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Pathfinder - Deloitte monthly regulatory update - April 2014


Banks – Supervisory reporting

Adoption by the European Commission of EBA implementing technical standards with regard to supervisory reporting of institutions – European Commission 16/04/2014

The European Commission has adopted EBA implementing technical standards on supervisory reporting. The remittance dates of the first set of supervisory reports will be postponed from April / May 2014 to end June 2014, but there is no change to reference dates.

The postponement concerns banks' submissions to competent authorities of:

  • First quarterly reports on own funds, large exposures, leverage ratio, and net stable funding ratio, with reference dates as of 31 March 2014 to end June 2014, as opposed to end May 2014; and
  • First monthly liquidity reports with reference dates as of 31 March 2014 and 30 April 2014 to end June 2014 as opposed to April 2014.

For further background information, please refer to our Regulatory News Alert of 7 Agust 2013 - CRD IV / CRR - ITS on supervisory reporting and to our Pathfinder of March 2014.

Capital Requirements Directive and Regulation (CRD IV / CRR)

BCBS regulatory standards on the capital requirements for bank exposures to central counterparties – Basel Committee on Banking Supervision 10/04/2014

The Basel Committee on Banking Supervision has issued final standards on capital requirements for bank exposures to central counterparties (CCPs). These standards will take effect on 1 January 2017 and will replace the interim requirements published in July 2012.

The main differences between the interim requirements and the final standards are:

  • Single approach for calculating capital requirements for bank exposures that arise from its contributions to the mutualised default fund of qualifying CCPs;
  • Standardised approach for counterparty credit risk (as opposed to the Current Exposure Method) to measure the hypothetical capital requirement of a CCP;
  • Explicit cap on the capital charges applicable to a bank's exposures to a qualifying CCP;
  • Specific rules on the treatment of multi-level client structures whereby an institution clears its trades through intermediaries linked to a CCP.

European Long-Term Investment Funds (ELTIF)

Adoption by the European Parliament of the Proposal for a Regulation of the European Parliament and of the Council on European Long-term Investment Funds – European Parliament 17/04/2014

The European Parliament has adopted the proposal for a Regulation on European Long-Term Investment Funds. This Regulation introduces a new type of collective investment framework allowing investors to put money into companies and projects that need long-term capital. It is aimed at investment fund managers who want to offer long-term investment opportunities to institutional and private investors across Europe.

To benefit from this cross-border passport the new funds would have to meet rules designed to protect both investors and the companies and projects they invest in:

  • At least 70% of the money in the fund has to be invested in unlisted companies needing long-term capital, real assets that need long-term capital to develop them, European Venture Capital Funds and European Social Entrepreneurship Funds. ELTIFs will have up to five years to invest at least 70% of the money.
  • Only be offered by a manager who is authorised under the Alternative Investment Managers Directive and so be subject to its rules.
  • Run for a specified period of time during which investors do not have the right to get their money back.
  • Strictly limit derivative use to currency risks so avoiding their use for speculative reasons.
  • Limit leverage.

Key Information Document (KID) for Packaged Retail Investment and Insurance Products (PRIIPs)

Adoption by the European Parliament of the Proposal for a Regulation of the European Parliament and of the Council on key information documents for investment products – European Parliament 15/04/2014

In its plenary session on 15 April 2014 the European Parliament adopted the text for a Regulation on key information documents for packaged retail and insurance based investment products (PRIIPs). The text had previously been agreed in the trialogue of the European Parliament, the EU Council and the EU Commission. The Regulation is expected to enter into force in the second half of 2014 and it will become applicable 2 years after the entry into force..

Discover the other topics of this newsletter in the attached PDF.

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