Basel Committee
COVID-19 and cryptoassets consultation - BCBS discusses initiatives at meeting - 7 June 2021
The Basel Committee on Banking Supervision (BCBS) has published a press release following a meeting held on 4 June 2021 during which the group discussed a range of topics. These included:
- Risks and vulnerabilities posed by the COVID-19 pandemic: the BCBS reiterated its guidance that banks should make use of Basel III capital and liquidity buffers to absorb shocks and maintain lending to creditworthy households and businesses. Members stressed that it was important for banks to strengthen their operational resilience in line with the recently finalised principles for operational resilience and risk, as reported in last week’s Bulletin.
- Cryptoassets: the BCBS discussed market developments and the next steps in developing its prudential treatment for banks’ cryptoasset exposures. Although banks’ exposures to cryptoassets are currently limited, the continued growth and innovation of cryptoassets, coupled with the heightened interest of some banks, could increase global financial stability concerns and risks to the banking system in the absence of a specified prudential treatment. The BCBS has published a consultation paper on the design of prudential treatment of banks’ exposures to cryptoassets (see separate item below).
Press release: Basel Committee discusses effects of COVID-19 on banks, assesses post-crisis reforms and agrees public consultation on cryptoassets
Prudential treatment of cryptoasset exposures - BCBS publishes consultation - 10 June 2021
The Basel Committee on Banking Supervision (BCBS) has published a consultation on the prudential treatment of banks’ cryptoasset exposures. The proposed prudential treatment outlined in the consultation divides cryptoassets into two broad groups:
- Group 1 cryptoassets - these fulfil a set of classification conditions and as such are eligible for treatment under the existing Basel Framework (with some modifications and additional guidance). These include certain tokenised traditional assets and stablecoins.
- Group 2 cryptoassets - are those, such as bitcoin, that do not fulfil the classification conditions. Since these pose additional and higher risks, they would be subject to a new conservative prudential treatment.
The document suggests a number of guiding principles for the prudential treatment of cryptoassets, which can be summarised as follows:
- same risk, same activity, same treatment: the BCBS adopts a “technologically neutral approach” so that a cryptoasset that provides equivalent economic functions and poses the same risks as a “traditional asset” should be subject to the same capital, liquidity and other requirements as the traditional asset. That said, the prudential treatment should also take into account additional risks posed by cryptoasset exposures;
- simplicity: the market, technologies and related services of cryptoassets are still evolving and as such the BCBS proposes a simple and cautious prudential treatment that could be adjusted in the future; and
- minimum standards: any prudential treatment of cryptoassets specified by the BCBS would constitute a minimum standard for internationally active banks. Jurisdictions would be free to apply super-equivalent measures, and jurisdictions that prohibit their banks from having any exposures to cryptoassets would be deemed compliant with a global prudential standard.
Central bank digital currencies are not within the scope of the consultation.
The consultation closes on 10 September 2021.
Consultation paper: Prudential treatment of cryptoasset exposures
Press release
European Commission
Transposition of BRRD II and CRD V - European Commission announces infringement proceedings - 4 June 2021
The European Commission has announced infringement proceedings against various EU members states for failures to make notifications relating to the transposition of the Bank Recovery and Resolution Directive ((EU) 2019/879) (BRRD II) and the Capital Requirements Directive ((EU) 2019/878) (CRD V). Infringement proceedings are pending against 21 member states in respect of BRRD II and 20 member states in respect of CRD V. A full list of the member states concerned can be found on the relevant transposition status webpage.
The deadline for transposition was 28 December 2020.
Webpage: Capital Requirements Directive (CRD V) – transposition status
Webpage: Bank Recovery and Resolution Directive (BRRD II) – transposition status
Council of the European Union
Assignments of claims - Council of the EU approves compromise text of EU regulation - 7 June 2021
The Council of the European Union has approved a compromise text of the proposal for a Regulation on the law applicable to the third-party effects of assignments of claims (this refers to the assignment of a right to claim a debt against a debtor, but does not cover transfers of both rights and obligations or novations). The legislation aims to increase legal certainty around the cross-border transfers of claims, with a view to facilitating access to finance and promoting EU cross-border investment. As it stands, there are various approaches in determining the applicable law on third-party effects of cross-border assignments in the national laws of the EU Member States.
