The Supervisory Authority has issued the 39th update of Circular No. 285/2013 on Supervisory Provisions for Banks.
This update amends the provisions:
- on banking groups and the register of banks and banking groups.;
- on the supervisory control process.
The changes in question concern two areas of intervention:
- The regulation of financial holding companies or mixed financial holding companies;
- The powers of intervention of the Supervisory Authorities within the context of the second Pillar.
The interventions have been subjected to public consultation.
Financial holding company or mixed financial holding company
The relevant provisions have introduced an authorization regime for financial holding companies and mixed financial holding companies at the top of a European banking group (so-called “EU parent”) or the national component of a group (so-called “parent in a Member State”).
The new rules regulate the authorization procedure and exemption from assuming the role of the parent company of a banking group of financial holding companies or mixed financial holding companies and ensure coordination with other authorization procedures under industry regulations.
Furthermore, the authorization procedures applicable to both financial holding companies and mixed financial holding companies other than the parent company (Art. 69.1 TUB) and those at the head of foreign groups (Art. 69.2 TUB) are regulated through referral to the parent company regulations.
Second Pillar Powers
In this context, a clear differentiation is introduced – for the first time in prudential regulation – between components of Pillar II capital demand estimated from an ordinary perspective (Pillar II requirement – P2R) and those determined from a stressed perspective (Pillar 2 Guidance – P2G).
The option is also introduced to provide for the requirement of additional capital due to excessive financial leverage risk, under ordinary and stress conditions (Pillar 2 Requirement Leverage Ratio – P2R-LR and Pillar 2 Guidance Leverage Ratio – P2G-LR).
Consult the documentation: