“Global Financial Supervision News” aims to provide insights into global financial supervision policy trends by regularly collecting and sorting out public information, providing the latest financial policy information of international and various countries and regions.
China
Measures of the People’s Bank of China on the Supervision and Administration of Anti-money Laundering and Anti-terrorist Financing of Financial Institutions-People’s Bank of China Order (2021) No. 3
Regulator: People’s Bank of China
Applicable objects: financial institutions
According to the development status of my country’s financial industry, the “Measures” increase the number of anti-money laundering obligations such as online microfinance companies and bank wealth management subsidiaries. At the same time, it further clarified the internal control and risk management requirements of financial institutions against money laundering. With reference to internationally accepted rules, financial institutions are required to conduct self-assessment of money laundering and terrorist financing risks, and establish internal control systems and corresponding risk management policies based on risk status and scale of operations, and further clarify financial institutions’ anti-money laundering organizations, human resources guarantees, and anti-money laundering Money laundering information system, anti-money laundering audit mechanism and other requirements.
China Securities Regulatory Commission on amendmentsDecision-China Securities Regulatory Commission Announcement (2021) No. 8
Regulatory agency: China Securities Regulatory Commission
The Guidelines restrict financial technology and model innovation companies from listing on the Sci-tech Innovation Board; real estate and companies mainly engaged in financial and investment businesses are prohibited from listing on the Sci-Tech Innovation Board.
India
The Reserve Bank of India Announces Extension of the Interest Equalization Plan for Rupee Export Credits Before and After Shipment
Regulator: Reserve Bank of India (RBI)
The Reserve Bank of India announced that the Indian government has approved the extension of the interest balance plan for export credits of rupee before and after shipment. This expansion will include the same scope and coverage as the original plan, and will be extended for another three months (that is, until June 30, 2021).
United Kingdom
Policy Statement on Emerging and Growing Unsystematic British Banks 8/21
Regulator: UK Prudential Regulation Authority (PRA)
The UK Prudential Regulation Authority issued a policy statement 8/21, expounding its attitude towards emerging and growing unsystematic UK banks. The policy statement is mainly related to emerging and growing unsystematic UK registered banks, although certain banks in this category will have sufficient experience and resources to quickly meet the expected standards of most established banks. This decision will depend on several factors, in particular: (i) whether the bank is part of an established domestic or international banking group; (ii) the scale and complexity of its activities; (iii) its available finances And the scope of non-financial resources.
Letter on obtaining deposits through deposit collection service providers
Regulator: Financial Conduct Authority UK Prudential Regulation Authority (FCA, PRA)
The Financial Conduct Authority and the UK Prudential Regulation Authority issued a letter on obtaining deposits through deposit pooling service providers. This letter clarified the authorities’ view of the risks associated with the increase in the number of deposits deposited into institutions through deposit-aggregation service providers and how to mitigate these risks. It also outlines some of the company’s key responsibilities, such as depositor protection, financial promotions and customer awareness.
“Financial Services and Markets: Solvency 2 (Credit Risk Adjustment) Regulations 2021”
Regulator: UK Ministry of Finance (HMT)
Applicable objects: insurance and reinsurance companies
The UK Ministry of Finance issued the “Financial Services and Markets: Solvency Standard 2 (Credit Risk Adjustment) Regulations 2021.” The regulations provide a new method for credit risk adjustment, which can be used for insurance and reinsurance companies to discount the basic risk-free interest rate term structure used by their liabilities. Given that LIBOR is being phased out, these regulations allow for appropriate adjustments to credit risk based on other benchmarks, such as the British Pound Overnight Average Index (SONIA).
Europe
Final report on the “European Market Infrastructure Regulation (EMIR) and Securitization Finance Transaction Regulation (SFTR) Data Quality”
Regulator: European Securities Regulatory Commission (ESMA)
The European Securities and Markets Authority (ESMA) released the final report on the “Data Quality of the European Market Infrastructure Regulation (EMIR) and the Securitization Financing Transaction Regulation (SFTR)”. The report covers the progress made so far in improving the quality of EMIR data used for supervision and supervision, and concludes that despite good progress, national authorities and ESMA need to make further efforts to further improve the quality of EMIR data. This report is the first review of data quality since the introduction of the EMIR and SFTR reporting systems. It also reviewed the data quality reported by the transaction database and outlined measures taken by ESMA and NCA to improve data quality.
The final draft of the regulatory technical standards for the prudential merger approach under the Capital Requirements Regulations
Regulator: European Banking Authority (EBA)
The European Banking Regulatory Authority (EBA) released the final draft of its regulatory technical standards (RTS). The main changes to the draft involve the newly introduced Capital Requirements Regulation (CRR) Article 18, paragraph 8, allowing the competent authority to substantively intervene In the case of risks, the prudential merger will be extended to certain non-financial companies. The final draft of the RTS has been revised to reflect the amendments introduced as part of a package of risk reduction measures.
ECB Annual Report 2020
Regulator: European Central Bank (ECB)
The European Central Bank (ECB) released its 2020 annual report. The annual report covers:
- Increased risks from the European financial industry and Covid-19;
- Innovation and integration of market infrastructure and payment;
- Digital euro; and
- climate change.