Under the compromise text, as a general rule, the law of the assignor’s habitual residence at the time of assignment will apply. For certain assignments (including of cash and electronic money, claims arising from financial instruments, financial contracts as defined in the Bank Recovery and Resolution Directive (2014/59/EU), associated collateral arrangements and netting arrangements and loans), the law of the assigned claim will apply. As a further exception, in securitisation and covered bond transactions, the parties may choose between the law of the assignor's habitual residence and the law of the assigned claim to govern third-party effects of the assignment of claims.
The compromise text will be used as a basis for negotiations with the European Parliament and European Commission negotiators with the aim of agreeing a final text in due course.
Press release: Assignment of claims: Council approves mandate for negotiations
Note: Proposal for a Regulation on the law applicable to the third-party effects of assignments of claims – General approach
European Parliament
Proposed Non-Performing Loans Directive - political agreement reached on proposed Directive on credit servicers and credit purchasers - 7 June 2021
The European Parliament has published a press release announcing that political agreement has been reached on the proposed Directive on credit servicers and credit purchasers (2018/0063A(COD)) (also known as the “Non-Performing Loans Directive”). The Directive sets out common EU standards regulating the transfer of bad or non-performing loans from banks to secondary buyers.
The European Parliament, Council of the EU and the European Commission are now working on certain technical aspects of the text. Following this, the political agreement will require final approval by the Economic and Monetary Affairs Committee and the Parliament.
Press release: Non-performing loans: deal struck on EU rules for selling NPLs to third parties
Official Journal of the European Union
CRD IV - Delegated Regulation on RTS on criteria to identify material risk takers for CRD IV remuneration purposes published in OJ - 9 June 2021
Commission Delegated Regulation (EU) 2021/923, which contains regulatory technical standards (RTS) supplementing the remuneration provisions in the Capital Requirements Directive (2013/36/EU) (CRD IV), has been published in the Official Journal of the EU.
Article 94(2) of CRD IV was amended by the CRD V Directive ((EU) 2019/878) to require the European Banking Authority (EBA) to develop RTS specifying the criteria for identifying staff members whose professional activities have a material impact on an institution’s risk profile (“material risk takers”).
The Delegated Regulation repeals and replaces Delegated Regulation (EU) 604/2014, which sets out RTS on the same issue.
The Delegated Regulation will enter into force and apply from 14 June 2021.
Delegated Regulation (EU) 604/2014 will continue to apply to investment firms until 26 June 2021.
Commission Delegated Regulation (EU) 2021/923 supplementing the Capital Requirements Directive (2013/36/EU) with regulatory technical standards setting out the criteria to define managerial responsibility, control functions, material business units and a significant impact on a material business unit’s risk profile, and setting out criteria for identifying staff members or categories of staff whose professional activities have an impact on the institution’s risk profile that is comparably as material as that of staff members or categories of staff referred to in Article 92(3) of that Directive
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CRR - Delegated Regulation with RTS relating to economic downturn published in OJ - 10 June 2021
Commission Delegated Regulation (EU) 2021/930 supplementing the Capital Requirements Regulation (575/2013/EU) (CRR) with regard to regulatory technical standards (RTS) specifying the nature, severity and duration of an economic downturn referred to in Article 181(1)(b) and Article 182(1)(b) of the CRR has been published in the Official Journal of the EU.
Article 181(3)(a) and 182(4)(a) of the CRR empower the European Commission to adopt delegated acts specifying the nature, severity and duration of an economic downturn to be taken into account for the estimation of loss given default and conversion factors appropriate for an economic downturn, where they are estimated under the internal ratings based approach. The RTS specify, among other things, the nature of an economic downturn through a set of economic indicators (such as gross domestic product, unemployment rate and house prices) relevant for the underlying businesses, sectors and jurisdictions.
