Securitization Regulation – Updates to the Questions and Answers by the European Securities and Markets Authority

 

On November 15th, The European Securities and Markets Authority (ESMA) published a new and updated version of its Questions and Answers in respect to the Securitization Regulation. 

The refreshed Questions and Answers provide direction on disclosure requirement in relation to ESMA’s draft technical standards, amongst other things. Questions and Answers.

 

Commission Delegated Regulation on Changing the Base Euro Amounts for Professional Indemnity Insurance

 

The Regulation varies the base amounts in Euros (see Article 10(4) as well as (6)) of the Insurance Distribution Directive) by 4.03%, i.e. the percentile changes in the index of consumer prices (Europe).

It should be noted that the Commission Delegated Regulation is coming into force on December 12. However, the Regulation will be operational and applied from June 12, 2028. As such, MS have half a year after its entry into force to adapt national legislation. Furthermore, the six months gives MS time to enable and allow insurance (and reinsurance) intermediaries and their insurance providers time to implement the steps necessary to ensure compliance. Commission Delegated Regulation.

Banking Agencies Amend Effective Date for Capital Simplification Final Rule for Non-Advanced Approach Banks

 

On November 13, the OCC, the FDIC and the FRB amended the effective date of the Capital Simplification Final Rule issued on July 22. Banks not subject to the advanced approaches capital rule will be permitted to implement the simplified standards for calculating regulatory capital on January 1, 2020, instead of April 1, 2020, as initially provided. OCC ReleaseFederal Register.

 

Banking Agencies Publish Capital Simplifications for Qualifying Community Banking Organizations

 

On November 13, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board (FRB) published in the Federal Register a final rule creating an optional Community Bank Leverage Ratio (CBLR) framework for measuring capital adequacy of qualifying community banking organizations. Banks that meet the qualifying criteria, including maintaining a leverage ratio greater than 9 percent, and elect to use the CBLR framework will be considered to have met the capital requirements for the “well capitalized” category under the agencies’ Prompt Corrective Action (PCA) framework and will no longer be subject to the generally applicable capital rule. The final rule will become effective on January 1, 2020. OCC ReleaseFederal Register.

 

Federal Reserve Board Proposes Extending Initial Compliance Dates for Foreign Banks Subject to Single-Counterparty Credit Limit Rule

 

On November 8, the FRB invited public comment on a proposal to extend by 18 months the initial compliance dates for foreign banks subject to its single-counterparty credit limit rule. The extension would allow additional time for foreign banks to comply with the FRB’s rule via certification with a similar home country rule or standard. Under the proposal, the largest foreign banks would need to comply by July 1, 2021, while smaller foreign banks would need to comply by January 1, 2022. Comments will be accepted for 30 days after publication in the Federal Register. ReleaseProposed Rule.

 

Agencies Publish Rule Simplifying Capital Calculations for Community Banks

 

On October 29, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board (FRB) adopted a final rule that simplifies capital requirements for community banks. The final rule allows community banks with less than $10 billion in total consolidated assets, a leverage ratio of greater than nine percent (9%) and limited amounts of off-balance-sheet exposures and trading assets to adopt a simple leverage ratio to measure their compliance with the capital requirements. The simplified leverage ratio framework removes requirements for calculating and reporting risk-based capital ratios for qualifying community banks that opt into the framework. FDIC Release. Federal Reserve Release.