Guideline ECB/2011/3 of 18 March 2011 (OJ L of 1 April 2011), amending Guideline
ECB/2004/18 of 16 September 2004,25 on the procurement of euro banknotes was issued
in compliance with the requirement to review Guideline ECB/2004/18 at the beginning of
2008 and every 2 years thereafter.
The ECB Governing Council decided on 10 July 2003 that a single Eurosystem tender
procedure should apply to the procurement of euro banknotes at the latest from 1 January
2012 onwards. Thus national central banks (NCBs) that have an inhouse printing works, or
those using a public printing works may elect not to participate in the single Eurosystem
tender procedure. In such cases, these printing works will remain responsible for the production
of the euro banknotes that have been allocated to their NCBs in accordance with
the capital key but will be excluded from participating in the single Eurosystem tender
procedure.
The expected start date of the procedure described above may be changed by a Governing
Council decision where more than half of the national central banks (NCBs) representing
more than half of the Eurosystem’s total banknote printing requirement choose not to
participate.
Given that this situation has occurred, Guideline ECB/2011/3 changes the start date of the
single Eurosystem tender procedure from 1 January 2012 to 1 January 2014, unless the
Governing Council decides on a different start date.
The Guideline came into force on 20 March 2011.
martes, 20 de diciembre de 2011
sábado, 17 de diciembre de 2011
Mergers of public limited liability companies: Union legislation
Directive 2011/35/EU of the European Parliament and of the Council of 5 April 2011 (OJ L
of 29 April 2011) concerning mergers of public limited liability companies coordinates the
safeguards required in mergers for the protection of the interests of members and others.
The Directive incorporates most of the provisions of Council Directive 2001/23/EC of 12
March 2001 on the approximation of the laws of the Member States relating to the safeguarding
of employees’ rights in the event of transfers of undertakings, businesses or
parts of undertakings or businesses, as well as the provisions on reporting and documentation
set out in Directive 2009/109/EC of the European Parliament and of the Council of
16 September 200922 amending Council Directives 77/91/EEC, 78/855/EEC and 82/891/
EEC, and Directive 2005/56/EC as regards reporting and documentation requirements in
the case of mergers and divisions. It thus regulates these transactions with a view to ensuring
that third parties are sufficiently informed.
The Member States shall, in accordance with this Directive, make provision for rules governing
merger by the acquisition of one or more companies by another company23 and
merger by the formation of a new company.
In the case of merger by acquisition, the administrative or management bodies of the
merging companies shall draw up draft terms of merger in writing, the content of which is
set out in detail in the Directive. Draft terms of merger must be published for each of the
merging companies, at least one month before their approval, or made available on its
website free of charge for the public or via the central electronic platform referred to in
Directive 2009/101/EC.
One or more experts, acting on behalf of each of the merging companies but independent
of them, appointed or approved by a judicial or administrative authority, shall examine the
draft terms of merger and draw up a written report to the shareholders. However, the laws
of a Member State may provide for the appointment of one or more independent experts
for all the merging companies, if such appointment is made by a judicial or administrative
authority at the joint request of those companies.
In addition to the draft terms of merger, shareholders shall be entitled to receive certain
documentation, specified in the Directive, at least one month before the date fixed for the
general meeting approving the merger. This documentation includes the annual accounts
and annual reports of the merging companies for the preceding three financial years. A
company shall be exempt from this requirement if it make such documentation available
to the public on its website during that period of time.
A merger shall require at least the approval of the general meeting with a majority of not
less than two thirds of the votes attached to the shares, equity units or subscribed capital
represented. The laws of a Member State may, however, provide that a simple majority of
the votes shall be sufficient when at least half of the subscribed capital is represented.
Protection of the rights of the employees of each of the merging companies shall be regulated
in accordance with Directive 2001/23/EC.
The laws of the Member States must provide for an adequate system of protection of the
interests of creditors of the merging companies whose claims antedate the publication of
the draft terms of merger and have not fallen due at the time of such publication. To that
end, such creditors shall be entitled to obtain adequate safeguards where the financial
situation of the merging companies makes such protection necessary.
