This newsletter summarizes recent regulatory changes impacting Banking, Capital Markets & Insurance firms.

Current coverage period: Through April 30, 2018 

CURRENT REGULATIONS: 

European Central Bank (ECB):
Completing the Banking Union with a European Deposit Insurance Scheme: who is afraid of cross-subsidisation?
Publication Date: April 11th 2018 

Risks Covered: Operational Risk 

Business Processes Impacted: Audit, Legal & Compliance 

The agency has published a paper on the European Deposit Insurance Scheme (EDIS). The paper examines possible effect and appropriateness of many EDIS features in the steady state.(1) 

Office of the Comptroller of the Currency (OCC): 

OCC 2018-08 Cyber Insurance: FFIEC Joint Statement on Cyber Insurance and Its Potential Role in Risk Management Programs
Publication Date: April 11th 2018
Risks Covered: Compliance Risk 

Business Processes Impacted: Audit, Legal & Compliance
The Federal Financial Institutions Examination Council (FFIEC) has issued a joint statement that discusses considerations for financial institutions contemplating the purchase of Cyber Insurance as a component of their risk management programs.(2) 

European Securities and Markets Authority (ESMA):
ESMA Updates its Double Volume Cap Register
Publication Date: April 10th 2018
Risks Covered: Compliance Risk 

Business Processes Impacted: Reporting
The agency has announced that it has updated its public register regarding the Double Volume Cap (DVC) mechanism under Markets in Financial Instruments Directive (MiFID) II.(3) 

Financial Conduct Authority (FCA):
Payments after PSD2: Evolution or Revolution
Publication Date: April 10th 2018
Risks Covered: Conduct Risk 

Business Processes Impacted: Audit, Legal & Compliance
The agency has published the text of a speech given by Karina McTeague, Director of Retail Banking Supervision at the agency. McTeague discussed the opportunities being created in payment space, including consumers being enabled to share their data in a way that takes advantage of the newly regulated Payment Initiation Service (PIS) and Account Information Service (AIS).(4) 

Financial Conduct Authority (FCA):
Cryptocurrency Derivatives
Publication Date: April 6th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Payments
The agency has issued a statement which confirms the requirement that firms offering cryptocurrency derivatives must be authorized, are to comply with all rules in the FCA’s Handbook, and any relevant provisions in European Union regulations that are directly applicable.(5) 

Prudential Regulation Authority (PRA):
Solvency II: External Audit of the Public Disclosure Requirement
Publication Date: April 11th 2018
Risks Covered: Strategic Risk
Business Processes Impacted: Audit, Legal & Compliance
The agency has published a consultation paper outlining its proposal to amend the rule that requires the external audit of parts of the Solvency and Financial Condition Report (SFCR).(6) 

Prudential Regulation Authority (PRA):
Solvency II: Internal Models – Modelling of the Volatility Adjustment
Publication Date: April 11th 2018
Risks Covered: Cyber Security Risk
Business Processes Impacted: Business Continuity Management
The agency has published a consultation paper outlining its proposal to consider applications from internal model firms that include a dynamic volatility adjustment (DVA).(7) 

BaFin (German Federal Financial Supervisory Authority):
BaFin-Tech 2018: Supervision in the area of tension between Innovation, Regulation and Consumer Protection
Publication Date: April 10th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Data Privacy
The agency has issued a press release on the second BaFin Tech conference. The conference involved panel discussions and thematic workshops which provided the framework for discussions on innovation, regulation and consumer protection.(8) 

European Insurance and Occupational Pensions Authority (EIOPA):
EIOPA’s cooperation platforms prove beneficial in addressing cross-border issues
Publication Date: April 18th 2018
Risks Covered: Market Risk
Business Processes Impacted: Audit, Legal & Compliance
The agency has published its 2017 Oversight Activities Report addressed to the European Parliament.(9) 

International Financial Reporting Standards (IFRS):
Supporting implementation video: How we help you prepare for IFRS 17
Publication Date: April 3rd 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The IFRS Foundation has produced an animation to outline three key ways of supporting the implementation of IFRS 17 Insurance Contracts, and to show what work is being done to help users of financial statements in the run-up to the 2021 effective date.(10) 

China Banking Regulatory Commission (CBRC):
Notice on Matters Concerning Further Easing Market Entry Restrictions on Foreign-invested Banks
Publication Date: April 27th 2018
Risks Covered: Operational Risk
Business Processes Impacted: Business Continuity Management
The agency has issued the “Notice on Matters Concerning Further Easing Market Entry Restrictions on Foreign-invested Banks” for the banking sector.(11) 

