EBA Final RTS on Cooperation and Exchange of Information for Passporting under PSD2
On December 14, 2016, the European Banking Authority ("EBA") published the regulatory technical final draft on passport notifications under the revised Payment Services Directive ((EU) 2015/2366) ("PSD2") (EBA/RTS/2016/08).
Article 28 of PSD2 requires an authorized payment institution to inform the competent authorities of its home member state if it wishes to provide payment services for the first time in one or more member states other than its home member state. Article 28(5) gives the EBA a mandate to develop draft RTS, specifying method, means and details of the cross-border cooperation between competent authorities in the context of passport notifications of payment institutions. The RTS must include the scope of information to be submitted, a common terminology and standard templates, to ensure that the process is consistent and efficient.
The EBA consulted on the draft RTS in December 2015. Changes to the final version of the RTS in light of responses to the consultation include:
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More clarity for when a payment institution uses an agent or an e-money institution uses a distributor.
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New provisions so that payment institutions will be informed when the notification is transmitted from the competent authority in the home member state to the authority in the host member state.
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A new field in a number of templates to include the legal entity identifier (LEI) as an identification number where available.
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Deletion of information relating to governance arrangements and internal control mechanisms, outsourcing and the agent structural organization.
The EBA has also published a flowchart providing a guide to competent authorities on which notification templates to use, a copy of which can be found here.
The final draft RTS will now be submitted to the European Commission for endorsement. The draft Delegated Regulation states that it shall enter into force 20 days after it is published in the Official Journal of the EU (OJ).
EBA Final Guidelines on Disclosure Requirements for EU Banking Sector
On December 14, 2016, the European Banking Authority ("EBA") published a final report (EBA/GL/2016/11) containing guidelines on regulatory disclosure requirements following its consultation in June 2016.
The guidelines follow an update of the Pillar 3 requirements by the Basel Committee on Banking Supervision (BCBS) and do not change the substance of the regulatory disclosures regarding the requirements defined in Part Eight of the Capital Requirements Regulation (Regulation 575/2013) ("CRR").
They provide further guidance and support to institutions in complying with both the CRR and the Pillar 3 requirements. In particular, the guidelines cover the entire content of the Pillar 3 framework, with the exception of:
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Securitization requirements, which are currently under discussion at the EU level following the finalization of a revised securitization framework at the international level.
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Other disclosure requirements in Part Eight of the CRR for which there are already EBA delegated or implementing regulations or guidelines, such as own funds and leverage ratio.
The guidelines apply to globally and other systemically important institutions ("G-SIIs" and "O-SIIs"). Competent authorities may still require institutions that are neither G-SIIs nor O-SIIs to apply some or all the guidance provided for in the guidelines when complying with the requirements in Part Eight of the CRR.
The guidelines apply from December 31, 2017. However, an accompanying press release states that G‑SIIs are encouraged to comply with a subset of the guidelines as soon as December 31, 2016.
European Commission Confirms Insurance Block Exemption Regulation Not to Be Renewed
On December 13, 2016, the European Commission announced in a press release that Regulation 267/2010, the Insurance Block Exemption Regulation ("IBER"), will not be prevented from expiring on March 31, 2017. The IBER entered into force on April 1, 2010 and provides a block exemption for agreements relating to joint compilations, tables and studies. This enables the exchange of statistical information (calculations, tables and studies), subject to the specified conditions, and common coverage of certain types of risks (co-(re)insurance pools), subject to market share thresholds and other specified conditions.
In March 2016, the Commission published a report and document presenting the preliminary findings and conclusions of its review of the IBER, which began in 2014. The Commission's provisional conclusion with regard to joint compilations, tables and studies was that the functioning of the insurance industry no longer appears to require a special instrument like a block exemption regulation. As regards co-(re)insurance pools, the Commission considered the IBER to be of limited use and relevance.
The Commission has now confirmed the block exemption is no longer warranted because the Commission's 2011 Guidelines on horizontal cooperation (OJ 2011 C11/1) already provides guidance on how to assess the conformity of joint compilations, tables and studies with EU antitrust rules. However, the expiry of the IBER does not mean that these forms of cooperation become unlawful under Article 101 of the Treaty on the Functioning of the European Union (TFEU). Rather, insurers, as with all other companies doing business in the EU, will need to assess their cooperation in the market context to see whether it is in line with EU competition rules.
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