Risk and Regulation Monthly November 2020 Contents

CENTRE for REGULATORY STRATEGY EMEA Risk and Regulation Monthly November 2020 Contents

CONTENTS HIGHLIGHTS COVID-19 BANKING CAPITAL MARKETS INVESTMENT MANAGEMENT CENTRAL BANK OF IRELAND OTHER CONTACTS

Highlights

In Ireland, the Central Bank published the outcome of its thematic review of fund management companies. It was found that a significant number of firms have not fully implemented the framework for governance, management and oversight in fund management companies.

The European Commission published a consultation on AIFMD. This ask respondents whether fund delegation rules should be accompanied with quantitative criteria or a list of core functions that cannot be delegated.

For a full list of COVID-19 related regulatory, monetary and fiscal policy initiatives, please see our report available here.

COVID-19  Speech by Pablo Hernández de Cos, Governor of the Bank of Spain, on EU Spain's experience with risks and ECB vulnerabilities in the corporate sector as a result of the COVID-19 crisis  Speech by Philip R. Lane, Member of the Executive Board at the ECB, on the  Speech by Luigi Federico Signorini, ECB’s monetary policy in the pandemic Deputy Governor at the Bank of Italy on mobilising private finance for a  Interview of Christine Lagarde, green recovery and hence “building President of the ECB on the role of the back better” ECB in non-normal times  Macroprudential bulletin covering the  Speech by Randal K Quarles, Vice usability of capital buffers Chairman for Supervision of the Board of Governors of the Federal Reserve ECB - SSM System, on lessons from the COVID-19  Keynote speech by Yves Mersch, stress on the financial system Member of the Executive Board at the ECB, on European economic  Speech by Klaas Knot, President of the governance in relation to early lessons Dutch Central Bank on COVID-19 and from the COVID-19 crisis how to contain its impact on the financial system Int’l  Speech by Randal K Quarles, Vice BIS Chairman for Supervision of the Board of Governors of the Federal Reserve  Panel remarks by Agustín Carstens, System, on the Financial Stability General Manager at the BIS, on Board's roadmap for addressing NBFI rebuilding better banks, central banks vulnerabilities and governments in a COVID-19 economy  Speech by Burkhard Balz, Member of the Executive Board of the Deutsche  Speech by Cecilia Skingsley, Deputy Bundesbank, on COVID-19 and cashless Governor of the Sveriges Riksbank, on payments post-pandemic monetary policy and the future of the interest rate as a  Welcome address by Ignazio Visco, policy tool Governor at the Bank of Italy, on financial stability implications of the  Speech by Tiff Macklem, Governor of pandemic the Bank of Canada, on the importance of risk management from COVID-19 to  Speech by Klaas Knot, President of climate Dutch Central Bank, on monetary policy responses to COVID-19  Publication by Patrizia Baudino, Senior Advisor at the Financial Stability  Speech by Pablo Hernández de Cos, Institute, on stress-testing banks Governor of the Central Bank of Spain, during the COVID-19 pandemic on the role of the European Central Bank's monetary policy in the COVID-  Blog by Gabriel Makhlouf, Governor of 19 crisis the Central Bank of Ireland, on inclusion, diversity, and the pandemic IMF  Report on Global Financial Stability  Assessment of the key vulnerabilities to which the global financial system is exposed

