EBA, EIOPA and ESMA propose amendments to bilateral margin requirements 03 August 2026 Joint Committee Trading The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published a final report on draft Regulatory Technical Standards (RTS), proposing to simplify the bilateral margin requirements of the European Commission’s Delegated Regulation (EU) 2016/2251. The proposed amendments aim to simplify the bilateral margin framework for counterparties that are subject to initia...
The ESAs have issued a Final Report and draft RTS proposing targeted amendments to Delegated Regulation (EU) 2016/2251 so that counterparties below the EUR 8 billion initial margin threshold under EMIR are fully exempt from exchanging initial margin, both on new and existing uncleared OTC derivatives. This materially simplifies bilateral margining for smaller in-scope counterparties, reduces operational and custodial burdens, and aligns the EU regime with similar reforms already implemented in other jurisdictions (e.g. UK EMIR). Compliance teams must prepare now for the transition from a “legacy-only” margining obligation to a complete exemption once the EUR 8 billion AANA threshold is no longer met.
What Changed
- - Counterparties whose average aggregate notional amount (AANA) of non-centrally cleared OTC derivatives falls below the EUR 8 billion threshold will no longer be required to exchange initial margin...
- The current framework, under which below-threshold counterparties are exempt from initial margin for new trades but must continue to exchange initial margin for pre-existing “legacy” contracts, will...
- Article 28(1) of Delegated Regulation (EU) 2016/2251 will be amended to explicitly extend the exemption from initial margin requirements to outstanding contracts where one of the two counterparties...
- The RTS introduce a clearer operational framework for entry into and exit from the initial margin regime based on the annual AANA calculation for March–May, including scenarios where one or both...
- Once a counterparty falls below the EUR 8 billion threshold under the revised rules, firms will be permitted to terminate related initial margin processes, including ceasing ongoing calculation,...
Suggested Considerations
- Map all EMIR in-scope entities within the group and identify those whose AANA of non-centrally cleared OTC derivatives is close to or below the EUR 8 billion threshold, to assess which relationships may benefit from the expanded exemption.
- Review current collateral and margin frameworks to identify legacy contracts where initial margin is still being exchanged solely because the regime requires continuation despite the counterparty having fallen below the EUR 8 billion threshold.
- Prepare an internal policy update so that, once the RTS enter into force, initial margin requirements are switched off for counterparties below the EUR 8 billion threshold on both new and existing uncleared OTC derivatives, subject to group risk appetite.
- Update EMIR margin procedures and AANA calculation processes to ensure accurate annual determination of whether each counterparty is above or below the EUR 8 billion threshold, including documentation of the March–May calculation methodology.
- Review and amend collateral agreements, credit support annexes (CSAs) and associated legal documentation to incorporate the revised treatment for below-threshold counterparties, including terms for stopping margin exchange and potentially releasing segregated collateral.
Key Dates
- ESAs publish the Final Report and draft RTS proposing amendments to Delegated Regulation (EU) 2016/2251 to simplify bilateral margin requirements for counterparties below the EUR 8 billion initial margin threshold
- The European Commission reviews and, if satisfied, endorses the draft RTS amending the EMIR bilateral margin Delegated Regulation; exact date to be set by the Commission’s internal process
- Following Commission endorsement, the RTS are subject to scrutiny by the European Parliament and the Council under the standard RTS procedure before publication in the Official Journal
- The amended RTS enter into force on the date specified in the Official Journal (typically 20 days after publication), from which firms can legally apply the new exemption regime
- By the date three years after entry into force, the ESAs must complete a review of the application and impact of the exemption from initial margin requirements in Article 28(1), potentially informing further changes
Compliance Impact
The amendments reduce the risk of technical non-compliance for below-threshold counterparties by simplifying obligations, but firms that fail to correctly apply the new threshold-based exemption (e.g. continuing or ceasing margin exchanges incorrectly) may face supervisory findings, remediation demands and potential sanctions under EMIR. Non-compliance could also create contractual disputes and counterparty risk misalignment if margin treatment is inconsistent across jurisdictions or relationships.
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BankBroker DealerAsset Manager EBA, EIOPA and ESMA call for enhanced governance and consistent supervision to mitigate ICT risks from frontier AI models in the EU financial sector 31 July 2026 Digital Finance and Innovation Joint Committee The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published a statement calling for a cross-sectoral, risk-based and consistent supervisory approach to mitigate the ICT risks stemming from frontier AI models. The statement takes into account existing regulatory ...
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On 10 February 2025, the ECB published a clarification paper tightening expectations on ICAAP and ILAAP design and, critically, on how and when related information must be submitted in the SREP cycle. The core compliance impact is a shorter annual submission deadline, a two‑step (annual plus continuous) reporting model, and more formalised governance, forward‑looking planning, and capital distribution expectations that must be demonstrably embedded in banks’ ICAAP/ILAAP frameworks and Board‑level oversight.
What Changed
- - Introduced a two‑step ICAAP/ILAAP submission model under the SREP: (1) annual submission of the main “ICAAP & ILAAP package” by 15 March and (2) continuous, year‑round submission of any new or...
- Shortened the standard annual deadline for ICAAP/ILAAP information from 31 March to 15 March, reducing the preparation and governance window by roughly two weeks versus prior practice.
- Confirmed that the clarifications apply from the SREP 2025 cycle onwards, with a general transition approach for 2025 and limited transitional flexibilities for banks whose internal processes cannot...