In any event, Member States shall ensure that the creditors are authorised to apply to the
appropriate administrative or judicial authority for adequate safeguards provided that they
can credibly demonstrate that due to the merger the satisfaction of their claims is at stake
and that no adequate safeguards have been obtained from the company.
The Directive sets out the legal consequences of a merger and the civil liability of the administrative
or management bodies of the acquiring or acquired company, and limits the
cases of nullity of a merger in order to preserve legal certainty in dealings between interested
companies, between interested companies and third parties and between shareholders.
Also set forth is the regime governing merger by formation of a new company, which includes
most of the provisions laid down for the other type of merger.
Finally, where a merger by acquisition is carried out by a company which holds 90% or
more, but not all, of the shares and other securities conferring the right to vote at general
BANCO DE ESPAÑA 16 ECONOMIC BULLETIN, JULY 2011 FINANCIAL REGULATION: 2011 Q2 meetings of the company or companies being acquired, Member States shall not require
approval of the merger by the general meeting of the acquiring company if certain conditions
are fulfilled.
The Directive came into force on 1 July 2011.
of 29 April 2011) concerning mergers of public limited liability companies coordinates the
safeguards required in mergers for the protection of the interests of members and others.
The Directive incorporates most of the provisions of Council Directive 2001/23/EC of 12
March 2001 on the approximation of the laws of the Member States relating to the safeguarding
of employees’ rights in the event of transfers of undertakings, businesses or
parts of undertakings or businesses, as well as the provisions on reporting and documentation
set out in Directive 2009/109/EC of the European Parliament and of the Council of
16 September 200922 amending Council Directives 77/91/EEC, 78/855/EEC and 82/891/
EEC, and Directive 2005/56/EC as regards reporting and documentation requirements in
the case of mergers and divisions. It thus regulates these transactions with a view to ensuring
that third parties are sufficiently informed.
The Member States shall, in accordance with this Directive, make provision for rules governing
merger by the acquisition of one or more companies by another company23 and
merger by the formation of a new company.
In the case of merger by acquisition, the administrative or management bodies of the
merging companies shall draw up draft terms of merger in writing, the content of which is
set out in detail in the Directive. Draft terms of merger must be published for each of the
merging companies, at least one month before their approval, or made available on its
website free of charge for the public or via the central electronic platform referred to in
Directive 2009/101/EC.
One or more experts, acting on behalf of each of the merging companies but independent
of them, appointed or approved by a judicial or administrative authority, shall examine the
draft terms of merger and draw up a written report to the shareholders. However, the laws
of a Member State may provide for the appointment of one or more independent experts
for all the merging companies, if such appointment is made by a judicial or administrative
authority at the joint request of those companies.
In addition to the draft terms of merger, shareholders shall be entitled to receive certain
documentation, specified in the Directive, at least one month before the date fixed for the
general meeting approving the merger. This documentation includes the annual accounts
and annual reports of the merging companies for the preceding three financial years. A
company shall be exempt from this requirement if it make such documentation available
to the public on its website during that period of time.
A merger shall require at least the approval of the general meeting with a majority of not
less than two thirds of the votes attached to the shares, equity units or subscribed capital
represented. The laws of a Member State may, however, provide that a simple majority of
the votes shall be sufficient when at least half of the subscribed capital is represented.
Protection of the rights of the employees of each of the merging companies shall be regulated
in accordance with Directive 2001/23/EC.
The laws of the Member States must provide for an adequate system of protection of the
interests of creditors of the merging companies whose claims antedate the publication of
the draft terms of merger and have not fallen due at the time of such publication. To that
end, such creditors shall be entitled to obtain adequate safeguards where the financial
situation of the merging companies makes such protection necessary.
In any event, Member States shall ensure that the creditors are authorised to apply to the
appropriate administrative or judicial authority for adequate safeguards provided that they
can credibly demonstrate that due to the merger the satisfaction of their claims is at stake
and that no adequate safeguards have been obtained from the company.
