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

    EBA Sets Out Standards for Pillar 3 Disclosures of ESG Risks

    The European Banking Authority (EBA) published the final draft implementing technical standards on Pillar 3 disclosures on environmental, social, and governance (ESG) risks.

    January 24, 2022 WebPage Regulatory News
    News

    EBA Proposes Guidelines on Remuneration Benchmarking, High Earner Data

    The European Banking Authority (EBA) proposed to update the guidelines on the data collection exercise on high earners and the remuneration benchmarking exercise under the Capital Requirements Directive (CRD).

    January 21, 2022 WebPage Regulatory News
    News

    MAS Issues Updates on Its Activities: Ravi Menon Becomes NGFS Chair

    The Network for Greening the Financial System (NGFS) announced the appointment of Mr. Ravi Menon, the Managing Director of the Monetary Authority of Singapore (MAS), as its new Chair for a two-year term.

    January 21, 2022 WebPage Regulatory News
    News

    CBIRC Issues Rules on Related-Party Transactions and Outsourcing Risks

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules on related-party transactions and outsourcing risks.

    January 21, 2022 WebPage Regulatory News
    News

    OSFI Issues Results of Pilot on Climate Risk Scenario Analysis

    The Office of the Superintendent of Financial Institutions (OSFI) published an update on the discussion paper that intended to engage federally regulated financial institutions and other interested stakeholders in a dialog with OSFI, to proactively enhance and align assurance expectations over key regulatory returns.

    January 20, 2022 WebPage Regulatory News
    News

    EC Issues Regulation on Adjustments to K-Factor Coefficients Under IFR

    The European Commission (EC) published a report summarizing responses to the targeted consultation on the supervisory convergence and the single rulebook in the European Union (EU).

    January 20, 2022 WebPage Regulatory News
    News

    BIS Tests CBDC with Banks; FIS Examines Tech Firm Licensing Regime

    The Bank of International Settlements (BIS) announced successful test integration of wholesale central bank digital currency (CBDC) settlement with commercial banks, as part of the Project Helvetia.

    January 20, 2022 WebPage Regulatory News
    News

    ECB Issues Opinions on Green Bonds Standard and CRR Proposals

    The European Central Bank (ECB) published its opinion on a proposal for a regulation on European green bonds, following a request from the European Parliament.

    January 19, 2022 WebPage Regulatory News
    News

    ESRB Explores Policy Response to Risks Arising from Digitalization

    The Advisory Scientific Committee (ASC) of the European Systemic Risk Board (ESRB) published a report that explores the expected impact of digitalization on provision of financial and banking services, and proposes policy measures to address the risks stemming from digitalization.

    January 18, 2022 WebPage Regulatory News
    News

    HKMA Consults on FIRO Code, Revises Policy on Foreign Exchange Risk

    The Hong Kong Monetary Authority (HKMA) is consulting on the draft Financial Institutions (Resolution) Ordinance (Cap. 628), or FIRO, Code of Practice chapter on liquidity and funding in resolution, until March 14, 2022.

    January 18, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7912