- Required inclusion of two distinct, concise documents within the annual packages: a “Capital Adequacy Statement” and a “Liquidity Adequacy Statement” reflecting the management body’s formal view on...
- Clarified governance expectations around capital and liquidity planning, including regular updates of governance frameworks to reflect external conditions and the submission of a complete risk...
Suggested Considerations
- Review existing ICAAP and ILAAP submission calendars and internal governance timelines and formally reset them to ensure core packages can be prepared, approved by the management body, and submitted by 15 March each year.
- Design and implement a documented two‑step submission process, including procedures for continuous, year‑round identification, approval and transmission to the ECB of any new or materially updated ICAAP/ILAAP‑relevant documents.
- Develop, approve and embed the new Capital Adequacy Statement and Liquidity Adequacy Statement, ensuring they reflect the management body’s signed‑off view on adequacy and are supported by clear references to ICAAP/ILAAP analyses and results.
- Update ICAAP and ILAAP governance frameworks to reflect ECB expectations, including explicit roles and responsibilities, escalation paths, periodic reviews triggered by external developments, and Board‑level oversight of capital and liquidity planning.
- Compile and maintain a comprehensive risk inventory covering both normative and economic perspectives, and ensure it is aligned with business models, risk appetite frameworks, recovery plans, stress testing programmes and SREP submissions.
Key Dates
- Recurring annual deadline for submission of the core ICAAP and ILAAP packages, including the Capital Adequacy Statement, Liquidity Adequacy Statement, risk inventory, stress testing information and liquidity stressed assumptions template
- ECB publishes the clarification paper on ICAAPs and ILAAPs and respective package submissions, setting out new expectations on governance, content and submission processes
- For the SREP 2025 cycle only, general transition date by which all documents foreseen for annual submission must be provided to the ECB, marking the first application of the new two‑leg submission process and shortened deadline
- New general submission date for ICAAP and ILAAP information becomes effective, replacing the former 31 March deadline for annual packages and applying to ICAAP quantifications, ILAAP templates and other annual information
- Ongoing, year‑round obligation to submit to the ECB any new or significantly updated ICAAP/ILAAP‑relevant documents, together with a description and justification of changes and their implications for capital and liquidity adequacy
Compliance Impact
Non‑compliance with the revised ICAAP/ILAAP expectations and submission deadlines can trigger SREP findings, higher Pillar 2 capital requirements, restrictions on distributions, and enhanced supervisory scrutiny. Persistent deficiencies in governance, buffers and forward‑looking adequacy assessments may also lead to qualitative measures, remedial action plans, and potential sanctions under the SSM framework.
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ESMA publishes first market capitalisation data for EU Member States 10 July 2026 Market data The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published today the annual market capitalisation and market capitalisation ratios of EU Member States for the reference years 2024 and 2025. This publication marks the first implementation of ESMA’s mandate under the FASTER Directive, under which ESMA developed technical standards on the cal...
ESMA’s 10 July 2026 publication is the first operational use of the FASTER Directive framework requiring annual disclosure of each Member State’s market capitalisation and market capitalisation ratio. For compliance teams, the key issue is not the data release itself but the downstream impact: Member States above the **1.5% threshold for four consecutive years** may fall within special withholding tax relief rules, affecting tax-processing, documentation, and eligibility assessments across the market.
What Changed
- - ESMA has started publishing annual market capitalisation figures and market capitalisation ratios for each EU Member State under its FASTER Directive mandate.
- The published figures are based on a harmonised methodology developed by ESMA in technical standards, using transaction data reported under MiFIR.
- Market capitalisation is calculated from shares admitted to trading on a regulated market or multilateral trading facility, with aggregation at the level of the issuer’s legal address in the relevant...
- The market capitalisation ratio is calculated as the Member State’s market capitalisation divided by the total market capitalisation of all Member States on the same date, expressed as a percentage.
- Member States whose market size exceeds 1.5% of total EU market capitalisation for four consecutive years are subject to specific withholding tax relief-related requirements.
Suggested Considerations
- Compliance teams should map whether any serviced Member State may approach or exceed the 1.5% threshold over a rolling four-year period and flag jurisdictions that could trigger special withholding tax relief consequences.
- Tax operations teams should align withholding tax relief workflows with the ESMA-published ratios so that jurisdictional eligibility assessments use the current official figures.
- Data and controls teams should document the calculation source, methodology, and reconciliation process for any internal use of ESMA market capitalisation data.
- Investment firms and intermediaries should review client-facing tax-relief processes to ensure they can respond to changes in Member State status under FASTER.
- Market-data and regulatory-reporting teams should prepare for annual updates by building a recurring review process around each ESMA publication cycle.
Key Dates
- The FASTER Directive was published in the Official Journal of the EU, establishing the legal basis for ESMA’s market capitalisation mandate
- ESMA published a consultation paper on the draft RTS methodology for calculating market capitalisation and the market capitalisation ratio
- The consultation period for ESMA’s draft RTS methodology closed
- ESMA was expected to finalise the RTS and submit them to the European Commission
- The European Commission issued a final document referring to the FASTER framework and its threshold mechanics
Compliance Impact
The immediate regulatory impact is medium to high because the publication does not itself impose new firm-level filing duties, but it informs a threshold-based regime that can materially affect withholding tax relief eligibility and operational processing. Non-compliance risk rises where firms fail to update jurisdictional tax workflows, leading to incorrect relief treatment, delays, or disputes with counterparties and tax authorities.