Back to top Banking  October 2020 Euro area bank lending survey Prudential  Speech by Kerstin af Jochnick, Member EU of the Supervisory Board of the ECB, on supervision in times of uncertainty EBA ESMA  Final guidelines on the appropriate subsets of exposures in the application  Published its annual Public European of a systemic risk buffer Common Enforcement Priorities for 2020  Consultation response supporting the harmonisation of creditworthiness Int’l assessments for consumer credit BIS across the EU  Research papers on the outlook for business bankruptcies,  unemployment and reallocation from COVID-19  Final draft regulatory technical  Speech by Pablo Hernandez de standards specifying the prudential Cos, Chair of the BCBS, on treatment of software assets COVID-19 and banking supervision, and future  EBA Opinion on Finansinspektionen implications measure to enhance the resilience of Swedish banks to downward  Statistical release on global corrections in residential real estate liquidity indicators at end-June markets 2020  Opinion to address possible infection FSB risk stemming from legacy instruments  Update on work to address  Issue of first monitoring report on market fragmentation TLAC-MREL instruments accompanied Conduct by 15 recommendations EU  Consultation on revised guidelines on sound remuneration policies EBA ECB - SSM  Consultation on the revision of  Letter from Andrea Enria, Chair of the the guidelines on major incident Supervisory Board of the ECB, to Mr reporting under PSD2 Schirdewan, MEP, on the supervision of ECB - SSM Wirecard Bank AG  Opinion piece by Yves Mersch,  Speech by Kerstin af Jochnick, Member Member of the Executive Board of the Supervisory Board of the ECB of the ECB, regarding the ECB SSM, on the priorities for ECB Banking “raising the bar on bank Supervision amid the pandemic governance”  Presentation by Edouard Fernandez- ECB Central Bank Bollo, Member of the Supervisory Board of the ECB, on financial  Blog post by Isabel Schnabel, regulation in 2020, trends in the EU Member of the Executive Board and global patterns of the ECB, titled "Don’t take it for granted: the value of high-  Opinion piece by Andrea Enria, Chair of quality data and statistics for the the Supervisory Board of the ECB, on ECB’s policymaking" bank asset quality SRB  Speech by Elke Konig, Chair of  Interview with Andrea Enria, the Single Resolution Board, to Chair of the Supervisory Board the European Parliament at the of the ECB ECON Committee on 27 October Int’l 2020 BIS Other  Speech by Lael Brainard, EU Member of Board of Governors ECB - SSM at the US Federal Reserve, on modernizing and strengthening  Letter from Andrea Enria, Chair Community Reinvestment Act of the Supervisory Board, to Mr regulations Melo, member of the European Parliament, on the appointment of national central bank governors

Back to top Capital Markets  Announcement on addition of UK venues to opinions on third-country Conduct trading venues EU  Final report on amendments to the EC Market Abuse Regulation (MAR) for the promotion of the use of SME  Adoption of CSDR RTS, further Growth Markets postponing settlement discipline measures until 1 February 2022 Int’l ECOFIN BIS  Announcement on Council agreeing its  Report submitted by a study group position on the Capital Markets chaired by Andréa M Maechler on FX Recovery Package execution algorithms and market functioning ESMA FSB  Updated Q&As on securitisation topics and guidelines on portability of  Announcement regarding FSB information between Securitisation publishing a global transition roadmap Repositories for LIBOR  Public Consultation on Articles 15 and Other 49 of EMIR – this consultation covers EU technical standards in relation to authorisation for a CCP and validations ECB Central Bank of CCP’s changes to models  Summary of feedback on public  Consultation, aimed at clarifying consultation on compounded €STR common procedures for supervisory rates review, on guidelines under Article 21 of EMIR, which sets out an obligation for NCAs to review processes and mechanisms implemented by central counterparties and to evaluate the risks they are exposed to

Investment Management  Consultation on the review of AIFMD seeking views on how the AIFMD can be Conduct amended to ensure a more efficient EU EU AIF market ECON ESMA  ESMA issues latest double volume cap  Consultation on a review of the ELTIF to data evaluate the effectiveness of the ELTIF framework and to determine why the ELTIF market has not developed as expected

Central Bank of Ireland  Gerry Cross, Director of Policy and Risk and Investment Banking Supervision Domestic (Interim) delivered a speech titled “A  The Central Bank published the financial sector better serving citizens outcome of its thematic review of fund and the economy: the role of management companies Supervisory Inspections in driving  The Central Bank issued a press release improvements” titled “Impact of COVID-19 on Irish  Deputy Governor Sharon Donnery enterprises has been sudden, large and delivered a speech on Ireland’s uneven” Engagement in Europe and Deeper Integration of Europe

