MIL Publishing Engine 1

Source: European Banking Authority

Consultation process

​Legal basis and background

Source: European Banking Authority

The European Banking Authority (EBA) has been actively working on shaping the regulatory landscape for crypto assets by publishing three regulatory products on governance, conflicts of interest and remuneration under MiCAR. These products are part of the EBA’s ongoing efforts to foster a transparent, secure, and well-regulated crypto-assets market.

The package of EBA regulatory products on governance and remuneration includes:

Guidelines on the minimum content of the governance arrangements for issuers of ARTs that specify further the various governance provisions in MiCAR, taking into account the principle of proportionality. In addition, these Guidelines clarify the tasks, responsibilities and organisation of the management body, and the organisational arrangements of issuers, including the sound management of risks across all the three lines of defence.

Final draft Regulatory Technical Standards (RTS) on the minimum content of the governance arrangements on the remuneration policy. The RTS are applicable to issuers of significant asset-referenced tokens (ARTs) and electronic money institutions issuing significant e-money tokens (EMTs), and, where Member States require to apply Article 45(1) MiCAR, to issuers of non-significant EMTs.

To ensure that remuneration policies promote the sound and effective risk management of issuers, do not create incentives to reduce risk standards and ensure the cross sectoral consistency, these final draft RTS set out a framework similar to the remuneration framework for investment firms that aims at achieving the same regulatory objectives.

Final draft RTS on conflicts of interest for issuers of ARTs that specify the requirements for policies and procedures on conflicts of interest (CoI). Issuers of ARTs shall implement and maintain effective policies and procedures to identify, prevent, manage and disclose conflicts of interest. For CoI to be effectively managed, the policies and procedures should ensure that there are sufficient resources available for their management.

The final draft RTS underline that Issuers of ARTs should pay particular attention to conflicts of interest that could arise in relation to the reserve of assets. Where the issuer of ARTs is a member of a group, the policies and procedures must also take into account any circumstances which may give rise to a CoI due to the structure and business activities of other entities within the group.

Legal basis and next steps

The EBA guidelines on the minimum content of the governance arrangements for issuers of ARTs have been developed in accordance with Article 34(13) of MiCAR which mandates the EBA in close cooperation with European Securities and Markets Authority (ESMA) and European Central Bank (ECB) to issue guidelines to specify the minimum content of the governance arrangements for issuers of ARTs in particular regarding the monitoring tools for the risks; the business continuity plans; the internal control mechanism; and the audits, including the minimum documentation to be used in the audits.

The RTS on the minimum content of the governance arrangements on the remuneration policy have been developed in accordance with Article 45(7) of MiCAR which mandates the EBA in close cooperation with ESMA to develop the RTS specifying the main governance processes regarding the adoption and maintenance of the remuneration policy and the main policy’s elements that should be adopted by the issuer as part of the remuneration policy.

The RTS on conflicts of interest for issuers of ARTs have been developed in accordance with Article 32(5) of MiCAR which mandates the EBA to specify the requirements for the conflicts of interest policies and procedures for issuers of asset-referenced tokens as well as the details and methodology for the content of the disclosure. It has been elaborated in close cooperation with the European Securities and Markets Authority (ESMA), who is mandated to develop a similar RTS for crypto-asset service providers (CASPs) under Article 72(5) of MiCAR.

Source: European Banking Authority

Detailed information on each phase of the DMP 2.0 implementation

Source: European Banking Authority

The European Supervisory Authorities (EBA, EIOPA, and ESMA – the ESAs) today announced that they have concluded a multilateral Memorandum of Understanding (MoU) to strengthen cooperation and information exchange with the European Union Agency for Cybersecurity (ENISA).

This multilateral MoU formalises the ongoing discussions between the ESAs and ENISA to strengthen their already close cooperation, as a result of the Directive on measures for a high common level of cybersecurity (NIS2 Directive) and the Digital Operational Resilience Act (DORA).

This MoU sets out the framework for cooperation and exchange of information on tasks of mutual interest, including policy implementation, incident reporting, and oversight of critical Information Communication Technologies (ICT)third-party providers. It will also promote regulatory convergence, facilitate cross-sectoral learning and capacity building on areas of mutual interest, and information exchange on emerging technologies.