The Delegated Regulation will enter into force on 30 June 2021.
Commission Delegated Regulation (EU) 2021/930 supplementing the Capital Requirements Regulation (575/2013/EU) with regard to regulatory technical standards specifying the nature, severity and duration of an economic downturn referred to in Article 181(1), point (b) and Article 182(1), point (b) of that Regulation (C/2021/1250)
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CRR - Delegated Regulation with RTS on standardised approach for counterparty credit risk published in OJ - 10 June 2021
Delegated Regulation (EU) 2021/931 supplementing the Capital Requirements Regulation (575/2013/EU) (CRR) with regard to regulatory technical standards (RTS) on the standardised approach for counterparty credit risk has been published in the Official Journal of the EU. The RTS specify the method for identifying the material risk drivers of derivative transactions for the purposes of mapping to one or more of the risk categories set out in Article 277 of the CRR.
The Delegated Regulation will enter into force on 30 June 2021 (that is 20 days after it is published in the Official Journal).
Commission Delegated Regulation (EU) 2021/931 supplementing Capital Requirements Regulation (575/2013/EU) with regard to regulatory technical standards specifying the method for identifying derivative transactions with one or more than one material risk driver for the purposes of Article 277(5), the formula for calculating the supervisory delta of call and put options mapped to the interest rate risk category and the method for determining whether a transaction is a long or short position in the primary risk driver or in the most material risk driver in the given risk category for the purposes of Article 279a(3)(a) and (b) in the standardised approach for counterparty credit risk (C/2021/1225)
European Supervisory Authorities
External Credit Assessment Institutions under CRR and Solvency II - ESAs publish amended technical standards -10 June 2021
The European Supervisory Authorities (the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA)) (ESAs) have published final reports containing draft implementing technical standards (ITS) on the mapping of External Credit Assessment Institutions (ECAIs) under the Capital Requirements Regulation (575/2013/EU) (CRR) and the Solvency II Directive (2009/138/EC) respectively:
- final report (JC/2021/38) on draft ITS amending Implementing Regulation (EU) 2016/1799 on the mapping of ECAIs’ credit assessments under Article 136(1) and (3) of the CRR – the ITS reflect a mandate in Article 136(1) of the CRR; and
- final report (JC/2021/39) on draft ITS amending Implementing Regulation (EU) 2016/1800 on the allocation of credit assessments of ECAIs to an objective scale of credit quality steps in accordance with the Solvency II Directive – the ITS reflect a mandate in Article 109a(1) of Solvency II.
Since the adoption of the ITS on the mapping of credit assessments of ECAIs in 2019, two additional credit rating agencies (CRAs) have been recognised and a number of CRAs have been de-registered. The ITS have therefore, been amended to reflect the allocation of appropriate risk weights to the newly established ECAIs, and to remove the reference to the de-registered ECAIs. Also, the amendments reflect the outcome of a monitoring exercise on the adequacy of the existing mappings.
The ITS will be submitted to the European Commission for endorsement, following which they will be published in the Official Journal of the EU. The ITS will apply 20 days following their publication.
Final report: Draft implementing technical standards amending Implementing Regulation (EU) 2016/1799 on the mapping of ECAIs’ credit assessments under Article 136(1) and (3) of the Capital Requirements Regulation (575/2013/EU) (JC/2021/38)
Final report: Draft implementing technical standards amending Implementing Regulation (EU) 2016/1800 on the allocation of credit assessments of external credit assessment insitutions to an objective scale of credit quality steps in accordance with the Solvency II Directive (2009/138/EC) (JC/2021/39)
Mapping reports
Press release: ESAs publish amended technical standards on the mapping of ECAIs
Webpage
European Banking Authority
Crowdfunding Regulation - EBA consults on RTS on Individual Portfolio Management of loans - 4 June 2021
The EBA has published a consultation paper (EBA/CP/2021/22) on draft regulatory technical standards (RTS) under Article 6(7) of the Regulation on European crowdfunding service providers for business ((EU) 2020/1503) (Crowdfunding Regulation). Among other things, the paper sets out the EBA’s proposals on requirements that are relevant to crowdfunding service providers (CSPs) offering individual portfolio management loans, including in relation to:
- the methods employed for risk assessments;
- the information that CSPs must disclose in relation to several key characteristics of each loan included in a certain portfolio; and
- the policies that crowdfunding platforms need to have in place on contingency funds.