The Directive sets out the legal consequences of a merger and the civil liability of the administrative
or management bodies of the acquiring or acquired company, and limits the
cases of nullity of a merger in order to preserve legal certainty in dealings between interested
companies, between interested companies and third parties and between shareholders.
Also set forth is the regime governing merger by formation of a new company, which includes
most of the provisions laid down for the other type of merger.
Finally, where a merger by acquisition is carried out by a company which holds 90% or
more, but not all, of the shares and other securities conferring the right to vote at general
BANCO DE ESPAÑA 16 ECONOMIC BULLETIN, JULY 2011 FINANCIAL REGULATION: 2011 Q2 meetings of the company or companies being acquired, Member States shall not require
approval of the merger by the general meeting of the acquiring company if certain conditions
are fulfilled.
The Directive came into force on 1 July 2011.
martes, 6 de diciembre de 2011
Update of TARGET2 legislation
Guideline ECB/2011/2 of 17 March 2011 (OJ L of 1 April 2011) amended Guideline
ECB/2007/2 of 26 April 200721 on a Trans-European Automated Real-time Gross settlement
Express Transfer system (TARGET2) so that the ECB Governing Council may, as a
precautionary measure, make available overnight credit in TARGET2 to certain central
counterparties that are not licensed as credit institutions.
For this purpose, they must meet the following conditions: 1) provide clearing and settlement
services and, in addition, be authorised as central counterparties in accordance with
the applicable Union or national legislation; 2) be established in the euro area; 3) be subject
to supervision and/or oversight by competent authorities; 4) comply with the oversight
requirements for the location of infrastructures offering services in euro, as amended from
time to time and published on the ECB’s website; 5) have accounts in the Payments Module
of TARGET2; and 6) have access to intraday credit.
It is clarified that the guarantee funds that a central counterparty has to maintain under the
applicable legislation, including those required on oversight grounds, shall be remunerated
at the main refinancing operations rate minus 15 basis points, while other guarantee funds
shall be remunerated at the deposit rate.
The Guideline came into force on 3 April 2011 and shall apply from 11 April 2011.
ECB/2007/2 of 26 April 200721 on a Trans-European Automated Real-time Gross settlement
Express Transfer system (TARGET2) so that the ECB Governing Council may, as a
precautionary measure, make available overnight credit in TARGET2 to certain central
counterparties that are not licensed as credit institutions.
For this purpose, they must meet the following conditions: 1) provide clearing and settlement
services and, in addition, be authorised as central counterparties in accordance with
the applicable Union or national legislation; 2) be established in the euro area; 3) be subject
to supervision and/or oversight by competent authorities; 4) comply with the oversight
requirements for the location of infrastructures offering services in euro, as amended from
time to time and published on the ECB’s website; 5) have accounts in the Payments Module
of TARGET2; and 6) have access to intraday credit.
It is clarified that the guarantee funds that a central counterparty has to maintain under the
applicable legislation, including those required on oversight grounds, shall be remunerated
at the main refinancing operations rate minus 15 basis points, while other guarantee funds
shall be remunerated at the deposit rate.
The Guideline came into force on 3 April 2011 and shall apply from 11 April 2011.
domingo, 27 de noviembre de 2011
Amendment of rules (foreign collective investment institutions)
Amendment of rules on reporting by foreign collective investment institutions registered with the CNMV
CNMV Circular 2/2011 of 9 July 2011 (BOE of 26 July 2011) on reporting by foreign collective
investment institutions registered with the CNMV repeals and replaces CNMV Circular
2/2006 of 27 June 2006.30 The Circular writes into the Spanish legal system the latest
precepts of Union legislation31 which came into force on 1 July 2011.
Under the new notification procedure, collective investment institutions (CIIs) have to submit
the relevant documentation to the competent authority of the home Member State.