Securities and Exchange Commission (SEC):
Amendments to Forms and Schedules to Remove Provision of Certain Personally Identifiable Information
Publication Date: April 24th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Data Privacy
The agency is adopting revisions to eliminate the portion of those forms that request filers to furnish certain Personally Identifiable Information (PII) of natural persons, including Social Security numbers.(12) 

European Commission (EC):
Commission Implementing Regulation (EU) 2018/634 of 24 April 2018 amending Implementing Regulation (EU) 2016/1799 as regards the mapping tables specifying the correspondence between the credit risk assessments of external credit assessment institutions and the credit quality steps set out in Regulation (EU) No 575/2013 of the European Parliament and of the Council
Publication Date: April 25th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Information Technology
The amendment is to provide mappings for certified or newly registered External Credit Assessment Institutions (ECAIs) and remove the mappings for de-registered ECAIs. The Regulation entered into force on May 15, 2018.(13) 

Federal Deposit Insurance Corporation (FDIC):
Regulatory Capital Rules: Regulatory Capital, Final Revisions Applicable to Banking Organizations Subject to the Advanced Approaches Risk-Based Capital Rule
Publication Date: April 23rd 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Risk Management & Stress Testing
The agency has issued a technical amendment to return text to its regulations that was altered due to a procedural error that allowed a 2014 rule to become effective on January 1, 2018.(14) 

Federal Reserve (The Fed):
Revised Interagency Examination Procedures for Regulation X and Regulation Z
Publication Date: April 19th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Finance & Performance Management
The agency has announced revisions to inter-agency examination procedures for Regulation X – Real Estate Settlement Procedures Act (RESPA) and Regulation Z – Truth in Lending (TILA).(15) 

Prudential Regulation Authority (PRA):
Solvency II: Changes to reporting format
Publication Date: April 20th 2018
Risks Covered: Strategic Risk
Business Processes Impacted: Reporting
The agency has published a consultation that contains proposals to change the file type and reporting format for a number of regular reporting submissions and to bring them into line with Solvency II Quantitative Reporting Templates and International Data Standards.(16) 

Prudential Regulation Authority (PRA):
Solvency II: Updates to internal model output reporting
Publication Date: April 9th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Reporting
The agency has published a Consultation Paper (CP) on its proposed updates to Supervisory Statement (SS) 25/15, “Solvency II: regulatory reporting, internal model outputs,” and SS26/15, “Solvency II: ORSA and the ultimate time horizon – non-life firms.”(17) 

Central Bank of Ireland (CBI):
Solvency II Regulatory Reporting
Publication Date: April 16th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Audit, Legal & Compliance
The agency has published a CEO letter containing observations from its analysis on Quantitative Reporting Templates (QRTs) and National Specific Templates (NSTs) that have been submitted to date, further to the introduction of Solvency II in 2016.(18) 

International Financial Reporting Standards (IFRS):
TRG for IFRS 17 Insurance Contracts—Agenda papers for May 2018 meeting are available now
Publication Date: April 18th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Training & Development
This covers the publishing of the agenda, agenda papers and submissions log for the Transition Resource Group for IFRS 17 Insurance Contracts meeting (held on May 2, 2018).(19) 

International Financial Reporting Standards (IFRS):
Investor Perspectives: Insurance Contracts—Accounting to reflect economics
Publication Date: April 10th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Funding & Liquidity Management
The firm’s board member Darrel Scott offers his perspective on the new information about insurers’ financial performance that will be available when IFRS 17 is applied.(20) 

 

FORTHCOMING REGULATIONS: 

Department of the Treasury (US)
Eliminating Unnecessary Regulations
The agency has filed notice of proposed rule-making to streamline its regulations by removing one regulation that is no longer necessary because it does not have any current or future applicability, and by amending one regulation to remove portions that no longer have any current or future applicability.(21) 

Financial Reporting Council (FRC – UK) 
Accountancy Scheme Sanctions Guidance
The agency has published an updated version of the Accountancy Scheme Sanctions Guidance. This revised version takes effect June 1, 2018.(22) 

Financial Conduct Authority (FCA)
Insurance firms still failing to meet FCA general insurance renewal rules
The agency has issued a press release announcing that it will take action against general insurance firms who are failing to properly implement rules introduced to increase transparency and encourage shopping around renewal time.(23) 