The consultation closes on 4 September 2021. A public hearing on the consultation paper in the form of a webinar will be held on 20 July 2021. The EBA intends to submit the final draft RTS to the European Commission in October 2021.
Consultation paper: Draft Regulatory Technical Standards on Individual Portfolio Management of loans offered by crowdfunding service providers under Art.6(7) of Regulation (EU) 2020/1503 (EBA/CP/2021/22)
Webpage
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Risk indicators and detailed risk analysis tools - EBA updates methodological guide - 7 June 2021
The EBA has published an updated version of its methodological guide on risk indicators and detailed risk analysis tools which now includes indicators on COVID-19, funding plans, resolution and remuneration and updated indicators on profitability, exposures to sovereign counterparties and own funds requirements for operational risk.
The guide seeks to serve the EBA compilers of risk indicators and internal users presenting the risk indicators and the EBA Detailed Risk Analysis Tools (DRATs). The EBA has also separately published an updated list of EBA risk indicators and DRATs.
Revised EBA Methodological Guide – Risk Indicators
Updated list of EBA Indicators
Press release
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Supervisory reporting - EBA makes recommendations for reducing costs - 7 June 2021
The EBA has published a report following a study of the cost of compliance with supervisory reporting requirements. In 2020, the EBA conducted an in-depth analysis of the effectiveness of, and firms’ experiences with, the current supervisory reporting regime.
The report makes 25 recommendations to further enhance the regime, organised around the following four main themes:
- potential improvements to EBA internal processes for the development, articulation and presentation of supervisory reporting requirements;
- changes to the design of EBA supervisory reporting requirements and reporting content, including in relation to proportionality;
- coordination and integration of data requests and reporting requirements; and
- changes to the reporting process, including the wider use of technology.
Together, the recommendations aim to make the EBA supervisory reporting requirements and reporting process more efficient for all stakeholders. It is estimated that the combined effect of the recommendations could reduce reporting costs by up to 24%.
The study also identified a need to remove barriers to the wider adoption by institutions of FinTech and RegTech solutions, as well as to promote better digitalisation of the institutions’ internal documents and contracts (particularly for small and non-complex institutions).
Report: Study of the cost of compliance with supervisory reporting requirements (EBA/Rep/2021/15)
Press release
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CRD IV and the threshold for reclassification of investment firms as credit institutions - EBA consults on draft RTS - 7 June 2021
The EBA has published a second consultation paper (EBA/CP/2021/23) on regulatory technical standards (RTS) required by the Capital Requirements Directive (2013/36/EU) (CRD IV) on the threshold for the reclassification of investment firms as credit institutions.
Article 8a of CRD IV, introduced by the Investment Firms Directive ((EU) 2019/2034) (IFD), specifies the relevant threshold as the average of the firm’s monthly total assets, calculated over a period of 12 consecutive months on a solo consolidated basis, equalling or exceeding EUR30 billion. The draft RTS sets out provisions relating to the calculation of the value of assets for determining whether that threshold has been reached, covering issues such as:
- the concept of consolidated assets;
- the use of accounting standards for determining asset values;
- the procedure for calculating total assets on a monthly basis; and
- the treatment of assets of branches of third country groups.
The consultation closes on 17 July 2021. The EBA intends to finalise and submit the RTS to the European Commission during the fourth quarter of 2021.
