EBA is consulting on the draft implementing technical standard on disclosure and reporting of the minimum requirement for own funds and eligible liabilities (MREL) and total loss absorbency requirement (TLAC). The draft standard follows an integrated approach and is aligned with disclosure standards under the Basel Pillar 3. The draft standard includes proposals for templates and tables implementing the TLAC and MREL disclosures and reporting requirements. In addition to the implementing technical standards, the consultation paper includes two recommended reporting templates covering the forecast of MREL and TLAC positions and funding structures, along with a mapping of the disclosure and reporting requirements. The consultation period ends on February 22, 2020.
MREL and TLAC are integrated for both the reporting and the disclosure templates, with both reporting and disclosure requirements being enshrined in a single set of implementing technical standards. This integrated approach aims to optimize efficiency by institutions when complying with the disclosure and reporting obligations, to facilitate the use of information by authorities and market participants, and to promote market discipline. The consultation paper presents proposals implementing the disclosure and reporting requirements on both MREL and TLAC in accordance with mandates included in the revised Capital Requirements Regulation (CRR 2) and the revised Bank Recovery and Resolution Directive (BRRD 2). The annexes to the consultation paper include the following information:
- Reporting templates (Annex 1) and instructions (Annex 2) on MREL and TLAC
- Data point model and validation rules (Annex 3)
- Reporting on MREL and TLAC related to standardized ranking (Annex 4)
- Disclosure templates (Annex 5) and associated instructions (Annex 6) on MREL and TLAC
- Reporting templates and instructions covering forecast of MREL and TLAC (Annexes 7 and 8, respectively)
This consultation paper is one of the deliverables presented in the EBA roadmap on risk-reduction measures package, which explains the Pillar 3 strategy of EBA to implement a comprehensive disclosure framework. The aim of this implementation is to become the EU-wide Pillar 3 hub and to facilitate the EBA pathway for a more efficient and proportionate supervisory reporting. EBA is expected to submit the final draft technical standard to EC in June 2020. With regard to the reporting requirements, EBA will develop data point model, XBRL taxonomy, and validation rules based on the final draft technical standard, which are likely to be published in the third quarter of 2020.
The provisions of this technical standard on the disclosure on TLAC are envisaged to apply immediately after its entry into force and adoption by EC. However, provisions on the MREL disclosure will apply from the date of the expiration of transition periods, pursuant to Article 45m of BRRD—that is, from January 01, 2024 or, where the resolution authority set a compliance deadline after January 01, 2024, from that compliance deadline. The first reference date for reporting in accordance with these technical standards is foreseen to be June 30, 2021, both for reporting on the MREL and the TLAC requirements. The expected implementation period for the proposed reporting requirements is approximately one year.
Comment Due Date: February 22, 2020
Keywords: Europe, EU, Banking, MREL, TLAC, Reporting, Disclosures, Pillar 3, Basel III, CRR 2, BRRD 2, Implementing Technical Standards, Proportionality, Bal-In, G-SIBs, EBA
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).
EBA published a statement on resolution planning in light of the COVID-19 pandemic.
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.
FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.