Consumer Financial Protection Bureau (CFPB)
Federal Mortgage Disclosure Requirements under the Truth in Lending Act (Regulation Z)
The agency is amending Federal mortgage disclosure requirements under the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) that are implemented in Regulation Z.(24) 

European Commission (EC)
Extension of transitional period on own funds requirements for exposures to central counterparties
The agency has issued an extension of an additional six months for the transitional periods in relation to own fund requirements for exposures to central counterparties as set out in Regulations (EU) No 575/2013 as well as (EU) No 648/2012 of the European Parliament and of the Council.25 

Insurance Europe (IE)
Broad industry coalition calls upon EU decision-makers to ACT NOW for equal access to in-vehicle data and functions
The agency has announced that a broad industry coalition is urging European Union decision-makers to act immediately to establish fair and equal access to in-vehicle data and resources.(26) 

Financial Stability Board (FSB)
FSB publishes toolkit to mitigate misconduct risk
The agency has published a report “Strengthening Governance Frameworks to Mitigate Misconduct Risk: A Toolkit for Firms and Supervisors,” for firms and supervisors to help them mitigate misconduct risk.(27) 

 

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

 

References:  

  1. “Completing the Banking Union with a European Deposit Insurance Scheme: who is afraid of cross-subsidisation?” European Central Bank, April 11, 2018. Access at: Completing the Banking Union with a European Deposit Insurance Scheme: who is afraid of cross-subsidisation?.   
  2. “FFIEC Joint Statement on Cyber Insurance and Its Potential Role in Risk Management Programs,” Office of the Comptroller of the Currency, OCC Bulletin 2018-8, April 11, 2018. Access at: OCC 2018-08 Cyber Insurance: FFIEC Joint Statement on Cyber Insurance and Its Potential Role in Risk Management Programs.
  3. “ESMA Updates its Double Volume Cap Register,” European Securities and Markets Authority, April 10, 2018. Access at: ESMA Updates its Double Volume Cap Register.
  4. “Payments after PSD2: evolution or revolution,” Financial Conduct Authority, April 10, 2018. Access at: Payments after PSD2: Evolution or Revolution.  
  5. “Cryptocurrency derivatives,” Financial Conduct Authority, April 6, 2018. Access at: Cryptocurrency Derivatives.
  6. “Solvency II: external audit of the public disclosure requirement,” Prudential Regulation Authority, Consultation Paper CP8/18, April 11, 2018. Access at: Solvency II: External audit of the public disclosure requirement.  
  7. “Solvency II: Internal models – modelling of the volatility adjustment,” Prudential Regulation Authority, Consultation Paper CP9/18, April 11, 2018. Access at: Solvency II: Internal models – Modelling of the volatility adjustment. 
  8. “BaFin -Tech 2018: supervision in the field of tension between innovation, regulation and consumer protection, BaFin (German Federal Financial Supervisory Authority), April 10, 2018. Access at: BaFin-Tech 2018: Supervision in the area of tension between innovation, regulation and consumer protection. 
  9. “EIOPA’s cooperation platforms prove beneficial in addressing cross-border issues,” European Insurance and Occupational Pensions Authority, April 18, 2018. Access at: EIOPA’s cooperation platforms prove beneficial in addressing cross-border issues.
  10. “Supporting implementation video: How we help you prepare for IFRS 17,” International Financial Reporting Standards, April 3, 2018. Access at: Supporting implementation video: How we help you prepare for IFRS 17.
  11. “Further Relaxation of Matters Related to Market Entry of Foreign Banks – The Bankruptcy Insurance Office issued [2018] No. 16,” China Banking Regulatory Commission General Office, April 27, 2018. Access at: Notice on Matters Concerning Further Easing Market Entry Restrictions on Foreign-invested Banks.
  12. “Amendments to Forms and Schedules to Remove Provision of Certain Personally Identifiable Information,” Securities and Exchange Commission, April 24, 2018. Access at: Amendments to Forms and Schedules to Remove Provision of Certain Personally Identifiable Information.
  13. “Commission Implementing Regulation (EU) 2018/634 of 24 April 2018 amending Implementing Regulation (EU) 2016/1799,” Official Journal of the European Union, April 25, 2018. Access at: Commission Implementing Regulation (EU) 2018/634 of 24 April 2018 amending Implementing Regulation (EU) 2016/1799 as regards the mapping tables specifying the correspondence between the credit risk assessments of external credit assessment institutions and the credit quality steps set out in Regulation (EU) No 575/2013 of the European Parliament and of the Council.