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All FirmsBankBroker Dealer ESMA publishes technical standards on CCP admission criteria elements 08 July 2026 CCP Guidelines and Technical standards The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published its Final Report on the Regulatory Technical Standards (RTS) concerning the central counterparties’ (CCPs) admission criteria elements , following the review of the European Market Infrastructure Regulation (EMIR 3). EMIR 3 introduces amendments to the p...
ESMA’s Final Report on the RTS for CCP admission criteria elements clarifies the factors CCPs must assess when determining who can become a clearing member, with specific attention to **non-financial counterparties** and **sponsored membership**. For compliance teams, the practical impact is that CCPs will need to evidence that their admission criteria are risk-based, proportionate, transparent, and aligned with EMIR 3, while clearing members—especially NFCs—should expect more structured scrutiny of financial resources, operational capability, and membership model fit.
What Changed
- - CCPs must base admission criteria on a comprehensive risk assessment of the risks posed by clearing members and ensure the criteria reflect those risks.
- CCPs must consider whether clearing members have sufficient financial resources to meet obligations arising from participation in the CCP.
- CCPs must assess whether clearing members have access to reliable credit, liquidity, and foreign exchange facilities commensurate with the scale and nature of their clearing activity.
- CCPs must examine the clearing member’s operational capacity to meet CCP obligations, including readiness to support clearing operations and margin obligations.
- CCPs must take account of the client clearing activity of a clearing member, including the relative importance of that activity and the member’s ability to meet margin requirements if clients default.
Suggested Considerations
- CCPs should review their current admission criteria to ensure they are explicitly tied to a documented assessment of risks posed by each clearing member type.
- CCPs should update membership rulebooks and onboarding procedures to reflect the RTS requirement to consider financial resources, operational capacity, and liquidity support arrangements.
- CCPs should build or refine documented methodologies for assessing NFC clearing members’ ability to meet margin and default fund obligations.
- CCPs should ensure sponsored membership frameworks clearly define how the sponsor’s support, the sponsored member’s profile, and relevant risk controls are assessed for eligibility purposes.
- CCPs should prepare to publish clear admission criteria, application steps, timelines, required documentation, and explanations for any category-specific requirements.
Key Dates
- ESMA conducted a public consultation on the draft RTS
- ESMA held a public hearing on the draft RTS
- The consultation period referenced in ESMA’s prior consultation paper closed
- ESMA published the Final Report on the RTS concerning CCP admission criteria elements
08 July 2026); - The RTS will be submitted to the European Commission for endorsement
Compliance Impact
The compliance impact is moderate to high because the RTS will shape how CCPs admit or exclude clearing members and how those decisions must be justified, documented, and disclosed. Failure to align admission frameworks with the final RTS could expose CCPs to supervisory challenge, remediation requirements, and operational delays in onboarding members or updating access terms.
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BankBroker DealerAsset Manager ESMA launches Common Supervisory Action with NCAs on the risk management function 03 July 2026 Risk monitoring The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, is launching a Common Supervisory Action (CSA) on risk management function of UCITS management companies and Alternative Investment Fund Managers (AIFMs) across the European Union. The CSA will be conducted throughout 2026 and 2027, in close collaboration with National Competent...
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Moody’s Germany fined EUR 2,145,000 for misreporting to ESMA 02 July 2026 Press Releases Securities Financing Transactions Supervision Trade Repositories The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has fined Moody’s Deutschland GmbH (Moody’s Germany) a total of EUR 2,145,000, for committing four breaches of the Credit Rating Agencies Regulation (CRA Regulation), and issued a public notice. Verena Ross, ESMA’s Chair said: "Moody’s ...
ESMA has fined Moody’s Deutschland GmbH EUR 2,145,000 for four negligent breaches of the EU Credit Rating Agencies Regulation (CRA Regulation), all relating to incomplete, inaccurate and outdated regulatory data reported to ESMA and published on ESMA’s central platforms. This enforcement action underscores that ESMA now treats **data quality in regulatory reporting by credit rating agencies (CRAs)** as a core supervisory priority, with failures in reporting frameworks, policies, procedures and internal controls attracting significant financial penalties and public censure.
What Changed
- - ESMA has clarified, through enforcement, that CRAs must ensure complete, accurate and up‑to‑date data is reported to ESMA across all relevant CRA reporting channels (including the European Rating...
- ESMA has reinforced that errors limited to regulatory reporting data (and not directly affecting published ratings) can still constitute material breaches of the CRA Regulation, demonstrating that...
- ESMA has indicated that group reporting arrangements (where one CRA entity reports on behalf of others in the group) must have clear documentation of responsibilities, validation processes, and...
- ESMA has emphasized that regulatory reporting frameworks must include robust policies, procedures and internal control mechanisms, and that deficiencies in these frameworks constitute distinct...
- ESMA has signalled that negligence, rather than intentional misconduct, is sufficient to trigger significant fines under the CRA Regulation, and that both aggravating and mitigating factors will be...
Suggested Considerations
- Conduct a comprehensive review of all ESMA‑related reporting processes to ensure that data submitted to ESMA (including rating information, historical performance data, rating changes, and other CRA regulatory reports) is complete, accurate, and kept up‑to‑date at all times.