Verena Ross, Chair of the Joint Committee of the ESAs and ESMA Chair, said:

This new cooperation agreement that we sign today will reinforce the collaboration between the ESAs and ENISA. By bringing together the ESAs working on cybersecurity risk in the financial sector and ENISA as the EU’s cybersecurity agency, we are further strengthening our commitment to safeguarding the financial system from information security risks.

In an interconnected world, ICT risk does not limit itself to one geographical or sectoral area, making cooperation in this field crucial. Through facilitating collaboration and resource sharing, we continue to enhance our capability to detect and respond to cybersecurity threats.

Juhan Lepassaar, Executive Director of the European Union Agency for Cybersecurity (ENISA), highlighted:

The MoU signed today showcases our willingness to move forward with a common and comprehensive approach in cybersecurity both at sectorial and horizontal level. Our efforts towards the implementation and harmonisation of NIS2 and DORA provisions, such as those on incident reporting, are paving the way to intensify our endeavours in creating a robust mechanism for cybersecurity in financial ICT systems.

Notes to editors

The Directive on measures for a high common level of cybersecurity across the Union (NIS2 Directive) is the EU-wide legislation on cybersecurity which provides legal measures to boost the overall level of cybersecurity in the EU.

The Digital Operational Resilience Act (DORA) sets a harmonised and comprehensive regulatory framework on digital operational resilience for EU financial entities and introduces oversight over Critical Third-party ICT Providers (CTPPs).

About ENISA

The European Union Agency for Cybersecurity, ENISA, is the Union’s agency dedicated to achieving a high common level of cybersecurity across Europe. Established in 2004 and strengthened by the EU Cybersecurity Act, ENISA contributes to EU cyber policy, enhances the trustworthiness of ICT products, services, and processes with cybersecurity certification schemes, cooperates with Member States and EU bodies, and helps Europe prepare for the cyber challenges of tomorrow. Through knowledge sharing, capacity building and awareness raising, the Agency works together with its key stakeholders to strengthen trust in the connected economy, to boost resilience of the Union’s infrastructure, and, ultimately, to keep Europe’s society and citizens digitally secure.

About the ESAs

The three European Supervisory Authorities (the EBA, EIOPA and ESMA) have the objective to protect the public interest by contributing to the short, medium, and long-term stability and effectiveness of the financial system, for the Union economy, its citizens, and businesses. The ESAs are tasked with developing and implementing a common regulatory framework and convergent supervisory practice across the EU. While most ongoing supervision of financial institutions still rests with the national supervisory authorities, the ESAs also carry out micro-prudential supervision of the EU financial markets along with the national supervisory authorities of the member states, as well as direct supervision of some market players.

Through the Joint Committee, the three ESAs coordinate their supervisory activities in the scope of their respective responsibilities regularly and closely and ensure consistency in their practices. The three ESAs Joint Committee is chaired alternately each year by one of the authorities. In 2024 the forum is chaired by ESMA. 

Source: European Banking Authority

See ESMA, EBA, and EIOPA reports

The European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) today published their final Reports on Greenwashing in the financial sector.

ESAs coordinated approach on greenwashing risks

In their respective reports the ESAs reiterate their common high-level understanding of greenwashing as a practice whereby sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services. This practice may be misleading to consumers, investors, or other market participants. The ESAs stress again that financial market players have a responsibility to provide sustainability information that is fair, clear, and not misleading.

Each ESA provides a stocktake of the current supervisory response to greenwashing risks under its remit and notes that competent authorities (CAs) are already taking steps in the area of supervision of sustainability-related claims. In addition, the ESAs provide a forward-looking view of how sustainability-related supervision can be gradually enhanced in coming years.

While the ESAs’ reports focus on the EU’s financial sector, they acknowledge that addressing greenwashing requires a global response, involving close cooperation among financial supervisors and the development of interoperable standards for sustainability disclosures.

