Author: Selwyn Manning

Source: European Banking Authority

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) today published a Consultation Paper on two draft Joint Guidelines covering suitability assessment of members of the management body, and suitability of shareholders and members with qualifying holdings of issuers of asset referenced tokens (ARTs) and of crypto-asset service provider (CASPs). The guidance will provide clarity and harmonisation with respect to the criteria to assess the suitability of the management body, the shareholders and members with qualifying holdings, thus reducing the risk of arbitrage in the application of the rules. The consultation runs until 22 January 2024.

To foster and protect the integrity of the market in crypto assets and related services and to promote trust, it is important to ensure that the members of the management body of issuers of ART’s and CASPs as well as the persons that hold or wish to acquire qualifying holdings in them are suitable.

The draft Joint Guidelines on the suitability assessment of the members of the management body of issuers of ARTs and CASPs provide common criteria to assess the appropriate knowledge, skills and experience of members of the management body as well as their good repute, honesty and integrity and if they are able to commit sufficient time to perform their duties.

The draft Joint Guidelines on the suitability assessment of shareholders or members, whether direct or indirect, with qualifying holdings in issuers of ARTs or CASPs provide competent authorities common methodology to assess the suitability of the shareholders and members with direct or indirect qualifying holdings for purposes of granting authorisation as issuers of ARTs or as CASPs, and for carrying out the prudential assessment of proposed acquisitions.

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the “send your comments” button on the consultation page.

The deadline for the submission of comments is 19 January 2024.

The EBA will inform ESMA of all the comments received. All received contributions will be published at the end of the consultation, unless requested otherwise.

Background

The EBA and ESMA have received two joint mandates under MiCA to issue respectively (i) guidelines on the assessment of the suitability of the members of the management body of issuers of ARTs and of the shareholders and members, whether direct or indirect, that have qualifying holdings in issuers of ARTs in accordance with Article 21(3), and (ii) guidelines on the assessment of the suitability of the members of the management body of the CASP and of the shareholders or members, whether direct or indirect, that have qualifying holdings in the CASP in accordance with Article 63(11).

Source: European Banking Authority

The European Banking Authority (EBA) today published the European Supervisory Examination Programme (ESEP) for 2024, which identifies key topics for heightened supervisory attention across the European Union. The ESEP is aimed at driving supervisory convergence by providing Competent Authorities with a single set of priorities for implementation in 2024.

The EBA selected the following three key topics for supervisory attention for 2024 on the basis of its EU-wide risk analysis, its relevant policy work and the practical experience of competent authorities:

• liquidity and funding risk
• interest rate risk and hedging
• recovery operationalisation

The choice of such topics was supported by structural changes, such as i) the end of the abudant liqudity in the system; ii) the increased interest rate environment; iii) the implementation of the IRRBB package in the EU; iv) lessons learned from the spring bank failures, v) energy and food markets volatility. These topics target aspects that are considered ‘specific’ for the upcoming year compared to the ‘business as usual’.

The specific supervisory attention to these areas will contribute to ensuring the financial resilience of EU institutions, and will ultimately lead to a higher level of supervisory convergence across the EU, also through the implementation of the related policy products.

The EBA will follow up on how these key topics are embedded in competent authorities’ priorities for 2024, and how they form part of their supervisory activities throughout the year. The observations collected will feed into the overall conclusions on the degree of convergence of supervisory practices. 

Note to the editors

The ESEP is one of the key elements of the EBA`s supervisory convergence toolkit which aims at delivering the EBA`s supervisory convergence mandate as required by the EBA`s founding regulation and by Article 107 of the CRD specifically in the context of the supervisory review. The 2024 ESEP complements competent authorities` core prudential supervisory activities and does not aim to provide an overarching and comprehensive supervisory examination programme, as that should be developed by competent authorities taking into account the ESEP, the structure and specific vulnerabilities of the banking system under their remit and the idiosyncratic dimensions of the individual bank or banking group they supervise.

With a view to fostering greater convergence of resolution practices, the EBA also sets priorities for resolution authorities in its annual European Resolution Examination Program (EREP). The 2024 priorities were published as part of the EBA’s latest Resolution Convergence report.

Source: European Banking Authority

The European Banking Authority (EBA) today published a Report on the role of environmental and social risks in the prudential framework of credit institutions and investment firms. Taking a risk-based approach, the Report assesses how the current prudential framework captures environmental and social risks. It recommends targeted enhancements to accelerate the integration of environmental and social risks across the Pillar 1. The proposed enhancements aim to support the transition towards a more sustainable economy, while ensuring that the banking sector remains resilient.

