Featured Product

    FSC Announces New Legislation on Financial Benchmarks in South Korea

    October 31, 2019

    FSC announced the passing of the Financial Benchmark Act, which is a new bill to regulate financial benchmarks, in the National Assembly. The new legislation is intended to ensure the validity and credibility of financial benchmarks in response to global regulatory moves in which major countries, including EU, are introducing regulations on financial benchmarks. FSC expects that the Financial Benchmark Act will strengthen the management and supervision on financial benchmarks, which will help secure financial stability. The new legislation will take effect in November 2020. Meanwhile, the government will continue to work with EU for an approval that the new legislation is deemed equivalent to the Benchmarks Regulation in EU.

    The following are the key features of the new legislation: 

    • Designation of critical benchmarks—FSC may designate benchmarks that would have a significant impact on financial market stability, consumer protection, and the real economy as “critical” benchmarks.
    • Administrator of critical benchmarks—FSC may designate entities which determine, publish, and provide critical benchmark as administrators.
    • Obligations of administrator—Administrators are required to establish a committee to deliberate on important matters in regard with establishing and revising operational rules, collecting input data, and calculating and determining critical benchmarks. Administrators are also required to disclose details about operational rules and management of conflict of interest on their websites. Administrators should review the validity of their operational rules at least every two years and disclose the results.
    • Cessation of provision of critical benchmarks—Any administrator that intends to cease the provision of critical benchmarks for unexpected reasons shall post a public announcement on the reasons and the date of cessation for more than 20 days and report to the FSC six months before the date of cessation. FSC may order the transfer of such operations to other administrators or the continuation of such operations for a certain period of time not exceeding 24 months, if the cessation would have a significant impact on financial markets.
    • Obligations of users—Users of critical benchmarks shall provide a counterparty to a financial contract with written explanations on critical benchmarks.
    • Prohibition of distortion and manipulation—Contributors of input data and administrators are prohibited from engaging in distortion or manipulation of input data and benchmarks, in addition to other unlawful activities.
    • Inspection and punitive measures—FSC is to oversee compliance with the Financial Benchmark Act by administrators and may impose punitive measures against violations of laws such as administrative orders, punitive fines, and penalties.

     

    Related Link: Press Release (PDF)

     

    Keywords: Asia Pacific, Korea, Banking, Securities, Financial Benchmarks, Benchmarks Regulation, EU, Critical Benchmarks, Equivalence Regime, Interest Rate Benchmark, FSC

    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