Highlights from the EBA Final Report

The EBA final Report provides an overview of greenwashing risk in the banking sector and its impact on banks, investment firms and payment service providers, with a focus on the changes during the last year. It also provides recommendations to institutions, supervisors, and policymakers.

The outcome of the quantitative analysis of greenwashing shows a clear increase in this trend across all sectors, including by EU banks. The total number of alleged cases continued to increase in 2023 (+21.1% in all regions and +26.1% in the EU compared to 2022).

The final Report investigates the actual and potential alleged greenwashing occurrences as reported by the competent authorities and provides updates on the adverse impact that greenwashing can have on institutions and consumers. Reputational and operational risks continue to be considered most impacted by greenwashing. This is in line with the observation that litigation risk resulting from greenwashing has been in a rising trend in the last years.

As institutions are expanding their offering of sustainable finance products and adapting their business models to meet challenges in relation to the transition towards a more sustainable economy, addressing greenwashing is key to provide confidence in the market and to maintain the trust of investors and consumers.

At a legislative and regulatory level, the EBA considers that the existing framework already provides key foundations to address greenwashing in the banking sector. Therefore, in the short-term, priority should be given to finalising the existing and planned initiatives, and to supporting a robust implementation of the full set of new regulations. Efforts to address challenges related to data, usability, consistency, and international interoperability should be further pursued.

The EBA recommends that institutions take a series of measures at both the entity level and the product level to ensure that sustainability claims are accurate, substantiated, up to date, that they fairly represent the institution’s overall profile or the profile of the product, and are presented in an understandable manner.

The EBA recommends that competent authorities pursue their planned and on-going efforts and activities to identify and monitor greenwashing risk within the remit of their respective prudential supervision and/or conduct supervision mandate.

Note to the editors

Source: European Banking Authority

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) published today a discussion paper on the potential review of the investment firms’ prudential framework. The discussion paper aims at gathering early stakeholder feedback to inform the response to the European Commission’s call for advice (CfA). The consultation runs until 3 September 2024. To assess the impact of the possible changes discussed in the paper, the EBA also launched a data collection exercise on a voluntary basis.

The discussion paper touches upon a broad range of topics, including:

• the adequacy of the current prudential requirements,
• an analysis of the existing methodology,
• risks not covered by the current framework.

It also discusses the implications of the adoption of the new EU Banking package (CRD VI and CRR 3) concerning the trading book, the fundamental review of the trading book (FRTB) and credit valuation adjustments (CVA).

Furthermore, prudential consolidation and a possible extension to crowdfunding and crypto-assets service providers are also considered. In this respect, the discussion paper provides an overview of the interaction of IFD/IFR with requirements applicable to undertakings for collective investment in transferable securities (UCITS) management companies and alternative investment funds managers (AIFMs) providing  MiFID services on an ancillary basis, or investment firms providing services related to crypto-assets.

The discussion paper also covers aspects related to remuneration in relation to investment firms, AIFMs and UCITS management companies, including the scope of application, remuneration policies, the requirements on variable remuneration, their oversight, disclosure and transparency. Finally, the discussion paper includes a short section on the treatment of firms currently non-prudentially regulated and active in commodity markets.

An ad-hoc data collection addressed to competent authorities, investment firms, and UCITS management companies and AIFMs is launched in parallel to the publication of the discussion paper.

Submission of responses

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 3 September 2024. All contributions received will be published following the close of the consultation, unless requested otherwise.

A public hearing will take place via conference call on 20 June 2024 starting at 14:00 CEST. The EBA invites interested stakeholders to register using this link by 17 June 2024 at 16:00 CET.

Next steps

EBA and ESMA will prepare the joint EBA-ESMA Report in response to the CfA, which will include a broad assessment of the provisions of the IFR and IFD and their interaction with other regulations.

Background and legal basis

The IFD and IFR entered into force in 2019 introducing key innovations to the prudential framework for MiFID investment firms. Both legislations include review clauses requiring the Commission to submit a report and, if needed, a legislative proposal to the Council and to the Parliament on the functioning of the new framework. The Commission’s report should be submitted five years after the entry into force of the new framework.