Back to top Other  Speech by François Villeroy de Galhau, Governor of the Bank of France, on the Cyber digital revolution in payments EU  Speech by Denis Beau, First Deputy ECB - SSM Governor of the Bank of France, on how the FinTech ecosystem can  Speech by Pentti Hakkarainen, contribute to a more efficient and Member of the Supervisory Board of stable financial system the ECB, on banks' cyber resilience in the digital world FSB EIOPA  Report on the use of supervisory and regulatory technology by authorities  Guidelines on information and and regulated firms communication technology  Final report and recommendations on security and governance, the regulation, supervision and including cyber security oversight of global stablecoin (GSC) capabilities arrangements Int’l  Enhancing Cross-border Payments: FSB Stage 3 roadmap IMF  Note on responses to the public consultation on effective practices for  Policy paper on potential macro- cyber incident response and recovery financial effects of the use of central  Publication of the toolkit of effective bank digital currencies and global practices for financial institutions’ stablecoins across borders cyber incident response and recovery Sustainable Finance Fintech EU

EU ECB Central Bank ECB Central Bank  Working paper on green asset pricing  Announcement stating that the ECB EIOPA has intensified its work on a digital euro  Announcement of a Sustainable  Consultation on a Eurosystem Finance Roundtable on the 16th of oversight framework for electronic December payment instruments, schemes and ESMA arrangements  ESMA's response to the EU Green Bond Int’l Standard consultation BIS Int’l  Speech by Frank Elderson, Executive BIS Director of Supervision at the Dutch  Speech by Mr. Kevin J Stiroh, Co-chair Central Bank, on a digitalisation boost of the Task Force on Climate-related due to COVID-19 and the supervisory Financial Risks of the Basel Committee response on Banking Supervision and Executive  Speech by David Ramsden, Deputy Vice President of the Federal Reserve Governor for Markets and Banking, to Bank of New York, on a new regulatory mark the launch of the BoE/FCA's and policy landscape for sustainable Artificial Intelligence Public Private finance Forum FSB  Annual status report on TCFD-aligned Int’l disclosures by firms BIS Other  Speech by Klaas Knot, President of the EU Dutch Central Bank, on relaunching ECB Central Bank growth in Europe together  Speech by Andy Haldane, Chief  Staff paper on the case for central bank Economist at the BoE, on avoiding independence, including a review of economic anxiety key issues in the international debate  Speech by Michelle W Bowman, Member of the Board of Governors at  Speech by Isabel Schnabel, Member of the US Federal Reserve System, on the Executive Board of the ECB, on mortgage market regulation and access fiscal and monetary policies in a low to mortgage credit interest rate environment  Speech by Mr Olli Rehn, Governor of  Article on the objectives and usability the Bank of Finland, reviewing of macroprudential capital buffers monetary policy and strategy in the  Opinion on appointment of new Eurozone Executive Board member, Frank Elderson  Introductory remarks by Klaas Knot, President of the Dutch central bank at ESMA the conference for the autumn 2020  SMSG advice on 2021 Annual Work Financial Stability Report on 13 Oct Programme 2020  ESAs’ Board of Appeal dismisses case FSB against ESMA on alleged non- application of Union law  FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors  Steven Maijoor, Chair at ESMA, speaks in October 2020 at the ESAs Annual ECON Committee Hearing

