Regulatory Alerts2022-12-13
Compliance with EBA Guidelines on common procedures and methodologies for SREP and stress testing (EBA/GL/2022/03)
The ACPR declares compliance with the EBA's updated guidelines on common procedures and methodologies for the Supervisory Review and Evaluation Process (SREP) and stress testing, which became applicable on January 1, 2023. These guidelines replace previous 2014 and 2018 versions to integrate requirements from the CRD5 directive, specifically addressing excessive leverage risk, Pillar 2 capital recommendations, and anti-money laundering risks. The ACPR will apply these standards to its supervision of class 1 bis credit institutions and investment firms, while adapting the application for financing companies that are not subject to leverage ratio requirements.
NOTICE Compliance with the European Banking Authority (EBA) Guidelines on common procedures and methodologies to be applied in the context of the Supervisory Review and Evaluation Process (SREP) and stress testing (EBA/GL/2022/03)
The Prudential Supervision and Resolution Authority (ACPR) has declared compliance with the European Banking Authority's (EBA/GL/2022/03) guidelines on common procedures and methodologies to be applied in the context of the Supervisory Review and Evaluation Process (SREP) and stress testing.
These guidelines are applicable as of January 1, 2023. They repeal and replace the EBA guidelines on common procedures and methodologies to be applied in the context of the Supervisory Review and Evaluation Process (SREP) and stress testing of December 19, 2014 (EBA/GL/2014/13) and the revised guidelines of July 19, 2018 (EBA/GL/2018/03).
The EBA/GL/2022/03 guidelines retain the main features of the Supervisory Review and Evaluation Process defined by the 2014 guidelines and revised in 2018. The main changes made to the 2018 revised guidelines aim to integrate into the Supervisory Review and Evaluation Process the new developments of Directive 2013/36/EU as amended by Directive (EU) 2019/978 of the European Parliament and of the Council (known as "CRD5"). In particular, these changes allow for the integration into the prudential analysis of competent authorities of the assessment of excessive leverage risk to determine whether it is sufficiently covered by the so-called "Pillar 1" requirements. The SREP methodology has also been clarified regarding provisions on Pillar 2 capital recommendations and the consideration of money laundering and terrorist financing risks. Finally, these guidelines also allow for better consideration of proportionality in the application of the SREP.
The ACPR will implement these guidelines within the framework of its supervision of class 1 bis credit institutions and investment firms. The ACPR will also apply these guidelines within the framework of the supervision of financing companies, for the provisions concerning them, in order to maintain similar treatment to that of credit institutions. In particular, since financing companies are not subject to a Pillar 1 requirement regarding the leverage ratio, the provisions relating to excessive leverage risk do not apply.