That documentation shall include the notification letter, which contains the identity of the
entity empowered to represent the CII before the CNMV and the information on the provisions
for marketing the CII in the host Member State. In this respect, the Circular spells out
the specific information which the foreign CII must include in the notification letter, for
which purpose it sets out a standard format of the marketing report.32
Certain information on the foreign CII must be kept up to date electronically.
The requirements regarding the CII documentation to be sent to the CNMV are changed, the
information required to be disclosed to investors is adjusted somewhat, the requirement to register
compartments in the CNMV register is eliminated, and the content of the communication to
be made to the CNMV pursuant to Article 52 of the Personal Income Tax Regulations is broadened
to include information on compartments and/or classes to be reported for tax purposes.
Lastly, non-harmonised CIIs are no longer required to send information electronically.
The Circular came into force on 1 July 2011.
CNMV Circular 2/2011 of 9 July 2011 (BOE of 26 July 2011) on reporting by foreign collective
investment institutions registered with the CNMV repeals and replaces CNMV Circular
2/2006 of 27 June 2006.30 The Circular writes into the Spanish legal system the latest
precepts of Union legislation31 which came into force on 1 July 2011.
Under the new notification procedure, collective investment institutions (CIIs) have to submit
the relevant documentation to the competent authority of the home Member State.
That documentation shall include the notification letter, which contains the identity of the
entity empowered to represent the CII before the CNMV and the information on the provisions
for marketing the CII in the host Member State. In this respect, the Circular spells out
the specific information which the foreign CII must include in the notification letter, for
which purpose it sets out a standard format of the marketing report.32
Certain information on the foreign CII must be kept up to date electronically.
The requirements regarding the CII documentation to be sent to the CNMV are changed, the
information required to be disclosed to investors is adjusted somewhat, the requirement to register
compartments in the CNMV register is eliminated, and the content of the communication to
be made to the CNMV pursuant to Article 52 of the Personal Income Tax Regulations is broadened
to include information on compartments and/or classes to be reported for tax purposes.
Lastly, non-harmonised CIIs are no longer required to send information electronically.
The Circular came into force on 1 July 2011.
AMENDMENT OF LEGISLATION (CREDIT INSTITUTION DEPOSIT GUARANTEE FUNDS)
AMENDMENT OF LEGISLATION ON CREDIT INSTITUTION DEPOSIT GUARANTEE FUNDS.
Royal Decree 771/2011 amends Royal Decree 2606/1996 by introducing a new regime for
additional contributions to these funds based on the remuneration of the deposits in
them.12 Specifically, the amounts of the deposits whose agreed remuneration exceeds the limits specified below shall be weighted at 500% (i.e. 400% more than the weight they
would have if they were included in that base) for the purpose of calculating the contributions
of the credit institutions belonging to the related deposit guarantee funds.
The limits above which the new weights will be applied are as follows: 1) sight deposits
whose annual interest paid in the periodic settlement of the account is more than 100 basis
points higher than average 1-month EURIBOR; 2) time deposits (or similar instruments)
up to three months whose agreed annual interest is more than 150 basis points higher than
average 3-month EURIBOR; 3) time deposits (or similar instruments) between three
months and one year whose agreed annual interest is more than 150 basis points higher
than average 6-month EURIBOR; and 4) time deposits (or similar instruments) with a term
of one year or more whose agreed remuneration is more than 100 basis points higher than
average 12-month EURIBOR.
Banco de España Circular CBE 3/2011 of 30 June 2011 (BOE of 2 July 2011) on additional
contributions to deposit guarantee funds sets out technical provisions implementing
the new precepts introduced by Royal Decree 771/2011.
The Circular contains two types of rules: those for identifying what is understood as deposit
remuneration in different practical cases, and those regulating ad hoc tools for calculating
the additional contribution.
