The Czech National Bank proposed a regulation over activities of banks and financial institutions. The regulation reflects recent changes that were proposed by G20 and the European Union. The regulation broadens the scope of activities that could be conducted under the previous directive of the EU. The regulation enables a supervision institution to control financial products of any financial institution. Doing that, the supervisor can determine the amount of equity capital in order to secure financial sustainability of companies providing financial products. Such a provision is applicable on those products that are of higher risk and may cause a rather serious damage to the company. The supervisor is also allowed to ask financial institutions on providing further details of their respective economic position. Those details should be provided in accordance with international accounting standards and financial reporting (IFRS, FINREP). The regulation also stipulates the basis on which capital buffers are determined. The CNB is the respective supervision institution in the Czech Republic.
The regulation further states under which condition a foreign branch of a financial institution is granted permission in the Czech Republic.
The regulation is heading to internal commentary procedure.
For further information, click here (explanatory report).
16th October 2017
13th October 2017
18th October 2017
17th October 2017