The EBA originally consulted on these RTS in June 2020, but concluded that further analysis was required, particularly in relation to the treatment of third country groups and branches.
Consultation paper: Draft Regulatory Technical Standards on the reclassification of investment firms as credit institutions in accordance with Article 8a(6)(b) of the Capital Requirements Directive (2013/36/EU) (EBA/CP/2021/23)
Press release
Public hearing
Data collection for draft RTS on EUR30 billion threshold methodology
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PSD2 - EBA publishes final report and revised guidelines on major incident reporting - 10 June 2021
The EBA has published its final report (EBA/GL/2021/03) containing updated guidelines on major incident reporting under the revised Payment Services Directive (EU) 2015/2366 (PSD2). The guidelines apply to the classification and reporting of major operational or security incidents in accordance with Article 96 of PSD2, with a view to optimising and simplifying the reporting process.
The EBA consulted on the revised guidelines in October 2020. A summary of the feedback, together with the EBA’s response, is included in the final report. In light of the comments received, the EBA has introduced changes to the guidelines. The most substantive change relates to the new classification criteria of “breach of security of network or information systems” which replaces the term “breach of security measures”. It is anticipated that this will require less complex assessment and implementation. The EBA has also clarified the process and timeline for the classification of major incidents, the meaning of the term “duration of an incident” and other aspects in the guidelines (primarily in relation to filling out the incident reporting template).
The guidelines will apply from 1 January 2022.
The EBA also refers to the ongoing negotiations on the European Commission’s legislative proposal for an EU regulatory framework on digital operational resilience (DORA), which contains a proposal for incident reporting across the entire EU finance sector. Depending on the outcome of those negotiations, the EBA guidelines may eventually be repealed when the DORA Regulation applies, which is currently estimated to be in 2024, or later.
Final report: Revised guidelines on major incident reporting under PSD2
Press release
European Central Bank
Regulation and Directive on digital operational resilience - ECB publishes Opinion - 4 June 2021
The European Central Bank (ECB) has published an opinion (CON/2021/21) on the proposal for a Regulation on digital operational resilience for the financial sector (DORA) (2020/0266 (COD)) and related proposal for a Directive that clarifies and amends certain existing EU financial services Directives to align them with the proposed Regulation (2020/0268 (COD)).
The ECB recommends further consideration of potential inconsistencies between the proposed Regulation and the Network and Information Security Directive ((EU) 2016/1148) (NIS Directive). It also suggests clarification of the interplay between the proposed Regulation and the Regulatory Technical Standards supplementing the Central Securities Depositories Regulation (909/2014) (CSDR). It notes that the DORA should be consistent with the range of requirements related to ICT risk that are currently distributed over a number of different pieces of EU legislation.
The ECB has set out certain specific drafting proposals in a separate technical working document, accompanied by an explanatory text.
Opinion of the European Central Bank on a proposal for a regulation on digital operational resilience for the financial sector (CON/2021/20)
Bank of England
Central bank work on climate change - Bank of England publishes speech delivered by Andrew Bailey - 3 June 2021
The Bank of England (BoE) has published a speech by BoE Governor, Andrew Bailey, about tackling climate change. In the speech, Mr Bailey reflects on the work conducted by central banks in this area to date, focusing on the following three main topics:
- Improving the understanding of climate-related financial risks across the financial system and macroeconomy: Mr Bailey refers to the “pioneering” work of the Network for Greening the Financial System (NGFS) and its publication of climate scenarios that provide a common starting point for analysing these risks. Going forward, he notes that “there is particular value in: (1) further integrating climate and macro modelling; (2) understanding and sizing related transmission channels; (3) going beyond the aggregate impacts to understand sectoral implications; and (4) assessing how the transition might affect the demand and supply sides of the economy”;
- Developing and embedding climate risk management in regulated financial firms: Mr Bailey notes that the BoE has deepened its understanding of the relevant risks posed to the financial system at the macro and micro prudential level. He also explains that climate disclosure is among the most essential of all the building blocks that will be required to manage climate-related risks, including by facilitating the flow of capital towards investments consistent with an orderly economy-wide transition to net-zero; and
- Achieving best practice through operations as a central bank: the BoE has committed to reduce emissions from its physical operations so they will be consistent with net-zero by 2050 at the latest. Mr Bailey also refers to the challenges of ensuring that emissions and climate risks are not systematically underpriced in financial markets and the BoE’s approach to greening its corporate bond purchase scheme.
