Tracker, Financial Services Regulation & Compliance - Banking

DOMESTIC

EU (Consumer Mortgage Credit Agreements) Regulations 2016
The Department of Finance has published the EU (Consumer Mortgage Credit Agreements) Regulations 2016.  As reported by the Department of Finance, the new laws have been introduced to transpose the Mortgage Credit Directive, increasing protections for mortgage holders and increasing choice by making it easier for people to get a mortgage from banks in other EU countries.  This mortgage law complements existing consumer protection provisions in relation to residential mortgages, such as the Consumer Credit Act 1995. It also works alongside the Central Bank of Ireland Consumer Protection Code and the Code of Conduct on Mortgage Arrears and applies to all new agreements that involve consumer mortgages.
 
Central Bank Publication - Application for Authorisation as a Retail Credit Firm under Part V of the Central Bank Act, 1997 (as amended) together with Guidance
The Central Bank has published an amended application form, together with detailed guidance on how to complete the application form, for all entities seeking authorisation as a Retail Credit Firm under Part V of the Central Bank Act, 1997 (as amended).
 
Central Bank introduces new authorisation process model for various industry sectors
As set out in the Consumer Protection Outlook Report 2016, the Central Bank has introduced new Authorisation Process Models for the following industry sectors: Money Transmission Businesses; Bureaux de Change Businesses; Debt Management Firms; Retail Intermediaries; Retail Credit Firms; Home Reversion Firms; and Moneylenders.

The key features of the new Authorisation Process Model include: (i) within 3 working days application submissions will be acknowledged; (ii) within 10 working days applicants will be advised whether or not all the key information required has been received to progress to the assessment phase; and (iii) within 90 working days applicants will be advised of the outcome of the assessment phase and the intended decision in respect of the application submission.
New Application Forms and Guidance Notes for each industry sector are now available on the Central Bank website.
 

EUROPEAN

ECB has announced a new series of targeted longer-term refinancing operations (TLTRO II)
The European Central Bank (ECB) has announced a decision to launch a new series of four targeted longer-term refinancing operations (TLTRO II).  The new operations will offer attractive long-term funding conditions to banks to further ease private sector credit conditions and to stimulate credit creation.  The new operations will be conducted from June 2016 to March 2017 at a quarterly frequency. All the new operations will have a four-year maturity, with the possibility of repayment after two years. 

EBA has published a corrective update to XBRL taxonomy used for supervisory reporting
The EBA has published a corrective update (2.4.1) to the XBRL taxonomy that Competent Authorities shall use for the remittance of data under the EBA Implementing Technical Standards (ITS) on supervisory reporting. The revised taxonomy will be used for the first reports under the revised Liquidity Coverage Ratio (LCR) and Leverage Ratio (LR) requirements resulting from Delegated Acts of the European Commission. This update is a modification of the previously published 2.4 taxonomy, which it replaces. It corrects a technical error in the reportable content of individual COREP reports and errors in the XBRL implementation of some validation rules.

EBA has published final draft Implementing Technical Standards 
The EBA has published an Opinion clarifying the proposed timeline for the regulatory review of the internal ratings-based approach, stating that it is to be finalised by the end of 2020 at the latest.  The EBA sets out general principles as guidance for the implementation of the regulatory review. The Opinion is supported by a Report, which summarised the concerns outlined in responses to a recent EBA public consultation on this topic, including around the lack of comparability of capital requirements determined under the IRB approach across institutions. In an attempt to address these concerns, the EBA have introduced certain changes to harmonise the credit risk mitigation techniques used, around disclosure, the estimation of risk parameters and the treatment of defaulted assets and definitions, and supervisory practices around default.
 
EBA Consultation Paper - Draft Implementing Technical Standards amending Commission Implementing Regulation (EU) 680/2014 on supervisory reporting of institutions
The EBA has published its final draft Implementing Technical Standards (ITS) amending the Commission's Implementing Regulation (EU) No 680/2014 on supervisory reporting. These final draft ITS include minor changes to templates and instructions which the EBA deemed necessary in order to reflect some of the answers published in its Single Rulebook Q&A, to align with disclosure requirements for capital buffers as well as to correct legal references and other clerical errors. The amendments are expected to be applicable for reporting as of December 2016.
 
EU Commission Implementing Regulation laying down Implementing Technical Standards on disclosure of leverage ratio for institutions under CRR

The EBA has launched a public consultation on the inclusion of prudent valuation into COREP, the reporting framework through which EU banking institutions report supervisory information.

In this consultation paper, the EBA has proposed a series of amendments to the COREP framework. The changes will allow the inclusion of the new requirements for reporting information on prudent valuation, as well as some supplementary requirements for reporting credit risk information. The information collected will allow banking supervisors throughout the EU to assess how banking institutions are complying with the requirements on prudent valuation set by EU legislation and the related technical standards developed by the EBA, as well as any additional financial information required by competent authorities to perform their supervisory tasks.  The public consultation will run until 30 March 2016.
 
EBA publishes the report on SMEs and the SME Supporting Factor    
The European Banking Authority has published a Report on small and medium enterprises (SMEs) which analyses (i) the evolution of lending trends and conditions for SMEs, (ii) the effective riskiness of EU SMEs over a full economic cycle and (iii) the consistency of own funds requirements laid down in the Capital Requirements Regulation (CRR) for credit risk on exposures to SMEs. Overall, the results of the EBA analysis show limited effectiveness of the SME Supporting Factor (SF). However, more data is needed before drawing firm conclusions and, therefore, the EBA recommends continued monitoring of the application of the SF.
 
EBA seeks input at national level on FINREP and GAAP
The European Banking Authority has launched a public consultation on reporting financial information using Generally Accepted Accounting Practices (GAAP) across EU jurisdictions. This is a decentralised public consultation, which takes place through National Competent Authorities across the EU and not through the EBA, so as to allow for a better informed discussion on questions that may be specific to the individual jurisdictions across the EU. All interested stakeholders can provide feedback directly to their National Competent Authorities (NCAs) by 15 April 2016.

For further information please contact a member of the Financial Regulation team.

Date published: 05 April 2016