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Source: European Banking Authority

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) are today publishing their Final Report amending the draft Regulatory Technical Standards (RTS) to the Delegated Regulation supplementing the Sustainable Finance Disclosure Regulation (SFDR). The ESAs propose adding new social indicators and streamlining the framework for the disclosure of principal adverse impacts of investment decisions on the environment and society.

The ESAs also suggest new product disclosures regarding “greenhouse gas emissions reduction” targets.

Additionally, the ESAs propose further technical revisions to the SFDR Delegated Regulation:

• Improvements to the disclosures on how sustainable investments “Do No Significant Harm” (DNSH) to the environment and society;
• Simplification of the pre-contractual and periodic disclosure templates for financial products; and
• Other technical adjustments concerning, among others, the treatment of derivatives, the calculation of sustainable investments, and provisions for financial products with underlying investment options.

Next steps

The European Commission will study the draft RTS and decide whether to endorse them within three months of today’s publication by the ESAs. These draft RTS would be applied independently of the comprehensive assessment of SFDR announced by the European Commission in September 2023 and before changes resulting from that assessment would be introduced.

Background

The Joint Committee of the ESAs received a mandate from the European Commission on 28 April 2022 to review and revise the RTS laid down in the SFDR Delegated Regulation with a deadline of 12 months within which to deliver amended RTS. The ESAs notified the Commission of an extension to this deadline to allow time to carry out a more thorough review and allow adequate time for public consultation and consumer testing.

Source: Government of the Netherlands

News item | 30-11-2023 | 10:01

Robbert Dijkgraaf, the Minister of Education, Culture and Science, will take on Ms Uslu’s responsibilities until a new state secretary is appointed. A state secretary who is a member of D66 will be sought for the period until the formation of a new government.

Source: Government of the Netherlands

News item | 01-12-2023 | 12:25

The importance of human rights

Human rights are for everyone – or at least, they should be. Everyone wants to be accepted. To be safe on the street, and be able to go to work or school. But there are places where this is not necessarily the case. This is why the Ministry of Foreign Affairs works for human rights worldwide. The efforts of human rights defenders play a crucial role in this work.

What is the Human Rights Tulip?

The Human Rights Tulip is a prize that the Dutch government awards each year to a human rights defender or human rights organisation to support their work: explaining, protecting and enhancing respect for global human rights. Since 2008, the Ministry of Foreign Affairs has presented the prize each year in December, around International Human Rights Day. The winner receives a bronze tulip and €100,000, which helps them continue and expand their human rights efforts so as to reach even more people and places.

Human Rights Tulip 2023: the candidates

An independent jury has now selected the top three candidates from the shortlist of ten according to, among other things, the impact of their work on society and their courage in striving to promote human rights despite threats and attacks. The three remaining candidates in the running for the Human Rights Tulip 2023 are: 

Claudelice dos Santos

Hülya Gülbahar

Julienne Baseke

The jury

The members of this year’s jury are: Marie Ricardo (director of the LGBTI rights organisation COC Netherlands), Wilco de Jonge (director of the Netherlands Institute for Human Rights), Maral Khajeh (programme coordinator at Justice & Peace), Fenna Timsi (UN youth representative for human rights and security) and Rick Lawson (professor of European law specialising in human rights, Leiden University).

Source: European Banking Authority

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) today published an interactive factsheet that answers consumers’ most frequently asked questions about sustainable finance. The factsheet provides tips to consumers considering buying financial products with sustainability features, including loans, investments, insurances and pensions.

The factsheet provides answers to frequently asked questions and steps consumers can take to understand how their financial choices could contribute to a more sustainable future.

In addition, the factsheet provides four tips consumers should take into account before choosing financial products with sustainability features. Consumers are encouraged to:

1. decide how important sustainability is for them and what financial goals they want to achieve before they choose a product;
2. pay attention to the conditions and the sustainability features, to avoid being misled by ‘greenwashing’;
3. keep in mind that financial products with sustainability features are not risk-free;
4. for investments and life insurance policies, take their time before deciding and, if need be, seek further clarification from the firm or person that can advise them on and sell them such products.

Financial jargon can at times be intimidating and prevent consumers from understanding crucial financial concepts such ‘ESG’ or ‘EU taxonomy’. To overcome this barrier, the factsheet has helpful pop-up boxes that explain specific terms in a simple and easy-to-understand way.

The factsheet has been translated in all EU languages, and the ESAs are working with national supervisory authorities to help promote it across the EU.

