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    EBA Publishes Single Rulebook Q&A and Guideline on Customer Onboarding

    The European Banking Authority (EBA) published the final guidelines on the use of remote customer onboarding solutions and received a call for advice from the European Commission (EC) on green loans originated by credit institutions in the European Union (EU). EBA also answered 26 questions under the Single Rulebook Question and Answer (Q&A) tool, in the month of November 2022. The addressed Q&A topics include Pillar 3 ESG disclosures as well as market and credit risk related topics under the Capital Requirements Regulation or CRR, This month's answers also addressed queries related to k-factor requirements under the Investment Firms Regulation or IFR.

    The EBA guidelines on remote customer onboarding set out the steps credit and financial institutions should take to ensure safe and effective remote customer onboarding practices in line with applicable anti-money laundering and countering the financing of terrorism (AML/CFT) legislation and the data protection framework in EU. The guidelines apply to all credit and financial institutions that are within the scope of the Anti-money Laundering Directive (AMLD or Directive 2015/849). The guidelines establish common EU standards on the development and implementation of sound, risk-sensitive initial customer due diligence policies and processes in the remote customer onboarding context. They set out the steps financial institutions should take when choosing remote customer onboarding tools and when assessing the adequacy and reliability of such tools, to comply effectively with their AML/CFT obligations. The guidelines are technologically neutral and do not prioritize the use of one tool over another. These guidelines will apply six months after their publication in all EU official languages. The deadline for competent authorities to report whether they comply with the guidelines will be two months after the publication of the translations.

    The EC request for Call for Advice from EBA on green loans states that advice should cover the most relevant types of green loans originated by credit institutions in the EU, including loans with environmental sustainability features, green mortgages and, where applicable, loans based on the Taxonomy and its six environmental objectives. EBA is requested to provide an overview of the green loans market and existing market practices based on interactions with the industry and the supervisory community. The overview should focus on relevant green loan market segments, including segments in which retail borrowers and SMEs are most active and where they might benefit from gaining access to green loans. The advice should include regulatory and legislative measures, for instance, related to establishing an EU definition of green loans based on the Taxonomy, the loan origination process, pre-contractual information and advice to the borrower, necessary information by the credit institution, advertising, product governance and consumer protection. The advice could also cover other non-regulatory measures such as those improving the provision of information, training tools, access to data or technical guidance. They should be supported by an assessment of the related administrative burdens and benefits of the measures for borrowers and lenders. EBA is requested to assess the merits of further specifying loan origination process requirements for credit institutions with the aim to facilitate the development of the green loans market and their origination and to safeguard credibility and consumer protection in the green retail loan market, while ensuring usability and proportionality. While emphasis should be placed on loan origination requirements for all types of green loans, it should be considered whether the loan origination requirements should be specified with certain aspects related to the origination of green loans based on the Taxonomy. 

     

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    Keywords: Europe, EU, Banking, Lending, Basel, Customer Onboarding, AML CFT, AMLD, IFR, Pillar 3, Disclosures, Regulatory Capital, Loan Origination, ESG, Climate Change Risk, K Factor Regime, Single Rulebook, Q A, EC, EBA

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