Deposit remuneration shall comprise any explicit or implicit compensation or payment,
in cash or in kind, for maintaining a deposit. Thus the value of remuneration in kind shall
be that applicable under tax legislation, including any tax prepayments to be made for
the remuneration when they are borne by the institution. In variable-rate time deposits,
the remuneration shall be that which results from applying the reference index at the
deposit placement date over the whole of the agreed time period, disregarding possible
future modifications. In time deposits in which the interest rates change before maturity,
the interest rate taken shall be the average of the rates, weighting each by the time it is
to be applied. In hybrid financial instruments in which the embedded derivative does
not share similar characteristics and risks with the host contract, the interest rate used
to determine their remuneration shall be the maximum annual percent remuneration
receivable by the depositor on the amount deposited, if it is higher than the effective
annual interest rate corresponding to the host contract after the embedded derivative
has been stripped out; in the absence of the former, only the latter shall be taken. In any
event, any additional remuneration envisaged in the contract, be it in cash or in kind,
has to be included.
For the purpose of calculating the additional contributions to a deposit guarantee fund
stipulated in Royal Decree 771/2011, in sight deposits the specified limits shall be compared
with the remuneration of their average balances. These average balances shall be
the result of dividing the sum of the daily balances of each sight deposit by the number of
calendar days included in each settlement. In time deposits, comparison shall be with the
various limits set depending on the duration of the initially agreed deposit, disregarding
any potential partial repayments agreed in the contract. Subsequent renewals, whether
envisaged or not in the original contract, shall be considered as new deposits.
Law 6/2011 came into force on 13 April 2011, Royal Decree 771/2011 came into force on
5 June 2011 (except as provided in the case of the transitional regimes envisaged therein)
and Circular 3/2011 came into force on 4 July 2011.
Royal Decree 771/2011 amends Royal Decree 2606/1996 by introducing a new regime for
additional contributions to these funds based on the remuneration of the deposits in
them.12 Specifically, the amounts of the deposits whose agreed remuneration exceeds the limits specified below shall be weighted at 500% (i.e. 400% more than the weight they
would have if they were included in that base) for the purpose of calculating the contributions
of the credit institutions belonging to the related deposit guarantee funds.
The limits above which the new weights will be applied are as follows: 1) sight deposits
whose annual interest paid in the periodic settlement of the account is more than 100 basis
points higher than average 1-month EURIBOR; 2) time deposits (or similar instruments)
up to three months whose agreed annual interest is more than 150 basis points higher than
average 3-month EURIBOR; 3) time deposits (or similar instruments) between three
months and one year whose agreed annual interest is more than 150 basis points higher
than average 6-month EURIBOR; and 4) time deposits (or similar instruments) with a term
of one year or more whose agreed remuneration is more than 100 basis points higher than
average 12-month EURIBOR.
Banco de España Circular CBE 3/2011 of 30 June 2011 (BOE of 2 July 2011) on additional
contributions to deposit guarantee funds sets out technical provisions implementing
the new precepts introduced by Royal Decree 771/2011.
The Circular contains two types of rules: those for identifying what is understood as deposit
remuneration in different practical cases, and those regulating ad hoc tools for calculating
the additional contribution.
Deposit remuneration shall comprise any explicit or implicit compensation or payment,
in cash or in kind, for maintaining a deposit. Thus the value of remuneration in kind shall
be that applicable under tax legislation, including any tax prepayments to be made for
the remuneration when they are borne by the institution. In variable-rate time deposits,
the remuneration shall be that which results from applying the reference index at the
deposit placement date over the whole of the agreed time period, disregarding possible
future modifications. In time deposits in which the interest rates change before maturity,
the interest rate taken shall be the average of the rates, weighting each by the time it is
to be applied. In hybrid financial instruments in which the embedded derivative does
not share similar characteristics and risks with the host contract, the interest rate used
to determine their remuneration shall be the maximum annual percent remuneration
receivable by the depositor on the amount deposited, if it is higher than the effective
annual interest rate corresponding to the host contract after the embedded derivative
has been stripped out; in the absence of the former, only the latter shall be taken. In any
event, any additional remuneration envisaged in the contract, be it in cash or in kind,
has to be included.
