EBA publishes technical package on reporting framework 2.9.1

08 November 2019

The European Banking Authority (EBA) published today a new release of reporting framework 2.9.1, which includes the validation rules, the DPM data dictionary, and the XBRL taxonomy. This release fixes some modelling issues on COREP Liquidity and FINREP.

EBA launches consultation on comprehensive Pillar 3 disclosures

16 October 2019

The European Banking Authority (EBA) launched today a public consultation on the new comprehensive Implementing Technical Standard (ITS) for financial institutions' public disclosure, designed to promote market discipline. This ambitious proposal seeks to optimise the EBA Pillar 3 policy framework by moving from a silo based approach, with different disclosure policy products, to an all-inclusive ITS. It also implements regulatory changes introduced by the CRR2 and aligns the disclosure framework with international standards.

The amending regulation (EU) No 2019/876 (‘CRR2') introduced new disclosure requirements for institutions, and a mandate for the EBA to implement them in a way that conveys sufficiently comprehensive and comparable information for market participants to assess the risk profiles of institutions (Article 434a of the CRR2). The new ITS aim to reinforce market discipline, by increasing consistency and comparability of institutions' public disclosures, and to implement the CRR2 regulatory changes in alignment with the revised Basel Pillar 3 standards.

The all-inclusive ITS provide a complete Pillar 3 disclosure framework that seeks to facilitate its implementation by institutions and to improve clarity for users of information. The disclosure ITS have been developed fostering consistency with supervisory reporting, and a mapping between quantitative disclosure data and reporting is provided in order to facilitate compliance by institutions. A parallel consultation regarding the draft ITS on supervisory reporting was also launched today.

This consultation paper is the first one of the deliverables that will be presented in a forthcoming EBA roadmap on institutions' Pillar 3 disclosures. That roadmap, which will be published in Q4 2019, provides an overview of the EBA Pillar 3 strategy, deliverables and timeline for the implementation of all the disclosure requirements included in the CRR2/BRRD2, including ESG risks and climate change related information, as well as the disclosure requirements for investment firms under the IFR.

Consultation process

Responses to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. All contributions received will be published after the consultation closes, unless requested otherwise. The deadline for the submission of comments is 16 January 2020.

A public hearing on this consultation will take place at the EBA premises on 2 December, from 14:00 to 16:00 CET time.

Legal basis and next steps

These draft ITS have been developed in accordance with Article 434a of Regulation (EU) No 575/2013 which mandates the EBA to develop draft implementing technical standards specifying uniform disclosure formats, and associated instructions in accordance with which the disclosures required under Titles II and III shall be made. The same mandate specifies that those uniform disclosure formats shall convey sufficiently comprehensive and comparable information for users of that information to assess the risk profiles of institutions and their degree of compliance with the requirements laid down in Parts One to Seven. To facilitate the comparability of information, the implementing technical standards shall seek to maintain consistency of disclosure formats with international standards on disclosures.

The EBA expects to submit these revised draft ITS to the European Commission in June 2020. The application of the disclosure requirements will be in June 2021.

links

ESAs consult on changes to the key information document for PRIIPs

16 October 2019

The European Supervisory Authorities (ESAs) have today issued a Consultation Paper  on amendments to existing rules underpinning the Key Information Document (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs).

The aims of the review are to:

  • Address issues that have been identified by stakeholders and supervisors since the implementation of the KID in 2018;
  • Make specific changes to allow the rules to be applied to investment funds that are expected to have to prepare a KID from 1 January 2022 onwards.

The consultation paper proposes changes relating to the following topic areas:

  • Illustrations of what the retail investor might receive in return from their investment (performance scenarios);
  • Information on what the costs of the investment are;
  • Specific issues for different types of investment funds;
  • Specific issues for PRIIPs offering a range of options for investment (so-called "Multi-Option Products").

As part of this review, the European Commission, in cooperation with the ESAs, is undertaking a consumer testing exercise to assess the effectiveness of different presentations of performance scenarios. The results are expected in the first quarter of 2020.

When deciding on their final proposals, the ESAs will take into account the feedback from respondents to this consultation, as well as the results of the consumer testing exercise.

The deadline for submission of feedback is 13 January 2020.

