Act on transparency in financial markets supervision
The Act on transparency in financial markets supervision has been published in the Bulletin of Acts and Decrees and is expected to enter into force shortly. The Act introduces new powers for the Dutch financial markets supervisor (AFM) and the Dutch Central Bank (DNB). It includes the following measures:
- supervisors will be granted more power to issue public warnings.
- under certain conditions, the AFM and the DNB may immediately publish a warning or a decision related to an administrative sanction. Under normal circumstances, supervisors have to observe a waiting period.
- under certain conditions, the DNB may publish the core figures of banks.
European bank supervisor publishes final guides on bank licensing and fintech bank licensing
The European Central Bank (ECB) has published its final guides to bank licensing and fintech bank licensing. The guides set out the application process and licensing requirements for banks in general, as well as for fintech banks, and intend to support common supervisory practices and to increase transparency.
FinTech publications of the European Commission and the European Banking Authority
The European Commission has published an Action Plan on FinTech setting out steps to enable innovative business models to scale up, support the uptake of new technologies, and increase cybersecurity and the integrity of the financial system. The steps include:
- hosting an EU FinTech Laboratory
- the development of a strategy on distributed ledger technology such as blockchain
- a consultation on the promotion of the digitisation of information published by listed companies in Europe
- workshops on information-sharing in relation to cybersecurity
- best practices on regulatory sandboxes
In addition, the European Commission has published a Proposal for a Regulation on European Crowdfunding Services for Business.
The European Banking Authority (EBA) has published a Roadmap on FinTech. Amongst other things, it takes the mandates in the European Commission’s Action Plan on fintech into account, and sets out priorities for 2018/2019. The priorities include:
- assessment of current authorisation and licensing approaches to fintech firms, and analysing regulatory sandboxes and innovation hubs
- analysis of the impact on institutions’ business models and the prudential risks and opportunities arising from the use of fintech
- promotion of best supervisory practices regarding cybersecurity
- addressing consumer issues arising from fintech
- identification and assessment of money laundering/terrorist financing risks
EBA will also establish a fintech Knowledge Hub.
Additional Capital Markets Union publications
In addition to the European Commission’s fintech publications, the European Commission has published a Communication on completing the Capital Markets Union by 2019 as well as the following legislative proposals:
- an action plan on sustainable finance
- legislative proposals on covered bonds
- legislative proposals on facilitating cross-border distribution of investment funds
- proposals on cross-border assignment of claims and communication on the law applicable to securities
Implementation of Directive amending bank creditor hierarchy
Following a consultation launched in December 2017, the bill amending the Bankruptcy Act to implement the directive amending the Bank Recovery and Resolution Directive (BRRD) as regards bank creditor hierarchy has been published. The Directive requires that member states create a new class of “non-preferred senior debt” eligible for bail-in.
Developments on the Insurance Distribution Directive
The Dutch Act implementing the Insurance Distribution Directive (IDD) has been published in the Bulletin of Acts and Decrees. It will enter into effect at a time to be determined by Royal Decree.
In addition, the Directive amending the IDD as regards the date of application of member states’ transposition measures was published in the Official Journal of the EU. By 1 July 2018, member states must adopt and publish the laws, regulations and administrative provisions necessary to comply with the IDD, and apply those measures from 1 October 2018 at the latest.
The Delegated Regulation postponing the application date of:
- the Delegated Regulation Supplementing the IDD with regard to Information Requirements and Conduct of Business Rules Applicable to the Distribution of Insurance-Based Investment Products
- the Delegated Regulation Supplementing the IDD with regard to product oversight and governance (POG) requirements for insurance undertakings and insurance distributors has also been published in the Official Journal of the EU.
European Commission launches consultation on the finalisation of Basel III
The European Commission has launched an exploratory consultation on the outstanding Basel III post-crisis regulatory reforms agreed upon by the Basel Committee in December 2017. The aim is to gather views from interested parties on the impact that amendments may have on the EU banking sector, as well as the wider economy, and to highlight potential challenges in its implementation. The implementation of the agreed reforms in the EU would require amendments to banking regulation, including the CRR.