Background and legal basis

The three ESAs developed the interactive factsheet in fulfilment of their mandate in Article 9(1)(b) of their respective Founding Regulations, which requires the authorities “to take a leading role in promoting transparency, simplicity and fairness in the market for consumer financial products or services across the internal market, including by reviewing and coordinating financial literacy and education initiatives by the competent authorities”.

Source: Government of the Netherlands

News item | 30-11-2023 | 16:28

Mr Van Leeuwen worked at the Ministry of Foreign Affairs previously. During that time, his roles included Dutch ambassador to Afghanistan, consul-general in Mumbai and director of the Middle East and North Africa Department. Mr Van Leeuwen is currently cabinet adviser on foreign affairs and defence in the Office of the Prime Minister.

Mr Van Leeuwen will be sworn in on Monday 4 December 2023 in the presence of His Majesty King Willem-Alexander at Noordeinde Palace.

Source: European Banking Authority

EBA reaffirms its commitment to enhance climate-related and broader sustainability considerations in the EU banking sector

30 November 2023

Source: European Banking Authority

The European Banking Authority (EBA) today published an Opinion following the notification by the Ministry of Business, Industry, and Financial Affairs of Denmark to apply Article 133 of the Capital Requirements Directive (CRD) to activate a new systemic risk buffer (SyRB). The proposed measure introduces a systemic risk buffer rate of 7% for a subset of exposure categories located in Denmark to increase banks’ ability to absorb unexpected losses from exposures to real estate companies. The intended date of application of the measure is 30 June 2024.

The measure applies to all credit institutions authorised in Denmark and to exposures to non-financial corporations operating in real estate activities and in construction – development of building projects activities. The measure excludes exposures to social housing associations and housing cooperative associations.

The EBA acknowledges the macroprudential risk concerns raised by the Ministry of Business, Industry and Financial Affairs and welcomes the proposed macroprudential measure that considers risks to the debt servicing capacity of real estate companies. The measure also envisages the application of the EBA Guidelines on the appropriate subsets of sectoral exposures in the application of a systemic risk buffer to identify the appropriate subset of exposures.

In its Opinion, addressed to the European Commission, the EBA noted that the identification of exposures based on NACE Rev.2 codes could increase the risk that the identified subsets lead to a systemic risk buffer application with greater granularity and complexity. In addition, the EBA highlighted that the calibration of macroprudential measures should be clearly linked to the systemic risk identified to ensure that macroprudential measures are effective and proportionate to mitigate risks.

Legal basis

On 10 October 2023, the EBA received a notification from the European Systemic Risk Board (ESRB) on the intention of the Ministry of Business, Industry, and Financial Affairs of Denmark to apply Article 133 of Directive 2013/36/EU of the European Parliament and of the Council to activate a new SyRB.  The EBA’s authority to deliver an opinion is based on Article 133(12), second subparagraph, of the Directive 2013/36/EU, and Article 131(5a), in conjunction with Article 131(15), both of that Directive. The EBA may within six weeks of receiving the notification provide the Commission with its opinion, in accordance with Article 16a of Regulation (EU) No 1093/2010. 
 

Source: European Banking Authority

The European Banking Authority (EBA) today launched a public consultation on its draft Regulatory Technical Standards (RTS) on the conditions for assessing the materiality of extensions and changes to the use of internal models as well as to the subset of the modellable risk factors applicable under the Fundamental Review of the Trading Book (FRTB) rules. These RTS are part of the Phase 4 deliverables of the EBA roadmap for the new market and counterparty credit risk approaches. The consultation runs until 29 February 2023.

These RTS follow the Capital Requirements Regulation (CRR) differentiation between material extensions and changes, to be approved by competent authorities, and non-material extensions and changes, to be notified to competent authorities. The RTS further divide the latter category into two sub-categories: notified extensions and changes requiring additional information and other extensions and changes.

For the categorisation of model extensions and changes to the relevant categories/sub-categories, the EBA is proposing a combination of qualitative and quantitative conditions. In particular, the quantitative conditions aim at assessing the effect of the extension or change on the IMA own funds requirements and on each component of the FRTB IMA (Expected Shortfall, Stress Scenario Risk Measure and Default Risk Charge), before and after the planned extension or change. In addition, for changes to the institution’s choice of the subset of modellable risk factors, the effect of the change on the ratio PEStRC/ PEStFC is also assessed.

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 29 February 2023.

The public hearing on these draft RTS will take place via conference call on 13 December 2023 from 15.00 to 16.30 CEST. The EBA invites interested stakeholders to register using this link by 11 December 2023 at 16:00 CEST. 