The Consultation Paper and template for comments can be accessed via the following webpage.

Background

The KID for PRIIPs is a mandatory, three-page A4 information document to be provided to consumers before purchasing a PRIIP. PRIIPs include, for example, investment funds, structured products and unit-linked and with-profits life insurance contracts.

The PRIIPs Regulation (No 1286/2014) defines the main rules and principles for KIDs. It is supplemented by a Delegated Regulation (2017/653) specifying the presentation and contents of the KID, which is based on Regulatory Technical Standards that the ESAs were mandated to develop.

This Consultation Paper follows a previous ESA consultation on the PRIIPs KID in November 2018 (CP 2018 60). The November 2018 consultation paper proposed more targeted amendments to the PRIIPs Delegated Regulation. Taking into account the feedback to that consultation, in February 2019, the ESAs decided to defer their review and work on more substantive revisions during 2019.

ESA's Joint Board of Appeal decides on appeal against the EBA

08 October 2019

The Joint Board of Appeal of the European Supervisory Authorities (ESAs – European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority) published today its decision in the appeal by the credit rating agency Creditreform AG against the European Banking Authority.

The German credit rating agency Creditreform AG appealed on 16 July 2019 challenging the adoption by the Joint Committee of the European Supervisory Authorities ("ESAs") of certain draft implementing technical standards proposed for endorsement by the European Commission.  It also made an application for suspension. The draft implementing technical standards propose to amend the correspondence ("mapping" in the CRR nomenclature) between certain of Creditreform's long-term corporate credit assessments and certain credit quality steps ("CQS") as set out in the Capital Requirements Regulation No. 575/2013. The appellant challenges the legality of this downgrade. The Board of Appeal dismissed the appeal as inadmissible, in accordance with settled case law of the CJEU finding that acts having a preparatory nature, like the draft implementing technical standards, are not subject to an autonomous judicial or quasi-judicial review but are subject to review through a check of the legitimacy of the final act adopted by the European Commission.

ESAs Joint Committee defines its priorities for 2020

02 October 2019

The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA) published today its 2020 Work Programme.

In 2020, under the EBA's chairmanship EBA, the Joint Committee of the three ESAs will continue its work in the areas of cross-sectoral risk analysis, consumer protection, financial conglomerates, securitisation as well as accounting and auditing.

Areas of particular focus of its work will be on PRIIPs, financial innovation - also in relation to the European Commission's FinTech Action plan and the work of the European Forum for Innovation Facilitators (EFIF) - as well as sustainable finance and securitisation.

Background

The Joint Committee is the forum for cooperation between the European Banking Authority (EBA), European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA), collectively known as the European Supervisory Authorities (ESAs).

Through the Joint Committee, the three ESAs cooperate regularly and closely to ensure consistency in their practices. In particular, the Joint Committee works in the areas of supervision of financial conglomerates, accounting and auditing, micro-prudential analyses of cross-sectoral developments, risks and vulnerabilities for financial stability, retail investment products and measures combating money laundering. In addition, the Joint Committee also plays an important role in the exchange of information with the European Systemic Risk Board (ESRB).

Joint Committee Website

EBA consults on its proposals to create a STS framework for synthetic securitisation

25 September 2019

The European Banking Authority (EBA) launched today a 2-month public consultation on its proposals for a simple, transparent and standardised (STS) framework for synthetic securitisation. This ground-breaking work on synthetic securitisation unveils new data and insights into post-crisis market developments and trends, including data on historical default and loss performance. It also proposes a list of criteria to be considered when labelling the synthetic securitisation as ‘STS'. While the Discussion Paper does not provide any recommendations on any potential differentiated regulatory treatment, it does seek stakeholders' input about the possibility, its potential impact and other considerations. The consultation runs until 25 November 2019.

The proposed STS criteria for balance sheet synthetic include requirements on simplicity, standardisation and transparency similar to those applied to traditional securitisation. In addition, the criteria need to meet a number of synthetic-specific requirements, such as those on mitigating counterparty credit risk, including on eligible protection contracts, counterparties and collateral; those addressing various structural features of the securitisation transaction; and those ensuring that the framework only targets balance sheet synthetic securitisation.