The consultation includes potential amendments to the standardised approach for credit risk (SA-CR), internal ratings-based (IRB) approaches for credit risk, minimum haircut floors for non-centrally cleared securities financing transactions (SFTs), the credit valuation adjustment (CVA) framework, as well as a new standardised approach for operational risk (SA-OR), and the replacement of the “Basel II” floor with an aggregate, more risk-sensitive output floor.
The Dutch bank supervisor publishes Q&As on Proprietary Traders
In November 2017, the Dutch Central bank (DNB) announced that it would amend the prudential regime for proprietary traders it considers “local firms” under the Capital Requirements Regulation (CRR). In March 2018, DNB published Q&As answering questions about the follow-up and transitional phase following the changes to the prudential regime. Among other things, the Q&As cover the following topics: capital requirements, capital buffer requirements, internal models, reporting obligations (FINREP and COREP), recovery plans, exemptions and exceptions, and the ICAAP and SREP process.
Consultation on public reporting by companies
The European Commission has launched a consultation on the reporting requirements for listed and non-listed companies. The current EU public reporting framework consists of a large number of directives and regulations, including the Accounting Directive, the IAS Regulation, the Transparency Directive and the Market Abuse Regulation. The Commission wants to assess whether this framework is still relevant to meet the intended objectives and whether it is effective, internally consistent, coherent with other EU policies, efficient and not unnecessarily burdensome. The consultation focuses on financial information (such as financial statements) and non-financial information (including the disclosure of relevant environmental and social information in accordance with the Non-Financial Reporting Directive). The consultation runs until 21 July.
Court of Justice interprets ne bis in idem principle in market abuse case
In a recent judgment concerning four Italian cases, the European Court of Justice has ruled that the ne bis in idem principle may be limited in order to protect the financial interests of the European Union and its financial markets. However, the principle of proportionality must be respected. If a criminal penalty itself punishes the offence in an effective, proportionate and dissuasive manner, bringing administrative procedures of a criminal nature for the same acts may exceed what is strictly necessary to protect the markets. The court explains that national legislation authorising a duplication of proceedings and penalties of a criminal nature must:
- pursue an objective of general interest; the proceedings and penalties must pursue additional objectives
- establish clear and precise rules, so that individuals can predict which acts or omissions are liable to be subject to a duplication of proceedings and penalties
- ensure the proceedings are coordinated and limited to what is strictly necessary to, in this case, protect the financial markets.
- ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned.
ESMA publishes technical advice under the Prospectus Regulation
The European Securities and Markets Authority (ESMA) has published the first part of its technical advice under the Prospectus Regulation. The advice will form the basis for the delegated acts which the European Commission is expected to adopt early next year.
The advice covers the format and content of prospectuses, the EU growth prospectus and the scrutiny and approval of prospectuses. The advice proposes a number of changes to the current prospectus regime, including:
- ESMA wants to ease requirements for issuers and reduce costs and the administrative burden in using a prospectus. At the same time, ESMA proposes a number of additional disclosure requirements that, in ESMA’s opinion, are necessary for investor protection.
- ESMA has developed the form and content of the Universal Registration Document, a new document for issuers of securities that are listed on a regulated market or multilateral trading facility. It will allow issuers to quickly offer securities to the market.
- ESMA identifies the minimum disclosure requirements for the new EU Growth prospectus. A proportionate regime for SMEs is provided for.
- ESMA proposes that standard criteria for scrutiny of the completeness, comprehensibility and consistency of the prospectus should be adopted. However, beyond these standard criteria, national competent authorities should have a certain level of flexibility.
ESMA based its advice on last year’s consultation. Responses to this consultation, including the response of De Brauw, are available on ESMA’s website.
