EU & UK Reg Round Up: 12/04/2025
European Banking Authority
The ESAs call for vigilance amid rising geopolitical and cyber risks - 31 March 2025
The European Supervisory Authorities (EBA, EIOPA, and ESMA) have released their Spring 2025 Joint Committee update, highlighting risks and vulnerabilities in the EU financial system, particularly those arising from geopolitical tensions and cyber risks. The authorities emphasize that trade disputes, shifting policies, ongoing conflicts, and economic fragmentation are creating significant challenges for financial stability. Financial institutions must manage growing uncertainties, such as exposure to international markets, liquidity risks, and the evolving role of artificial intelligence (AI).
The ESAs stress the need for proactive risk management, enhanced cyber resilience, and close monitoring of global financial linkages. In light of high geopolitical risks, they advise supervisors and financial entities to prepare for market volatility, potential liquidity risks, and adverse developments, including ensuring adequate provisions. To address cyber and digitalisation risks, they recommend strong data governance, evaluating AI compliance with the AI Act, and supporting the timely implementation of the Digital Operational Resilience Act.
ESAs publish evaluation report on the Securitisation Regulation - 31 March 2025
The ESAs’ Joint Committee published its SECR evaluation, recommending simplifications like clarifying scope (EU-based parties), expanding public securitisation definitions, and streamlining reporting. It also proposes proportionate due diligence, STS framework tweaks, and enhanced supervisory consistency. These will inform the European Commission’s legislative review.
The EBA releases the draft of the technical package for its 4.1 reporting framework - 27 March 2025
The EBA released a draft technical package for version 4.1 of its reporting framework, to aid early implementation, with the final version due by end-May 2025. It includes validation rules, DPM, and XBRL taxonomies for Pillar 3 disclosures, MiCAR reporting guidelines, Instant Payments ITS integration, and new ESG data collection rules. This continues the transition to DPM 2.0 and a new glossary, as outlined in June 2024, with data dictionary contents in both DPM 1.0 and 2.0 formats. FAQs from December 2024 provide further guidance.
The EBA updates methodology on the regulatory and supervisory equivalence of non-EU countries - 24 March 2025
The European Banking Authority (EBA) published an updated methodology, for assessing non-EU countries’ regulatory and supervisory frameworks, aligning with revisions to the Capital Requirements Regulation (CRR) and Directive (CRD). It features two questionnaires: a preliminary screening (1st step) to check key requirements, and a detailed mapping (2nd step) of EU provisions against non-EU frameworks. The 2nd step questionnaire has been streamlined for usability and moved to a secure online platform, accessible to non-EU jurisdictions upon request .
The EBA updates technical standards on the joint decision process for internal model authorisation - 17 March 2025
The European Banking Authority (EBA) has published its final draft Implementing Technical Standards (ITS), which amend the existing Implementing Regulation on the joint decision process for internal model authorization under the Capital Requirements Regulation (CRR). These revisions are part of the EBA's first phase in implementing the EU Banking Package.
The key amendments include a revised scope for the use of internal models under CRR III, notably removing the possibility of applying these models for operational risk, leading to the deletion of references to the Advanced Measurement Approach (AMA) from the revised ITS. Additionally, the ITS now reflect updates to the functioning of supervisory colleges, in line with changes in the revised supervisory colleges regulatory framework.
European Securities and Markets Authority
ESMA publishes the annual peer review of EU CCP supervision - 02 April 2025
ESMA published its annual peer review on National Competent Authorities’ (NCAs) supervision of EU Central Counterparties (CCPs) under EMIR. The review assessed NCA effectiveness in monitoring CCP compliance with outsourcing and intragroup governance requirements, finding NCAs generally met expectations. CCP college functioning was rated positively overall. Where shortcomings were identified, ESMA issued recommendations. The report also highlighted the need for greater supervisory convergence on defining major risk management activities.