For the purpose of calculating the additional contributions to a deposit guarantee fund
stipulated in Royal Decree 771/2011, in sight deposits the specified limits shall be compared
with the remuneration of their average balances. These average balances shall be
the result of dividing the sum of the daily balances of each sight deposit by the number of
calendar days included in each settlement. In time deposits, comparison shall be with the
various limits set depending on the duration of the initially agreed deposit, disregarding
any potential partial repayments agreed in the contract. Subsequent renewals, whether
envisaged or not in the original contract, shall be considered as new deposits.
Law 6/2011 came into force on 13 April 2011, Royal Decree 771/2011 came into force on
5 June 2011 (except as provided in the case of the transitional regimes envisaged therein)
and Circular 3/2011 came into force on 4 July 2011.
jueves, 24 de noviembre de 2011
COMPETENCE OF AND COOPERATION BETWEEN SUPERVISORS
STRENGTHENING OF THE COMPETENCE OF AND COOPERATION BETWEEN SUPERVISORS
The Law introduces various measures in this respect, such as the obligation of the Banco de España and the CNMV to take into account the effect of their decisions on the stability of the financial stability of other Member States, the regulation of colleges of supervisors and of common decisions within the framework of supervision of cross-border groups, and the possibility of designating a branch of a credit institution as being significant.
Along these lines, to the competences entrusted to the Banco de España and the CNMV as the authorities responsible supervising credit institutions and investment firms, respectively, and their respective consolidatable groups, are added the following new ones:
1 Require institutions and their groups to have in place remuneration policies and practices that are consistent with and promote sound and effective risk management and to limit variable remuneration when it is inconsistent with the maintenance of a sound capital base.
2 Use the information received in accordance with the disclosure criteria established in this Law to compare remuneration trends and practices.
3 Collect information on the number of individuals per credit institution in pay brackets of at least €1 million including the business area involved and the main elements of salary, bonus, long-term award and pension contribution.
That information shall be forwarded to the European Banking Authority and the European Securities and Markets Authority by the Banco de España and the CNMV, respectively.
Regarding European Union supervisory authorities, the new obligations set for the Banco de España and the CNMV include the following:
1 Planning and coordination of supervisory activities in cooperation with the competent authorities involved, in preparation for and during emergency situations, including adverse developments in credit institutions or in financial markets, using, where possible, existing defined channels of communication for facilitating crisis management.
2 The formulation of applications to the competent supervisory authorities of a credit institution or investment firm authorised in the European Union with branches in Spain for such branches to be deemed to be significant, and, in the absence of a joint decision in this respect, the issuance of a decision on whether the branch is significant.
Regarding this latter case, in accordance with the legally stipulated procedure, the Banco de España or, as applicable, the CNMV shall work towards the adoption of a joint decision on the application with the other competent authorities of other Member States entrusted with supervising the various institutions forming part of the group. Also, they shall be responsible for ruling, through a joint decision, on the equivalent applications made by the competent authorities of countries in which branches of Spanish credit institutions are located, and, in the absence of a joint decision in that respect, for recognising the decision by such competent authority on the branch’s significant nature. In these procedures, a branch shall be considered to be significant on the basis of such reasons as market share in terms of deposits, the likely impact of a suspension or closure of the operations on market liquidity or on the payment and clearing and settlement systems, and the size and
the importance of the branch in terms of number of clients.
Also, the Law strengthens the close cooperation with other competent authorities responsible for the supervision of foreign credit institutions or investment firms, parents, subsidiaries or investees in the same group. Within this cooperation framework, the Banco de España and, where applicable, the CNMV shall do everything in their power to reach a joint decision to determine the adequacy of the consolidated level of own funds held by the group with respect to its financial situation and risk profile and the required level of own funds for each entity within the banking group and on a consolidated basis. The joint decision shall also duly consider the risk assessment of subsidiaries performed by relevant competent authorities.
The joint decision shall be adopted according to the legally stipulated procedure.
In order to facilitate the exercise of their tasks with other EU competent authorities, the Banco de España and the CNMV shall establish colleges of supervisors and ensure appropriate coordination and cooperation with third-country competent authorities.
