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Source: European Banking Authority

The European Banking Authority (EBA) today launched a public consultation on its draft Guidelines on Environmental, Social and Governance (ESG) scenario analysis. The draft Guidelines set out expectations for institutions when adopting forward-looking approaches and incorporating the use of scenario analysis as part of their management framework to test institutions’ financial and business model resilience to the negative impacts of ESG factors. They complement the EBA Guidelines on the management of ESG risks, published on 9 January this year. The consultation runs until 16 April 2025.

Climate change, environmental degradation, social issues and other environmental, social and governance factors are posing considerable challenges for the economy that impact the financial sector. The risk profile and business model of institutions may be affected by ESG risks, in particular environmental risks through transition and physical risk drivers.

To ensure the safety and soundness of institutions in the short, medium and long term, the Guidelines set out expectations for developing a framework and using scenarios to support thinking and decision-making in a changing economic and physical environment. As part of this, the Guidelines set out principles for testing the financial resilience, capital and liquidity, of an institution to ESG-related shocks, starting with climate, and the resilience of its business model to different plausible scenarios, including the achievement of climate neutrality in the EU by 2050.

Consultation process

Comments to the consultation paper can be sent by clicking on the “send your comments” on the EBA’s consultation page. The deadline for the submission of comments is 16 April 2025. The EBA will consider the feedback received to this consultation when finalising the Guidelines.

All contributions received will be published following the end of the consultation, unless requested otherwise.

The EBA will hold a virtual public hearing on the consultation paper on 17 March 2025 from 14:30 to 16:00 CET. The EBA invites interested stakeholders to register using this link by 13 March 2025 at 16:00. The dial-in details will be communicated to those who have registered for the meeting.

Legal basis and background

The draft Guidelines were developed in line with the EBA Roadmap on Sustainable Finance and as part of the planned EBA’s actions  for the implementation of the EU banking package. Together with the Guidelines on the management of ESG risks, they deliver on the mandate laid down in Article 87(a)5 of the Capital Requirements Directive (CRD6), (Directive 2013/36/EU). 

Source: Government of the Netherlands

News item | 15-01-2025 | 09:00

The new policy will apply, for example, to specific measuring and inspection equipment that can be used in the production of advanced semiconductors. This announcement was made by Minister for Foreign Trade and Development Reinette Klever in the Government Gazette on Wednesday. The expansion of the export control measure covers only a very limited number of technologies and goods.

As the minister has stated: “We believe it is important to maintain control over who gains possession of what technology. The government closely monitors semiconductor manufacturing technology. Technological developments may make it necessary to modify the rules. We are observing increased security risks associated with the uncontrolled export of this specific equipment. For this reason an export authorisation will henceforth be required.”

This new authorisation requirement is the second time the national export control measure has been amended since it was introduced on 1 September 2023.

Security risks

Until now the national measure covered a number of very specific technologies in the production cycle of semiconductors, such as lithography equipment. A limited set of technologies for other steps in the manufacturing process is now also subject to an authorisation requirement. The security risks associated with the uncontrolled export of these technologies have increased. These technologies can be combined with technologies from other countries to produce advanced semiconductors. Such advanced semiconductors can then in turn play a key role in advanced military applications.

Authorisations

Under the national authorisation requirement, the export of these technologies will now also require an export authorisation. The government will decide on a case-by-case basis whether to grant an authorisation. The national measure applies to exports from the Netherlands to all destinations outside the EU. It does not constitute an export ban.

“The semiconductor industry is international. The Netherlands plays a unique role in this sector. It is important that we do not disrupt the chip industry unnecessarily. In expanding the export control measure, we have therefore set to work with the utmost care,” said Minister Klever.

Certain textual changes, some of a technical legal nature, have been made to the ministerial order as well. This was done in part to clarify the existing measure for the benefit of implementing agencies and the industry.

Source: Government of the Netherlands

News item | 10-01-2025 | 15:45

Study

To be able to actually take faster, more effective and targeted action against deliberately disruptive actions that involve violations of the law, and thus also maintain public support for demonstrations, the government wants to distinguish more sharply between peaceful protests and actions that disrupt public order. The study being conducted via the Scientific Research and Documentation Centre (WODC) announced earlier is expected to help make a sharper distinction. The results of this study are expected in summer 2025.

Exploratory survey on ban on face-covering clothing

Also, in parallel to this survey, the government will already take steps to address issues surrounding demonstrations. For instance, during the first quarter of 2025, a legal ban on face-covering clothing at demonstrations will be explored. Indeed, there have been a number of demonstrations where rioters wearing face-covering clothes have broken the law, for example by destroying property or committing violence. Face-covering clothing can make it more difficult to track down these rioters afterwards.

