Featured Product

    EBA on Application of Product Oversight and Governance Arrangements

    November 03, 2020

    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.

     

    Related Links

    Keywords: Europe, EU, Banking, Product Oversight and Governance, CRD IV, Governance, Digitalization, Good Practices, EBA

    Featured Experts
    Related Articles
    News

    EC Rule on Contractual Recognition of Write Down and Conversion Powers

    The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.

    September 17, 2021 WebPage Regulatory News
    News

    APRA Issues Further Guidance on Application of Securitization Standard

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.

    September 16, 2021 WebPage Regulatory News
    News

    SRB Provides Update on Approach to Prior Permissions Regime

    The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.

    September 16, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Finalizes Guidance to Assess Breaches of Large Exposure Limits

    The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.

    September 15, 2021 WebPage Regulatory News
    News

    PRA Finalizes Changes to Consolidated Prudential Rules Under CRD5/CRR2

    The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Revises Guidelines on Stress Tests of Deposit Guarantee Schemes

    The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).

    September 15, 2021 WebPage Regulatory News
    News

    Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics

    The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.

    September 15, 2021 WebPage Regulatory News
    News

    HKMA Endorses Industry Guidance to Support LIBOR Transition

    The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).

    September 14, 2021 WebPage Regulatory News
    News

    OCC Issues Booklet on Supervision of Problem Banks

    The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.

    September 13, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7481