Colleges of supervisors shall provide a framework for the following tasks, among others:
1) exchanging information; 2) agreeing on voluntary entrustment of tasks and voluntary
delegation of responsibilities where appropriate; 3) determining supervisory examination
programmes based on a risk assessment of the group; 4) increasing the efficiency of supervision
by removing unnecessary duplication of supervisory requirements; and 5) consistently
applying the prudential requirements for the taking up and pursuit of the business
of credit institutions across all entities within a banking group without prejudice to the
options and discretions available in EU legislation;
When the Banco de España or the CNMV supervise an institution with significant branches, they shall also establish and preside a college of supervisors to facilitate the exchange of information. Legal provisions may be promulgated specifying the characteristics to be met by these colleges, the composition of which shall be determined by the Banco de España or the CNMV, as appropriate.
Lastly, the Law reforms the exchange of information by the Banco de España with central banks and other bodies with a similar function in their capacity as monetary authorities.
Under this reform, which addresses the exchange of information and cooperation between supervisory authorities, it is expressly provided that such exchange may refer to the information relevant for the exercise of their respective statutory tasks.
The Law introduces various measures in this respect, such as the obligation of the Banco de España and the CNMV to take into account the effect of their decisions on the stability of the financial stability of other Member States, the regulation of colleges of supervisors and of common decisions within the framework of supervision of cross-border groups, and the possibility of designating a branch of a credit institution as being significant.
Along these lines, to the competences entrusted to the Banco de España and the CNMV as the authorities responsible supervising credit institutions and investment firms, respectively, and their respective consolidatable groups, are added the following new ones:
1 Require institutions and their groups to have in place remuneration policies and practices that are consistent with and promote sound and effective risk management and to limit variable remuneration when it is inconsistent with the maintenance of a sound capital base.
2 Use the information received in accordance with the disclosure criteria established in this Law to compare remuneration trends and practices.
3 Collect information on the number of individuals per credit institution in pay brackets of at least €1 million including the business area involved and the main elements of salary, bonus, long-term award and pension contribution.
That information shall be forwarded to the European Banking Authority and the European Securities and Markets Authority by the Banco de España and the CNMV, respectively.
Regarding European Union supervisory authorities, the new obligations set for the Banco de España and the CNMV include the following:
1 Planning and coordination of supervisory activities in cooperation with the competent authorities involved, in preparation for and during emergency situations, including adverse developments in credit institutions or in financial markets, using, where possible, existing defined channels of communication for facilitating crisis management.
2 The formulation of applications to the competent supervisory authorities of a credit institution or investment firm authorised in the European Union with branches in Spain for such branches to be deemed to be significant, and, in the absence of a joint decision in this respect, the issuance of a decision on whether the branch is significant.
Regarding this latter case, in accordance with the legally stipulated procedure, the Banco de España or, as applicable, the CNMV shall work towards the adoption of a joint decision on the application with the other competent authorities of other Member States entrusted with supervising the various institutions forming part of the group. Also, they shall be responsible for ruling, through a joint decision, on the equivalent applications made by the competent authorities of countries in which branches of Spanish credit institutions are located, and, in the absence of a joint decision in that respect, for recognising the decision by such competent authority on the branch’s significant nature. In these procedures, a branch shall be considered to be significant on the basis of such reasons as market share in terms of deposits, the likely impact of a suspension or closure of the operations on market liquidity or on the payment and clearing and settlement systems, and the size and
the importance of the branch in terms of number of clients.
Also, the Law strengthens the close cooperation with other competent authorities responsible for the supervision of foreign credit institutions or investment firms, parents, subsidiaries or investees in the same group. Within this cooperation framework, the Banco de España and, where applicable, the CNMV shall do everything in their power to reach a joint decision to determine the adequacy of the consolidated level of own funds held by the group with respect to its financial situation and risk profile and the required level of own funds for each entity within the banking group and on a consolidated basis. The joint decision shall also duly consider the risk assessment of subsidiaries performed by relevant competent authorities.