Environmental and social risks are changing the risk profile for the banking sector and are expected to become more prominent over time. They affect traditional categories of financial risks, such as credit, market and operational risks. Hence, environmental and social factors may affect both the risks faced by individual institutions and the financial stability of the entire financial system.

The Report recommends risk-based enhancements to the risk categories of the Pillar 1 framework. It also develops considerations on the potential use of macroprudential tools. The Report explains why the EBA does not support the introduction of a green supporting factor or a brown penalising factors at this stage. The use of such adjustment factors presents challenges in terms of design, calibration, and complex interaction with the existing Pillar 1 framework.

Against this background, the EBA puts forward recommendations for short-term actions to be taken over the next three years as part of the implementation of the revised Capital Requirements Regulation and Capital Requirements Directive (CRR3/CRD6).

In particular, the EBA is proposing to:

1. Include environmental risks as part of stress testing programmes under both the internal ratings-based (IRB) and the internal model approaches (IMA) under the Fundamental Review of the Trading Book (FRTB).
2. Encourage inclusion of environmental and social factors as part of external credit assessments by Credit Rating Agencies.
3. Encourage the inclusion of environmental and social factors as part of due diligence requirements and valuation of immovable property collateral.
4. Require institutions to identify whether environmental and social factors constitute triggers of operational risk losses.
5. Progressively develop environment-related concentration risk metrics as part of supervisory reporting.

Taking a medium-to-longer term perspective, the Report also presents possible revisions of the Pillar 1 framework reflecting the growing importance of environmental and social risks. These include:

1. The possible use of scenario analysis to enhance the forward-looking elements of the prudential framework.
2. The role that transition-plans could play in the future as part of the development of further risk-based enhancements to the Pillar 1 framework.
3. Reassessing the appropriateness of revising the IRB supervisory formula and the corresponding standardised approach (SA) for credit risk to better reflect environmental risk elements.
4. The introduction of environment-related concentration risk metrics under the Pillar 1 framework.

Alongside other policy initiatives outside the prudential framework, the EBA will continue to strengthen the integration of environmental and social risks across all pillars of the regulatory framework.

Legal basis and background

The EBA is mandated under Article 501c of Regulation (EU) No 575/2013, i.e. the Capital Requirements Regulation (CRR), and Article 34 of Regulation (EU) 2019/2033, i.e. the Investment Firms Regulation (IFR), to assess whether a dedicated prudential treatment of exposures related to assets, including securitisations, or activities (CRR), and of assets exposed to activities (IFR) associated substantially with environmental and/or social objectives would be justified.

The Report builds on the principles presented in the EBA Discussion Paper on the role of environmental risks in the prudential framework, published in May 2022.

Source: European Banking Authority

EU/EEA banks: benefits from rising interest rates are stabilising, the EBA says

10 October 2023

Source: European Banking Authority

The EBA publishes 2023 list of third country groups and third country branches operating in the EU/EEA

04 October 2023

Source: European Banking Authority

ESAs publish Joint Committee Work Programme for 2024

04 October 2023

Source: European Banking Authority

The European Banking Authority (EBA) published today its annual work programme for 2024, setting out the key strategic areas for the Authority to work on in the coming year, as well as related activities and tasks.

In 2024, the EBA will need to address a large number of mandates in a wide range of areas, building on the priorities defined in its programming document for the period 2024-2026. The focus will be on i) implementing the EU banking package (Capital Requirements Regulation – CRR III / Capital Requirements Directive – CRD VI), ii) monitoring financial stability and sustainability against a backdrop of increased interest rates and uncertainty, iii) providing a data infrastructure at the service of stakeholders, iv) developing oversight and supervisory capacity for the Digital Operational Resilience Act (DORA) and the Markets in Crypto Assets Regulation (MiCAR), and v) increasing attention on innovation and consumers (including access to financial services) while preparing the transition to the new anti-money laundering and countering the financing of terrorism (AML/CFT) framework. All this will require adequate liaison and cooperation with EU and non-EU stakeholders.

Facing these challenges with broadly unchanged human and financial resources in 2024, the EBA needs to reap as many internal and external synergies as possible, and to carefully prioritise and redeploy its resources.

As in previous years, the work programme benefitted from the recommendations of the EBA’s Advisory Committee on Proportionality.

The executive summary of the EBA work programme for 2024 will be made available in all EU official languages.  