Preparing for the Consolidated Tape Provider for bonds - ESMA clarifies some aspects - 02 April 2025
The European Securities and Markets Authority (ESMA) is urging market participants to prepare for the upcoming launch of the Consolidated Tape Provider (CTP) for bonds. ESMA has clarified that the draft technical standards (RTS) for the CTP, published in December 2024, are expected to be adopted soon without substantial changes from the European Commission (EC). These RTS will set out requirements for data contributors regarding their connection and contribution to the CTP, as well as standards on bond transparency.
The ESMA publish evaluation report on the Securitisation Regulation - 31 March 2025
The Joint Committee of the ESAs published its SECR evaluation, proposing simplifications to enhance Europe’s securitisation framework while protecting investors and financial stability. Key recommendations include clarifying SECR scope (applies if one party is EU-based), broadening the public securitisation definition (e.g., prospectus-approved or traded securities), and introducing proportionate due diligence and streamlined reporting. It also suggests refining the STS framework, clarifying risk retention rules (e.g., for CLOs), and promoting supervisory consistency via stronger coordination.
ESMA makes recommendations for the supervision of STS securitisations - 27 March 2025
ESMA published its Peer Review Report on how National Competent Authorities (NCAs) supervise Simple, Transparent, and Standardised (STS) securitisations, focusing on four NCAs: AMF (France), BaFin (Germany), CMVM (Portugal), and DNB (Netherlands). The report recommends NCAs adopt a mix of transaction- and entity-based supervision tailored to market size, enhance risk identification, and allocate sufficient resources. Some NCAs need a more structured, risk-based framework. Aimed at boosting investor confidence and supporting the EU securitisation market revival, ESMA will follow up with future assessments to track progress.
Bank of England
The PRA proposes raising FSCS deposit protection limit to £110,000 - 31 March 2025
The Prudential Regulation Authority (PRA) has proposed increasing the Financial Services Compensation Scheme (FSCS) deposit protection limit from £85,000 to £110,000, effective from 1 December 2025. This adjustment accounts for inflation since 2017 and aims to strengthen consumer confidence in the financial system. Alongside this, the PRA is consulting on raising the protection limit for temporary high balance claims, such as property transactions and insurance payouts, from £1 million to £1.4 million. Additionally, new rules will be introduced to support the Banking Resolution (Recapitalisation) Bill, allowing FSCS funds to be used for recapitalizing failing firms to facilitate their sale or transfer. These changes form part of a broader effort to enhance financial stability and consumer protection in the UK.
Updated taxonomy and data point model Version 1.3.1 - 31 March 2025
The Bank of England has released a public working draft (PWD) of the updated taxonomy and data point model (DPM), following Green Notice 2024/01. While reporting requirements remain unchanged, this update addresses known issues in data modelling and validation rules to enhance alignment with existing definitions. As previously announced, the Statistical Utility tool will be withdrawn, and firms will need to use recognised software providers for XBRL reporting. The Bank is seeking industry feedback on the PWD technical artefacts by 30 May 2025. A user acceptance testing (UAT) window will be available from 28 April to 9 May 2025, with additional testing phases to be announced. The final taxonomy publication date and first applicable reporting period will be confirmed after testing.
Bank of England launches the 2025 Bank Capital Stress Test - 24 March 2025
The Bank of England has launched the 2025 Bank Capital Stress Test for the UK’s seven largest and most systemic banks and building societies, succeeding the Annual Cyclical Scenario (ACS). This test assesses the resilience of the UK banking system against severe global and domestic economic downturns, sharp declines in asset prices, rising interest rates, and misconduct costs. The scenario, designed to test ‘tail risk’ events rather than predict actual conditions, includes a 5% fall in UK GDP, an 8.5% peak unemployment rate, a 28% drop in UK house prices, and a peak inflation rate of 10%. This is the first stress test since the end of transitional arrangements for IFRS 9, and the results will help set capital buffers and assess systemic risks. Results will be published in Q4 2025, with stress tests expected to occur biennially moving forward.
Bank Rate maintained at 4.5% - 20 March 2025
The Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. The MPC adopts a medium-term and forward-looking approach to determine the monetary stance required to achieve the inflation target sustainably.