The paper also examines the rationale of the STS synthetic product and assesses positive and negative implications of its possible creation and label as "STS".

Finally, the discussion paper provides a balanced analysis of possible introduction of a limited and clearly defined differentiated regulatory treatment of the STS synthetic securitisation.

Stakeholders are invited to comment on the possibility of introduction of an STS framework for synthetics as well as on the regulatory treatment and potential market impact of the proposals laid out in the discussion paper.

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 25 November 2019.

 A public hearing will take place at the EBA premises on 9 October 2019 from 14.00 to 16.00.

All contributions received will be published following the end of the consultation, unless requested otherwise.

Legal basis

The Discussion Paper has been developed in response to a mandate assigned to the EBA in the Article 45 of the Securitisation Regulation (Regulation (EU) 2017/2402), which requires the EBA, in close cooperation with ESMA and EIOPA, to publish a report on the feasibility of a specific framework for simple, transparent and standardised (STS) synthetic securitisation, limited to balance sheet securitisation.

Adam Farkas steps down as EBA Executive Director

17 September 2019

Adam Farkas has announced his resignation from his post as Executive Director of the European Banking Authority (EBA), which will be effective on 31 January 2020.

The EBA's Board of Supervisors (BoS) has conducted an assessment of the potential conflict of interest arising from Adam Farkas' proposed future employment at the Association for Financial Markets in Europe (AFME). In compliance with the EBA staff regulations and ethics rules, the BoS has decided that Adam Farkas will no longer participate in the EBA's policy and supervisory work and will focus exclusively on operational matters until 31 October 2019. For the remainder of his notice period, his duties will be reallocated until 31 January 2020.

The BoS has also decided to apply conditions on his future employment. Adam Farkas cannot engage in lobbying or advocacy of the EBA, or have professional contacts with EBA staff, for 24 months after leaving the Authority. Mr Farkas cannot advise his new organisation's members or otherwise contribute to the activities of his new organisation on topics directly linked to the work he carried out during his last three years of service for 18 months after leaving the EBA.

José Manuel Campa, EBA Chairperson praised the contribution Adam Farkas has made in building up the EBA from its creation in 2011, ensuring its smooth and sound operation as it grew, and throughout its move in June 2019 from London, UK to its new seat in Paris, France.

The EBA will soon start the recruitment process of a new Executive Director.

Background

Adam Farkas was appointed as first Executive Director of the EBA in 2011 and his mandate was renewed in 2015 for another five-year term.

EBA issues revised list of validation rules

10 September 2019

The European Banking Authority (EBA) issued today a revised list of validation rules in its Implementing Technical Standards (ITS) on supervisory reporting, highlighting those which have been deactivated either for incorrectness or for triggering IT problems. Competent Authorities throughout the EU are informed that data submitted in accordance with these ITS should not be formally validated against the set of deactivated rules.

EBA adds the Securitisation Regulation to its online Interactive Single Rulebook and Q&A tools

04 September 2019

The European Banking Authority (EBA) has updated its online Interactive Single Rulebook and Q&A tool with the inclusion of the "simple, transparent and standardised" (STS) Securitisation Regulation, (EU) 2017/2402.

Users will now be able to review on the EBA website all the EBA's final Technical Standards and Guidelines associated with the Securitisation Regulation by navigating through this text on an article-by-article basis. The inclusion of the Securitisation Regulation into the Q&A tool will also allow users to submit any questions they may have on the application of this Regulation and the EBA's work related to it.

The purpose of the Q&A tool is to support the consistent and effective application of the EU regulatory framework for the banking sector, the Single Rulebook. The Q&A tool also contributes to the completion of the legislative framework by ensuring any remaining regulatory loopholes are addressed. The process is based on close and on-going interaction with the European Commission so that responses in the Q&A tool are fully consistent with EU legislative texts.

 

EBA publishes phase 2 of its technical package on reporting framework 2.9

21 August 2019

The European Banking Authority (EBA) published today a new release of the reporting framework 2.9, which includes the validation rules, the DPM data dictionary and XBRL taxonomies. The update reflects the amendments to the Implementing Technical Standards (ITS) on supervisory reporting related to FINREP and those to the ITS on benchmarking of internal approaches, both published on 16 of July 2019.