Featured Product

    MFSA Publishes Regulatory Updates and Supervisory Priorities for 2021

    December 24, 2020

    MFSA published its cross-sector supervisory priorities for 2021, along with the principles-based cross-sectoral guidelines on outsourcing and technology arrangements, including addressing the management of Information and Communication Technology (ICT), security, and cloud deployment risks. In another update, MFSA announced that it will adopt the ECB recommendation (ECB/2020/62) on restrictions on dividend distribution during COVID-19 pandemic in its entirety and the recommendation will be applicable to all credit institutions licensed in terms of the Banking Act until September 30, 2021. The ECB recommendation requires credit institutions to consider refraining from, or to limit, distributing any cash dividends or share buy-backs until September 30, 2021. Finally, MFSA published a circular to credit institutions on the exercise of discretion under Article 178(2)(d) of the Capital Requirements Regulation (CRR) with regard to the threshold for assessing the materiality of credit obligations past due.

    In the circular addressing credit obligations past due, MFSA announced that, from December 31, 2020, the ECB guideline (ECB/2020/32; published on June 25, 2020) on materiality threshold for assessing credit obligations past due shall apply to all credit institutions licensed in terms of the Banking Act (Chapter 371 of the Laws of Malta). The ECB guideline sets the materiality threshold that shall be applied for the purposes of point (d) of paragraph 2 of Article 178 of the CRR. The materiality threshold comprises two components: an absolute limit and a relative limit. A default shall be deemed to have occurred when both the following limits are exceeded for more than 90 consecutive days:

    • A limit in terms of the sum of all amounts past due owed by the obligor, which is equal to EUR 100 for retail exposures and EUR 500 for exposures other than retail exposures
    • A limit in terms of the amount of the credit obligation past due in relation to the total amount of all on-balance sheet exposures to that obligor, excluding equity exposures, equal to 1%.

    The guidance on ICT risk and outsourcing arrangements informs authorized firms on the implementation of technology arrangements, ICT and security risk management, and relevant outsourcing arrangements (including cloud computing). The guideline stipulates that the approach to adoption of cloud computing resources and services should be based on sound governance and management and should take into consideration the Guiding Principles for Cloud Computing Adoption and Use, which were issued by the global non-profit IT association ISACA, as outlined in clauses 2.4.2 to 2.4. The Accountability Principle states that the internal and cloud provider responsibilities should be clearly defined such that accountabilities are managed accordingly. The guideline elaborates on different type of cloud service models and shared responsibilities for these cloud service models. MFSA notes that this guidance document should be considered as a live document due to the dynamic nature of regulatory developments, technology evolution, and related opportunities and risks. MFSA plans to conduct thematic reviews on a sectoral basis on key aspects of the guidance document, which will be cross-referenced by the respective prudential rules of the applicable sectors along with ESAs guidelines (where applicable). 


    Related Links

    Keywords: Europe, EU, Banking, Insurance, Securities, ICT Risk, Outsourcing Arrangements, Fintech, CRR, Credit Risk, Materiality Threshold, Credit Obligations, Supervisory Priorities, Dividend Distribution, COVID-19, ECB, MFSA

    Featured Experts
    Related Articles

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News

    DNB Publishes Multiple Reporting Updates for Banks

    DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.

    February 28, 2023 WebPage Regulatory News

    NBB Sets Out Climate Risk Expectations, Issues Reporting Updates

    The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting

    February 24, 2023 WebPage Regulatory News

    EBA Updates Address Securitization Standards and DGS Guidelines

    The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.

    February 21, 2023 WebPage Regulatory News

    FSB Publishes Letter to G20, Sets Out Work Priorities for 2023

    The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023

    February 20, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8793