Consultation on the treatment framework for EU unit linked market currency value risk
Regulator: European Insurance and Occupational Pension Administration (EIOPA)
The European Insurance and Occupational Pension Administration (EIOPA) has published a consultation on the framework for resolving the risk of the market currency value of EU units linked to the market. The consultation document proposes a framework that sets out how to assess whether unit-linked and hybrid products are cost-effective, and takes into account the needs, goals and characteristics of the target market.
Use of distributed ledger technology in the post-transaction process
Regulator: European Central Bank (ECB)
The European Central Bank (ECB) issued a document on the use of distributed ledger technology (DLT) in the post-transaction process. The document considers:
- Regulatory, governance and interoperability considerations in the DLT environment;
- Issuance or recording of securities and post-transaction processing in the DLT environment; and
- The main functions of using DLT for issuance, custody and settlement.
Report of the Ministry of Financial Stability and Capital Markets on the exemption of EMIR liquidation obligations
Regulatory agency: European Commission (EUC))
The European Commission (EC)’s Department of Financial Stability and Capital Markets (DG FISMA) issued a report that considers possible post-trade risk reduction (PTRR) services that may lead to exemption from EU market infrastructure supervision (EU EMIR) for direct transactions Required liquidation obligations. The European Commission’s assessment considers:
- To what extent has the PTRR service reduced risks, especially counterparty credit risk and operational risk;
- If an exemption is granted, it is possible to evade liquidation obligations;
- Whether the exemption is granted may have an adverse effect on Central Clearing; and
- Quantitative evidence on the benefits of PTRR services and whether the use of this exemption may cause any new risks.
United States
A government agency issues a statement and requests information about bank secrecy laws/anti-money laundering compliance
Regulatory agency: Federal Deposit Insurance Corporation Financial Crime Enforcement Network, National Credit Union Administration Office of Currency Supervision (FED, FDIC, FinCEN, NCUA, OCC)
The Federal Reserve, the Federal Deposit Insurance Corporation, the Financial Crime Enforcement Network, the National Credit Union Administration, and the Office of the Comptroller of the Currency issued a joint statement. The joint statement sets out the relationship between the risk management principles described in the “Model Risk Management Regulatory Guide” and the systems or models used by banks to assist in compliance with the Bank Secrecy Act (BSA) laws and regulations. The statement further stated that it will not change existing bank secrecy laws or anti-money laundering (AML) laws or regulations, nor will it establish new regulatory expectations, and does not require a specific model risk management framework.
Credit loss provision: new supervision manual
Regulator: Office of the Comptroller of Currency (OCC)
The Office of the Comptroller of the Currency (OCC) has issued a new supervision manual-the “Credit Loss Preparation” manual, which is used by OCC inspectors to inspect and supervise national banks, the Federal Savings Association, and federal branches and foreign banking organizations (collectively referred to as banks). Used in institutions. This manual provides inspectors with information on credit loss allowances (ACL) and review procedures. It is applicable to banks that adopt the current expected credit loss (CECL) method when subject to 326.1 of the Accounting Standards Collection (ASC). OCC supervision. The “Loan and Lease Loss Reserves” sub-volume of the Supervision Manual continues to apply to the OCC’s supervision of banks that have not adopted CECL.
2020 Fair Loan Report
Regulator: Consumer Financial Protection Bureau (CFPB)
The Consumer Financial Protection Bureau (CFPB) released the 2020 annual fair loan report. The report highlights the work carried out by the CFPB in 2020 to promote the bureau’s fair lending mission, which is to ensure fair, equal and non-discriminatory access to credit, while also in the COVID-19 epidemic and the resulting economic consequences Protect consumers. The Consumer Financial Protection Bureau (CFPB) released the 2020 annual fair loan report. The report highlights the work carried out by the CFPB in 2020 to promote the bureau’s fair lending mission, which is to ensure fair, equal and non-discriminatory access to credit, while also in the COVID-19 epidemic and the resulting economic consequences Protect consumers.
International
Basel Committee releases work plan and strategic priorities for 2021-22
Regulator: Basel Committee (BCBS)
The Basel Committee (BCBS) has issued a work plan for 2021/22, which sets out the strategic priorities for the coming year and reflects the results of its recent strategic review. The work plan focuses on three key themes:
- Covid-19 resilience and resilience;
- Comprehensively scan and mitigate mid-term risks and trends; and
- Strengthen supervision and coordination and practice.
Climate-related risk drivers and their communication channels
Regulator: Basel Committee (BCBS)
The Basel Committee released a report on climate-related risk drivers and their communication channels. The report explores climate-related risk drivers, including how physical risks and transitional risks are generated through micro and macroeconomic transmission and affect banks and the banking system.
Climate-related financial risks-measurement methods
Regulator: Basel Committee (BCBS)
The Basel Committee released a report on climate-related financial risks-measurement methods. The report outlines conceptual issues related to climate-related financial risk measurement and methods, as well as the actual implementation of banks and bank supervisory agencies. According to the report:
- Climate-related financial risks have unique characteristics, which means that sufficiently fine-grained data and forward-looking measurement methods are required to solve these problems.
- So far, the measurement of climate-related financial risks has focused on mapping recent transition risk drivers to bank risk exposures. Credit risk measurement has attracted the most energy investment, while other risk categories have received less attention. In many cases, initial program analysis and stress testing focused on specific investment portfolios or risk exposures for transformational risks, and specific hazards for physical risks.
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