Source: Government of the Netherlands

News item | 18-12-2021 | 19:15

The Omicron variant is relatively new and many factors are therefore uncertain. Despite these uncertainties, the modelling experts at the National Institute for Public Health and the Environment (RIVM) were able to calculate how fast the virus can spread in different circumstances. For more details on this, see the RIVM news item (in Dutch). These calculations show that the measures already in place are not sufficient to ensure the pressure on hospitals and care homes remains manageable.

Measures and urgent advice applicable from Sunday 19 December 2021

• Everyone should stay at home as much as possible and avoid busy places.
• Always stay 1.5 metres apart.
• Receive no more than 2 visitors aged 13 and over per day. On 24, 25 and 26 December and on 31 December and 1 January the maximum number of visitors aged 13 and over is 4 per day.
• Visit no more than 1 household a day.
• The maximum group size outdoors for people aged 13 and over is 2 people. There can be more than 2 people in a group if everyone in the group lives at the same address.
• Educational institutions and out-of-school care (BSO) are closed until at least 9 January 2022. There are some exceptions. On 3 January the government will decide in what form education will resume from 10 January.
• All hospitality venues are closed, except for delivery and takeaway.
• All non-essential shops are closed, except for click and collect and returns.
• Essential shops, such as supermarkets and chemists, can open until 20.00. Face masks must be worn. The maximum number of shoppers is one per 5 square metres.
• Certain locations, such as petrol stations, pharmacies, libraries, driving schools, notaries’ offices and lawyers’ offices can open for their normal hours.
• All locations where non-medical contact-based professions are carried out, such as hairdressers and beauty salons, are closed.
• Cinemas, museums, theatres and concert venues are closed.
• All indoor sports facilities are closed, except for swimming lessons. Outdoor sports facilities can open for all ages between 05.00 and 17.00. People aged 18 and over can engage in sports outdoors, alone or in groups of 2. They must stay 1.5 metres apart. Children and teenagers aged 17 and under can play sports outdoors and can take part in matches and competitions within their own club.
• Events are not permitted, except for funerals (no more than 100 people), weekly markets selling groceries, and professional sports matches and competitions (no spectators).

Check the overview of basic rules, measures, conditions and exceptions.

The new measures are in addition to the measures and advice that already apply to everyone in the Netherlands, such as following the basic rules to combat the spread of coronavirus, wearing a face mask where required, doing a self-test before visiting others and working from home. People aged 70 and over are still advised to limit their contacts as much as possible, including with children under 12. If they do have interactions with children, they should take care to keep a 1.5-metre distance.

Business owners, companies and workers can make use of the financial support package that has recently been extended.

Education

From Monday 20 December until Sunday 9 January, secondary schools, secondary schools for special education, secondary vocational education (MBO) and higher education (HBO and universities) will be closed. This measure had already been announced for primary schools, where the existing arrangements continue to apply. Exceptions exist for practical training, exams, and vulnerable pupils and students. In principle, educational institutions will reopen after the Christmas break. The government will take a decision on this on 3 January at the latest. Out-of-school care (BSO) centres will also be closed until Sunday 9 January. Emergency childcare will be provided for the children of key workers and for vulnerable children. Daycare for children aged under 4 will remain open.

Booster vaccinations

To increase protection against the Omicron variant, everyone aged 18 and over will be invited to receive a booster vaccination as soon as possible. Getting a booster offers the best protection against this variant. The aim is to ensure that as many people aged 60 and over as possible receive their booster before the end of the year. Where capacity allows, people aged 60 and over who already have a booster appointment for January will be invited to move their appointment forward. They will receive an SMS text message with more information next week. These people are requested not contact the municipal health service (GGD) themselves. Around 7 January, everyone aged 18 and over will be invited to make an appointment online to receive their booster vaccination. In the second half of January, everyone aged 18 and older who was vaccinated or had coronavirus more than three months ago should have had the opportunity to receive a booster vaccination.

Make your appointment online if you can. This will help the GGD run its booster campaign as quickly and efficiently as possible. If you are unsure how to make an appointment online, ask someone to help you. Staff at your local library can also help you make an appointment online.

Healthcare

The Omicron variant is known to spread rapidly, which may put the healthcare sector under significant pressure. This pressure would be felt not only by hospitals, but also by homecare services, mental health services (GGZ), GPs and the care sector for the elderly and disabled. Plans are currently being drawn up covering a range of scenarios to ensure healthcare provision can continue in as optimal a way as possible. The aim is to ensure that, even under the most difficult circumstances, everyone who requires urgent care has access to it.

Source: Government of the Netherlands

News item | 12-11-2021 | 20:45

To enable society to reopen as fully and as safely as possible after these three weeks, while keeping the infection rate manageable, the government is working to make coronavirus entry passes mandatory by law in additional sectors and the workplace. Preparations are also being made to allow businesses to choose whether to apply a 2G or 3G entry policy. Parliament will have to approve any such legislation.

