Featured Product

    EBA to Enhance Framework Addressing Dividend Arbitrage Trading Schemes

    May 12, 2020

    EBA published a report on the approaches of competent authorities to tackling market integrity risks associated with dividend arbitrage trading schemes. The report contains the results of an inquiry into the actions of prudential and anti-money laundering (AML) and countering the financing of terrorism (CFT) supervisors in dealing with the dividend arbitrage trading schemes. The report sets out the EBA expectations of credit institutions and national authorities under the current regulatory framework. EBA also decided on a ten-point action plan for 2020-21 to enhance the future framework of prudential and anti-money laundering requirements covering such schemes.

    The report sets out that EBA expectations under the current regulatory framework include

    • Requirement to take a comprehensive view of the risks highlighted by dividend arbitrage trading cases, looking at the adequacy of financial institutions’ internal controls and internal governance arrangements, their systems, and controls of AML/CFT
    • The exchange of information between prudential and AML authorities when performing reviews of institutions’ internal controls and governance
    • AML authorities reaching out to local tax authorities
    • Prudential and AML authorities pursuing targeted inspections
    • Prudential supervisory colleges discussing such schemes

    To enhance the future regulatory framework, the EBA published a ten-point action plan, which seizes on the opportunities afforded by recent legislative changes in the EU Capital Requirements Directive (CRD5) and the AML/CFT mandate in the EBA Regulation,and which will be implemented in 2020 and 2021. EBA will strengthen its prudential Guidelines on Internal Governance, its Guidelines on the Assessment of the Suitability of Members of the Management Body and Key Function Holders, and its Guidelines on Supervisory Review and Evaluation Process (SREP); it will also monitor how prudential colleges will follow up on the related guidance.

    With regard to AML requirements, EBA will amend its guidelines on money laundering (ML) and terrorist financing (TF) risk factors, its Guidelines on Risk-Based AML/CFT Supervision, and its biennial Opinion on ML/TF Risks. EBA will also allocate explicit time to such schemes during its staff-led AML/CFT implementation reviews of national authorities and monitor AML/CFT colleges for financial institutions that are exposed to significant ML/TF risks associated with tax crimes. EBA will then carry out a second formal inquiry into the actions taken by financial institutions and national authorities to supervise compliance with the aforementioned amended requirements.


    Related Links

    Keywords: Europe, EU, Banking, AML/CFT, CRD 5, SREP, Governance, Dividend Arbitrage Trading Schemes, EBA

    Related Articles

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News

    BaFin Consults on Resolvability Requirements for Resolution Planning

    The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.

    June 10, 2022 WebPage Regulatory News

    EBA Consults on Certain Standards and Guidelines Under CRR and BRRD

    The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.

    June 08, 2022 WebPage Regulatory News

    OJK Publishes Regulatory Updates for Financial Sector Entities

    The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)

    June 03, 2022 WebPage Regulatory News

    EU Publishes Rules on DLT and Data Governance

    The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).

    June 03, 2022 WebPage Regulatory News

    EBA Publishes Phase 2 of Reporting Framework 3.2

    The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications

    June 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8267