- Map and document all responsibilities for ESMA reporting within the CRA group, ensuring that where one entity reports on behalf of others, the allocation of roles, ownership of data, and validation steps is explicitly defined, approved, and regularly reviewed.
- Perform a gap analysis of existing regulatory reporting policies, procedures, and internal control mechanisms against CRA Regulation requirements and ESMA supervisory expectations, and update documentation to remove ambiguities and outdated provisions.
- Implement or strengthen data validation and reconciliation controls over submissions to the European Rating Platform and ESMA’s central repositories, including automated checks for missing ratings, non‑withdrawn ratings, incorrect rating actions, and inconsistencies in historical performance data.
- Establish a formal governance process for changes to regulatory reporting frameworks, ensuring regular review, independent challenge by compliance or risk functions, and clear escalation routes for identified data quality issues or control failures.
Key Dates
– ESMA has been responsible for the supervision and registration of credit rating agencies in the EU under the CRA Regulation, including enforcement actions for breaches
– Potential appeal window for Moody’s Germany to bring the case before the Board of Appeal of the European Supervisory Authorities; any appeal does not have automatic suspensive effect, though suspension can be granted by the Board of Appeal on request
– ESMA Board of Supervisors adopts supervisory measures and imposes fines on Moody’s Deutschland GmbH for four negligent breaches of the CRA Regulation, and publishes a public notice and press release
Compliance Impact
The compliance impact is high: ESMA has imposed a multi‑million euro fine on Moody’s Germany for negligent data reporting failures that did not affect the underlying ratings, indicating that poor regulatory reporting alone can trigger significant financial and reputational consequences, and that persistent or systemic weaknesses in CRA reporting frameworks could ultimately risk sanctions up to withdrawal of registration.
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original ESMA source
before acting. Full disclaimer.
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ESMA appoints Peter Tkáč as the new member of its Management Board 01 July 2026 About ESMA Management Board The European Securities and Markets Authority (ESMA), the European Union’s financial markets regulator and supervisor, has appointed Peter Tkáč, Národná Banka Slovenska (NBS), Slovakia, as the new member of its Management Board . The election took place at the Board of Supervisors meeting on 30 June 2026, in order to replace outgoing member Ante Žigman, Hrvatska agencija za nadzor finan...
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The ECB has imposed a €3.255 million administrative penalty on Banque Internationale à Luxembourg (BIL) for intentionally failing, over three quarters, to apply its approved internal models when calculating expected loss for retail and corporate defaulted exposures, leading to overstated capital and capital ratios. This case is a clear supervisory signal to Significant Institutions and Less Significant Institutions using IRB/internal models that deviations from approved model usage, especially around expected loss and IRB shortfall, will be treated as severe breaches with material sanctions exposure.
What Changed
- - The ECB has reaffirmed that institutions using internal ratings-based (IRB) approaches must apply their approved internal models consistently for expected loss calculation on defaulted retail and...
- The ECB has underscored that the IRB shortfall (difference between expected loss and accounting provisions) must be correctly calculated and deducted from regulatory capital whenever expected loss...
- The ECB has classified intentional failure to apply approved internal models to expected loss calculations as a “severe” breach under its Guide to the method of setting administrative pecuniary...
- The enforcement action confirms the ECB’s readiness to use its sanctioning powers under Article 18 of Council Regulation (EU) No 1024/2013 against internal-model users that misreport capital due to...
- The case highlights that miscalculation of expected loss and IRB shortfall over multiple reporting periods, even without an explicit capital ratio breach of minima, can be sanctioned where capital...
Suggested Considerations
- Review and confirm that all regulatory capital calculations, including expected loss and IRB shortfall for defaulted exposures, consistently use the approved internal models as authorised by the ECB or national competent authority.
- Map and reconcile the internal-model implementation across risk systems, finance, and regulatory reporting to ensure that there are no manual overrides, alternative methods, or parallel calculations that deviate from the approved model specifications.
- Strengthen model risk governance by ensuring that any proposed changes to expected loss methodologies, including for defaulted retail and corporate portfolios, are formally approved by the competent authority before being used in regulatory capital reporting.
- Implement robust controls and periodic testing within Finance, Risk, and Regulatory Reporting functions to detect and prevent misapplication or non-application of approved internal models, with clear escalation procedures for identified discrepancies.
- Ensure that the calculation of IRB shortfall (difference between expected loss and accounting provisions) is independently validated and appropriately deducted from CET1 capital in accordance with CRR and ECB internal models guidance.
Key Dates
- Council Regulation (EU) No 1024/2013 enters into force, granting the ECB sanctioning powers for prudential supervision of credit institutions (contextual basis for this enforcement)
- Start of the period during which BIL failed to apply its approved internal models to expected loss calculation for defaulted retail and corporate exposures, leading to overstated capital
- Second consecutive quarter in which incorrect expected loss and IRB shortfall calculations continued to affect reported capital and capital ratios
- Third consecutive quarter of miscalculation; end of the period identified by the ECB as affected by the breach
- The ECB publishes its decision imposing an administrative penalty of €3.255 million on BIL for the severe breach of its decision on internal models
Compliance Impact
This enforcement action indicates high supervisory sensitivity to internal model governance and capital reporting, with severe classification and multi-million euro penalties where intentional non-use of approved models leads to overstated capital. Non-compliance can result in significant administrative fines, reputational damage, supervisory remediation measures, and potential legal proceedings before the Court of Justice of the European Union.