Short-term measures

• Everyone must stay 1.5 metres from others in areas or venues where a coronavirus entry pass is not required.
• Face masks are mandatory in areas or venues where a coronavirus entry pass is not required.
• Businesses providing non-essential goods and services, such as clothes shops, contact-based services such as hair salons, and casinos must close at 18.00.
• Food and drink venues and shops selling essential goods, such as supermarkets, pet shops and chemists, must close at 20.00.
• Coronavirus entry passes and assigned seats are mandatory in food and drink venues.
• Events must end at 18.00. Coronavirus entry passes and assigned seats are mandatory, and there is a limit of 1,250 visitors per space.
• The mandatory closing time does not apply to artistic and cultural performances, for instance in cinemas, theatres and concert halls.
• Spectators are not allowed at professional or amateur sports events. There are no further restrictions for sports.
• People are advised to work from home unless that is impossible.
• No more than four visitors are allowed in your home in a day.
• If someone in your household tests positive for coronavirus, that person must self-isolate, and everyone else in the household must self-quarantine, whether they are vaccinated or not.
• In secondary vocational (MBO) and higher education (HBO and universities), the maximum group size, not including staff, is 75 people per room. This does not apply to spaces where examinations are sat.

A complete overview of measures, conditions and exceptions can be found on the page ‘Measures in brief’. 

Financial support will be available for businesses directly affected by these new coronavirus restrictions, such as retailers and food and drink venues. The government will provide more details about this support for businesses next week.

These new measures come on top of the measures that already apply, including the basic rules, mandatory face masks and the coronavirus entry pass system. Get tested if you have any symptoms of COVID-19, even if you’re fully vaccinated.

Proposed longer-term measures

If we succeed in reversing the current trend in the weeks ahead and the number of positive cases falls, the government believes it will be possible to reopen society as fully and as safely as possible. We will then be able to roll out the coronavirus entry pass system more widely. Legislation is being drafted that will make coronavirus entry passes mandatory for most shops and for venues like zoos and amusement parks. The legislation will also allow employers to check coronavirus entry passes in the workplace. The government had already announced these legislative proposals last week. A new proposal is being added to these. The government wants to give businesses subject to the coronavirus entry pass system the ability to choose between a 3G door policy (proof of vaccination or recovery, or a negative test result) with assigned seating, and a 2G policy (proof of vaccination or recovery only) without assigned seating. This legislative proposal will be sent to parliament as soon as possible.

Vaccine booster campaign to begin sooner

The COVID-19 vaccine booster campaign is starting (in Dutch only) on Friday 19 November for people aged 80 and over who can come to a vaccination centre themselves, care home residents aged 18 and over, and healthcare workers who come into contact with patients. A booster is an extra dose of vaccine that people get on top of their initial vaccinations. This ensures a high level of protection against serious illness and helps reduce the number of hospital admissions.

Source: Government of the Netherlands

News item | 04-11-2021 | 12:28

Ministers Grapperhaus (Justice and Security) and De Jonge (Health, Welfare and Sport) reported the above to the Lower House in a letter today. They will work with growers and the relevant mayors to establish a start date for delivery to coffee shops during the so-called transition phase of the experiment. The municipalities now need to join forces with the growers and the surrounding communities to decide on the most appropriate farm set-up and communication about it for the location in question.

Important planning factors

In the period ahead, several factors will be important for planning, such as the time needed to prepare the growing locations and obtain permits under the Environmental and Planning Act. There has to be enough hemp and hashish to supply the coffee shops, and the quality and diversity of the products has to be right too.

The transition phase

During the transition phase, the participating coffee shops will be able to sell the hemp products grown by the cannabis-growing farms – as part of the experiment – as well as any products they were already allowed to sell before. The weed-experiment phase will start after the transition phase and will continue for four years. During the experiment phase, participating coffee shops will only be allowed to sell hemp and hashish supplied by the designated growers as part of the closed coffee shop chain.

The aim is for the designated growers to meet the conditions applicable and for the transition phase to start at some point in the second half of 2022. Once the start date has been determined, ongoing monitoring will take place to see whether the planning is realistic and identify opportunities for acceleration.

Prospective growers

In the coming period, it will be possible to select a maximum of three growers to join the current seven designated growers in the weed experiment. This selection procedure is still ongoing. When designing the weed experiment, the government decided that a maximum of ten cannabis growing farms could participate, which would ensure that supply was efficient.