PSR and PSD3 - ECON publishes draft reports - 7 November 2023
The European Parliament’s Economic and Monetary Affairs Committee (ECON) has published the following draft reports:
a draft report on a proposal for a regulation on payment services in the internal market and amending the EBA Regulation (1093/2010) (2023/0210 (COD)) (known as the Payment Services Regulation (PSR)); and
a draft report on the proposal for a directive on payment services and electronic money services in the Internal Market amending the Settlement Finality Directive (98/26/EC) and repealing the Payment Services Directive (2015/2366/EU) and the Electronic Money Directive (2009/110/EC) (PSD3).
Mapping credit assessments of ECAIs under CRR and Solvency II - Final reports published by ESAs - 13 November 2023
The Joint Committee of the European Supervisory Authorities (ESAs) (that is, the EBA, EIOPA and ESMA) has published two final reports on the mapping of external credit assessment institutions' (ECAIs) credit assessments:
a final report (JC 2023 050) on draft implementing technical standards (ITS) amending Implementing Regulation (EU) 2016/1799 on the mapping of ECAIs' credit assessments under Article 136(1) and (3) of the Capital Requirements Regulation (575/2013) (CRR); and
a final report (JC 2023 049) on draft ITS amending Implementing Regulation (EU) 2016/1800 on the allocation of credit assessments of external credit assessment institutions to an objective scale of credit quality steps (CQS) in accordance with the Solvency II Directive (2009/138/EC).
Among other things, the revised draft ITS remove three credit rating agencies that have lost ECAI status from the relevant mapping tables. The ITS will be submitted to the European Commission for endorsement, following which they will be published in the Official Journal.
European Commission and European Banking Authority
Operational resilience in EU - EBA publishes speech and Commission consults on DORA criteria - 15 and 16 November 2023
The European Banking Authority (EBA) has published a speech delivered by José Manuel Campa, EBA Chair, on operational resilience in the EU financial services sector. Of particular note is Mr Campa’s reference to the high-level exercise conducted by the EBA on the landscape of information and communication technology (ICT) providers in the EU, which revealed a highly concentrated market and a potentially high degree of interconnectedness and interdependencies between ICT providers. The results of this exercise are being used to develop the EBA’s supervisory framework under the Regulation on Digital Operational Resilience for the Financial Sector ((EU) 2022/2554) (DORA).
Separately, the European Commission has published two draft delegated acts to be adopted under DORA, one of which specifies the criteria for designating ICT third-party service providers as critical for financial entities. The draft delegated act is open for feedback until 14 December 2023.
TARGET - ECB adopts amending Guideline and Decision - 16 November 2023
The European Central Bank (ECB) has adopted an amending Guideline (ECB/2023/22), dated 7 September 2023, on a new generation Trans-European Automated Real-time Gross Settlement Express Transfer system (TARGET) which amends Guideline ECB/2022/8. The ECB has also adopted a Decision (ECB/2023/27), dated 9 November 2023, concerning amendments to the terms and conditions of TARGET-ECB. The Decision will enter into force on 20 November 2023.
Non-performing exposures capital deduction - PRA publishes Policy Statement (PS14/23) - 13 November 2023
The PRA has published a Policy Statement (PS14/23) on the non-performing exposures (NPEs) capital deduction, along with relevant appendices. This follows Consultation Paper (CP6/23), published in March 2023, in which the PRA proposed to remove the CET1 deduction requirement for NPEs that are treated as insufficiently covered by firms’ accounting provisions and related reporting requirements. The PRA considers that removing the NPE deduction requirement aligns with international standards and eliminates a potential competitive disadvantage compared to firms in jurisdictions that are not subject to the NPE deduction. The removal of associated reporting requirements also reduces firms’ costs of monitoring, compliance and data gathering.
The removal of the NPE capital deduction took effect on 14 November 2023.
Working with deposit aggregators - PRA publishes ‘Dear CFO’ letter - 15 November 2023
The PRA has published a letter to the CFOs of firms working with deposit aggregators (DAs). Among other things, the letter recommends that firms mitigate any risks that could adversely impact Financial Services Compensation Scheme pay-outs. Firms are also encouraged to consider the potential correlation and concentration risks associated with deposits from DAs, as well as the potential speed of outflows, when managing liquidity risk and funding needs. Finally, the letter asks firms to consider how the PRA's expectations on outsourcing and third-party risk management relate to their arrangements with DAs.
The FCA has announced that it is reviewing its approach to limited permission secondary credit brokers. In particular, the review will examine how consumer credit legislation applies to credit broking firms whose main business activity is the supply of non-financial services.
The FCA explains that, through the review, firms authorised as full permission credit broker firms may be eligible to become authorised as limited permission firms, depending on what activities they undertake. It also notes that a partial refund of past regulatory fees plus interest may be owed in those circumstances. A webpage with relevant FAQs has also been published.
Banking access and customer service - Charity Commission publishes Dear CEO letter - 16 November 2023
The chief executives of the UK charity regulators have issued an open letter to the UK's main high street banks urging them to address the challenges faced by charities when seeking to access banking services. In particular, they have requested urgent action on charity accounts being closed or suspended suddenly for long periods of time, a reduction in bespoke banking services for charities, poor customer service and administrative delays, as well as online banking services that are not designed to match the way charities operate.