The joint decision shall be adopted according to the legally stipulated procedure.
In order to facilitate the exercise of their tasks with other EU competent authorities, the Banco de España and the CNMV shall establish colleges of supervisors and ensure appropriate coordination and cooperation with third-country competent authorities.
Colleges of supervisors shall provide a framework for the following tasks, among others:
1) exchanging information; 2) agreeing on voluntary entrustment of tasks and voluntary
delegation of responsibilities where appropriate; 3) determining supervisory examination
programmes based on a risk assessment of the group; 4) increasing the efficiency of supervision
by removing unnecessary duplication of supervisory requirements; and 5) consistently
applying the prudential requirements for the taking up and pursuit of the business
of credit institutions across all entities within a banking group without prejudice to the
options and discretions available in EU legislation;
When the Banco de España or the CNMV supervise an institution with significant branches, they shall also establish and preside a college of supervisors to facilitate the exchange of information. Legal provisions may be promulgated specifying the characteristics to be met by these colleges, the composition of which shall be determined by the Banco de España or the CNMV, as appropriate.
Lastly, the Law reforms the exchange of information by the Banco de España with central banks and other bodies with a similar function in their capacity as monetary authorities.
Under this reform, which addresses the exchange of information and cooperation between supervisory authorities, it is expressly provided that such exchange may refer to the information relevant for the exercise of their respective statutory tasks.
viernes, 11 de noviembre de 2011
CHANGES IN LIQUIDITY RISK MANAGEMENT POLICY
A substantial change was made to the risk management policy of credit institutions, specifically
that regarding liquidity risk. The Banco de España will periodically assess the
overall management of this risk and encourage the development of sound internal methodologies.
Its assessments shall take into account the role played by credit institutions in
financial markets. However, the Banco de España shall detail the method and procedure
to be used in these assessments.
Credit institutions shall establish robust strategies, policies, processes and systems for
the identification, measurement, management and monitoring of liquidity risk over an appropriate
set of time horizons, including intra-day, so as to ensure that credit institutions maintain adequate levels of liquidity buffers. Those strategies, policies, processes and systems shall be tailored to business lines, currencies and entities and shall include adequate allocation mechanisms of liquidity costs, benefits and risks.
Credit institutions shall consider different liquidity risk mitigation tools, including a system of limits and liquidity buffers in order to be able to withstand a range of different stress events and an adequately diversified funding structure and access to funding sources.
Those arrangements shall be reviewed regularly.
As under the previous legislation, alternative scenarios shall be considered and the assumptions
underlying decisions concerning the funding position shall be reviewed regularly.
Credit institutions shall adjust their strategies, internal policies and limits on liquidity risk
and develop effective contingency plans, taking into account the outcome of the alternative
scenarios considered.
that regarding liquidity risk. The Banco de España will periodically assess the
overall management of this risk and encourage the development of sound internal methodologies.
Its assessments shall take into account the role played by credit institutions in
financial markets. However, the Banco de España shall detail the method and procedure
to be used in these assessments.
Credit institutions shall establish robust strategies, policies, processes and systems for
the identification, measurement, management and monitoring of liquidity risk over an appropriate
set of time horizons, including intra-day, so as to ensure that credit institutions maintain adequate levels of liquidity buffers. Those strategies, policies, processes and systems shall be tailored to business lines, currencies and entities and shall include adequate allocation mechanisms of liquidity costs, benefits and risks.
Credit institutions shall consider different liquidity risk mitigation tools, including a system of limits and liquidity buffers in order to be able to withstand a range of different stress events and an adequately diversified funding structure and access to funding sources.
Those arrangements shall be reviewed regularly.
As under the previous legislation, alternative scenarios shall be considered and the assumptions
underlying decisions concerning the funding position shall be reviewed regularly.
Credit institutions shall adjust their strategies, internal policies and limits on liquidity risk
and develop effective contingency plans, taking into account the outcome of the alternative
scenarios considered.
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