Featured Product

    EBA Proposes to Revise Guidelines on Internal Governance

    July 31, 2020

    EBA launched a consultation on revisions to the guidelines on internal governance of certain entities in EU. The guidelines will apply to competent authorities across EU as well as to credit institutions on a solo and consolidated basis. This review takes into account amendments introduced by the fifth Capital Requirements Directive (CRD5) and the Investment Firms Directive in relation to sound and effective governance arrangements of credit institutions. The consultation runs until October 31, 2020 and the amended guidelines are expected to enter into force on June 26, 2021.

    The proposed guidelines clarify that identifying, managing, and mitigating money laundering and financing of terrorism risk is part of sound internal governance arrangements and risk management framework of credit institutions. The draft guidelines further specify and reinforce the framework regarding loans to members of the management body and their related parties. Such loans may constitute a specific source of actual or potential conflict of interest and, therefore, specific requirements have been explicitly included in CRD (Directive 2013/36/EU). Similarly, other transactions with members of the management body and their related parties have the potential to create conflicts of interest and, therefore, EBA is providing guidance on how to properly manage them. Finally, in line with the requirement to have a gender-neutral remuneration policy, the consultation paper contains new guidance on the code of conduct to ensure that credit institutions take all necessary measures to avoid discrimination and guarantee equal opportunities to staff of all genders.

    The consultation paper indicates that the final guidelines would apply similarly to credit institutions and to investment firms that are subject to Title VII of CRD (Directive 2013/36/EU) in application of the Article 1(2) and (5) of Regulation 2019/2033/EU. The guidelines are based on an earlier set of guidelines on internal governance and add requirements that aim to foster a sound risk culture implemented by the management body, to strengthen the management body oversight of the activities of credit institutions and to strengthen the risk management frameworks of credit institutions. Additional guidelines have been provided to further increase the transparency of credit institutions’ offshore activities of credit institutions and to ensure the consideration of risks within change processes of credit institutions.

     

    Related Links

    Comment Due Date: October 31, 2020

    Effective Date: June 26, 2021 (Expected)

    Keywords: Europe, EU, Banking, Internal Governance, Governance, Guidelines, CRD, IFD, AML/CFT, EBA

    Featured Experts
    Related Articles
    News

    FSB Sets Out Effective Practices for Cyber Incident Recovery

    FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.

    October 19, 2020 WebPage Regulatory News
    News

    HKMA Urges Early Action for Adherence to IBOR Fallbacks Protocol

    HKMA urged authorized institutions to take early action to adhere to the IBOR Fallbacks Protocol, which ISDA is expected to publish soon.

    October 16, 2020 WebPage Regulatory News
    News

    FSB Sets Out Roadmap for Transition to Alternative Reference Rates

    FSB published a global transition roadmap for London Inter-bank Offered Rate (LIBOR).

    October 16, 2020 WebPage Regulatory News
    News

    HM Treasury Publishes Response to Proposal on BRRD2 Transposition

    HM Treasury published a document that summarizes the responses received from a consultation on the approach of UK to transposition of the revised Bank Resolution and Recovery Directive (BRRD2).

    October 15, 2020 WebPage Regulatory News
    News

    HM Treasury Publishes Response to Proposal on CRD5 Transposition

    HM Treasury published the government response to the feedback received on the consultation for updating the prudential regime of UK before the end of the Brexit transition period.

    October 15, 2020 WebPage Regulatory News
    News

    BoE Publishes Reporting Schedule for Statistical Returns

    In a recent statistical notice, BoE announced publication of the reporting schedule for statistical returns for 2021.

    October 15, 2020 WebPage Regulatory News
    News

    EC Welcomes Declaration by Member States on EU Cloud Federation

    EC welcomed the joint declaration by 25 EU member states on building the next generation of cloud in Europe.

    October 15, 2020 WebPage Regulatory News
    News

    MAS Amends Notice on Issuance of Covered Bonds by Banks in Singapore

    MAS published amendments to Notice 648 on the issuance of covered bonds by banks incorporated in Singapore.

    October 15, 2020 WebPage Regulatory News
    News

    FDIC Selects Technology Companies for Rapid Prototyping Competition

    FDIC has selected 14 technology companies—including Accenture Federal Services, LLC, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the next phase of the rapid prototyping competition.

    October 15, 2020 WebPage Regulatory News
    News

    GLEIF Defines New Validation Agent Role for Financial Institutions

    GLEIF announced that financial institutions worldwide can realize a variety of cost, efficiency, and customer experience benefits by assuming a new “validation agent” role within the Global Legal Entity Identifier (LEI) System.

    October 15, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5979