De Nederlandsche Bank N.V. Consultation Amendment to the regulation “Specifieke bepalingen CRD IV en CRR” regarding the transition of liquidity requirements 13 October 2014 1. REACTIONS This document is offered for public consultation. De Nederlandsche Bank N.V. (DNB) gives stakeholders the opportunity to comment on the decision regarding the Amendment to the regulation “Specifieke bepalingen CRD IV en CRR” regarding the transition of liquidity requirements. Following the consultation, DNB will publish a short feedback statement, summarizing the received reactions on an anonymous basis. Reactions per email or post are accepted until November 10th 2014. Contact details Address Email De Nederlandsche Bank N.V. Divisie Toezicht Beleid T.a.v. CRD IV consultation liquidity Postbus 98 1000 AB AMSTERDAM [email protected] Subject: “LCR consultation” Should there be any questions regarding this consultation, please contact Clemens Bonner ([email protected]). 2. Description 2.1 CRD IV and CRR The CRD IV consists of a Directive (2013/36/EU), henceforth Capital Requirements Directive IV or “CRD IV”, and a Regulation (575/2013), henceforth Capital Requirements Regulation or “CRR”. The CRD IV needs to be implemented in national law, while the CRR is immediately binding. Most supervisory rules of DNB were replaced by the implementation of the CRR on January 1st 2014. Against this background, January 1st 2014 was the implementation date of the rule “specifieke bepalingen CRD IV en CRR”, which replaced several of DNB’s supervisory regulation. 2.2 CRD IV and CRR: Liquidity Requirements CRD IV Article 412(1) states that institutions shall hold liquid assets that cover net outflows under stressed conditions over a period of 30 days. According to Article 460(2), the liquidity coverage requirement (LCR) referred to in Article 412 shall be phased in, starting with 60% in 2015 and to gradually rise to 100% by January 2018. Article 460(1) empowers the Commission to adopt a delegated act in order to specify the general requirement set out in Article 412(1). Until the LCR is fully introduced (1st January 2018), Member States may maintain national requirements and/or shorten the phasing-in period and require institutions to reach 100% before 2018 (Article 412(5)). Since the Netherlands has a national liquidity requirement, a decision needs to be made until when the so called “8028” Dutch liquidity (reporting) requirement 1 will be maintained as well as whether the Netherlands requires a shorter phase-in period for the LCR. The hereby consulted proposal specifies to immediately start with a liquidity coverage requirement of 100% in October 2015 and to discontinue the Dutch requirement 8028 as of January 2016. The proposed decision according to Article 412(5) 2.3 The hereby consulted proposal includes two decisions: a) Independent of the specific implementation date of the CRD IV liquidity coverage requirement, the requirement will immediately be set to 100% in October 2015. 1 The “8028” is the common reference to the compliance and reporting of a liquidity metric. The compliance is legally enforced through the DNB supervisory regulation “Regeling liquiditeit Wft 2011”, which is based on article 108 of the Besluit prudentiële regels Wft (Bpr), which in turn is based on articles 3:63, 3:64 and 3:65 of the Wet op het financieel toezicht. The reporting of the “8028” is legally enforced through the “Regeling staten financiële ondernemingen Wft 20111” (essentially being a cross reference to the “Regeling liquiditeit Wft 2011”), which is based on articles 130 to 135 of the Besluit prudentiële regels Wft (Bpr), which in turn is based on article 3:72 of the Wet op het financieel toezicht. b) The Dutch requirement “8028” will be discontinued as of January 2016 with December 2015 being the last reporting date. Scope of the decision and impact of the Single Supervisory Mechanism 2.4 The proposed decision is applicable to the following types of entities: - Credit institutions with their statutory seat in the Netherlands Opt-in banks with their statutory seat in the Netherlands Branches of credit institutions with their statutory seat in the Netherlands Branches with the head office in the EEA will be subject to the 8028 until further notice. DNB expects to discontinue the 8028 at the moment the LCR becomes legally applicable as a binding minimum, which is currently foreseen as of October 2015. EEA branches are not subject to the LCR on a branch-segregated basis as their head offices are subject to the LCR. DNB considers the relevant provisions in the CRD/CRR as mandates the Members States which are not transferred to the ECB as a part of the Single Supervisory Mechanism. Hence DNB will remain the competent party to take such decision. Please note that this power is not a part of DNB’s powers as a competent authority but rather a part of its powers a delegated rule making party in the Netherlands. 3. Related issues Annex 7 Regeling Staten specifies an audit requirement for the 8028 for 2014. Due to the decision to discontinue the 8028, DNB has also decided to not enforce this requirement regarding the 8028. Since this decision has been made to allow banks to use their resources to improve the LCR reporting, it is currently investigated how the requirement can be transferred to the LCR. Recently, the BCBS published the “Monitoring tools for intraday liquidity management” (April 2013) as well as disclosure standards for the LCR (January 2014). The reporting of the monitoring tools as well as the disclosure of the LCR was expected to commence from 1 January 2015 to coincide with the planned implementation of the LCR reporting requirements. In collaboration with other European supervisors, DNB is currently working on an informal proposal to harmonize the implementation of the disclosure standards and the intraday monitoring tools in Europe. Although there is no time table yet, DNB does not expect banks to implement these guidelines prior to the introduction of the LCR.
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