Article 60 of Regulation (EU) 2019/2033 (IFR) and Article 66 of Directive (EU) 2019/2034 (IFD) mandate the Commission to submit a report to the Council and to the Parliament regarding multiple aspects of the IFD and IFR. In its report, the Commission may include a legislative proposal to amend the prudential framework applicable to investment firms.

On that basis, the Commission submitted a call for advice on 1 February 2023 to the EBA and ESMA (link) seeking advice on the investment firms prudential framework as well as other related topics.

Source: European Banking Authority

The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published templates, technical documents and tools for the dry run exercise on the reporting of registers of information in the context of Digital Operation Resilience Act (DORA) announced in April 2024.

The materials published today include:

• templates for the registers of information with example (in Excel);
• draft technical package for reporting, including data point model (DPM),annotated table layout and validation rules;
• optional tool (VBA macro) to assist with the conversion of Excel templates into .csv files and .zip files for their submission;
• frequently asked questions regarding the exercise.

All these materials are available on the dry run exercise webpage.

Financial entities can use these materials and tools to prepare and report their registers of information of contractual arrangements on the use of ICT third-party service providers in the context of the dry run exercise, and to understand supervisory expectations for the reporting of such registers from 2025 onwards.

Next steps

The participating financial entities are expected to submit their registers of information to the ESAs through their competent authorities between 1 July and 30 August.

Workshop

The ESAs invite financial entities to take part in a dedicated workshop on 10 June 2024 from 10:00 to 12:00 with the aim to support their participation in the dry run exercise and introduce the materials and tools published today.

The workshop will be held virtually, and interested parties are invited to register by 5 June using the following link.

Background

The ESAs note that following the specification of the dry run exercise as announced in April, materials and tools published today are meant solely for the purposes of the dry run exercise as they are (1) based on the Final report on the Draft Implementing Technical Standards (ITS) on registers of information published and submitted in January 2024 by the ESAs to the EU Commission for adoption and, therefore, do not reflect the final legal act adopted by the EU Commission, (2) presented in a draft form (DPM and validation rules). The final technical package for the steady-state reporting, which will start in 2025, will be published later in the year. 

Source: Government of the Netherlands

News item | 30-05-2024 | 12:45

With less than a year to go until the opening of the World Expo in Osaka, the Dutch participation is taking shape. With the signing of the contract with Van Der Linde, an important operational partner has been selected. Van Der Linde will provide the facility and hospitality management in the pavilion. The facility management includes security, cleaning, waste management and maintenance. The hospitality management includes managing the public café during the pavilion’s opening hours, catering the events in the business lounge and operating the gift shop. Van Der Linde will be working with several Dutch and Japanese partners and suppliers. For example, Randstad Japan will take on the recruitment and selection of staff, whileJEFF Co., the Japanese partner, is responsible for the contract management of all Japanese suppliers.

The theme of the Netherlands Pavilion at Expo Osaka 2025 is ‘Common Ground’, with the aimto show visitors innovative solutions in areas such as energy transition. The Netherlands alsowants to offer companies, knowledge institutions and (cultural) organisations a meeting place during Expo 2025. Events will be organized in the pavilion by various Dutch sectors with the aim of stimulating international cooperation and exchanging knowledge, expertise and ideas. Sustainability and innovation are important features in the participation. Van der Linde’s operating concept fits well with this. The company works as much as possible with 100% organic, sustainably produced and fair trade products.

Van Der Linde was also the hospitality partner during the previous Expo 2020 in Dubai. Robin Van Der Schuyt, Managing Director at Van Der Linde says:

“Our experiences of the previous Expo in Dubai were very positive, which made us see Expo 2025 in Osaka as a new challenge. The theme ‘Common Ground’ appeals to us, as we work from the vision of ‘Create together’, where collaboration leads to impact and sustainable solutions. With several local partners, we created a creative proposal. We are therefore proud that these collaborations led to the awarding of this contract. We will use our years of knowledge and experience of operations to support a successful participation by the Netherlands in Japan.”

The selection was made through a contract award procedure.