Speech: Tackling climate for real: progress and next steps
New forms of digital money - Bank of England publishes discussion paper - 7 June 2021
The BoE has published a discussion paper on new forms of digital money as well as a summary of responses to its discussion paper on central bank digital currencies, published in March 2020. The discussion paper considers:
- the role of money in the economy;
- fundamental questions across a range of public policy objectives, including the BoE’s work with other UK and international authorities to understand the challenges and opportunities presented by systemic stablecoins, and access to cash and declining cash usage and how new forms of digital money can support innovation in payments and possible financial inclusion;
- the implications for macroeconomic stability; and
- a range of regulatory models that could address both payments-related and money-creation risk, building on HM Treasury’s consultation paper on the UK’s overall regulatory approach to cryptoassets and stablecoins, published in January 2021.
Comments can be made until 7 September 2021. Responses will help inform the BoE’s thinking on digital money and will support the ongoing work of the recently announced central bank digital currency taskforce, as previously reported in this Bulletin.
The summary of responses to the BoE’s discussion paper on central bank digital currency demonstrates a range of views on whether a currency is needed or desired. The BoE has identified a number of core principles to progress work in this area and notes that financial inclusion will be a prominent consideration in the design of any central bank digital currency.
Discussion paper: New forms of digital money
Response form
Responses to the Bank of England’s March 2020 Discussion Paper on the central bank digital currency
Press release
Prudential Regulation Authority
Approach to overseas internal ratings based models for credit risk - PRA publishes Policy Statement (PS13/21) - 7 June 2021
The PRA has published a Policy Statement (PS13/21) on its approach to overseas internal ratings based (IRB) models for credit risk following its Consultation Paper CP16/20 on the overseas model approach, published in October 2020. The Policy Statement includes an updated Supervisory Statement on IRB approaches (SS11/13) effective from 1 July 2021.
For existing overseas IRB models built to non-UK requirements that are not currently used for UK consolidated capital requirements, the PRA outlines two options:
- firms that wish to use the updated approach in the Policy Statement (referred to as the Overseas Models Approach, or OMA) can now submit applications using the updated pro forma on the PRA’s website; or
- firms that do not wish to use the OMA can continue not to use it for UK consolidated capital requirements.
For existing overseas IRB models built to non-UK requirements that are already used for UK consolidated capital requirements, there are three options:
- if these models meet the new OMA criteria, they can continue to be used for UK consolidated capital requirements and firms should submit a self-attestation that the criteria are met;
- if these models do not meet the OMA criteria from 1 July 2021, firms may need to remediate these models to meet UK IRB requirements or the criteria for the OMA, and the PRA expects those models that do not meet the criteria to be remediated by 1 January 2023; and
- if firms do not wish to use these models on the OMA, they will need to develop models that meet UK IRB requirements and discuss this with their supervisor.
Policy statement: Credit risk: The approach to overseas Internal Ratings Based models (PS13/21)
Appendix I: SS11/13 Internal Ratings Based approaches
Appendix II: Updated pro-forma for the notification of changes to IRB, IMM and IMA permissions under the CRR
Updated webpage: Capital Requirements Regulation permissions
Press release
Payment Systems Regulator
Five year strategy - PSR publishes consultation paper - 9 June 2021
The Payment Systems Regulator (PSR) has published a Consultation Paper (CP21/7) setting out its proposed strategy for the next five years. In the paper, the PSR identifies four strategic outcomes that it wants to achieve in the next five years, and proposes four corresponding strategic priorities to enable it to deliver against those outcomes. Its priorities are to:
- ensure users have continued access to payment services they rely upon and support effective choice of alternative payment options;
- ensure users are sufficiently protected when using the UK’s payment systems now and in the future;
- promote competition in markets and protect users where that competition is insufficient, including between payment systems within the UK and in the markets supported by them; and
- ensure that the renewal and future governance of the UK’s interbank payment systems supports innovation and competition in payments.