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The ECB has launched a **comprehensive clean‑up and re‑classification of all its supervisory guidance** (guides, reports, letters, methodologies) to streamline content, remove outdated expectations and explicitly underline that these documents are **non‑binding**. This matters for compliance teams because it changes the **reference set of applicable ECB expectations**, clarifies the status of “supervisory guidance” versus hard law, and introduces targeted revisions in key areas such as ICAAP management buffers, internal models, CRR III implementation and licensing processes.
What Changed
- - The ECB is conducting a comprehensive review of around 130 supervisory publications (guides, reports, letters, methodologies) to assess their relevance, effectiveness and clarity and to align them...
- Approximately 40 supervisory documents have been classified as outdated, superseded or no longer relevant and have been formally discontinued, with the texts remaining accessible but clearly labelled...
- The ECB has updated its classification of supervisory guidance documents to emphasise explicitly that they are non‑binding, do not create new legal obligations and do not replace binding EU or...
- The Guide to the internal capital adequacy assessment process (ICAAP Guide) will be revised to clarify supervisory expectations on the management buffer, explicitly positioning it as the bank’s own...
- The ECB has removed all content on supervisory expectations for the credit conversion factor (CCF) from the Guide to internal models, in anticipation of forthcoming EBA guidelines on CCF, thereby...
Suggested Considerations
- Review the ECB press release and associated lists of discontinued publications to identify any ECB guides, reports, letters or methodologies currently referenced in your internal policies, risk frameworks or model documentation that are now labelled as discontinued.
- Update internal policy inventories, regulatory mapping and compliance registers to reflect the new classification of ECB supervisory guidance as non‑binding and to distinguish clearly between binding EU/national law and non‑binding ECB expectations.
- For banks using the ICAAP Guide, perform a gap analysis of capital planning and management buffer practices against the forthcoming clarified expectations, ensuring internal documentation clearly differentiates management buffers from Pillar 2 requirements and guidance.
- For institutions using internal models for credit risk, remove any reliance on the ECB’s former CCF expectations by re‑mapping modelling policies and documentation to forthcoming EBA guidelines on credit conversion factors and to CRR/CRD provisions, once those guidelines are finalised.
- For risk and finance functions, review the CVA treatment in internal capital and risk methodologies to verify alignment with CRR III and ensure that internal references to ECB guidance (assessment methodology, materiality assessment) are updated to reflect the removed CVA content.
Key Dates
- ECB announces the comprehensive review of around 130 supervisory guidance publications, confirms discontinuation of about 40 outdated documents, and signals targeted and in‑depth revisions for the remaining guidance set
- Revised **Guide to the internal capital adequacy assessment process** is expected to be published “shortly” after the press release, incorporating clarified treatment of the management buffer and its relationship to Pillar 2 guidance
- Removal of supervisory expectations on **credit conversion factor (CCF)** from the **Guide to internal models** and the removal of **CVA references** from the **Guide on assessment methodology** and the **Guide on materiality assessment** are implemented as part of the ongoing review and alignment with EBA guidance and CRR III
- **Public consultations** will be launched on those guidance documents identified as needing substantial revision, ahead of finalising the updated versions
- Publication of the new **report on good practices in governance and risk culture**, replacing the existing Draft guide on governance and risk culture, following finalisation of the revised EBA Guidelines on internal governance
Compliance Impact
The immediate legal risk is limited because the ECB reiterates that its supervisory guidance is non‑binding and does not create new obligations, but misalignment with updated ECB expectations can materially affect SREP outcomes, Pillar 2 guidance, model approvals and licensing decisions. Failure to update internal frameworks, models and governance practices in line with the revised guidance and EBA/CRR III developments may therefore lead to higher capital guidance, increased supervisory findings, delays in approvals and more intensive supervisory scrutiny.
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original ECB source
before acting. Full disclaimer.
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BankInsuranceAsset Manager ESMA publishes shortlist of candidates for position of Chair 20 May 2026 About ESMA Board of Supervisors Press Releases The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published the shortlist of candidates for the position of Chair, which it has sent to the Council of the European Union (Council) and the European Parliament (Parliament). The Council will appoint the Chair following confirmation by the Parliament. The Board of Supe...
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European Commission launches call for candidates for the ESAs’ Board of Appeal 12 May 2026 Board of Appeal The European Commission has launched a call for expression of interest for the appointment of members to the Board of Appeal of the three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs). This call aims to establish a reserve list of qualified candidates to fill vacancies that may arise within the Board of Appeal. The reserve list will remain valid for a period of five y...
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ESMA identifies areas for further supervisory convergence on compliance and internal audit in the funds sector 11 May 2026 Audit Fund Management The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published the results of its 2025 Common Supervisory Action (CSA) on the compliance and internal audit functions of fund managers , carried out in with the participation of all EU and EEA national supervisors. The EU-wide review found that m...
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ESMA promotes proportionate supervision of MiFID II sustainability requirements 06 May 2026 Investor protection The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has issued a statement presenting the results of its Common Supervisory Action (CSA) on how sustainability is integrated into firms’ suitability assessment as well as into processes and procedures for product governance. The statement highlights key themes emerging from the sup...
