Featured Product

    FI on Capital Rules for Banks and Reporting Rules for Investment Firms

    August 25, 2021

    The Swedish Financial Supervisory Authority (FI) issued new regulations on reporting requirements for investment firms, in accordance with the Investment Firms Regulation and Directive (IFR and IFD). FI will inform when test reporting in the new reporting portal Fidac will be possible. In addition, FI published the capital requirements of the largest Swedish banks and credit institutions that belong to the supervisory categories 1 and 2 as of the end of the second quarter of 2021. The capital requirements have been published for Handelsbanken, SEB, Swedbank, Landshypotek, Länsförsäkringar, Kommuninvest, Svensk Exportkredit (SEK), SBAB, Skandiabanken, Avanza, Nordnet, and Sparbanken Skåne.

    At the end of 2020, new rules were introduced, which change the application of capital requirements going forward. The risk assessments and the accompanying capital requirements and liquidity requirements determined during the Supervisory Review and Evaluation Process (SREP) of FI apply until the new SREP decisions are made under the new regulation. The following capital requirements apply in the second quarter of 2021:

    • The capital allocation for Pillar 2 additional own funds requirements for concentration risk, interest rate risk, and additional market risk and pension risk shall comply with the main rule introduced in Chapter 2, section 1a of the Supervision Act.
    • For other Pillar 2 additional own fund requirements, the capital allocation in the SREP decisions applies until further notice.
    • For three major banks (Handelsbanken, SEB, and Swedbank), the 2% additional requirement for systemic risk in pillar 2 has been removed, other systemically important institutions (O-SII) buffer has been changed to 1%, and systemic risk buffer is 3%.
    • As of March 16, 2020, Sweden applies a countercyclical buffer of 0%.

    FI also announced that the recommendation regarding restrictions on dividend distribution will not be further extended and will expire on September 30, 2021. Since the uncertainty regarding the Swedish economy due to the pandemic has decreased, it is reasonable to now remove the recommendation. This means that FI will return to the normal supervision procedure for assessing the risks and capital needs of banks. The banks' boards of directors bear responsibility for assessing the capital buffers banks should hold over and above the capital requirements set by FI and propose dividends to their annual general meetings given these capital requirements. Considering a combination of the remaining systemic risks and the economic recovery, FI will raise the countercyclical capital buffer in 2021; this was communicated in the stability report at the beginning of June and is something that the banks must take into account.


    Related Links

    Keywords: Europe, Sweden, Banking, Investment Firms, IFR, IFD, Reporting, Test Environment, FIDAC, Regulatory Capital, Basel, Pillar 2, SREP, Systemic Risk Buffer, O-SII Buffer, CCyB, Dividend Distribution, FI

    Featured Experts
    Related Articles

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News

    APRA Consults on Prudential Standard for Operational Risk

    The Australian Prudential Regulation Authority (APRA) is seeking comments, until October 21, 2022, on the introduction of CPS 230, which is the new cross-industry prudential standard on operational risk management.

    July 28, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8422