EU & UK Reg Round Up: 17/02/2024
European Banking Authority
The EBA have released taxonomy 3.4 to its reporting framework -06 February 2024
This package includes the validation rules, the Data Point Model (DPM), and the XBRL taxonomies to now support the amendments to the reporting requirements. This new reporting framework will be expected to apply to all reporting from 06/2024, and the new and amended reports are the IRRBB (reference date is 09/2024), and the MREL/TLAC reports (reference date is 06/2024).
ESMA decision to withdraw the recognition of the DCCC has passed - 06 February 2024
The appeal raised by the United Arab Emirates to include the Dubai Commodities Clearing Corporation as a Tier 1 Third-country central counterparty (CCP) has not passed. ESMA decision stems from the European commission to include the UAE on the list of high-risk third countries presenting deficiencies in their national anti-money laundering and counter financing of terrorism regime. As of 6 February, this decision is now fully operational.
EBA seeks input on draft technical standards for FRTB regarding RRAO - 01 February 2024
The European Banking Authority (EBA) has initiated a public consultation concerning whether certain financial instruments, which carry residual risk, can function as hedges; this is part of the EBA roadmap for market risk reports (notably FRTB). The CRR3 includes a provision to allow the exemption of the RRAO (residual risk add-on) charge for instruments bearing residual risks hedging other instruments with residual risks. The question the EBA seek to understand is whether the RRAO charge for which the institutions seek exemption relates to risk factors that are not accounted for in the SBM, or if it down to other reasons.
European Securities and Markets Authority
ESMA to withdraw Euronext as a DRSP - 13 February 2024
Previously Euronext Paris SA has been approved as both a Reporting Mechanism and an approved Publication Arrangement under MiFIR since 3 January 2018, however as of 13/02/2024, this authorisation has been withdrawn.
ESMA has published data for bond liquidity - 01 February 2024
ESMA has published their latest quarterly liquidity assessment for bonds available on EU trading venues. For this last quarter, ESMA have found that there are currently 1,374 liquid bonds subject to the MiFID II transparency requirements, out of 131,505 bonds. ESMA assess bond liquidity by calculating the daily average trading activity and the percentage of days traded per quarter.
Bank of England
BOE to transition from the cash ratio deposit scheme to the BOE levy - 02 February 2024
The BOE will replace the current CRD (cash ratio deposit) scheme with the levy scheme (subject to parliamentary approval). Upon the closure of the scheme the BOE will return all CRD deposits held to the CRD payers.
Bank rate to remain at 5.25% - 01 February 2024
To help curb inflation and to aid the MPC (monetary policy committee) at maintaining inflation at 2%, they decided to maintain the Bank Rate at 5.25%.