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ESMA launches its sixth stress test exercise for Central Counterparties 30 April 2026 CCP Press Releases The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today launched its sixth stress test exercise for Central Counterparties (CCPs) . The CCP stress test framework drafted by ESMA for the purpose of this exercise is supported by an adverse market scenario provided by the European Systemic Risk Board (ESRB). Mandated under the European ...
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ESMA consults on guidelines on endorsement under the ESG Ratings Regulation 29 April 2026 Credit Rating Agencies The European Securities and Markets Authority (ESMA) has launched a public consultation on draft guidelines on endorsement under the ESG Ratings Regulation 1 . The consultation paper sets out ESMA’s proposed approach to the endorsement of non-EU ESG ratings under the regulatory framework and seeks feedback from ESG rating providers and other stakeholders on the draft guidelines. Th...
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Joint Committee annual report highlights digitalisation, cyber resilience and sustainable finance as key priorities of 2025 24 April 2026 Joint Committee The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published its Annual Report for 2025 , setting out the main priorities and achievements of its cross-sectoral work over the past year. In 2025, the Joint Committee focused on protecting consumers in increasingly digital financial markets, stren...
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ESMA launches a call for evidence on restricted subscription and private credit ratings 16 April 2026 Credit Rating Agencies The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today launched a call for evidence to gather stakeholder views on the purposes, market practices, needs and risks associated with restricted subscription and private credit ratings. ESMA is encouraging all interested stakeholders to share views, data and analysis i...
ESMA has launched a call for evidence on restricted subscription and private credit ratings to gather stakeholder input on their market practices, uses, risks, and potential regulatory gaps under the CRA Regulation. This matters because rising use of these non-public ratings could prompt future clarifications or adjustments to ensure consistent standards with public ratings, impacting credit rating agencies (CRAs) and users reliant on them for regulatory or investment purposes.
What Changed
There are no immediate regulatory changes; this is a fact-finding call for evidence to assess whether adjustments to the CRA Regulation are needed. ESMA seeks views on definitions (e.g., restricted subscription ratings as selectively distributed to limited subscribers with economic interest; private ratings excluded from CRA scope if not distributed to >150 persons), production processes, governance comparability to public ratings, distribution risks, and market needs. Potential future outcomes include enhanced clarity on CRA Regulation application, but none are confirmed yet.
Suggested Considerations
- Review the full Call for Evidence document and annexes for specific questions on restricted subscription (Annex I) and private credit ratings (Annex II).
- Prepare and submit evidence-based responses addressing key areas: use cases/benefits vs. public ratings, contracting/distribution parties, analytical/governance comparability, transparency impacts, risks/mitigations, and multi-CRA practices.
- Provide quantitative data, concrete examples, and rationale; indicate specific questions and alternatives considered.
- Submit online by 31 May 2026 using the docx reply form; note responses may be published unless confidentiality requested.
Key Dates
- ESMA reviews responses to assess potential regulatory adjustments under CRA Regulation
- Deadline for submitting evidence-based responses, including quantitative data and market examples, via ESMA's online consultation form in docx format
Compliance Impact
Urgency: Medium - This is not mandatory rulemaking but a critical opportunity to influence potential CRA Regulation clarifications amid growing private rating use, which could standardize governance/internal controls or expand scope. Firms using or issuing these ratings should engage to mitigate risks of future unaddressed practices leading to enforcement or restrictions; inaction may expose gaps if ESMA identifies inconsistencies with public rating standards.
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original ESMA source
before acting. Full disclaimer.
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The ECB imposed a €6.2 million penalty on BofA Securities Europe SA for intentionally breaching market risk reporting requirements between 2022 and 2024. The bank systematically underreported risk-weighted assets by including unauthorized sovereign bond option positions in its internal models, resulting in inflated capital ratios and misrepresented financial strength—a "severe" breach that signals the ECB's heightened enforcement focus on reporting accuracy and internal control governance.
What Changed
- This enforcement action does not introduce new regulatory requirements but rather clarifies existing obligations:
- Internal Models Scope Limitation: Banks must strictly adhere to supervisory permissions when applying internal models approaches; unauthorized asset classes cannot be included regardless of...
- Risk-Weighted Asset Accuracy: RWA calculations must reflect actual supervisory permissions, not theoretical modeling capabilities
- Capital Ratio Integrity: Misreporting of RWAs directly affects CET1 ratios and capital adequacy disclosures, which are fundamental to regulatory reporting
- Intentionality Standard: The ECB's classification of this breach as "intentional" (rather than negligent) indicates that awareness of supervisory limitations combined with non-compliance triggers...
Suggested Considerations
- *Immediate (for all firms with internal models):
- *Audit Internal Models Scope: Conduct comprehensive review of all asset classes currently included in internal models approaches to confirm supervisory permission exists for each category
- *Verify Sovereign Bond Derivatives Treatment: Specifically validate that all sovereign bond options, forwards, and other derivatives are explicitly covered by supervisory approval documentation
- *Reconcile RWA Calculations: Recalculate historical RWAs (at minimum for the past 3-5 years) to identify any unauthorized inclusions and assess whether prior reporting was accurate
- *Strengthen Internal Controls: Implement automated controls to prevent unauthorized asset classes from being included in model calculations, with documented supervisory permission matrices
Key Dates
2024; - Period during which BofA Securities Europe SA committed the breach across six consecutive reporting periods
- ECB penalty announcement and effective date
- Bank has the right to challenge the decision before the Court of Justice of the European Union (no statutory deadline specified, but typically within 2 months of notification)
Compliance Impact
Urgency: CRITICAL
AI-generated analysis. May contain errors or omissions — verify with the
original ECB source
before acting. Full disclaimer.
