In this issue:
- MFSA publishes 2020 supervisions priority
- EBA publishes guidelines on ICT and security risk management
- EBA publishes risk reduction package roadmaps
- ECB clarifies on process regarding recognition of contractual netting agreements as risk-reducing
- CJEU's preliminary ruling on the information to be included in credit agreements
- CMU and fintech – Commission welcomes agreement to boost crowdfunding in the EU
- MFSA circular with recommendations post-bank mystery shopping exercise
- New EU payment rules economise cross-border payments
- ESMA publishes report on securities financing transactions regulation
- GANADO Advocates' 7th Annual Banking and Finance Law Seminar
MFSA PUBLISHES 2020 SUPERVISIONS PRIORITY
In line with its strategic plan 2019-2021, the MFSA has published its supervisory activities for the year 2020. The Authority, within this document, sets out the year's work which is planned to be undertaken in order to achieve the objectives, framework and priorities for the 2019-2021 period. Consisting of 3 sections, section I tackles six cross-sectoral themes which are to be impacted by the MFSA's work within the coming year, followed by section II which then analyses five areas of the financial services sector, highlighting sector-specific priorities throughout. Section III outlines the regulatory and supervisory tools to be utilised by the Authority to meet the priorities mentioned above. Any changes to the Authority's priorities within this document would be communicated through further interactions.
EBA PUBLISHES GUIDELINES ON ICT AND SECURITY RISK MANAGEMENT
The European Banking Authority (EBA) has responded to the increasing security-related risks with regards to information and communication technology by publishing guidelines which ICT supervisors are to follow in order to comply with the provisions and requirements found within Article 95 of Directive 2015/2366/EU (PSD2) and Article 74 of Directive 2013/36/EU (CRD). Such guidelines specify, inter alia, the importance for sound internal governance, up-to-date maintenance of inventories and information security found within their ICT systems. They also specified that the implementation of such guidelines is to be done in accordance with the principle of proportionality.
EBA PUBLISHES RISK REDUCTION PACKAGE ROADMAPS
The EBA has published risk reduction package roadmaps whose function is to outline the Authority's approach to market risk within which one has to deliver on the mandates given to the EBA with regards to Pillar 2 areas, which are governance and remuneration, large exposures, resolution as well as reporting and disclosure. Amending capital requirements under the Capital Requirements Directive 5, the Capital Requirements Regulation 2 and resolution under the revised Bank Recovery and Resolution Directive and the Single Resolution Mechanism Regulation, this package shall entail numerous new regulations or implementing technical standards, guidelines and reports for the EBA. The EBA shall also be presenting 2 more action plans on money laundering and sustainable finance outlining the policy stance and sequencing of mandates in these respective areas.
ECB CLARIFIES ON PROCESS REGARDING RECOGNITION OF CONTRACTUAL NETTING AGREEMENTS AS RISK-REDUCING
Andrea Enria, as Chair of the Supervisory Board of the European Central Bank (ECB), has published a clarification with regards to the process to be applied by ECB as of 1st January 2020 regarding contractual netting agreements as being deemed risk-reducing pursuant to Articles 295 to 298 of Regulation 575/2013 (CRD2). A list of circumstances is provided within which significant credit institutions are obliged to notify their Joint Supervisory Team should they intend to treat contractual netting agreements as risk-reducing.
CJEU'S PRELIMINARY RULING ON THE INFORMATION TO BE INCLUDED IN CREDIT AGREEMENTS
On the 19th of December 2019 (C290-19), the European Court of Justice gave its interpretation by virtue of a preliminary ruling on the interpretation of Article 10 of Directive 2008/48/EC (on credit agreements for consumers). The CJEU noted that it must be borne in mind that the Directive 2008/48 was adopted to ensure that all consumers in the EU enjoy a high and equivalent level of protection of their interests and to facilitate the emergence of a well-functioning internal market in consumer credit. The Court stated that the Directive seeks, inter alia, to ensure that consumers receive adequate information, prior to the conclusion of the credit agreement. For a consumer, the total cost of credit presented in the form of an annual percentage rate of charge is essential.
CMU AND FINTECH - COMMISSION WELCOMES AGREEMENT TO BOOST CROWDFUNDING IN THE EU
The European Commission welcomes the provisional political agreement on its proposal to boost Crowdfunding in the EU wherein the new framework will harmonise the rules for investment-based and lending-based crowdfunding platforms operating in the Union. This will enable the cross-border operation in the EU by means of a single licence.
MFSA CIRCULAR WITH RECOMMENDATIONS POST-BANK MYSTERY SHOPPING EXERCISE
This exercise was a follow-up of a mystery shopping initiative carried out in 2018. The MFSA issued a Circular providing several recommendations to address a number of identified recurring weaknesses as a matter of priority.
NEW EU PAYMENT RULES ECONOMISE CROSS-BORDER PAYMENTS
Under the new regime, Euro cross-border payments in non-Eurozone states will now be cheaper as these will be treated equally to domestic payments and will therefore be subject to low fees, if any. Regulation (EU) 2019/518, which was initially set out in the Consumer Financial Services Action Plan of March 2017, will be augmented this April, with additional provisions which will allow EU consumers to compare currency conversion charges when paying with their cards in another EU currency.
ESMA PUBLISHES REPORT ON SECURITIES FINANCING TRANSACTIONS REGULATION
The European Securities and Markets Authority (ESMA) published its final report, on the Securities Financing Transactions Regulation (SFTR), amended SFTR validation rules and a statement on Legal Entity Identifiers (LEI). The guidelines inter alia provide a better blueprint on several provisions of SFTR and provide guidance on their implementation. ESMA also updated the SFTR validation rules which have now been fully aligned with the updated XML schemas published in December 2019, as well as with the aforementioned LEI statement.
GANADO ADVOCATES' 7TH ANNUAL BANKING AND FINANCE LAW SEMINAR
12th March 2020
Save the Date
Banking and Finance
GANADO Advocates' 7th Annual Banking and Finance Law Seminar, organised in collaboration with Malta Bankers' Association, will be held on the 12th March 2020. More details will follow in the coming weeks.
Click here to view newsletter.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.