Pressure on capacity of police and Public Prosecution Service

The total number of demonstrations in the Netherlands more than tripled between 2015 and 2022.  Police deployment at demonstrations has also increased by 84% since 2017. The chief of police has indicated urgently that this deployment is putting heavy pressure on the police organisation. The Public Prosecution Service, too, is making ever sharper choices to ease the criminal justice chain. One is that, in principle, the Public Prosecution Service does not institute criminal proceedings for a violation of the Public Assemblies Act, partly because practice shows that judges usually impose low or no sentences for the relatively minor offences committed in relation to a peaceful demonstration.

Crimes such as vandalism, threats, (group) defamation, discrimination or arson are, in principle, criminally prosecuted. Multiple consecutive offences can also be prosecuted. This is possible only if detained protesters are registered. This is now done to a limited extent because protesters sometimes do not carry ID and registration takes a lot of police capacity. The government will discuss with police and the Public Prosecution Service whether additional actions are needed to prosecute criminal behaviour more than at present.

Online calls

Public order disturbances incited online are a relatively new problem. These are physical disturbances or threatened disturbances which start online or are amplified online. Think of the online calls for people to rise up during the corona-era curfew riots and an out-of-control giveaway at a shopping centre, as well as calls for people to block motorways.

Preventing the posting of utterances online affects the constitutional freedom of expression (the prohibition of censorship). Reactive action because of the content of an utterance is possible, however; take, for example, prosecution for incitement. In addition, the aim is to have such utterances taken offline as soon as possible and to punish the persons posting them more often and faster.

The minister for Justice and Security is therefore preparing a legislative proposal to improve the information position of police around public order enforcement. In the first half of this year, a legislative proposal will be submitted for consultation regulating the power to systematically collect information in publicly accessible online sources. At the same time, the possibility of giving the police access to private app and chat groups as part of public order enforcement is being worked hard on, as requested by MP Yeşilgöz-Zegerius in her motion.

Staying engaged

In addition, the Ministries of Interior and Kingdom Relations and Justice and Security continue to engage with various stakeholders such as municipalities, police, civil society organisations and protester advocacy groups. This dialogue is essential to strike the balance between protecting the right to demonstrate and tackling the small group that misbehaves. By working with all stakeholders, the government aims to achieve a broadly supported approach that both allows for peaceful demonstrations and contributes to a safe and orderly society.

Source: Government of the Netherlands

News item | 10-01-2025 | 15:11

Conference on sanctions compliance and enforcement

On 15 January 2025 the Ministry of Foreign Affairs is hosting a conference on sanctions compliance and enforcement. This event will bring together policymakers, legal experts, financial institutions and representatives of the business sector to discuss how sanctions can be complied with and enforced effectively at national, European and international level.

Sanctions are an important instrument for holding countries, organisations and individuals responsible for their actions. For instance, the sanctions imposed on Russia are intended to make it as difficult as possible for the country to continue waging war against Ukraine, and to put pressure on Russia, or anyone else involved, to stop this aggression. However, whether the intended aims are achieved ultimately depends on effective compliance and enforcement. It is therefore important to continuously monitor whether sanctions are practicable and effective. This conference will provide a platform for exchanging information, sharing observations and learning from each other’s experiences. This in turn will help the Netherlands and other member states tackle new attempts at sanctions circumvention.

Programme

The conference will be opened by foreign minister Caspar Veldkamp, who will deliver a speech on the importance of enhanced compliance and enforcement. Other speakers include President Zelenskyy’s special adviser, Vladyslav Vlasiuk, EU sanctions envoy David O’Sullivan, Finnish foreign minister Elina Valtonen and Latvian foreign minister Baiba Braže,

Exhibition

There will also be an exhibition at the conference venue showing objects used by Russia in its war that, despite the sanctions, contain Western components. The exhibition was created by NAKO, an anti-corruption research organisation from Ukraine.

Source: European Banking Authority

The European Banking Authority (EBA) today published its final Guidelines on the management of Environmental, Social and Governance (ESG) risks. The Guidelines set out requirements for institutions for the identification, measurement, management and monitoring of ESG risks, including through plans aimed at ensuring their resilience in the short, medium and long term.

The Guidelines specify requirements regarding the internal processes and ESG risk management arrangements that institutions should have in place in accordance with the Capital Requirements Directive (CRD6). They will contribute to ensuring the safety and soundness of institutions as ESG risks intensify and the EU transitions towards a more sustainable economy.

The Guidelines specify the content of plans to be prepared by institutions with a view to monitoring and addressing the financial risks stemming from ESG factors, including those arising from the adjustment process towards the objective of achieving climate neutrality in the EU by 2050. These plans will support the preparedness of institutions for the transition and should be consistent with transition plans prepared or disclosed by institutions under other pieces of EU legislation.

The Guidelines will apply from 11 January 2026 except for small and non-complex institutions for which the Guidelines will apply at the latest from 11 January 2027.

