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. EBA also seeks comments on the revised guidelines on the Deposit Guarantee scheme (DGS) contributions, draft regulatory technical standards on the homogeneity of underlying exposures in simple, transparent, and standardized (STS) securitizations, and the supervisory handbook for the validation of internal ratings based systems.
The key highlights of the aforementioned updates follow:
- The guidelines on liquidity requirements exemption specify the criteria under which competent authorities may exempt small and nonâinterconnected investment firms from liquidity requirements. The guidelines, which are in accordance with the Investment Firms Regulation or IFR, address three main elements: the set of investment services and activities provided by investment firms which are eligible for the exemption, the criteria for the exemption, and the guidance for competent authorities when granting and withdrawing an exemption. The guidelines will be applicable from two months after issuance date.
- The updated version 5.2 of filing rules document for supervisory reporting modifies rule 3.6 to redefine the condition to apply the new reporting subject and to explicitly instruct the usage of entity types to indicate aggregate levels in the reporting subject of an aggregate reporting document. The filing rules represent a collection of additional rules and guidance specifically applicable to the remittance of eXtensible Business Reporting Language (XBRL) reports for reporting entities in scope of relevant EBA regulations (for example, banks) regulatory filings by relevant national and supranational authorities to EBA.
- The EBA Single Rulebook Q&A tool updates for July 2022 include answers to 18 questions. The updates cover queries on topics such as credit risk, market risk, own funds, k-factor requirements, leverage ratio, STS securitization, and minimum requirements for own funds and eligible liabilities (MREL). The overall objective of the Q&A tool is to ensure consistent and effective application of regulatory framework across the Single Market. Institutions, supervisors, and other stakeholders can use the Single Rulebook Q&A tool to submit questions on certain EU regulations and directives.
- The revised guidelines on DGS contributions aim to enhance proportionality between the risk of a credit institution and its contributions to the deposit guarantee schemes and at streamlining and simplifying the original guidelines. EBA, in its latest review of the guidelines in 2021-22, concluded that, overall, the methodology remains appropriate, and identified several elements of the calculation method that should be improved. The key proposals include setting minimum thresholds for the majority of core risk indicators, adjusting the minimum weights of the core risk indicators, replacing the formula for determining the risk adjustment factor of each member institution, specifying how to account for deposits where the DGS coverage is subject to uncertainty, including in relation to client funds, and clarifying the addressees of the guidelines and their respective roles. The consultation period ends on October 31, 2022.
- The draft regulatory technical standards on homogeneity of underlying exposures in STS securitizations specify which underlying exposures are deemed to be homogeneous as part of the simplicity requirements under the Securitization Regulation and as amended by the Capital Markets Recovery Package. The draft regulatory technical standards carry over the provisions on homogeneity set out in the existing RTS (Regulation No 2019/1851) with some modifications and will be applicable to all securitizations, including asset-backed commercial paper (ABCP), non-ABCP, and on-balance-sheet securitizations. The consultation period ends on October 28, 2022. Following a submission to the European Commission for endorsement, these standards will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union.
- The supervisory handbook for validation of internal ratings-based systems clarifies the role of the validation function as part of corporate governance, in terms of scope of work and interaction with the credit risk control unit. The handbook provides general guidance on the expectations relative to the validation function, in accordance with article 185 of the Capital Requirements Regulation (CRR). The handbook does not present any specific methodology to be used by the validation function. Instead, the handbook provides a set of expectations and good practices on the work of the validation function depending on its position in the model cycle (that is, first or subsequent validation) as well as some additional guidance for the validation of rating systems when using external data, when outsourcing some validation tasks, as well as in a situation of data scarcity. The consultation period ends on October 28, 2022.
Related Links
- Press Release on Guidelines on Liquidity Requirements Exemption
- Guidelines on Liquidity Requirements Exemption (PDF)
- Press Release on EBA Filing Rules Version 5.2
- EBA Filing Rules Version 5.2 (PDF)
- Press Release on Revised Guidelines on Deposit Guarantee Schemes
- Consultation Paper on Revised Guidelines on Deposit Guarantee Schemes (PDF)
- Press Release on Draft Standards on STS Securitizations
- Consultation Paper on Draft Standards on STS Securitizations (PDF)
- Press Release on Supervisory Handbook
- Consultation Paper on Supervisory Handbook (PDF)
- Single Rulebook Q&A
Keywords: Europe, EU, Banking, Securities, Investment Firms, IFR, Liquidity Risk, XBRL, Filing Rules, Deposit Guarantee Scheme, Credit Risk, STS Securitization, Securitization Regulation, Regulatory Technical Standards, Supervisory Handbook, CRR, Single Rulebook, Q&A, Reporting, Basel, Market Risk, MREL, Own Funds, IRB Approach, EBA
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
BIS Report Notes Existing Gaps in Climate Risk Data at Central BanksRelated Articles
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.