- Proposal for a COUNCIL DECISION on the position to be adopted, on behalf of the European Union, within the EEA Joint Committee concerning an amendment to Annex IX (Financial Services) to the EEA Agreement, EC, 21 March 2018
- Reducing Risk in the Banking Union: Commission presents measures to accelerate the reduction of non-performing loans in the banking sector, EC, 14 March 2018
- Commission Delegated Regulation Supplementing CRR with regard to the specification of the assessment methodology under which competent authorities permit institutions to use Advanced Measurement Approaches for operational risk, EC, 14 March 2018
- Briefing – Public hearing with Danièle Nouy, Chair of the Supervisory Board, presenting the SSM Annual Report 2017, EP, 22 March 2018
- European Parliament Hearing – Speech of Elke König, Chair of the Single Resolution Board, EP, 20 March 2018
- Cash outflows in crisis scenarios: do liquidity requirements and reporting obligations give the SRB sufficient time to react?, EP, 19 March 2018
- Briefing – Exchange of views with Mrs Elke König, Chair of the Single Resolution Board – PE 614.492 – Committee on Economic and Monetary Affairs, EP, 15 March 2018
- The UK’s potential withdrawal from the EU and single market access under EU financial services legislation, EP, 15 March 2018
- Briefing – Non-performing loans in the Banking Union – Stocktaking and challenges – PE 614.491 – Committee on Economic and Monetary Affairs, EP, 15 March 2018
- EBA consults on extending the application of the Joint Committee Guidelines on complaints-handling to the new institutions under PSD2 and MCD, EBA, 27 March 2018
- PII Tables Tool for calculating professional indemnity insurance or comparable guarantee under PSD2, EBA, 22 March 2018
- EBA updates list of public sector entities for the calculation of capital requirements, EBA, 22 March 2018
- EBA advises European Commission on the use of prudential backstops to prevent the building up of new NPLs, EBA, 12 March 2018
- The EBA CRDIV-CRR/Basel III monitoring exercise shows further improvement of EU banks capital leverage and liquidity ratios, EBA, 6 March 2018
- ESMA agrees to prohibit binary options and restrict CFDS to protect retail investors, ESMA, 27 March 2018
- List of trading venues benefiting from a transitional exemption from the access provisions under Article 36(5) of MiFIR, ESMA, 26 March 2018
- List of trading venues and CCPs benefiting from a transitional exemption from the access provisions under Article 54(2) of MiFIR, ESMA, 26 March 2018
- Official translations Joint ESMA and EBA Guidelines on the assessment of the suitability of members of the management body and key function holders, ESMA, 21 March 2018
- ESMA publishes responses to its Consultation on draft RTS under the new Prospectus Regulation, ESMA, 21 March 2018
- ESMA clarifies treatment of packages under MIFIR’s trading obligation for derivatives, ESMA, 21 March 2018
- ESMA publishes translations for guidelines on stress tests scenarios under article 28 of the MMF Regulation, ESMA, 21 March 2018
- Risk-free interest rate term structures Report on the Calculation of the UFR for 2019, EIOPA, 28 March 2018 (publication date)
- EIOPA consults on corrections and amendments to the implementing technical standards on reporting and disclosure, EIOPA, 28 March 2018
- Mitigating systemic risk through Solvency II: EIOPA publishes the second paper of a series on systemic risk and macroprudential policy in the insurance sector, EIOPA, 21 March 2018
- Monthly update of the symmetric adjustment of the equity capital charge for Solvency II – end-February 2018, EIOPA, 6 March 2018
- EIOPA publishes monthly technical information for Solvency II relevant Risk Free Interest Rate Term Structures – end-February 2018, EIOPA, 6 March 2018
- ECB aims to ensure that banks apply rules on internal models in a consistent manner, ECB, 28 March 2018
- What are fintech banks and what impact will they have on financial services?, ECB, 27 March 2018
