Worldwide: Financial Regulatory Developments Focus – 17 June 2014

In this newsletter, we provide a snapshot of the principal European, US and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.


EBA Report on EU Remuneration Trends

On 13 June 2014, the European Banking Authority ("EBA") published a report on remuneration practices across the EU. The report, which is based on data collected on a consolidated basis from 2010 to 2012, illustrates the diversity in quantity and structure of pay across the EU financial sector. The report highlights that practices vary on the deferral of variable remuneration depending on the application of the proportionality principle by Member States and individual firms. The EBA is analyzing an emerging practice on the use of "position or role-based allowances" and intends to provide guidance criteria on the allocation of those elements of pay to either fixed or variable remuneration because it is concerned that the practice may lead to the cap between variable and fixed remuneration being thwarted.

The EBA report is available at:


Further Secondary Legislation under CRD IV Published

On 13 June 2014, secondary legislation under the Capital Requirements Regulation ("CRR") and the Capital Requirements Directive was published in the Official Journal of the European Union. The legislation comprised regulatory technical standards ("RTS"), setting out the requirements for investor, sponsor, original lenders and originator institutions relating to exposures to transferred credit risk, and implementing technical standards ("ITS") on the information exchange between home and host Member State regulators.

The legislation is available at: and

EBA Consults on Draft Guidelines for Pillar 3 Disclosure Waivers

On 13 June 2014, the EBA published a consultation on proposed Guidelines for banks and investment firms wishing to utilize the Pillar 3 disclosure waivers available under the CRR. The draft Guidelines cover the process that banks and investment firms should follow and the criteria that should be applied when firms assess whether to use any waiver relating to the materiality, proprietary or confidentiality of disclosures or the frequency of disclosures. The draft Guidelines also set out the information that firms making use of a waiver should provide. The EBA anticipates that the Guidelines will be finalized by 31 December 2014 at the latest. Responses to the consultation are due by 13 September 2014.

The consultation paper is available at: 09+Consultation+paper+on+Guidelines+Article+432+and+Article+433+CRR+dis closures.pdf.

EBA Announcement on Supervisory Reporting Templates

The EBA announced, on 11 June 2014, that there were issues with the supervisory reporting templates included in the adopted ITS on supervisory reporting. The EBA and the European Commission have agreed that firms should use the liquidity templates published by the EBA on 2 December 2013 or the templates published by the European Commission on 16 April 2014 for liquidity reporting under the CRR until such time as the issue is corrected.

The EBA announcement is available at:

EBA Consults on Draft RTS Relating to Advanced Measurement Approaches for Operational Risk

On 12 June 2014, the EBA launched a consultation on draft RTS that set out the criteria for national regulators to consider before granting a firm permission to use advanced measurement approaches for calculating its capital requirements for operational risk, including the minimum conditions that a firm must meet. The draft RTS are required under the CRR. Responses to the consultation are due by 12 September 2014.

The consultation paper is available at: 08+CP+on+draft+RTS+on+AMA+assesment.pdf.

FDIC Releases Proposed Rulemaking to Amend Annual Stress Test Rule

On 16 June 2014, the Federal Deposit Insurance Corporation ("FDIC") announced that it is seeking comment on a notice of proposed rulemaking amending the FDIC's Annual Stress Test rule, following similar actions by the Board of Governors of the Federal Reserve System ("Federal Reserve Board") and the Office of Comptroller of the Currency ("OCC") on 12 June 2014. This proposed rule would shift back the timing of the annual stress testing cycle by approximately 90 days, and clarify that institutions covered by the Annual Stress Test rule will not have to calculate their regulatory capital ratios using the Basel III advanced approaches until the stress testing cycle begins on 1 January 2016.

The full text of the proposed rule is available at:

Federal Reserve Board Invites Comment on Proposal to Modify Regulations for Capital Planning and Stress Testing

On 12 June 2014, the Federal Reserve Board issued a proposal to modify the regulations for capital planning and stress testing. The proposed rule would shift the start date of the capital plan and stress test cycles from 1st of October of a calendar year to 1st of January of the following calendar year. Under the proposed rule, a bank holding company with total consolidated assets of $50 billion or more would be required to submit its capital plan and stress test results to the Federal Reserve by 5 April, three months later than under the current rulemakings.

Comments on the proposed rule will be accepted until 11 August 2014.

The full text of the proposed rule is available at:

Federal Banking Regulators Finalize Joint Supplemental Guidance on Income Tax Allocation Agreements

On 13 June 2014, the Federal Reserve Board, the FDIC and the OCC issued final supplemental guidance on income tax allocation agreements involving holding companies and insured depository institutions. One aim of the guidance is to reduce confusion regarding ownership of tax refunds. The guidance supplements an interagency policy statement on income tax allocation issued by the regulators in 1998 which said that a holding company that receives a tax refund from a taxing authority obtains these funds as agent for its subsidiary insured depository institutions and other affiliates. The guidance supplements the policy statement by instructing insured depository institutions and their holding companies to review their tax allocation agreements to ensure the agreements expressly acknowledge that the holding company receives any tax refunds as an agent. In addition, all banking organizations are asked to insert specific language in their tax allocation agreements to further clarify tax refund ownership.

Institutions and holding companies should implement the guidance as soon as reasonably possible, which the regulators expect would not be later than 31 October 2014.

The full text of the interagency guidance is available at:

To read this Focus in full, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions