The Swiss Federal Council adopted the implementing ordinance on climate disclosures for large Swiss companies, with slated entry into force as of January 01, 2024. The Federal Council also brought both the Banking Act and the Banking Ordinance into force, with effect from January 01, 2023. Another recent publication is a report on the Swiss National Bank (SNB) and the sustainability goals in Switzerland. The report shows that, in fulfilling its mandate, SNB considers various climate, environmental, and sustainability aspects, to the extent that they affect price and financial stability or entail financial risks for SNB.
The new ordinance on climate disclosures provides for the binding implementation of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) by large Swiss companies. Public companies, banks, and insurance companies with 500 or more employees and at least CHF 20 million in total assets or more than CHF 40 million in turnover are obliged to report publicly on climate issues. Public reporting involves disclosures not only on the financial risk that a company incurs as a result of climate-related activities, but also on the impact of the company's business activities on the climate. In addition, the company has to describe the reduction targets it has set for its direct and indirect greenhouse gas emissions as well as how it plans to implement them. The draft ordinance was widely supported by stakeholders during the consultation that ran from March to July 2022. To give the concerned companies sufficient time for implementation, the Federal Council has decided to bring the ordinance into force as of January 01, 2024, with reporting beginning in 2025. The Ordinance specifies that "the obligation to publish the disclosures in a machine-readable electronic format in common international use shall be met one year at the latest after this Ordinance enters into force."
The amendments to the Banking Act and Banking Ordinance have implementing provisions that mainly comprise definitions and more precise formulations on deposit insurance. For example, there are stipulations for banks on how to make preparations to ensure the swift payout of insured deposits in the event of insolvency. Furthermore, there are new provisions enabling cantonal banks to issue special financial instruments for resolution that are tailored to their special legal status. In addition, the financial and organizational requirements for unsupervised, important companies belonging to a systemically important banking group have been fleshed out. Finally, the amendments also concern big banks, as their rebate on certain capital requirements is replaced with an incentive system. The Federal Council has brought both the Banking Act and the Banking Ordinance into force with effect from January 01, 2023. Parliament had adopted the amendments to the Banking Act on December 17, 2021. As a result of the amendments to the Banking Act, the Banking Ordinance also needs to be amended.
Keywords: Europe, Switzerland, Banking, Basel, Reporting, Banking Ordinance, G SIBs, ESG, Climate Change Risk, Disclosures, Climate Disclosures Ordinance, TCFD Recommendations, Sustainable Finance, Swiss Federal Council
Previous ArticleDigital Services Act and Digital Markets Act Go into Effect in EU
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.