- BOJ/ECB joint research project on distributed ledger technology, ECB, 27 March 2018
- ECB Annual Report on supervisory activities 2017, ECB, 26 March 2018
- Letter from Danièle Nouy, Chair of the Supervisory Board, to Mr Viegas, MEP, with regard to an audit by the European Court of Auditors, ECB, 21 March 2018
- SSM Supervisory Manual, ECB, 16 March 2018
- ECB sets out its supervisory expectations for new NPLs, ECB, 15 March 2018
- Second public consultation on developing a euro unsecured overnight interest rate, ECB, 15 March 2018
- Letter from Danièle Nouy, Chair of the Supervisory Board, to Mr Urtasun, MEP, with regard to the work of supervisors in Joint Supervisory Teams, ECB, 9 March 2018
- List of supervised entities (significant and less significant credit institutions), ECB, 2 March 2018
- ECB launches public consultation on draft guides for banks on their capital and liquidity management, ECB, 2 March 2018
Official Journal of the EU
- Commission Delegated Regulation (EU) 2018/480 supplementing Regulation (EU) 2015/760 (ELTIF) with regard to RTS on financial derivative instruments solely serving hedging purposes, sufficient length of the life of the European long-term investment funds, assessment criteria for the market for potential buyers and valuation of the assets to be divested, and the types and characteristics of the facilities available to retail investors, OJ, 23 March 2018
- Commission Delegated Regulation (EU) 2018/405 correcting certain language versions of CRR, OJ, 16 March 2018
- Commission Delegated Regulation (EU) 2018/389 supplementing PSD2 with regard to RTS for strong customer authentication and common and secure open standards of communication, OJ, 13 March 2018
- Commission Delegated Regulation (EU) 2018/345 supplementing BRRD with regard to RTS specifying the criteria relating to the methodology for assessing the value of assets and liabilities of institutions or entities, OJ, 9 March 2018
- Commission Delegated Regulation (EU) 2018/344 supplementing BRRD with regard to RTS specifying the criteria relating to the methodologies for valuation of difference in treatment in resolution, OJ, 9 March 2018
- Corrigendum to Regulation (EU) 2017/1538 of the ECB amending Regulation (EU) 2015/534 on reporting of supervisory financial information (ECB/2017/25), OJ, 8 March 2018
- Commission Implementing Regulation (EU) 2018/308 laying down ITS for BRRD with regard to formats, templates and definitions for the identification and transmission of information by resolution authorities for the purposes of informing the EBA of the MREL, OJ, 2 March 2018
- Corrigendum to Guideline (EU) 2017/697 of the ECB7 on the exercise of options and discretions available in Union law by national competent authorities in relation to less significant institutions (ECB/2017/9), OJ, 2 March 2018
- Corrigendum to Decision (EU) 2017/2081 of the ECB amending Decision ECB/2007/7 concerning the terms and conditions of TARGET2-ECB (ECB/2017/30), OJ, 2 March 2018
- Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the Mid-Term Review of the Capital Markets Union Action Plan’, OJ, 2 March 2018
- Kamerbrief verslag plenaire vergadering Financial Action Task Force (FATF) februari 2018, MinFin, 28 March 2018
- Beantwoording Kamervragen over het bericht ‘Peking pleegt coup bij verzekeringsreus Anbang’, MinFin, 26 March 2018
- Overzicht stand van zaken van de toezeggingen van Financiën aan de Eerste Kamer, MinFin, 23 March 2018
- Antwoorden Kamervragen over afschaffen van de dividendbelasting, het MKB en de ongewogen kapitaalbuffer, MinFin, 23 March 2018
- Beantwoording Kamervragen over het bericht ‘Aandelenbeurzen niet gelukkig met nieuwe handelsregels’, MinFin, 22 March 2018
- Kamerbrief Moties handelaren voor eigen rekening uit VAO over de bankensector 21 februari 2018, MinFin, 6 March 2018
- Position EMU Denmark Estonia Finland Ireland Latvia Lithuania the Netherlands and Sweden, MinFin, 6 March 2018
