Regulatory radar - issue 40 (November - December 2011)
The past months, the FSB published its overview report on the implementation of the G20 recommendations for strengthening financial stability. The report details the general progress made in developing and implementing global policy reforms since the G20 Seoul Summit in November 2010. The FSB found, that while progress is being made, a number of issues still need to be addressed e.g. establishing legal frameworks for effective intervention in failing firms and weaknesses in their supervisors’ mandates.
The Basel Committee on Banking Supervision (BCNS) issued several interesting documents on Basel III e.g. consultation papers on the definition of capital disclosure requirements and on the application of own risk credit adjustments to derivatives as well as a third set of Basel III frequently asked questions. Next to this the BCBS published a consultation paper on internal audit functions in banks. The paper sets out 20 principles with respect to the internal audit function in banks, organised in three sections: A) Supervisory expectations relevant to the internal audit function, B) The relationship of the supervisory authority with the internal audit function, and C) Supervisory assessment of the internal audit function.
On EU level, REMIT, the regulation on wholesale energy market integrity and transparency was published as well as further initiatives relating to the regulation of credit rating agencies. The EC also published two proposals relating to the fund industry i.e. a proposal for Regulation on European Venture Capital Funds and a proposal for a Regulation on European Social Entrepreneurship Funds.
On a national level, the NBB published the circular NBB_2011_09 of 20 December 2011 regarding the reporting of the effective management on the internal control system. The Circular mainly aims to align the reporting of the effective management on the internal control system with the Twin Peaks supervisory structure. This results amongst others in a separate report that has to be drafted by the effective management on the assessment of the internal control system in relation to investment services and investment activities. A summarized overview of all the changes is available in Dutch and in French.
Finally, this issue also includes a briefing note setting out the key requirements of the European Markets Infrastructure Regulation (EMIR), comparing them to the corresponding requirements in the Dodd-Frank Act and identifying a number of key considerations for firms.
We hope you enjoy the reading
The Editorial Board