Featured Product

    ECB Opines on Bulgarian Covered Bond Law, Purview of AML/CFT Authority

    February 22, 2022

    The European Central Bank (ECB) published an opinion on the implementation of the Covered Bond Directive of European Union into the Bulgarian law and on the establishment of the anti-money laundering and countering the financing of terrorism (AML/CFT) Authority in European Union.

    The ECB opinion on the proposal for a regulation establishing the AML/CFT Authority covers the scope of direct and indirect supervision of AML/CFT Authority, cooperation between AML/CFT Authority and ECB, processes employed in direct and indirect supervision, and governance structure of the AML/CFT Authority. The European Commission had adopted this proposal in July 2021. ECB sets out that it stands ready to cooperate with AML/CFT Authority and contribute to the legislative process, by sharing its experience as a Union-level prudential supervisory authority, where this experience may be relevant for building Union-level AML/CFT supervision. ECB would welcome an increase in the scope of AML/CFT Authority’s direct supervisory tasks to cover a wider subset of entities that ECB directly supervises. The proposed regulation requires AML/CFT supervisors to transmit to the database, the advice provided to other "national" authorities in relation to the authorization procedures, the withdrawal of authorization procedures, and the fit-and-proper assessments of shareholders or members of the management body of individual obliged entities. ECB notes that the word "national" should be deleted, as AML/CFT supervisors will provide information in this respect not only to national authorities, but also to ECB.  In its opinion, ECB also welcomed the wide range of powers and tools envisaged for AML/CFT Authority to discharge its oversight function and ensure high supervisory standards across the European Union. ECB notes that AML/CFT Authority’s oversight toolkit in the area of information gathering for non-selected obliged entities does not include some of the tools available to ECB with respect to gathering information about the less significant supervised entities. 

    In its opinion on the draft law on covered bonds in Bulgaria, ECB welcomes the draft law’s introduction of a new legal regime for covered bonds, which aims to contribute to the development of the Bulgarian capital market and improve the level of protection and legal certainty for investors. The draft law designates Bulgarian National Bank (BNB) as the competent authority responsible for the public supervision of covered bonds issued by credit institutions. There is no existing national legislation on covered bonds in Bulgaria and BNB does not have any relevant supervisory tasks under the existing Law on mortgage bonds, which the draft law repeals. However, ECB emphasizes that a proposed conferral of new tasks on a national central bank participating in the European System of Central Banks (ESCB) must be assessed against the prohibition on monetary financing under Article 123(1) of the Treaty on the Functioning of the European Union. In its opinion, ECB concluded that the new tasks conferred by the draft law on BNB regarding the supervision of the issuance of covered bonds by credit institutions can be regarded as central bank tasks, as they would complement the existing functions of BNB in relation to the prudential supervision of credit institutions. In short, the new tasks conferred by the draft law are not atypical of central bank tasks and have been conferred on a number of other ESCB national central banks. ECB has published this opinion upon a request from the Bulgarian Minister of Finance for an opinion on a draft law on covered bonds. The draft law is intended to implement the Covered Bond Directive (2019/2162) into Bulgarian law. 

     

    Related Links

     

    Keywords: Europe, EU, Banking, Securities, Opinion, AML CFT, ML TF Risk, AML CFT Authority, Covered Bonds, Bulgaria, Covered Bond Directive, BNB, EC, ECB

    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582