Source: European Banking Authority

• Deposits protected by EU deposit guarantee schemes (DGS) increased by 1.7% to 8.5 trillion Euros between 2022 and 2023, whereas funds available to protect those deposits in case of bank failures rose by 14.9% to 73 billion Euros.
• The high increase in the amount of funds held by DGSs to protect deposits reflects the need for all the DGSs to reach the minimum target level of 0.8% of covered deposits by July 2024.
• As of 31 December 2023, 21 of the 36 DGSs in the European Economic Area (EEA) had already reached the minimum target level ahead of the deadline.

The European Banking Authority (EBA) today published end-2023 data related to two key concepts and indicators in the Deposit Guarantee Schemes Directive (DGSD), namely available financial means (AFMs) and covered deposits. The EBA publishes these data for the deposit guarantee scheme (DGS) in each Member State on a yearly basis to enhance the transparency and public accountability of DGSs across the EEA to the benefit of depositors, markets, policymakers, DGSs and Members States.

Under the DGSD, covered deposits are guaranteed up to 100,000 Euro or the equivalent in other currencies per depositor at each bank. The data as of 31 December 2023 shows that, compared to 2022, the amount of covered deposits across the EEA increased by 1.7%, which is lower than the increases of 2.6% in 2022, 5.4% in 2021, and 8.2% in 2020.

In parallel, EEA DGSs are obliged to raise funds from credit institution for the main purpose of reimbursing depositors in case of bank failures. The end-2023 data shows that most of the EEA DGSs continued raising contributions from the banks to reach the minimum target level applicable to all national DGSs imposed by the Deposit Guarantee Schemes Directive (DGSD). DGSs have until July 2024 to reach the minimum target level which in most cases is 0.8% of covered deposits. As of end-2023, 21 of the 36 EEA DGSs had already reached the target level ahead of the deadline, with further six DGSs within 0.05 percentage points of reaching the minimum target level.

Legal basis and background

The EBA is collecting DGS data in accordance with Article 10(10) of the DGSD. With its Decision EBA/DC/2018/243 from 23 July 2018, the EBA explained that it will make these data publicly available on its website.

In support of the DGSD, the EBA published in December 2021 the Guidelines EBA/GL/2021/17 on the delineation and reporting of AFMs of the DGSs and, thus, expanded the reporting requirements from DGSs to the EBA.

Source: European Banking Authority

The European Banking Authority (EBA) published today the final Guidelines on the criteria related to simplicity, standardisation and transparency and additional specific criteria for on-balance-sheet securitisations (so-called STS criteria). These Guidelines will ensure a harmonised interpretation of these STS criteria, in alignment with the EBA Guidelines for asset-backed commercial paper (ABCP) and non-asset-backed commercial paper (non-ABCP) securitisation.

The Guidelines on the STS criteria for on-balance-sheet securitisations (OBS) provide a harmonised interpretation of the STS criteria and focus on clarifying those criteria with potential aspects of ambiguity. The Guidelines will ensure a common understanding as well as a harmonised implementation of the criteria throughout the Union.

The Guidelines also include a limited set of targeted amendments to the Guidelines for non-ABCP securitisation and ABCP securitisation to ensure that the interpretation provided by the EBA is, where appropriate, the same and consistent across all three sets of guidelines.

Similar to the Guidelines on STS criteria for ABCP securitisation and non-ABCP securitisation, these Guidelines aim to provide a single point of consistent interpretation of the STS criteria to the relevant stakeholders throughout the Union.

These Guidelines will be applied on a cross-sectoral basis throughout the Union with the aim of facilitating the adoption of the STS criteria for OBS securitisation, which is one of the prerequisites for the preferential risk weight treatment under the CRR, supporting further lending to the real economy and thus contributing further to the objectives of the Capital Markets Union.

Legal basis and next steps

The Guidelines have been developed according to Article 26e(2) of the Regulation (EU) 2017/2402 (Securitisation Regulation) as amended by Regulation (EU) 2021/557, as part of the Capital Markets Recovery Package. The mandate entitles the EBA, in close cooperation with ESMA and EIOPA, to produce guidelines and recommendations on the harmonised interpretation and application of the criteria related to simplicity, transparency, standardisation and additional specific criteria for on-balance-sheet securitisation.