The Joint Committee of the ESAs published its 2020 work program. The Joint Committee will continue its work in the areas of cross-sectoral risk analysis, consumer protection, financial conglomerates, securitization, accounting, and auditing. Key areas of focus include the packaged retail and insurance-based investment products (PRIIPs), sustainable finance, securitization, and financial innovation—also in relation to the fintech action plan of EC and the work of the European Forum for Innovation Facilitators (EFIF). For the EFIF, the Joint Committee will further promote coordination and cooperation among national innovation facilitators to foster the scaling up of innovation in the financial sector. The EFIF work program is also annexed to the Joint Committee work program.
The Joint Committee will continue to be an important forum for discussing key cross-sectoral trends and vulnerabilities to financial stability, with the publication of bi-annual cross-sectoral risk reports. In the area of Financial Conglomerates, the Joint Committee will further develop and finalize its work on specific reporting formats for financial conglomerates. In addition, the Joint Committee will continue to serve as an important body for addressing other cross-sectoral matters, such as the cross-sectoral mandates and questions (Q&As) stemming from the Securitization Regulation and the work to make the Joint Committee the coordination platform of data collected. The key cross-sectoral issues that have been identified are the jurisdictional scope of application, the due diligence requirements of EU institutional investors, the definition of sponsor for investment firms, and the credit granting criteria. The Joint Committee will also work on practical and operational issues in relation to supervision of the Securitization Regulation.
The Joint Committee enhances confidence and strengthens the protection of European consumers in relation to banking, insurance, and securities products. This will continue to be an area of priority for the Joint Committee in 2020. ESAs are undertaking a review of Commission Delegated Regulation 2017/653 and intend to propose amendments by February 2020 as requested by EC to allow the amendments to be scrutinized before expiry of the transitional exemption in Article 32 of the PRIIPs Regulation (No 1286/2014). Work will continue on the development of Q&As or other Level 3 tools to promote supervisory convergence and to give competent authorities and market participants further guidance on implementation of the new PRIIPs rules. ESAs will assess the phenomenon, focusing on potential consumer protection concerns and benefits associated to it. This will involve assessment of the fintech phenomenon, assessment of its benefits and risks, and, potentially, identification of any regulatory and/or supervisory measures that may need to be taken, taking into account the ongoing sectoral work that the ESAs are doing in this field.
The 2019-2020 work program of EFIF highlights that EFIF will be used to monitor developments in the design and operation of innovation facilitators, taking account of the best practices set out in the January 2019 joint report of the ESAs on regulatory sandboxes and innovation hubs. Additionally, EFIF will be used to monitor developments in the innovative products that have been identified in the context of innovation facilitator activities and to monitor the related regulatory and supervisory issues. Finally, EFIF will focus on certain thematic priorities—artificial intelligence, big data analytics, and machine learning; tokenization and distributed ledger technologies; open banking/application program interfaces; and platforms facilitating the re-aggregation of financial services (retail and institutional).
Keywords: Europe, EU, Banking, Insurance, Securities, Work Program, PRIIPs, Securitization, Fintech, Reporting, EFIF, ESAs
Previous ArticleAPRA Informs RSE Licensees About Reforms to Address Account Erosion
Next ArticleEBA Single Rulebook Q&A: First Update for July 2019
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.
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.
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.
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.
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.
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.
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).
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.
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).
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.