The European Supervisory Authorities (ESAs) have published a Joint Consultation Paper on draft regulatory technical standards (RTS) on risk concentration and intra-group transactions under article 21a(1a) of the Financial Conglomerates Directive (FICOD).
The draft RTS:
- aim to ensure that Articles 2, 7 and 8 and Annex II of FICOD are applied in a consistent way. They clarify which risk concentration and intra-group transactions at the level of the financial conglomerate should be considered “significant”, given that Articles 7(2) and 8(2) of FICOD require that significant risk concentration and intra-group transactions are reported to the co-ordinators;
- provide for co-ordination of the factors that co-ordinators and other relevant competent authorities should take into account when identifying types of significant risk concentration, defining appropriate thresholds for the reporting of risk concentration and intra-group transactions, setting periods for reporting and overviewing significant risk concentration and intra-group transactions as part of the supplementary supervision on the basis of FICOD;
- provide that co-ordinators and the other relevant competent authorities should require regulated entities or mixed financial holding companies to report certain minimum information. The aim of this is to ensure a consistent application of FICOD’s rules on risk concentration and intra-group transactions. The co-ordinator and the other relevant competent authorities should agree on the form and content of the significant intra-group transactions report, including language, frequency, addressees, remittance dates and channels of communication; and
- aim to provide a set of supervisory measures that should be taken into account by supervisors in their supplementary supervision under FICOD in order to foster a more harmonised approach with respect to supervisory measures.
The deadline for comments on the Joint Consultation Paper is 24 October 2014.