Legal basis and background

The Guidelines are based on Article 87(a)5 of the CRD. They will be complemented by Guidelines on ESG scenario analyses. The Guidelines on the management of ESG risks have been developed in line with the EBA’s roadmap on sustainable finance and as part of the EBA actions outlined in the roadmap on the implementation of the EU banking package.

Source: European Banking Authority

The European Banking Authority (EBA) today published a Consultation Paper on its draft Regulatory Technical Standards (RTS) to specify the technical elements necessary for institutions to calculate and aggregate crypto-asset exposures in relation to the prudential treatment of such exposures. These RTS will address implementation aspects and ensure harmonisation of the capital requirements on crypto-assets exposures by institutions across the EU.

Considering the rapidly evolving crypto-market, the Capital Requirements Regulation (CRR 3) introduced a transitional prudential framework for institutions holding crypto-assets exposures. The provisions consider the legal requirements introduced in the Markets in Crypto Assets Regulation (MiCAR) and specify, amongst others, the capital treatment of exposures to electronic money tokens (‘EMTs’), asset reference tokens (‘ARTs’) that reference one or more traditional asset(s) and ‘other’ crypto-assets – including for example ARTs referencing a crypto-asset – and – unbacked crypto-assets, such as Bitcoin.

These draft RTS further develop the relevant capital treatment for credit risk, counterparty credit risk (‘CCR’), market risk (‘MR’) and credit valuation adjustment risk for ‘ARTs’ and ‘other’ crypto-assets exposures and align, to the extent possible, the capital treatment with the elements specified in the Basel standard on prudential treatment of crypto-asset exposures.

These draft RTS also include all the relevant technical elements on the use of netting, aggregating of long and short positions, criteria to allow hedge recognition for other crypto-assets, and the underlying formulas relevant for calculating the exposure value of crypto-assets for the CCR and MR treatment.

In addition, these draft RTS propose that all fair valued crypto assets within the scope of MiCAR under the applicable accounting framework shall be subject to the requirements for prudent valuation under the CRR 3. 

Transitional provisions in the CRR 3 together with the rules set out in these draft RTS enable institutions to adequately capitalise their crypto-asset exposures until a permanent prudential treatment comes into force.

Consultation process

Comments to the consultation paper can be sent by clicking on the “send your comments” button on the EBA’s consultation page. The deadline for the submission of comments is 8 April 2025.

The EBA will hold a virtual public hearing on 4 March 2025 from 10:00 to 12:00 CET. The EBA invites interested stakeholders to register using this link by 28 February 2025 at 16:00 CET. The dial-in details will be communicated to those who have registered for the meeting.

All contributions received will be published following the end of the consultation, unless requested otherwise.

Legal basis

Regulation (EU) 2024/1623 amending Regulation (EU) No 575/2013 (CRR 3) introduces in Article 501(d) of the CRR3 a transitional prudential treatment for crypto-assets.

The EBA has developed these draft RTSs in accordance with Article 501d(5) of CRR 3 which mandates the EBA to specify the technical elements necessary for institutions to calculate their own funds requirements in accordance with the approaches set out in paragraph 2, points (b) and (c), including how to calculate the value of the exposures and how to aggregate short and long exposures for the purposes of paragraphs 2 and 3.

According to the mandate, the EBA shall take into consideration the relevant internationally agreed prudential standards as well as existing authorisations in the Union under Regulation (EU) 2023/1114 (MiCAR).

Background

The development of crypto-assets markets and activities has been marked by significant market innovation and advancements. Institutions have shown increasing interest in getting involved in crypto-assets activities. This interest is driven by the potential for new revenue streams and the need to stay competitive in a rapidly evolving financial landscape. Institutions are exploring various roles, including acting as custodians of crypto-assets, issuing crypto-assets, and providing related services such as trading and lending on behalf of their clients. However, this involvement also comes with challenges, including regulatory compliance, risk management, and the need for a robust technological infrastructure.

Source: Government of the Netherlands

News item | 05-01-2025 | 18:03

‘The Netherlands believes an inclusive, Syrian-led political transition is key for sustainable stability in Syria,’ foreign minister Caspar Veldkamp said. ‘It is essential that Christian, Kurdish and other minority communities participate in this process and that human rights are respected. Through Mr Gerlag’s visit, we are exploring how the Netherlands and the EU can support the process of political transition in Syria. Promoting stability in Syria also serves the Netherlands’ interests, for instance, in regard to counterterrorism and the return of refugees. Our special envoy also conveyed that the Netherlands remains committed to achieving justice for the human rights violations that were perpetrated.’

Mr Gerlag had meetings the Office of the UN Special Envoy to Syria; the office of  the UN High Commissioner for Human Rights (OHCHR); the coordination platform for Damascus-based humanitarian NGO’s (DINGO); and Christian religious leaders.

