Edition Highlights:

  • The Australian Prudential Regulation Authority Releases its Final Revised Prudential Standard on Liquidity for the Net Stable Funding Ratio
  • European Commission (EC) Council Directive (EU) 2016/2258 of December 6, 2016 amends Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities
  • The Office of the Comptroller of the Currency (OCC) economic growth and regulatory paperwork reduction Act of 1996 Amendments

Current coverage period: Through Dec 31, 2016

Note: Anticipated business impact for covered regulations is shown using the following rating legend:       (*Low) (** Medium) (*** High)

CURRENT REGULATIONS:

Australian Prudential Regulation Authority (APRA)( ***):
APRA Releases Final Revised Prudential Standard on Liquidity for the Net Stable Funding Ratio
Publication Date: December 20th 2016

Risks Covered: Liquidity Risk

Business Processes Impacted: Capital Adequacy and Capital Planning, Funding and Liquidity Management

The final revised Prudential Standard APS 210 Liquidity (APS 210) and Prudential Practice Guide APG 210 Liquidity (APG 210) incorporate, among other things, the Net Stable Funding Ratio (NSFR) requirements for some authorized deposit-taking institutions (ADIs).1

 

Department of the Treasury (US) (*):
Regulation Regarding Nondiscrimination on the Basis of Race, Color, or National Origin in Programs or Activities Receiving Federal Financial Assistance From the Department of the Treasury
Publication Date: December 13th 2016

Risks Covered: Conduct Risk

Business Processes Impacted: Consumer/Investor Protection
This rule enforces amendments to Title VI of the Civil Rights Act of 1964 such that no person in the United States shall on the grounds of race, color, or national origin be denied participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity that receives federal financial assistance from the Department of the Treasury.2

 

European Banking Authority (EBA) (***):
Report on the Implementation and Design of the MREL Framework
Publication Date: December 14th 2016

Risks Covered: Business Cycle Risk

Business Processes Impacted: Business Continuity Management, Capital Adequacy and Capital Planning
This final Report on the implementation and design of the minimum requirement for own funds and eligible liabilities (MREL) quantifies the current MREL stack and estimates potential financing needs of European Union (EU) banks under various scenarios.3

 

European Commission (EC) (**):
Commission Welcomes Entry into Force of New Transparency Rules for Tax Rulings
Publication Date: January 3rd 2017

Risks Covered: Compliance Risk

Business Processes Impacted: Audit, Legal and Compliance
The new rules require Member States to automatically exchange information on all new cross-border tax rulings that they issue and, at a later date, all cross-border rulings issued since 2012.4

 

European Commission (EC) (***):
Council Directive (EU) 2016/2258 of 6 December 2016 Amending Directive 2011/16/EU as regards access to Anti-Money-Laundering Information by Tax Authorities
Publication Date: December 16th 2016
Risks Covered: Compliance Risk

Business Processes Impacted: Audit, Legal and Compliance, Fraud and Financial Crime, KYC
The amendments strive to give tax authorities access to AML information, procedures, documents and mechanisms for the performance of their duties, specifically monitoring the proper application and functioning of all forms of administrative cooperation provided for in this Directive.5

 

The Board of Governors of the Federal Reserve System (The Fed)(***):
Total Loss-Absorbing Capacity, Long-Term Debt, and Clean Holding Company Requirements for Systemically Important U.S. Bank Holding Companies and Intermediate Holding Companies of Systemically Important Foreign Banking Organizations
Publication Date: December 15th 2016

Risks Covered: Systemic Risk, Sovereign Risk

Business Processes Impacted: Business Continuity Management
This final rule requires a US top-tier bank holding company identified under the Board’s rules as a global systemically important bank holding company to maintain outstanding a minimum amount of loss-absorbing instruments, including a minimum amount of unsecured long-term debt.6

 

