EBA published the second report on how the industry has implemented the EBA guidelines on product oversight and governance arrangements. The report identifies good practices of financial institutions and concludes that many of them do not sufficiently put the required focus on ensuring that needs of consumers are met in line with the guidelines. Therefore, EBA encourages financial institutions to ensure that the interests, objectives, and characteristics of consumers are taken into account when applying product oversight and governance arrangements, to avoid consumer detriment. The annex to the report sets out certain good practices, the application of which would contribute to compliance with the EBA guidelines and to the consistency of supervisory and consumer outcomes.
The report identifies ways for financial institutions to further strengthen the application of the EBA guidelines on product oversight and governance arrangements. It does so by outlining good practices identified in the sample concerning the scope of the EBA guidelines and general governance, also identifying the target market, product testing, product monitoring, remedial actions, and the product oversight and governance arrangements for distributors. The report confirms the conclusions reached in the first report; specifically, while surveyed manufacturers had implemented the internal processes in relation to product oversight for retail products, this was not necessarily done in a way that put the required focus on ensuring that consumer needs are met. Despite the objectives of the EBA guidelines to enhance consumer protection and to address the prudential risks arising from misconduct, financial institutions appeared to focus almost only on the requirements set out in the EBA guidelines on internal governance under the Capital Requirements Directive (CRD IV). The assessment also highlights that the application of the EBA guidelines varies significantly according to the size of the financial institutions, between the member states and also between financial institutions in the same member state.
The EBA guidelines on product oversight and governance arrangements consist of a set of eight guidelines for manufacturers and four guidelines for distributors; they are addressed to credit institutions CRD IV, payment institutions under the Payment Services Directive (PSD 1/PSD 2), electronic money institutions under the Electronic Money Directive (EMD), and mortgage creditors under the Mortgage Credit Directive (MCD) to the extent that those are financial institutions under the EBA Regulation. EBA conducted this review with 78 credit institutions, payment, and e-money institutions across 12 member states in EU. The EBA and relevant competent authorities will continue monitoring how financial institutions apply these EBA guidelines and whether they make use of the good practices identified in this report. However, EBA does not plan to carry out another analysis for the purpose of the supervisory convergence work of EBA on the guidelines on product oversight and governance arrangements in the immediate future.
Keywords: Europe, EU, Banking, Product Oversight and Governance, CRD IV, Governance, Digitalization, Good Practices, EBA
Previous ArticleCPMI and IOSCO Report on Implementation Monitoring of PFMI in Brazil
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.