Glossary AFMs = Authorised Fund Managers AI = Artificial Intelligence AIFMD = Alternative Investment Fund Managers Directive AMF = Autorité des Marchés Financiers AML = Anti-Money Laundering APA = Approved Publication Arrangement AUM = Assets under management BCBS = Basel Committee on Banking Supervision BEAR = Banking Executive Accountability Regime BIS = Bank for International Settlements BMR = Benchmarks Regulation BRRD = Bank Recovery and Resolution Directive BTS = Binding Technical Standard BoE = Bank of England CBI = Central Bank of Ireland CCP = Central Counterparty CP= Consultation Paper CTF = Counter Terrorist Financing CISO = Chief Information Security Officer CMA = Competition and Markets Authority CMU = Capital Markets Union CNMV = Comisión Nacional del Mercado de Valores CQS = Credit Quality Step CRD = Capital Requirements Directive CRR = Capital Requirements Regulation CROE = Cyber Resilience Oversight Expectations CSSF = Commission de Surveillance du Secteur Financier CTP = Consolidated Tape Provider DB = Defined Benefit DC = Defined Contribution DP = Discussion Paper DPA = Data Protection Agency DRR = Digital Regulatory Reporting EBA = European Banking Authority ECB = European Central Bank ECOFIN = Economic and Financial Affairs Council EIOPA = European Insurance & Occupational Pensions Authority EMEA = Europe, Middle East and Africa EMIR = European Market Infrastructure Regulation EONIA = Euro Over Night Index Average ESAs = European Supervisory Authorities ESG: Environmental, Social, and Governance ESMA = European Securities & Markets Authority ESRB = European Systemic Risk Board ESTER = Euro Short-Term Rate EU = European Union Euribor = Euro Interbank Offered Rate FAMR = Financial Advice Market Review FCA = Financial Conduct Authority FinPro = Financial Protection FGCA = Financial Guidance and Claims Act 2018 FMIs = Financial Market Infrastructures FOS = Financial Ombudsman Service FPC = Financial Policy Committee FRTB = Fundamental Review of the Trading Book FS = Financial Services FSA = Financial Services Authority FSB = Financial Stability Board GBP = British pound sterling GDP = Gross Domestic Product GDPR = General Data Protection Regulation GSIBs = Global Systemically Important Banks HMT = Her Majesty’s Treasury IAIS = International Association of Insurance Supervisors IASB = International Accounting Standards Board IBOR = Interbank Offered Rate ICAAP = Internal Capital Adequacy Assessment Process ICO = Information Commissioners Office ICS = Insurance Capital Standard IDD = Insurance Distribution Directive IFRS = International Financial Reporting Standards ILAAP = Internal Liquidity Adequacy Assessment Process IM = Initial Margin IOSCO = International Organization of Securities Commissions IPU = Intermediate Parent Undertaking IRB = Internal Ratings Based ISAs = Individual Savings Accounts IT = Information Technology JST = Joint Supervisory Teams KID = Key Information Document LEI = Legal Entity Identifier LIBOR = London Interbank Offered Rate LTV = Loan to Value M&A = Mergers and Acquisitions MI = Management Information MiFID = Markets in Financial Instruments Directive MiFIR = Markets in Financial Instruments Regulation MLD = Money Laundering Directive MoU = Memorandum of Understanding MREL = Minimum requirement for own funds and eligible liabilities MTF = Multilateral Trading Facility NCA = National Competent Authority NED = Non-Executive Director NGFS = Network for Greening the Financial System NPLs = Non-performing Loans NSFR = Net Stable Funding Ratio OCIR – Operational Continuity in Resolution ORSA = Own Risk and Solvency Assessment OTF = Organised Trading Facility OTC = Over the counter PPI = Payment Protection Insurance PRA = Prudential Regulation Authority PRIF = Prudential Regime for Investment Firms PRIIPs = Packaged Retail Investment and Insurance Products PS = Policy Statement PSD2 = Revised (second) Payment Services Directive RDR = Retail Distribution Review RFRs = Risk-Free Rates RRM = Risk Reduction Measures RTGS = Real Time Gross Settlement RTS = Regulatory Technical Standard RW = Risk Weight SA = Standardised Approach SFTR = Securities Financing Transactions Regulation SI = Systematic Internaliser SIPPs = Self Invested Personal Pensions SM&CR = Senior Managers and Certification Regime SONIA = Sterling Overnight Index Average SRB = Single Resolution Board SRF = Single Resolution Fund SREP = Supervisory Review and Evaluation Process SS = Supervisory Statement SSM = Single Supervisory Mechanism TCA = Total Capital Adequacy TCFD = Task Force on Climate-related Financial Disclosures TIBER = Threat Intelligence-based Ethical Red Teaming TLAC = Total Loss-Absorbing Capital TMTP = Transitional Measure on Technical Provisions TPP = Third-Party Providers TPR = Temporary Permissions Regime TRIM = Targeted Review of Internal Models TRR = Temporary Recognition Regime UCITS = Undertakings for Collective Investments in Transferable Securities Contacts

Sean Smith Partner, Regulatory Risk +353 (01) 417 2306 E:[email protected]

Senan Ryan Assistant Manager -Regulatory Risk T: +353 1 417 8630 E: [email protected]

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