Financial Industry Regulatory Authority (FINRA) (***):
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend FINRA Rules To Conform to the Commission’s Proposed Amendment to Commission Rule 15c6–1(a) and the Industry-Led Initiative To Shorten the Standard Settlement Cycle for Most Broker-Dealer Transactions From T+3 to T+2
Publication Date: December 21st 2016
Risks Covered: Counterparty Credit Risk, Compliance Risk

Business Processes Impacted: Clearing and Settlement – Exchange Traded and Over-the-Counter
These rules propose several amendments to conform to the Securities and Exchange Commission’s (SEC) proposed amendment to shorten the standard settlement cycle for most broker-dealer transactions from three business days after the trade date (“T+3”) to two business days after the trade date (“T+2”) and the industry-led initiative to shorten the settlement cycle from T+3 to T+2.7

 

Office of the Comptroller of Currency (OCC) (***):
Economic Growth and Regulatory Paperwork Reduction Act of 1996 Amendments
Publication Date: December 15th 2016

Risks Covered: Compliance Risk

Business Processes Impacted: Audit Legal and Compliance
This final rule works to remove outdated or unnecessary provisions of certain rules to reduce regulatory burden on national banks and federal savings associations.8

 

Prudential Regulation Authority (PRA) (**):
Financial Statements – Responses to Chapter 3 of CP17/16 – PS36/16
Publication Date: December 12th 2016
Risks Covered: Operational Risk, Compliance Risk

Business Processes Impacted: Corporate Finance, M&A and Advisory, Reporting
This policy statement provides feedback on the related consultation responses and also includes the final rules for the new reporting requirements relating to balance sheet and profit or loss data in the Regulatory Reporting Part of the PRA Rulebook.9

 

Prudential Regulation Authority (PRA) (**):
The PRA’s Approach to Supervising Liquidity and Funding Risks
Publication Date: December 12th 2016
Risks Covered: Liquidity Risk, Conduct Risk
Business Processes Impacted: Risk Management and Stress Testing
This document on the PRA’s approach to supervising liquidity and funding risks covers the following: (i) The Internal Liquidity Adequacy Assessment Process; (ii) The Liquidity Supervisory Review and Evaluation Process; (iii) Drawing down Liquid Asset Buffers; (iv) Collateral placed at the Bank of England; and (v) Reporting.10

 

FORTHCOMING REGULATIONS:

European Banking Authority (EBA)
Decision by the EBA Board of Supervisors Regarding an EU-Wide Stress Test in 2017
Per this decision, the EBA will start immediately to prepare the methodology for the 2018 stress test exercise, and which will also include an assessment of the impact of IFRS 9.11

 

The Board of Governors of the Federal Reserve System (The Fed)
Rules Regarding Availability of Information
These interim final rules propose to amend regulations for processing requests under the Freedom of Information Act (FOIA), following the enactment of the Freedom of Information Improvement Act of 2016. The amendments clarify and update procedures for requesting information from the Board, extend the deadline for administrative appeals, and add information on dispute resolution services.12

 

Hong Kong Monetary Authority (HKMA)
Revised Disclosure Rules and Amendment Notice Under Banking Ordinance Gazetted
The rules implement recent international standards for banking regulation in Hong Kong by seeking to enhance the regulatory disclosure made by authorized institutions in terms of comprehensiveness, user-relevance and comparability, and require disclosure of certain key regulatory metrics on a quarterly basis.13

 

 

Visit www.accenture.com/RegulatoryCompliance for latest insights on regulatory remediation and compliance transformation.