  14. “Regulatory Capital Rules: Regulatory Capital, Final Revisions Applicable to Banking Organizations Subject to the Advanced Approaches Risk-Based Capital Rule,” Federal Deposit Insurance Corporation, April 23, 2018. Access at: Regulatory Capital Rules: Regulatory Capital, Final Revisions Applicable to Banking Organizations Subject to the Advanced Approaches Risk-Based Capital Rule.
  15. “CA 18-3: Revised Interagency Examination Procedures for Regulation X and Regulation Z,” Federal Reserve, April 19, 2018. Access at: Revised Interagency Examination Procedures for Regulation X and Regulation Z
  16. “Solvency II: Changes to reporting format,” Consultation Paper CP11/18, Prudential Regulation Authority, April 20, 2018. Access at: Solvency II: Changes to reporting format.
  17. “Solvency II: Updates to internal model output reporting,” Prudential Regulation Authority, April 9, 2018. Access at: Solvency II: Updates to internal model output reporting.
  18. “Solvency II Regulatory Reporting,” Central Bank of Ireland, April 16, 2018. Access at: Solvency II Regulatory Reporting.
  19. “TRG for IFRS 17 Insurance Contracts—agenda papers for May 2018 meeting are available now,” International Financial Reporting Standards, April 18, 2018. Access at: TRG for IFRS 17 Insurance Contracts—Agenda papers for May 2018 meeting are available now.
  20. “Investor Perspectives: Insurance Contracts—Accounting to reflect economics,” International Financial Reporting Standards, April 10, 2018. Access at: Investor Perspectives: Insurance Contracts—Accounting to reflect economics.
  21. “Eliminating Unnecessary Regulations,” Department of the Treasury, April 9, 2018. Access at: Eliminating Unnecessary Regulations
  22. “Accountancy Scheme Sanctions Guidance,” Financial Reporting Council, April 14, 2018. Access at: Accountancy Scheme Sanctions Guidance.
  23. “Insurance firms still failing to meet FCA general insurance renewal rules,” Financial Conduct Authority, April 3, 2018. Access at: Insurance firms still failing to meet FCA general insurance renewal rules.
  24. “Federal Mortgage Disclosure Requirements under the Truth in Lending Act (Regulation Z),” Consumer Financial Protection Bureau, April 26, 2018. Access at: Federal Mortgage Disclosure Requirements under the Truth in Lending Act (Regulation Z).
  25. Extension of requirements to central counterparties, Draft document. European Commission, April 17, 2018. Access at: Extension of transitional period on own funds requirements for exposures to central counterparties
  26. “Broad industry coalition calls upon EU decision-makers to ACT NOW for equal access to in-vehicle data and functions,” Insurance Europe, April 23, 2018. Access at: Broad industry coalition calls upon EU decision-makers to ACT NOW for equal access to in-vehicle data and functions. 
  27. “FSB publishes toolkit to mitigate misconduct risk,” Financial Stability Board, April 20, 2018. Access at: FSB publishes toolkit to mitigate misconduct risk. 

 

About the Monthly Regulatory Tracker  

The “Regulatory Reform” newsletter is the monthly initiative aimed at updating the Finance & Risk community with the most recent regulatory changes impacting Banking, Capital Markets & Insurance firms. We track more than 70 regulatory and industry bodies covering North America, Europe and Asia-Pacific. Every month, we will highlight approximately 20 regulations shortlisted on the basis of geography of coverage and anticipated business impacts. Our summaries will highlight the risks covered and business processes affected by the regulatory reforms. 

 

Disclaimer  

This blog is intended for general informational purposes only, does not take into account the reader’s specific circumstances, may not reflect the most current developments, and is not intended to provide advice on specific circumstances. Accenture disclaims, to the fullest extent permitted by applicable law, all liability for the accuracy and completeness of the information in this blog and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professional. 

 

About Accenture  

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 425,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Its home page is www.accenture.com 

Copyright © 2018 Accenture. All rights reserved. 

Accenture, its logo, and High Performance Delivered are trademarks of Accenture. This document is produced by Accenture as general information on the subject. It is not intended to provide advice on your specific circumstances. 

Submit a Comment

Your email address will not be published. Required fields are marked *