Featured Product

    ESMA Issues Opinion on ESG Disclosures for Benchmark Administrators

    April 29, 2020

    ESMA issued a no-action letter to promote coordinated action by national competent authorities regarding the new environmental, social and governance (ESG) disclosure requirements for benchmark administrators, under the Benchmarks Regulation. According to the letter, national competent authorities should not prioritize supervisory or enforcement action against administrators regarding these new requirements until the delegated acts apply. ESMA also issued an opinion to EC on the need for prompt adoption of the relevant delegated acts. The new requirements are due to apply on April 30, 2020 and require benchmark administrators to include details of how ESG factors are reflected in their methodology documents and benchmark statements.

    The new ESG-related disclosure requirements oblige benchmark administrators, by April 30, to include:

    • in their methodology document, an explanation of how the key elements of the methodology reflect ESG factors for each benchmark or family of benchmarks
    • in their benchmark statement, an explanation of how ESG factors are reflected in each benchmark or family of benchmarks provided and published.

    These disclosure requirements that have been set out in the EU Regulation 2016/1011 aim to increase the comparability of benchmarks with regard to ESG factors and are key for users of benchmarks to make well-informed choices. The associated delegated acts are expected to ensure that these objectives may be achieved by setting out the minimum content of the ESG factors to be disclosed as well as the standard formats for the presentation of that information.  

    EC, on April 08, 2020, had published the draft delegated acts, the consultation period for which ends on May 06, 2020. Following their adoption, the delegated acts will be subject to a scrutiny period by the European Parliament and by the Council before they enter into force. In its opinion to EC, ESMA states that it considers it necessary for national competent authorities to address the absence of the delegated acts through consistent risk-based supervisory and enforcement practices. ESMA explained that if the date of application of the new disclosure requirements had been aligned with the date of application of the delegated acts, significant issues would not have arisen. ESMA asserted that the delegated acts should be adopted by EC without delay, to ensure the objectives of these requirements are achieved, to provide administrators with clarity on how to apply these requirements, and to provide competent authorities with clarity on how to supervise compliance with these requirements. 

     

    Related Links

    Keywords: Europe, EU, Banking, Securities, ESG, Benchmarks Regulation, Opinion, National Competent Authorities, Delegated Act, Disclosures, Benchmark Administrator, Climate Change Risk, ESMA

    Related Articles
    News

    BIS Examines Use of Big Data and Machine Learning at Central Banks

    BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.

    March 04, 2021 WebPage Regulatory News
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    ECB Publishes Guide for Determining Penalties for Regulatory Breaches

    ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.

    March 02, 2021 WebPage Regulatory News
    News

    MAS Sets Out Good Practices to Manage Operational Risks Amid COVID

    MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.

    March 02, 2021 WebPage Regulatory News
    News

    ACPR Announces New Data Collection Application for Banks and Insurers

    ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.

    March 02, 2021 WebPage Regulatory News
    News

    BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox

    BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.

    March 02, 2021 WebPage Regulatory News
    News

    EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models

    EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.

    March 01, 2021 WebPage Regulatory News
    News

    SRB Publishes Overview of Resolution Tools Available in Banking Union

    SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.

    March 01, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6655