- Beantwoording Kamervragen naar aanleiding van het artikel ‘de hervorming van een goed pensioenstelsel’, MinSZW, 12 March 2018
- AFM reageert op consultatie voorontwerp langetermijnbetrokkenheid aandeelhouders, AFM, 15 March 2018
- Vooraf ingevulde bedragen beïnvloeden kredietwaardigheidstoets bij telefoonkrediet, AFM, 1 March 2018
- Wijziging van de Faillissementswet m.b.t. rechten en verplichtingen inzake deelname aan betalings- en effectenafwikkelsystemen in derde landen, Internetconsultatie, 31 March 2018
- Banken klaar voor nieuwe uitdagingen op gebied van digitalisering en verduurzaming, NVB, 29 March 2018
- Eerste Kamer heeft het voorstel van de Wet transparant toezicht financiële markten als hamerstuk afgedaan, EK, 27 March 2018
- Basel Committee discusses its work programme, current policy work, implementation of its standards, and initiatives to promote strong supervision, BIS, 23 March 2018
- Bail-in in the new bank resolution framework: is there an issue with the middle class?, BIS, 23 March 2018
- FSB survey of reporting entities on legal barriers to OTC derivatives trade reporting, FSB, 23 March 2018
- Pillar 3 disclosure requirements: regulatory treatment of accounting provisions – consultative document, BIS, 22 March 2018
- Revisions to the minimum capital requirements for market risk – consultative document, BIS, 22 March 2018
- Frequently asked questions on the Basel III standardised approach for measuring counterparty credit risk exposure, BIS, 22 March 2018
- Regeling van De Nederlandsche Bank N.V. van 9 maart 2018 houdende wijziging van de Regeling staten financiële ondernemingen Wft 2011, Staatscourant, 16 March 2018
- FSB publishes progress report on addressing declines in correspondent banking and recommendations on remittances, FSB, 16 March 2018
- Wetsvoorstel ivm aanscherping van de definitie van “vaste beloning” en introductie van een instemmingsrecht voor de Minister van Financiën mbt de vaststelling of verhoging van de vaste beloning van een bestuurder van een systeemrelevante bank, TK, 15 March 2018
- Referendabiliteitsbesluit Wet implementatie richtlijn verzekeringsdistributie, Staatscourant, 15 March 2018
- FSB launches survey on infrastructure financing as part of its efforts to evaluate the impact of G20 regulatory reforms, FSB, 15 March 2018
- ESRB Secretariat staff response to the European Commission’s consultation document “Fitness check on supervisory reporting”, ESRB, 14 March 2018
- Uitvoeringswet Algemene verordening gegevensbescherming door de Tweede Kamer aangenomen, TK, 13 March 2018
- Gewijzigd voorstel van wet – Uitvoeringswet Algemene verordening gegevensbescherming, TK, 13 March 2018
- Public Consultation on the 2018 change requests for the SEPA Credit Transfer and SEPA Direct Debit Rulebooks, EPC, 13 March 2018
- IOSCO seeks to protect senior investors from financial fraud, unsuitable investments and other risks, IOSCO, 12 March 2018
- Regulatory Consistency Assessment Programme (RCAP) – Handbook for Jurisdictional Assessments, BIS, 12 March 2018
- Central bank digital currencies could impact payments, monetary policy and financial stability, BIS, 12 March 2018
- FSB publishes Supplementary Guidance to the FSB Principles and Standards on Sound Compensation Practices, FSB, 9 March 2018
- Collective agreement between central banks and CSDs to enter into force on 20 March 2018, ECB, 9 March 2018
- IOSCO consults on recommendations to help trading venues manage extreme volatility, IOSCO, 7 March 2018
- Eerste Kamer heeft het voorstel van de Wet implementatie richtlijn verzekeringsdistributie als hamerstuk afgedaan, EK, 6 March 2018
- BCBS, CPMI, FATF and FSB welcome industry initiative facilitating correspondent banking, BIS, 6 March 2018
- ESRB recommends EU-wide reciprocation of Finland’s 15% risk-weight floor on Finnish mortgage loan exposures, ESRB, 5 March 2018
- ECB-verordening inzake statistische dataverzameling van pensioenfondsen, Pensioenfederatie, 1 March 2018