Mr Gerlag’s meeting with the interim government led by HTS was a first meeting to establish contact. There are currently no plans to open a Dutch embassy in Damascus. It remains to be seen how HTS and other groups will carve out a new administration. Together with likeminded countries, the Dutch government is examining how a process of inclusive and peaceful political transition in Syria can be supported.

Source: European Banking Authority

The European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) today kicked off a joint recruitment process for Heads of Unit (AD9) in the Joint Oversight team that was set up to carry out the oversight of the Information and Communication Technology Critical Third-Party Providers (CTPPs) under the Digital Operational Resilience Act (DORA).

The Heads of Unit, who will be assigned to each ESA, will be part of the DORA Joint Oversight Team.

To ensure cross-sectoral coordination and pool resources, the ESAs will carry out oversight activities of critical third-party providers (CTPPs) in a Joint Oversight team working as one team, headed by Marc Andries, the DORA Joint Oversight Director.

The Joint Oversight team will eventually be made up of 30 staff across the ESAs and will be complemented by experts from the Competent Authorities (CA).

The Heads of Unit will be responsible for organising the oversight activities for the CTPPs under their Unit’s remit. Each Unit will regroup several Joint Examination Teams (JETs) dealing with the main types of ICT services provided by CTPPs.

Recruitment

The Selection Board is composed of the DORA Joint Oversight Director as Chair, HR and Staff Committee s from ESMA as the coordinating ESA as well as staff from the other ESAs as members. For more information, please refer to the full vacancy notice. The deadline for applications is 30 January 2025.  

Source: European Banking Authority

The European Banking Authority (EBA) published today a response to the letter received from a law firm on 18 June 2024, regarding the intention of Banque Fédérative du Crédit Mutuel (BFCM), based in France, to keep some legacy instruments in its balance sheet without any regulatory value.

The EBA has carefully assessed the aspects related to ranking and subordination. While the instruments have been rightfully disqualified from all layers of capital and eligible liabilities under applicable grandfathering provisions, they still rank pari passu with fully eligible own funds instruments, creating undue complexity within the balance sheet of the issuer and raising concerns in terms of ranking. Therefore, it is the EBA’s view that BFCM should target the redemption of these instruments.

In addition, the EBA recalls that the options contained in the EBA Opinion on legacy instruments were meant for institutions to explore how to dispose of remaining legacy instruments to clean their capital structure and ensure a clear subordination ranking within and between regulatory stacks, while preventing unnecessary complexity. Keeping legacy instruments in the balance sheet was considered to be a last resort option, in cases where the other options provided in the Opinion were not available for institutions. In this regard, it has always been the EBA’s expectation that legacy instruments should be phased out.

Note to the editors

In October 2020, the EBA published its Opinion on the prudential treatment of so-called ‘Legacy instruments’ in the context of the end of the grandfathering period in December 2021. On 7 July 2022, the EBA published the outcome of the implementation of its Opinion.

Source: European Banking Authority

The European Banking Authority (EBA) today published a Handbook on independent valuers for resolution purposes. The Handbook enhances convergence by providing best practices, high-quality methodologies and processes for the selection and appointment of independent valuers for resolution purposes, as well as examples on the application of these methodologies under some scenarios.

The EBA has developed this Handbook with the view of improving the process of selecting independent valuers and facilitating its implementation by resolution authorities. The Handbook also identifies safeguards which could mitigate the effects of a potential conflict of interest hampering the independence of the valuer.

The Handbook’s structure follows a chronological order, covering actions before, during and after the appointment of the independent valuer. The preparatory arrangements include actions, such as market research, framework contracts and internal procedures. The Handbook includes specific sections dealing with the assessment of the valuer’s independence and the application of safeguards. Finally, after the appointment of the independent valuer, the Handbook includes aspects such as the maintenance of policies and procedures to identify and manage conflicts of interest.

Note to the editors

The Handbook has been compiled in line with Article 8(1)(ab) of Regulation 1093/2010 of the European Parliament and the Council, establishing the EBA, which mandates the EBA to develop and maintain “an up-to-date Union resolution handbook on the resolution of financial institutions in the Union which is to set out best practices and high-quality methodologies and processes for resolution, taking into account the work of the Single Resolution Board, and changing business practices and business models and the size of financial institutions and of markets“.

This Handbook provides best practices and high-quality methodologies and processes for the selection and appointment of independent valuers for resolution purposes in accordance with article 36 and 74 of Directive 2014/59/EU of the European Parliament and the Council

The Handbook identifies best practices for the three elements of independence that the resolution authorities should assess for the valuer in line with the existing regulatory framework, which states that the valuer should: i) possess the necessary qualifications, experience, ability, knowledge and resources; ii) be legally separated from the relevant public authority and the relevant entity; and iii) have no material common or conflicting interest with the relevant public authority or the relevant entity.