. CSSF expects these changes to be reflected within the governance and operating frameworks of institutions from December 31, 2020.

    The amended Circulars CSSF 07/301 and CSSF 11/506 shall no longer be applicable to non-CRR investment firms. The circular CSSF 07/301 has been considerably shortened and is now focusing on the key implementing provisions that institutions shall meet to comply with Articles 18 and 19 of the CSSF Regulation N° 15-02. These provisions complement the general (risk) governance principles of Circular CSSF 12/552, which apply to ICAAP and ILAAP in particular. Also, the reporting requirements have been clarified in line with the EBA guidelines on ICAAP and ILAAP information collected for SREP purposes (EBA/GL/2016/10). The amendments of circular CSSF 11/506 are meant to provide further guidance on the principle of proportionality and on operational arrangements related to the coverage of longer term risks (such as climate-related risks) and data infrastructure. To allow for a straightforward review of the changes made, the amendments to Circular CSSF 11/506 are presented in tracked changes in Annex 1. A dedicated version in tracked changes of Circular CSSF 07/301 has not been provided due to the substantial shortening and redesign of the circular. The amended text, without tracked changes, appears in Annex 2. 

     

    Related Links

    Effective Date: October 31, 2020

    Keywords: Europe, Luxembourg, Banking, ICAAP, ILAAP, Stress Testing, Regulatory Capital, CRR, Basel, Climate Change Risk, Proportionality, Governance, EBA, CSSF

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582