FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs. This extension is intended to ease operational burdens on market participants and authorities, thus assisting them to focus on addressing the impact of COVID-19 pandemic. In this context, FSB has updated the report on regulatory framework for haircuts on certain non-centrally cleared securities financing transactions, which was initially published in November 2015.
FSB has updated Annexes 1, 3, and 4 of the report on regulatory framework for haircuts on certain non-centrally cleared securities financing transactions. Annex 1 contains implementation dates for the policy recommendations for shadow banking risks in securities lending and repos. Annex 3 presents timeline for initial implementation of the FSB framework for numerical haircut floors, while Annex 4 presents steps for assessing the need to cover non-bank-to-non-bank transactions. For bank-to-non-bank transactions, the updated implementation date is January 2023 (instead of January 2022). For non-bank-to-non-bank transactions, the updated implementation date is January 2025 (instead of January 2024). In March 2020, the Group of Central Bank Governors and Heads of Supervision decided to defer the implementation of the Basel III framework by one year to January 2023. Since the FSB framework for numerical haircut floors for bank-to-non-bank transactions is expected to be implemented through the Basel III framework in many jurisdictions, this timeline extension is in line with the re-prioritization of the work of FSB in light of the COVID-19 pandemic.
Keywords: International, Banking, Securities, Securities Financing Transactions, Haircuts, Shadow Banking, Market-based Finance, Basel, COVID-19, Implementation Timeline, FSB
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleCMF Announces Strategic Initiatives for 2020-2022
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.
ECB finalized guidance on the way it expects banks to prudently manage and transparently disclose climate and other environmental risks under the current prudential rules.
BCBS published a technical amendment to the capital treatment of securitizations of non-performing loans by banks.
BoE announced that the Data and Statistics Division is planning to move collection of statistical data to the BoE Electronic Data Submission (BEEDS) portal.
APRA published the updated reporting standards and guidance for the collection of Economic and Financial Statistics (EFS), following a consultation process. Also published was a response letter to the feedback received on the proposal for amending the EFS reporting standards and guidance.
EC is consulting on a draft delegated regulation to supplement the Taxonomy Regulation (2020/852) by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as environmentally sustainable.
The IFRS Foundation published material highlighting the ways in which existing requirements in IFRS standards require companies to consider climate-related matters when their effect is material to the financial statements.
FSB published a progress report on the implementation of reforms to major interest rate benchmarks, including the London Inter-bank Offered Rate (LIBOR) benchmark.