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SEC confirms exemption for directors and officers of EEA Foreign Private Issuers 18 March 2026 Market Abuse Post Trading The United States Securities and Exchange Commission (SEC) has decided to exempt directors and officers of European Economic Area (EEA) foreign private issuers (FPIs) from the reporting requirements under Section 16(a) of the US Securities Exchange Act of 1934. The SEC’s decision means that directors and officers of EEA FPIs will not be required to comply with these specifi...
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The EBA and ESMA consult on revised suitability assessment requirements for banks and investment firms 25 February 2026 Investor protection The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) today launched a consultation on the revised joint guidelines on the assessment of the suitability of members of the management body and key function holders . The revised guidelines form part of a broader package designed to harmonise suitability assessments and...
The EBA and ESMA have launched a consultation on revised joint guidelines updating suitability assessments for management body members and key function holders in banks and investment firms, incorporating new requirements from the revised CRD and MiFID II to enhance harmonization and supervisory convergence. This matters for compliance professionals as it introduces mandatory assessments for additional roles, strengthens AML/CFT links, and includes simplifications to reduce burdens, potentially impacting governance processes once finalized and replacing the 2021 guidelines.
What Changed
- - Incorporation of revised CRD requirements for large institutions, including ex-ante applications where authorities perform ex-post assessments, and mandatory suitability assessments for key roles...
- Expanded application to CRD-covered entities and MiFID II investment firms, with further specifications for third-country branches.
- Strengthened integration with AML/CFT framework, providing guidance on identifying reasonable grounds to suspect money laundering or terrorist financing risks during assessments.
- Introduction of targeted simplifications to streamline processes, reduce administrative burdens, and offer greater flexibility/clarity for institutions and supervisors.
- Parallel EBA consultation on RTS specifying standardized documentation (e.g., suitability questionnaires, CVs, internal assessments) for large institutions to ensure consistent submissions.
Suggested Considerations
- Assess current suitability processes against new requirements (e.g., ex-ante applications, AML/CFT checks, third-country branch specs) and prepare for mandatory assessments of additional roles like CFOs.
- For large institutions, evaluate EBA RTS on documentation and align internal templates (e.g., suitability questionnaires, CVs).
- Participate in public hearings on 15 April 2026 if relevant.
- Plan governance updates, including ongoing monitoring of collective/individual suitability and corrective measures.
Key Dates
15:30; - Public hearing on joint guidelines
16:30; - Public hearing on EBA RTS
- Deadline for submitting comments on joint guidelines and EBA RTS
25 May 2026; - EBA publishes all contributions (unless requested otherwise)
consultation); - Revised guidelines enter into force, repealing 2021 guidelines
Compliance Impact
Urgency: High - As a consultation launched today (25 February 2026), firms have ~3 months to engage, but final guidelines will repeal existing ones, mandating process updates for core governance/AML functions in banks and investment firms; delays risk non-compliance with harmonized EU standards, especially for large institutions facing RTS on documentation. Matters due to expanded scope (e.g., CFOs, third-country branches) and AML ties, amplifying fit-and-proper regime enforcement amid supervisory convergence push.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
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ESMA sanctions Regis-TR for serious breaches of organisational obligations 19 February 2026 Press Releases Securities Financing Transactions Supervision Trade Repositories The European Securities and Markets Authority (ESMA), the European Union’s (EU) financial markets regulator and supervisor, has fined the trade repository (TR) REGIS-TR, S.A. a total of EUR 1,374,000 for seven infringements under the European Market Infrastructure Regulation (EMIR) and the Securities Financing Transactions ...
ESMA has fined REGIS-TR, S.A. €1,374,000 for seven negligent breaches of organisational obligations under EMIR and SFTR, marking the first SFTR enforcement action and ESMA's highest fine against a trade repository. The breaches involved deficiencies in policies, procedures, organisational structure, operational risk management, and data confidentiality, compromising SFTR reporting and market data integrity. This underscores ESMA's intensified enforcement on trade repositories (TRs) to ensure high-quality data for market surveillance and financial stability.
What Changed
- This is an enforcement decision, not new legislation, but it reinforces existing EMIR and SFTR requirements on TRs, particularly:
- Policies and procedures: Must be adequate to ensure compliance, with clear roles and responsibilities for governing bodies (breaches under EMIR Art. 78(3) and SFTR Art.
- Organisational structure: Must ensure business continuity and orderly functioning, especially for SFTR services (breach under SFTR).
- Operational risk management: Identify and minimise risks via systems, controls, and procedures (breaches under EMIR and SFTR, Point (a) Section II Annex I EMIR).
- Data confidentiality and integrity: Protect information received under EMIR and prevent misuse (breaches under EMIR).
Fines were calculated per EMIR Art.
Suggested Considerations
- For REGIS-TR specifically: Cease three ongoing breaches (policies/procedures under EMIR/SFTR; SFTR organisational structure for business continuity) per ESMA supervisory measures (EMIR Art. 73).
- For all TRs:
- Review and strengthen policies/procedures for clarity on governance roles/responsibilities.
