The three European Supervisory Authorities (EBAEIOPA and ESMA) have issued a Consultation Paper seeking input on draft Regulatory Technical Standards (RTS) regarding disclosures of financial products investing in economic activities that contribute to an environmental investment objective.

The proposed draft RTS aim to facilitate disclosures to end investors regarding the investments of financial products in environmentally sustainable activities and

create a single rulebook for sustainability disclosures under the Regulation on sustainability-related disclosures in the financial services sector (SFDR) and the Taxonomy Regulation.

The ESAs’ proposal on how and to what extent activities funded by the product are taxonomy- aligned, consist of two elements:

  • a graphical representation of the taxonomy-alignment of investments of the financial product and a key performance indicator calculation for that alignment; and
  • a statement that the activities funded by the product that qualify as environmentally sustainable, are compliant with the detailed criteria of the Taxonomy Regulation.

ESMA published its first Trends, Risks and Vulnerabilities (TRV) Report of 2021.

The Report analyses the impact of COVID-19 on financial markets during the second half of 2020 and highlights the increasing credit risks linked to significant corporate and public debt overhang, as well as the risks linked with investments in non-regulated crypto-assets.

EBA published a consultation paper on its revised Guidelines on recovery plan indicators.

The revised Guidelines provide additional guidance on indicators’ calibration, monitoring and breaches notifications. The amendments aim at strengthening the quality of recovery indicators framework and contributing to effective crisis preparedness of institutions. The deadline for the submission of comments is 18 June 2021.

EBA published a consultation on Guidelines for institutions and resolution authorities on improving resolvability.
These Guidelines represent a significant step in complementing the EU legal framework in the field of resolution. They aggregate existing international standards, leverage on existing EU best practices and implement them into an EU-wide legal document. The consultation runs until 17 June 2021.

EBA launched a public consultation on changes to its Guidelines on Risk-Based Supervision of credit and financial institutions’ compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) obligations.
The proposed changes address the key obstacles to effective AML/CFT supervision that the EBA has identified during its review of the existing Guidelines, including the effective use of different supervisory tools to meet the supervisory objectives.

The changes the EBA is proposing include practical step-by-step approaches to addressing those aspects of AML/CFT supervision that competent authorities have found particularly challenging. The revised Guidelines focus on helping the supervisors identify and manage ML/TF risks more effectively, including the risks that may arise from de-risking practices in some sectors or Member States by providing greater detail on ML/TF risk assessments and by requiring to develop a robust supervisory strategy and plan that are based on those risk assessments. The consultation runs until 17 June 2021.