European Commission
Investment Firms Regulation - European Commission adopts three Delegated Regulations setting out RTS on prudential requirements - 28 September 2021
The European Commission has adopted three Delegated Regulations setting out regulatory technical standards (RTS) relating to prudential requirements for investment firms under the Investment Firms Regulation ((EU) 2019/2033) (IFR)
- a Delegated Regulation adopted on 22 September 2021 supplementing the IFR with RTS that specify the methods for measuring the K-factors referred to in Article 15 of the IFR (C(2021) 6739 final);
- a Delegated Regulation adopted on 24 September 2021 supplementing the IFR with RTS specifying the amount of total margin for the calculation of the K-factor ‘clear margin given’ (C(2021) 6776 final); and
- a Delegated Regulation adopted on 24 September 2021 supplementing the IFR with RTS specifying the notion of segregated accounts to ensure client money protection in the event of an investment firm’s failure (C(2021) 6807 final).
The Council of the EU and the European Parliament will now scrutinise the Delegated Regulations. If neither object, the Delegated Regulations will enter into force 20 days after their publication in the Official Journal of the EU.
Webpage (C(2021) 6739 final)
Webpage (C(2021) 6776 final)
Webpage (C(2021) 6807 final)
Official Journal of the European Union
PSD2 - Delegated Regulation with RTS on framework for home-host co-operation and information exchange published in OJ - 28 September 2021
Commission Delegated Regulation (EU) 2021/1722, which sets out regulatory technical standards (RTS) which supplement the revised Payment Services Directive ((EU) 2015/2366) (PSD2), has been published in the Official Journal of the EU (OJ).
The Delegated Regulation establishes the framework for co-operation and for exchanging information between the competent authorities of the home member state and the host member state in the context of supervision of payment institutions and electronic money institutions exercising rights to provide cross-border payment services under PSD2. It also establishes the framework for monitoring compliance with national law transposing Titles III and IV of PSD2. The Delegated Regulation will enter into force and apply on 18 October 2021.
Commission Delegated Regulation (EU) 2021/1722 supplementing Directive (EU) 2015/2366 with regard to regulatory technical standards specifying the framework for co-operation and the exchange of information between competent authorities of the home and the host Member States in the context of supervision of payment institutions and electronic money institutions exercising cross-border provision of payment services (C/2021/4273)
European Banking Authority
EBA launches 2021 transparency exercise - 24 September 2021
The European Banking Authority (EBA) has launched its 2021 transparency exercise and expects to publish the results in December 2021. Transparency exercises are conducted on an annual basis, and are part of the EBA's efforts to monitor risks and vulnerabilities and to reinforce market discipline.
The EBA will release nearly 2 million data points from about 120 participating banks (on average more than 16,000 data points per bank). As in the previous years, the data will cover capital positions, profitability, financial assets, risk exposure amounts, sovereign exposures and asset quality. This year the exercise will also include data on exposures under EBA compliant moratoria and public guarantee schemes to allow for a comprehensive assessment of the impact of COVID-19 on the banking sector.
2021 EU-wide transparency exercise
Press release
HM Treasury
Cash Ratio Deposit scheme - HM Treasury publishes consultation paper - 24 September 2021
HM Treasury has published a consultation paper on proposed changes to the Bank of England’s (the Bank) Cash Ratio Deposit (CRD) scheme, which funds the Bank’s monetary policy and financial stability functions. Under the scheme, banks and building societies with eligible liabilities of more than £600 million are required to place a proportion of their deposit base with the Bank on a non-interest bearing basis. The Bank then invests these funds in interest bearing assets, such as gilts, and the income generated is used to meet the costs of its monetary policy and financial stability functions.
HM Treasury is considering replacing the CRD scheme with a levy-based arrangement. It believes that this would be more straightforward for firms and that the Bank will benefit from increased certainty over its funding.
The consultation closes on 5 November 2021. HM Treasury will continue to monitor the effectiveness of the Bank’s funding model and will conduct a further formal review within the next five years.
Consultation: Review of the cash ratio deposit scheme: consultation on proposed changes
Webpage
Prudential Regulation Authority
Domestic Liquidity Sub-Groups - PRA publishes consultation paper - 28 September 2021
The PRA has published a consultation paper (CP19/12) outlining its proposed rules in respect of the application of prudential liquidity requirements to Domestic Liquidity Sub-Groups (DoLSubs).
Where certain conditions are met on the availability, distribution, management and monitoring of liquidity, the UK Capital Requirements Regulation (575/2013/EU) (CRR) allows the PRA to waive the application of liquidity requirements at the level of an individual firm and to permit a firm to form a DoLSub. Where the PRA has granted a DoLSub permission, the PRA assesses liquidity requirements on the basis of the consolidated situation of its members, as opposed to evaluating each constituent entity individually.
The PRA proposes to:
- permit the inclusion in a DoLSub of firms that are subsidiaries of a common immediate UK qualifying parent undertaking that is not a bank or PRA-designated investment firm; and
- revise the conditions to qualify for a DoLSub permission and the factors that the PRA will take into account when considering DoLSub applications.
The consultation closes on 12 October 2021. The PRA proposes that the changes will be implemented on 1 January 2022, with the finalisation of the rules taking place in November 2021.
Consultation paper: Domestic Liquidity Sub-Groups CP19/12
Webpage
