In context

Financial markets in brief – new regulation and publications

November 10, 2014
In context

There have been many developments in national and European financial markets regulation during the past month. Among other things, the European Commission has adopted rules on the contributions of banks to the resolution fund. Also, the European Commission has published several regulations supplementing the CRD IV Directive. In addition, supervisory authorities have published a large number of consultation documents, draft rules and other information since the last edition of In context. For example, the European Central Bank has assumed responsibility for banking supervision, and ESMA has published an updated version of its Q&A regarding prospectuses.

Dutch regulation


Future Oriented Banking – publication of the Dutch Banking Association

  • The Dutch Banking Association has published a package called Future Oriented Banking intended to increase public trust in banks and their role in the community. The package contains:
  • a social charter describing the (preferred) position of the sector as a whole in society and the shared values of the sector.
  • an updated banking code, which emphasises the importance of sound and ethical operation by banks and sets this out in the principles for the executive board and supervisory board, proper risk management, thorough audit processes and a sound, balanced and sustainable remuneration policy.
  • rules of conduct, which make the responsibility of every individual employee at the bank explicit. The rules of conduct are consistent with the banker’s oath.


Use of mandates in retail funds allowed under certain conditions

For the time being, the Netherlands Authority for the Financial Markets (AFM) sees no reason to restrict the offer of mandates to non-professional investors. Mandates are unit trusts in which investments are made in selections of other unit trusts. These are often performed at the request of professional investors, such as pension fund managers or banks, and tailored to the wishes of these parties. The AFM considers it important that there are no money flows between investment firms and the creators of unit trusts that are included in the mandates. This also applies if the investment firm and the unit trust form part of a single financial undertaking.


European regulation


European Commission adopts rules on contributions of banks to resolution funds

The European Commission has adopted rules on the contributions of banks to the European resolution funds. The resolution fund is a part of the single resolution mechanism which will enter into force on 1 January 2015. Under the new mechanism, the European Central Bank decides in its role as European supervisor to restructure and wind up a troubled bank. The single resolution board then adopts a resolution scheme. The national resolution authority is also involved in this process. In addition to shareholders, certain bondholders and large savers will have to contribute towards a bank’s rescue. This “bail-in” is limited to 8% of a bank’s total liabilities. After this, the bank-financed single resolution fund can be called upon, subject to a maximum of 5% of the total liabilities. 


Delegated regulations CRD IV

The European Commission has published two delegated regulations supplementing the CRD IV directive:

  • Commission Delegated Regulation (EU) No 1151/2014 with regard to regulatory technical standards on the information to be notified when exercising the right of establishment and the freedom to provide services
  • Commission Delegated Regulation (EU) No 1152/2014 with regard to regulatory technical standards on the identification of the geographical location of the relevant credit exposures for calculating institution-specific countercyclical capital buffer rates


The European Commission has published a large number of delegated regulations, implementing regulations and technical standards, and an even larger number is expected to be published in the coming months. An overview of these documents can be found on the Commission’s website.


European Commission adopts prudential rules for banks and insurers

The European Commission has adopted two delegated regulations under the Solvency II Directive and the Capital Requirements Regulation:

  • The Delegated act on the liquidity coverage ratio lays down a full set of rules on the liquid assets, cash outflows, cash inflows needed to calculate the precise liquidity coverage requirement.
  • The Delegated act on the leverage ratio ensures that EU credit institutions and investment firms use the same methods to calculate, report and disclose their leverage ratios which express capital as a percentage of total assets (and off balance sheet items). 


European and international supervisors


ECB responsible for euro area banking supervision

The European Central Bank assumed responsibility for the supervision of euro area banks on 4 November 2014. The ECB now directly supervises 120 significant banking groups. For the supervision of all other 3,500 banks, the ECB will work closely with the national competent authorities. In its Guide to banking supervision, the ECB explains the supervisory principles, and gives guidance on the supervisory practices and the procedures for authorisations and withdrawals of authorisations.


A new website,, has been launched. Here, the ECB has published the results of the comprehensive assessment and many other documents relating to its new role.


All seven Dutch banks involved in the assessment have passed the test. On its website, the Dutch Central Bank comments briefly on the situation of Dutch banks and also gives an explanation of the new authorisation procedures.


Supervisory fees

The ECB has published a regulation on supervisory fees, which sets out how the ECB recovers its expenditures for supervising the banking sector.


Publications European Central Bank


Publications European Securities and Markets Authority


Publications European Banking Authority


The EBA is of the view that “role-based allowances” which are not pre-determined, are not transparent to staff, are not permanent, provide incentives to take risks or, without prejudice to national law, are revocable and should not be considered as fixed remuneration, but should be classified as variable in line with the letter and purpose of the CRD.


The EBA is currently revising its Guidelines on remuneration policies and practices, which will be consulted upon by the end of 2014 and finalised by the first half of next year.



Financial Action Task Force – publications


Basel Committee on Banking Supervision – publications


Financial Stability Board – publications


Publications IOSCO


International publications


Journal of International Banking Law & Regulation

  • The Soft Law Nature of Basel III and International Financial Regulations / Emily Lee – J.I.B.L.R. 2014, 10
  • Contractual Automaticity in International Financial Regulation: Part III / Dr Toussant Boyce – J.I.B.L.R. 2014, 10
We keep track of you on our site with cookies, in order to offer the basic functionality of the website and generate user statistics on an anonymous basis to make our website more user-friendly. We do not use or share your data with third parties for advertising purposes.