Featured Product

    SARB on Group Structure Reporting Requirements for Resolution Planning

    September 30, 2020

    SARB published a discussion paper that sets out criteria to identify resolution groups. In other words, the criteria is to identify which entities in a financial conglomerate should be treated as part of a designated institution and which entities could be excluded without affecting the ability of SARB to conduct an orderly resolution. These criteria will also inform future reporting requirements of designated institutions on their group structures, for resolution planning purposes. SARB is requesting comments on the paper by November 30, 2020.

    The development of a feasible resolution plan is dependent on a good understanding of the group structure and the identification of relevant entities in the group that will play an important role to achieve an orderly resolution. The existing regulatory requirements for the reporting of group structures are not suitable for the identification of resolution groups. For example, the "Regulations relating to Banks" require banks to submit a group structure that identifies all interest held as at March 31 and September 30 of each year, or in the event of any major change in the group structure. This regulation potentially results in very detailed and lengthy group structures, without sufficient background information to identify resolution groups. A similar situation may arise with the reporting of financial conglomerates to which non-bank systemically important financial institutions belong. In order to identify resolution groups and group entities that should be excluded by the Governor from the definition of designated institutions, more specific requirements on the reporting of group structures will be placed on designated institution.

    The discussion paper sets out the proposed entities that should be reported to SARB in order to facilitate the identification of resolution groups. These entities include banks, non-bank systemically important financial institutions, payment system operators and participants of a systemically important payment system, holding companies, market infrastructures, and resolution support entities. For certain reportable entities, SARB will also require information about their ownership structures at a minimum level of detail. An understanding of the ownership structure is important when identifying applicable resolution actions, for example, to assess contagion effects if shareholders and creditors are to be bailed in. The format in which this information has to be reported is illustrated in Annexure A of the paper, which provides an illustration of a hypothetical group structure, as well as Annexure B, which sets out the relevant reporting template.

     

    Related Links

    Comment Due Date: November 30, 2020

    Keywords: Middle East and Africa, South Africa, Banking, Reporting, Resolution Framework, Resolution Planning, SARB

    Featured Experts
    Related Articles
    News

    APRA Finalizes Guidance on Management of Climate Change Risks

    The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.

    November 26, 2021 WebPage Regulatory News
    News

    European Council Adopts Position on Digital Finance Package Proposals

    The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).

    November 25, 2021 WebPage Regulatory News
    News

    PRA Proposes Rulebook Changes; BoE Extends BEEDS Testing Window

    The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.

    November 25, 2021 WebPage Regulatory News
    News

    EC Proposes New Measures Under Capital Markets Union Package

    The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.

    November 25, 2021 WebPage Regulatory News
    News

    EBA Publishes Standards to Calculate Risk-Weights of CIUs Under CRR

    The European Banking Authority (EBA) published the final report on draft regulatory technical standards for the calculation of risk-weighted exposure amounts of collective investment undertakings or CIUs, in line with the Capital Requirements Regulation (CRR).

    November 24, 2021 WebPage Regulatory News
    News

    FED Outlines Lending Conditions and Supervisory Activities in H1 2021

    The Board of Governors of the Federal Reserve System (FED) published a report that summarizes banking conditions in the United States, along with the supervisory and regulatory activities of FED.

    November 24, 2021 WebPage Regulatory News
    News

    APRA Expects Boards to Strengthen Ability to Oversee Cyber Resilience

    The Australian Prudential Regulation Authority (APRA) recently completed two pilot initiatives in its 2020-2024 Cyber Security Strategy, which was published in November 2020.

    November 23, 2021 WebPage Regulatory News
    News

    FSB Updates List of Global Systemically Important Banks

    The Basel Committee on Banking Supervision (BCBS) published further information related to its 2021 assessment of global systemically important banks (G-SIBs), with additional details to help understand the scoring methodology.

    November 23, 2021 WebPage Regulatory News
    News

    FASB Proposes Improvements to Credit Losses Standard

    The Financial Accounting Standards Board (FASB) is consulting on an Accounting Standards Update and the associated taxonomy improvements for requirements on troubled debt restructurings and vintage disclosures under the credit losses standard (for financial instruments) topic 326.

    November 23, 2021 WebPage Regulatory News
    News

    US Agencies Issue Statement on Crypto-Asset Policy Initiatives

    US Agencies issued a statement that summarizes the work undertaken during the interagency policy sprints focused on crypto-assets and provides a roadmap of future work related to crypto-assets.

    November 23, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7733