Featured Product

    CMF Consults on Reporting Requirements for Basel III Standards

    December 31, 2020

    CMF is consulting on the new regulatory files related to the implementation of Basel III standards in Chile. The proposal introduces a new system, called the Risk System, to the Information Systems Manual for banks, with the aim to facilitate supervision of the implementation of Basel III regulations. The proposed system sets out new reporting requirements for monitoring and evaluation of the requirements contained in Chapters 21-1 through 21-30 of the Updated Compilation of Rules for Banks (RAN). The submission of information will begin in the second half of 2021. The consultation is open until March 01, 2021. CMF also published a file on the rating of systemically important banks (File R11), for its inclusion in the Information Systems Manual. The published file is necessary to determine the systemic importance index of banks, according to the provisions established in Chapter 21-11 of RAN.

    CMF completed the process of issuing the necessary regulations to implement the Basel capital framework in Chile on December 01, 2020. Due to the need to adequately gather all information required to monitor the capital adequacy of banks and the main risks they are exposed to, CMF developed a new "Risk System" that provides the necessary information to observe compliance with the new limits. The "Risk System" is formed by eight new normative files with 29 registries. These files contain specific instructions on how to report the requested information, establishing type and criteria, periodicity, and submission dates for each of the registries. Furthermore, the reporting guidelines are limited only to each bank's applicable combinations. The list of the new files is as follows:

    • Solvency limits and effective equity (R01)
    • Regulatory capital instruments (R02)
    • Credit risk-weighted assets (R06)
    • Market risk-weighted assets (R07)
    • Operational risk-weighted assets (R08)
    • Rating of systemically important banks (R11)
    • Banking book market risk (R13)
    • Concentration risk (R14)

    File R11 was put out for public consultation between November 02 and December 02, 2020. It will focus on reporting of the index factors that determine the degree of a bank's systemic importance, related to what its financial deterioration or eventual insolvency would mean for the functioning of the local financial system. The considered factors include the bank size, interconnection with other financial institutions, the degree of substitution in the provision of financial services, and the complexity of business model and operating structure. After reviewing feedback from the industry, the descriptions associated with the sub-factors, necessary to construct the index, were adjusted to provide a greater degree of detail. On February 01, 2021, banks must submit their monthly information corresponding to 2020 through the Secure Information Submission (ESI) system. Later, within nine business days, banks must submit their information to CMF on a monthly basis, starting in February with the information for January 2021.

    New tables will be introduced to the Information Systems Manual for banks, which will refer to the identification of exposures subject to credit risk, market risk, systemically important index sub-factors, and definition of time bands, among others. The requirements established in these normative files will apply to all banks incorporated in Chile as well as branches of foreign banks operating in the local market. Unless CMF dictates otherwise, the regulatory files of other systems containing information of a similar nature or which currently measure the risks described in the Basel III regulations must continue to be submitted simultaneously to the new files, without change. The submission of information will begin in the second half of 2021. Banks must submit information for files R06 through R08 in July; for files R01 and R02 in September; and for files R13 and R14 in December of each year.

     

    Related Links (in English and Spanish)

    Comment Due Date: March 01, 2021

    Keywords: Americas, Chile, Banking, Basel, Regulatory Capital, Reporting, Credit Risk, Market Risk, Operational Risk, Systemic Risk, CMF

    Featured Experts
    Related Articles
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    News

    US Agencies Propose Changes to Call Reports and Instructions

    Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.

    July 22, 2021 WebPage Regulatory News
    News

    PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker

    The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Examines Asset Encumbrance in Banking Sector

    The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Publishes Methodological Guide to Mystery Shopping

    The European Banking Authority (EBA) published a methodological guide to mystery shopping.

    July 21, 2021 WebPage Regulatory News
    News

    APRA Issues Update on Capital Reform Policy Settings for Banks

    The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.

    July 21, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Assess Continuity Planning of Market Infrastructures

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.

    July 21, 2021 WebPage Regulatory News
    News

    BoE Announces Changes to Validation Rules for Form BTL

    The Bank of England (BoE) published questions and answers (Q&A) on OSCA to BEEDS migration for statistical reporting as well a presentation from the project overview session held with statistical reporters.

    July 20, 2021 WebPage Regulatory News
    News

    BCBS Proposes Changes to Process for Reviewing G-SIB Methodology

    The Basel Committee on Banking Supervision (BCBS) is consulting on a technical amendment to the Basel Framework to reflect a new process reviewing the global systemically important bank (G-SIB) assessment methodology.

    July 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7281