The consultation closes on 10 September 2021, and the PSR aims to publish the final version of its strategy before the end of 2021.
Consultation paper: Our proposed PSR strategy (CP21/7)
Webpage
Factsheet
Webinars
Working Group on Sterling Risk-Free Reference Rates
GBP Loans and GBP Loan Market Q&A - Sterling Working Group updates best practice guide - 4 June 2021
The Working Group on Sterling Risk-Free Reference Rates has updated its best practice guide for GBP Loans. The guide addresses conventions for new sterling SONIA-referencing loans (including refinancing and renewals) and for transitioning legacy sterling LIBOR-referencing loans. The update deals with calculating SONIA-based cost of carry for loans traded on the secondary market.
The Working Group has also updated its GBP Loan Market Q&A.
Updated Guide: GBP Loan Market Q&A for the Working Group’s end-Q1 2021 recommended milestone
Webpage
Lending Standards Board
Access to Banking Standard Review - Lending Standards Board publishes consultation paper - 8 June 2021
The Lending Standards Board (LSB) has published a Consultation Paper on its review of Access to Banking Standard. The LSB is seeking views on whether the Standard, as implemented, seeks the right outcomes for customers and welcomes comments on its effectiveness in achieving fair outcomes for consumers and SMEs affected by branch closures or a reduction in the availability of key banking services.
The consultation poses questions about the impact of changes to banking services since 2017 and future changes to the provision and use of banking services (such as a further move to digital-based banking or the development of banking hubs). Moreover, the LSB refers to past and anticipated regulatory changes including the FCA’s finalised guidance on branch closures (FG20/3) and vulnerability (FG21/1).
The consultation closes on 5 August 2021, after which the LSB intends to publish its final report and recommendations.
Consultation paper: The Access to Banking Standard Review
Press release
Recent Cases
Bankia SA v Unión Mutua Asistencial de Seguros (UMAS), Judgment of the Court (Fourth Chamber) (Case C-910/19) - 3 June 2021
Prospectus Directive - interpretation of Article 6 and Article 3(2) – issuer’s liability
A ruling has been handed down by the European Court of Justice (ECJ) in proceedings between Bankia SA (Bankia) and the Unión Mutua Asistencial de Seguros (UMAS) on the interpretation of Article 3(2) and Article 6 of Directive 2003/71/EC of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading (Prospectus Directive) as amended by Directive 2008/11/EC of the European Parliament and of the Council (Prospectus (Amendment) Directive).
The proceedings were referred to the ECJ from the Spanish Supreme court and concerned the subscription by UMAS to Bankia’s offer of shares to the public and misleading information on the financial situation of Bankia which was contained in its initial public offering (IPO) prospectus.
In short, the ECJ ruled that qualified investors can bring a liability action against a company on the ground of inaccurate information in its IPO prospectus even if the document is only issued for retail investors, based on Article 6, read in conjunction with Article 3(2)(a). Moreover, the ECJ concluded that, if a qualified investor lodges a complaint, the local courts can “take account of the fact the investor was, or ought to have been, aware of the economic situation of the share offering issuer” by other means than the prospectus, if their national laws allow or require it. However, the court specified, on the basis of Article 6(2), that such provisions of national law shall “not make it impossible or excessively difficult to bring that action.”
Judgement
Please see the General section for an item on the launch by the Bank of England of the Climate Biennial Exploratory Scenario 2021 and an item on updated climate scenarios published by the NGFS.
