Consultation on the AML Colleges Guidelines

On 6 November The European Supervisory Authorities (EIOPA, EBA and ESMA) issued a consultation on draft joint guidelines on the cooperation and information exchange between competent authorities supervising credit and financial institutions (The AML Colleges Guidelines).

The EU Commission, Council and Parliament have amended Directive (EU) 2015/849 to explicitly require EU Member States not to prohibit or unreasonably restrict the exchange of information or cooperation between competent authorities for AML/CFT supervision purposes. However, the revised Directive does not set out in detail how this should be achieved. The three ESAs are therefore proposing Guidelines to clarify the method of supervisory cooperation and information exchange, and to create a framework that supervisors should use to support the effective AML/CFT supervision of firms that operate on a cross-border basis.

Comments to this consultation should be submitted by 8 February 2019.

Joint Consultation Paper concerning amendments to the PRIIPs KID

On 8 November, the European Supervisory Authorities (EIOPA, EBA and ESMA) published a joint Consultation Paper regarding amendments to Commission Delegated Regulation (EU) 2017/653 ("the Regulation") on key information documents (KID) for packaged retail and insurance-based investment products (PRIIPs). 
The consultation requests feedback regarding the proposed amendments outlined in section 4 of the paper which include:

  • proposals to change the approach for performance scenarios as well as a description of several other options that were identified;
  • potential amendments on a limited number of other specific issues based on the information gathered by the ESAs since the implementation of the KID;
  • possible changes relating to the expiry of the exemption in Article 32 of the PRIIPs Regulation; 
  • possible use of the PRIIPs KID by UCITS and relevant non-UCITS funds from 1 January 2020.
These amendments, which would take the form of regulatory technical standards (RTS), relate to the presentation and contents of the KID, including the approach for performance scenarios and methodologies for the calculation of risks, rewards and costs. Following consideration of feedback received, the ESAs will submit the RTS to the European Commission in January 2019. 

Comments must be submitted on or before 6 December 2018.

EIOPA peer reviews supervisory practices and application of Solvency II key functions 

On 15 November EIOPA published the findings of its peer review assessing how National Competent Authorities (NCAs) supervise and determine whether an insurer's setting of key functions fulfils the legal requirements of Solvency II with a particular emphasis on proportionality. 

The review examined practices regarding: 

•    combining key functions under one holder; 
•    combining key functions with administrative, management or supervisory body (AMSB) membership or with carrying out operational tasks; 
•    subordination of one key function under another key function; 
•    splitting of one key function among several holders; 
•    assessment of the fitness of key function holders; 
•    outsourcing of key functions.

The report included findings from a comparative analysis of the key functions, identified best practices and presented an overview of recommended actions addressed to the NCAs and EIOPA. The report notes that overall, NCAs have adopted similar approaches in assessing how insurers manage key functions and have applied the principle of proportionality in their assessment. Best practices have been identified, providing guidance to NCAs for a more systematic approach regarding the principle of proportionality as well as for ensuring consistent and effective supervisory approaches.

The report also identified some weaknesses, resulting in a number of recommended actions issued to NCAs. Some NCAs had not yet assessed key functions according to the Solvency II requirements. Other NCAs had weaknesses, in particular regarding the depth assessment and mitigating measures demanded from insurers for example in cases where combinations exist.

Q&A on regulation

During the month EIOPA has published a series of updates to its Questions and Answers (Q&As) on regulation. On 7 November it published a new set of Q&As on Directive 2009-138-EC of 25 of November of 2009 of the European Parliament Article 308b (13)(b) relating to the Transitional Equity Stress.
  • (EU) 2015-35 supplementing Directive 2009-138 – the Delegated Regulations
  • (EU) No 2015-2450 templates for the submission of information to the supervisory authorities
  • Directive 2009-138-EC of 25 of November of 2009 of the European Parliament Article 308b (13)(b) relating to the Transitional Equity Stress.
On 19 November EIOPA released a new set of Q&As on the following: 
  • guidelines on treatment of related undertakings, including participations;
  • guidelines on classification of own funds;
  • (EU) No 2015-2450 templates for the submission of information to the supervisory authorities; 
  • (EU) 2015-35 supplementing Directive 2009-138.

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