  1. “APRA releases final revised prudential standard on liquidity for the Net Stable Funding Ratio,” Australian Prudential Regulation Authority, December 20, 2016. Access at:
    APRA Releases Final Revised Prudential Standard on Liquidity for the Net Stable Funding Ratio
  2. “Regulation Regarding Nondiscrimination on the Basis of Race, Color, or National Origin in Programs or Activities Receiving Federal Financial Assistance From the Department of the Treasury,” Department of the Treasury, December 13, 2016. Access at:
    Regulation Regarding Nondiscrimination on the Basis of Race, Color, or National Origin in Programs or Activities Receiving Federal Financial Assistance From the Department of the Treasury
  3. “Final Report on MREL – Report on the Implementation and Design of the MREL Framework,” European Banking Authority, December 14, 2016. Access at:
    Report on the Implementation and Design of the MREL Framework
  4. “Commission welcomes entry into force of new transparency rules for tax rulings,” European Commission, Press release, January 3, 2017. Access at: Commission Welcomes Entry into Force of New Transparency Rules for Tax Rulings
  5. “Council Directive (EU) 2016/2258 of 6 December 2016 amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities,” Official Journal of the European Union, December 16, 2016. Access at:Council Directive (EU) 2016/2258 of 6 December 2016 Amending Directive 2011/16/EU as regards access to Anti-Money-Laundering Information by Tax Authorities
  6. “Economic Growth and Regulatory Paperwork Reduction Act of 1996 Amendments,” Office of the Comptroller of the Currency (OCC), Treasury, Final Rule, December 15, 2016. Access at:
    Economic Growth and Regulatory Paperwork Reduction Act of 1996 Amendments
  7. “Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend FINRA Rules To Conform to the Commission’s Proposed Amendment to Commission Rule 15c6–1(a) and the Industry-Led Initiative To Shorten the Standard Settlement Cycle for Most Broker-Dealer Transactions From T+3 to T+2,”Securities and Exchange Commission, December 21, 2016. Access at:
    Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend FINRA Rules To Conform to the Commission’s Proposed Amendment to Commission Rule 15c6–1(a) and the Industry-Led Initiative To Shorten the Standard Settlement Cycle for Most Broker-Dealer Transactions From T+3 to T+2
  8. “Total Loss-Absorbing Capacity, Long-Term Debt, and Clean Holding Company Requirements for Systemically Important U.S. Bank Holding Companies and Intermediate Holding Companies of Systemically Important Foreign Banking Organizations,” Board of Governors of the Federal Reserve System, Final Rule, December 15, 2016. Access at:
    Total Loss-Absorbing Capacity, Long-Term Debt, and Clean Holding Company Requirements for Systemically Important U.S. Bank Holding Companies and Intermediate Holding Companies of Systemically Important Foreign Banking Organizations
  9. “The PRA’s approach to supervising liquidity and funding risks,” Prudential Regulation Authority, Supervisory Statement SS24/15, December 12, 2016. Access at:
    The PRA’s Approach to Supervising Liquidity and Funding Risks
  10. “Financial statements – responses to Chapter 3 of CP17/16 – PS36/16,” Prudential Regulation Authority, December 12, 2016. Access at:
    Financial Statements – Responses to Chapter 3 of CP17/16 – PS36/16
  11. “Decision by the EBA Board of Supervisors regarding an EU-wide stress test in 2017,” European Banking Authority, Letter, December 21, 2016. Access at: Decision by the EBA Board of Supervisors Regarding an EU-Wide Stress Test in 2017
  12. “Rules Regarding Availability of Information,” Board of Governors of the Federal Reserve System, Interim Final Rule and Request for Comment, December 23, 2016. Access at: Rules Regarding Availability of Information
  13. Revised disclosure rules and amendment notice under Banking Ordinance gazetted,” The Government of the Hong Kong Special Administrative Region, Press Release, December 30, 2016. Access at: Revised Disclosure Rules and Amendment Notice Under Banking Ordinance Gazetted

 

The tracker is the monthly initiative aimed at updating the Finance and Risk community with the most recent regulatory changes impacting Banks and Capital Markets firms. We update our comprehensive regulatory database every month by tracking more than 40 regulatory and industry bodies covering North America, Europe and Asia Pacific. Every month, we will highlight approximately 10 regulations shortlisted on the basis of geography of coverage and anticipated business impacts. Our summaries highlight the risks covered and business processes affected by the regulatory reforms.

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