European Commission Issues Call for Advice on Own Fund Requirements for Market Risk

On April 22, 2016, the European Banking Authority published a call for advice it had received from the European Commission regarding revisions to the own fund requirement for market risk as part of the CRR review.

The call for advice sets out that the EC is undertaking a review of the Capital Requirements Regulation and is considering the impact of implementing the agreed Basel Committee on Banking Supervision framework detailed in the document “Minimum capital requirements for market risk.” The EC notes that to date there has been no EU-specific assessment of the convenience and impact of updating these rules in the ways proposed by the BCBS.

Insurance Europe Raises Concerns over Misunderstanding of Ultimate Forward Rate

On April 21, 2016, Insurance Europe, the European insurance and reinsurance federation, released a press releaseraising concerns over how Solvency II liabilities are currently calculated, including discount rates. This press release was published in response to the consultation carried out by the European Insurance and Occupational Pensions Authority and it discusses whether the Ultimate Forward Rate should be calculated by reference to the discount rate, or whether it may be adjusted to reflect changes in long-term expectations.

ECB Offers Opinion on Proposed Regulation to Establish a European Deposit Insurance Scheme

On April 20, 2016, the European Central Bank (ECB) published an opinion on a proposal for a regulation amending Regulation (EU) No. 8.6/2014 in order to establish a European Deposit Insurance Scheme (EDIS).

The ECB notes that an EDIS is a necessary third pillar to complete the Banking Union, having established a Single Supervisory Mechanism and the Single Resolution Mechanism and overall welcomes the system proposed. However, the opinion notes risks in terms of scope and governance of the scheme.

The opinion appends a technical working document containing drafting proposals as proposed amendments to the text released by the European Commission.

EBA Publishes Final Report on Provision of Information in Summary or Collective Form

On April 19, 2016, the European Banking Authority published its final report providing guidelines on the provision of information in summary or collective form for the purposes of Article 84(3) of Directive 2014/59/EU. This relates to general rules in relation to professional secrecy and confidentiality requirements when dealing with confidential information.

The report includes a summary of responses to the consultation and the EBA’s own summarized analysis.

Rating Agency Developments

On April 18, 2016, Fitch issued a report entitled: Fitch Updates U.S. Tax-Supported Rating Criteria. Release.

On April 15, 2016, DBRS issued a report entitled: DBRS Criteria: Commercial Paper Liquidity Support for Non-Bank Financial Issuers. Report.

On April 14, 2016, Fitch issued a report entitled: Fitch Publishes Criteria Exposure Draft for Counterparty Risk in Structured Finance and CVBs. Release.

SEC Adopts Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants

On April 15, 2016, the Securities and Exchange Commission adopted final rules modifying regulations “for security-based swap dealers and major security-based swap participants (security-based swap entities).”  The final rules address conduct and compliance officer issues. Release.

Rating Agency Developments

On April 13, Moody’s published its approach to rating obligations with variable promises, where the source of variation is related to non-standard or non-credit-related reference factors. Report.

On April 7, Fitch published its criteria for rating tender option bonds. Report.

On April 7, Fitch published its criteria for rating Mexican residential mortgage-backed securities (RMBS). Report.

On April 7, DBRS published its criteria for rating companies in the television broadcasting industry. Report.

On April 7, DBRS published its criteria for rating companies in the radio broadcasting industry. Report.

On April 7, DBRS published its criteria for rating companies in the printing industry. Report.

On April 7, DBRS published its criteria for rating companies in the publishing industry. Report.

No-Action Relief Regarding Masking Information Reportable under the OCR Final Rule

On April 8, the U.S. Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight issued a no-action letter regarding the masking of information reportable under the ownership and control final rule (the “OCR Final Rule”).  The no-action letter permits reporting parties with reporting obligations on OCR Forms 102A and 102B to mask certain identifying information, subject to conditions, until the earlier of: (i) a reporting party no longer holding the requisite reasonable belief regarding the privacy law consequences of reporting; and (ii) March 1, 2017. Release.

No-Action Letter Issued Regarding the OCR Final Rule

On April 8, the U.S. Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight issued a no-action letter regarding the ownership and control final rule (the “OCR Final Rule”).  The OCR Final Rule requires the electronic submission of trader identification and market participant data on new and updated forms.  The no-action letter extends certain relief previously provided and is intended to provide improvements in the reliability and consistency of the OCR data submitted to the CFTC. Release.