Legal basis and background

These draft RTS have been developed according to Article 325az(8)(a) of Regulation (EU) No 575/2013 (Capital Requirements Regulation – CRR), which mandates the EBA to specify the conditions for assessing the materiality of extensions and changes to the use of alternative internal models and changes to the subset of the modellable risk factors.

The mandate in Art. 325az(8)(a) of the CRR is very similar to the mandate in Art. 363(4)(a), which constitutes the legal basis for the existing RTS on market risk model extension and changes. Therefore, the existing RTS on model extensions and changes is used as a starting point from which the new RTS is developed.

The CRR allows institutions to calculate their own funds requirements for market risk using the alternative internal model approach (IMA), provided that permission from competent authorities is granted. According to the CRR, material changes to the use of the IMA, the extension of the use of the IMA and material changes to the institution’s choice of the subset of the modellable risk factors require separate permission from competent authorities. All other extensions and changes to the use of the IMA require notification to the competent authorities.

Source: Government of the Netherlands

News item | 28-11-2023 | 14:49

Bank accounts and insurance

Sex workers who want to apply for a business bank account are now often refused due to the risk of money laundering. Taking out insurance is also not a matter of course for sex workers. The approach has brought sex workers, banks and insurers together to make agreements on opening business bank accounts and insurance for sex workers.  

Prejudices 

Prejudices play a major role in the daily lives of sex workers. For instance, doctors sometimes without any reason encourage sex workers to quit their work, or medical complaints are wrongly linked to their work. With the online course ‘help and care for sex workers’ offered to healthcare providers, these prejudices should be eliminated.  

Sex workers also do not always feel taken seriously by the police due to prejudice. Partly because of this, only one in five sex workers report violence while working. That is why the police are developing a teaching module for officers in training that should increase knowledge about sex workers, so that prejudices are eliminated. In addition, sex workers are better informed about their rights and obligations when reporting violence. We also focus on increasing knowledge about sex workers among municipal officials to eliminate prejudice. Together we must ensure prejudices about sex work disappear.

Source: European Banking Authority

The European Banking Authority (EBA) today extended its risk-based anti-money laundering and countering the financing of terrorism (AML/CFT) supervision guidelines to AML/CFT supervisors of crypto-asset service providers (CASPs). The new guidelines set clear expectations of the steps supervisors should take to identify and manage money laundering and terrorism financing (ML/TF) risks in this sector and are an important step forward in the EU’s fight against financial crime.

CASPs can present high ML/TF risks. They also operate across borders. This is why a common supervisory approach to tackling ML/TF risks in that sector is important. By extending the scope of its AML/CFT Supervision Guidelines to supervisors of CASPs, the EBA fosters a common understanding, across all Member States, of the risk-based approach to the AML/CFT supervision of CASPs and how it should be applied.

Today’s amendments include guidance on the sources of information competent authorities should consider when assessing ML/TF risks associated with CASPs. They highlight the importance of a consistent approach in setting supervisory expectations, where multiple competent authorities are responsible for the supervision of the same institutions. They also emphasise the importance of training so that staff from competent authorities have the technical skills and expertise necessary to carry out their roles.

The EBA will issue AML/CFT guidance for CASPs through forthcoming amendments to the EBA’s ML/TF Risk Factors Guidelines, and new Guidelines to prevent the abuse of fund and crypto-asset transfers for ML/TF purposes.

Legal basis, background and next steps

Directive (EU) 2015/849 puts the risk-based approach at the centre of Europe’s AML/CFT regime. The requirements in this Directive were complemented by the mandate given to the EBA under Article 48(10) of the same Directive requiring the EBA to issue guidelines to competent authorities on the characteristics of a risk‐based approach to AML/CTF supervision.

Article 36 of Regulation (EU) 2023/1113 requires the EBA to issue Guidelines addressed to competent authorities on the characteristics of a risk-based approach to supervision of CASPs and the steps to be taken when conducting such supervision.

Additionally, Regulation (EU) 2023/1114 will bring crypto-asset services and activities within the EU regulatory scope and will ensure that CASPs become subject to EU AML/CFT obligations and supervision. This will ensure that the AML/CTF regulatory and supervisory framework is aligned with international recommendations and that the ML/TF risks associated with this sector are addressed and effectively managed.

The amending Guidelines will be translated into the official EU languages and published on the EBA website. A consolidated version will also be published on the EBA website. The deadline for competent authorities to report whether they comply with the Guidelines will be two months after the publication of the translations. The amending Guidelines will apply from 30 December 2024.