- Audit organisational structure for SFTR business continuity and orderly functioning.
- Conduct operational risk assessments, implementing controls/systems to minimise risks under EMIR/SFTR.
- Enhance data confidentiality/integrity protections and misuse prevention measures.
Key Dates
- REGIS-TR initial registration with ESMA under EMIR
- REGIS-TR registration extended to SFTR reporting
- ESMA Supervisory Report identifying serious indications of breaches
- Public notice references investigations leading to findings (dated in decision docs)
- ESMA Board of Supervisors meeting discussing the case
Compliance Impact
Urgency: High – As the first SFTR enforcement and record TR fine (€1.374M), it demonstrates ESMA's commitment to punitive action on negligence causing systemic data risks, directly threatening market integrity and surveillance. TRs face immediate remediation pressure (three breaches ongoing), with fines amplified by duration/systemic factors; non-TRs using TRs risk indirect exposure via poor data quality. Firms should prioritise audits now to avoid similar "negligent" findings.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
All Firms
ESMA supports the simplified European Sustainability Reporting Standards and suggests targeted adjustments 18 February 2026 Issuer disclosure Press Releases Sustainable finance The European Securities and Markets Authority, the EU’s financial markets regulator and supervisor, has delivered its opinion on the draft revised European Sustainability Reporting Standards (ESRS) developed by EFRAG. ESMA strongly supports the European Commission’s goal of enhancing competitiveness and growth through ...
ESMA has issued an opinion supporting EFRAG's draft simplified European Sustainability Reporting Standards (ESRS) under the CSRD, praising improvements in readability and materiality focus while recommending targeted adjustments to enhance investor protection and financial stability. This matters for compliance professionals as it signals upcoming refinements to sustainability disclosures, with pragmatic supervision promised during the transition, potentially reducing short-term burdens but requiring monitoring of final delegated act adoption by summer 2026.
What Changed
- The draft revised ESRS introduce simplifications such as improved readability, language, format, reduced volume of requirements, and a focus on material matters.
- Introduce time limits to certain permanent reliefs (e.g., reliefs #3, #4, #9, #11 on quantitative information for anticipated financial effects until FY 2029, and metrics).
- Refine requirements on transition plans (e.g., consistent disclosure of absolute financed emissions and contextual information).
- Strengthen reporting on sustainability competences of administrative, management, and supervisory bodies.
- Enhance transparency on financial resources allocated to sustainability actions.
Suggested Considerations
- Monitor Commission process: Track final delegated act by summer 2026, incorporating ESMA/EBA/EIOPA/ECB opinions; review full ESMA opinion PDF for detailed recommendations.
- Assess current reporting: Evaluate use of permanent/temporary reliefs (e.g., #3/#4 on quantitative data, #9/#11 on metrics) and prepare for time limits; refine transition plans for emissions/targets.
- Enhance governance disclosures: Strengthen reporting on sustainability competences in management/supervisory bodies and financial resources for actions.
- Review subsidiary exemptions: Check materiality exclusions for sustainability risks/opportunities in consolidated statements.
- Prepare for supervision: Leverage NCAs flexibility during transition; integrate into data governance and risk systems per CSRD implementation trends.
Key Dates
- European Commission aims to adopt revised ESRS into a delegated act, considering ESMA, EBA, EIOPA, ECB opinions
- End of certain temporary reliefs on quantitative information for anticipated financial effects (if ESMA recommendations adopted)
adoption (2026+); - Learning curve period with pragmatic NCAs supervision and flexibility in examinations
Compliance Impact
Urgency: Medium - Not yet finalized (pending summer 2026 adoption), with pragmatic supervision promised, reducing immediate pressure; however, matters due to potential tightening of reliefs and disclosures impacting FY2026+ reporting, investor protection focus, and interoperability needs. Firms should prioritize if heavily using reliefs or with complex transition plans, as non-adjustment risks supervisory scrutiny post-learning curve.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
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ESMA launches selection process for its next Chair 03 February 2026 About ESMA Careers Vacancies The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has launched the selection procedure for the position of ESMA Chair . This key leadership role offers the opportunity to shape the future of Europe’s financial markets and steer the organisation through an evolving regulatory and supervisory landscape. As a full‑time, independent professional...
ESMA has launched a selection process for its next Chair, a full-time independent role based in Paris responsible for leading strategic direction, governance, and representation amid evolving EU financial markets regulation. This matters for compliance professionals as the incoming Chair will influence ESMA's supervisory priorities, enforcement approach, and adaptation to upcoming legislative changes like market integration proposals, potentially impacting how firms navigate cross-border supervision and reporting requirements.
What Changed
This publication announces no direct regulatory changes or new requirements; it is a vacancy notice for ESMA's leadership position rather than a policy update or consultation imposing obligations on market participants. Responsibilities outlined align with the existing ESMA Regulation, including chairing the Board of Supervisors and Management Board, strategy development, and navigating potential governance adjustments from the European Commission's market integration proposal.
Key Dates
- Application deadline for ESMA Chair position
Compliance Impact
Urgency: Low. This leadership transition poses minimal immediate compliance burden, as it introduces no new rules or deadlines for firms; however, the new Chair's tenure from mid-2026 onward could shape enforcement consistency, risk-based supervision, and adaptation to reforms like DORA and EMIR 3, warranting long-term tracking by governance and public affairs teams.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
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