|
|
||||||||||||
|
 |
|
Basel ii Offshore
The Basel Committee on Banking Supervision consists of senior
representatives of bank supervisory authorities and central banks
from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg,
the Netherlands, Spain, Sweden, Switzerland, the United Kingdom,
and the United States.
The Committee expects its members to move forward with the
appropriate adoption procedures in their respective countries. In
a number of instances, these procedures will include additional
impact assessments of the Committee’s Framework as well as further
opportunities for comments by interested parties to be provided to
national authorities.
The Basel ii framework is being
circulated to supervisory authorities worldwide
with a view to encouraging them to
consider adopting
this revised Framework at such time
as they believe is consistent with their broader supervisory
priorities.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Cayman Islands
The Cayman Islands Monetary Authority (CIMA) announced that it
will undertake a staged implementation of the Basel II Framework
for banks licensed in the Cayman Islands. This decision was made following a detailed impact study conducted with PricewaterhouseCoopers that included consultation with various stakeholders of the Cayman banking industry. The implementation will be staged over a number of years in collaboration with the industry. The Basel II Framework was developed by the Basel Committee on Banking Supervision and is a new global supervisory framework for assessing the capital adequacy of international banks. Most G-10 countries and many other banking supervisors, including those of major international financial services centres, plan to implement the framework over the next few years. CIMA's Acting Managing Director, Mr. Patrick Bodden, said the Authority assessed the Basel II Framework on its merits and considers its implementation as beneficial for the jurisdiction: "The implementation of the framework is a vital part of the Cayman Islands' continued commitment both to modern risk based supervision and to meeting internationally accepted and applied supervisory standards. Having the framework in place will enhance our standing and competitiveness as a financial services centre." The Board of the Cayman Islands Monetary Authority (CIMA) has approved the implementation of the new Basel II framework in the Cayman Islands between 2010 and 2012. This will occur following the preparation process that will include policy development, new reporting requirements, and a measured pace of consultations with the Cayman Islands banking industry. The initial focus will be on requiring Cayman incorporated banks to implement the standardized approaches under Pillar 1 by the end of 2010, with a staged implementation of Pillars 2 and 3 between 2010 and 2012. Further consideration will be given to the more advanced approaches thereafter. The standardized approaches under Basel II will facilitate the Cayman banking industry's risk profile and business mix, while enhancing its risk measurement and management practices. Cayman's banking industry currently comprises 280 banks from over 40 countries, of which approximately 100 will be directly impacted by the implementation of the Basel II framework. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Bermuda Bermuda banks and deposit companies are required to meet, on an ongoing basis, the minimum licensing criteria set out in the Second Schedule to the Banks and Deposit Companies Act 1999 (‘the Act’). This provides, among other requirements, that institutions must conduct their business in a prudent manner, including that they maintain capital commensurate with the nature and scope of their operations. The setting and monitoring of requirements for capital adequacy and the effective assessment of risk within institutions represent key elements in the framework of prudential oversight and control applied by the Bermuda Monetary Authority (‘the Authority’) to help protect the interests of depositors and potential depositors. The approach developed and applied by the Authority in that regard under the Act has reflected the regulatory standards designed and promulgated by the Basel Committee on Banking Supervision, the international standard-setting body. As a result, institutions licensed in Bermuda have been required to maintain at all times levels of capital in excess of the minimum international standards. Institutions are expected to operate at all times in such a way as to ensure that their capital exceeds the minimum level resulting from the Pillar 1 calculation and remains at all times consistent with the overall capital requirement set by the Authority in consequence of the supervisory review process under Pillar 2 of the framework. The new approach is also intended, through the application of more effective risk sensitive requirements, to provide greater incentives for the adoption by banks of continuing enhancements in their risk management practices. The revised framework includes a range of options of increasing sophistication for determining the capital requirements for credit risk and operational risk. At the same time, the new approach retains significant aspects of the present international capital adequacy framework, including the general ‘floor’ requirement that no bank should operate with capital equivalent to less than 8% of its risk-weighted assets. The framework for calculating capital requirements for market risk also remains unchanged from that introduced by the Basel Committee in 1996 and incorporated into the Authority’s regime. The definition of eligible capital is similarly unchanged for the time being, although firms should be aware that the Basel Committee is committed to reviewing the current rules defining the componets of regulatory capital. Once the results of that work are available, the Authority will consider how and when to make any changes that prove necessary. The Bermuda Monetary Authority (BMA) has published the 'Revised Framework for Regulatory Capital Assessment', which sets out in a single policy document the final rules for implementation in Bermuda of Pillars 1 and 2 of the new Basel II international capital accord. The Authority is also publishing the new reporting form and guidance notes that institutions must use from 1st January 2009 to calculate and report their capital requirements to the Authority. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- NEW! Course Title Providing Financial Services to the European Clients: For banks and financial organizations of the Offshore Financial Centers Directives and Regulations of the European Union with Extraterritorial Application that affect banks and financial organizations of the Offshore Financial Centers Objectives: The seminar has been designed to provide with the knowledge and skills needed to understand the European Union’s Directives and Regulations that give opportunities for arbitrage and competitive advantage to banks, hedge funds and financial organizations of the Offshore Financial Centers Target Audience: This course is intended for senior executives from Banks, Financial Organizations, Hedge Funds, Financial Supervisors and Regulators of the Offshore Financial Centers This course is highly recommended for all managers and professionals from the Offshore Financial Centers, who provide financial services to clients from the 30 countries of the European Economic Area Duration: 3 Days, 09:00 to 17:00. Course Synopsis: Introduction Understanding the directives and the regulations of the European Union that affect the Offshore Financial Centers The European Union’s Financial Services Action Plan (FSAP) The most Important Directives The Lamfalussy process What is new, what is different for banks and financial organizations outside the European Economic Area Extraterritorial Application of EU directives and regulations The European Savings Tax Directive (that harmed the UK Crown Dependencies and Overseas Territories and helped their competitors, OFCs outside of the influence of the European Union) – lessons learned From the Savings Tax Directive to the Markets in Financial Instruments Directive (MiFID), the 8th Company Law Directive (European Sarbanes Oxley) and other directives The Markets in Financial Instruments Directive (MiFID) From the Investment Services Directive (ISD) to MiFID: What is different now From the “know your customer” requirements to the new client classification, suitability and appropriateness Conduct of Business (COB) obligations The Regulation for National Market System (Reg NMS) in the United States and the MiFID in EU – a flat world? MiFID and options, futures, swaps, forward rate agreements, and other derivative contracts Extraterritorial Application of MiFID Challenges and opportunities for countries outside the European Economic Area MiFID and investment products authorized under different regimes Hedge Funds in the European Economic Area (EEA) after MiFID New challenges for Hedge Fund managers MiFID and competitive advantage - Recommendations for banks and financial organizations of the Offshore Financial Centers The 8th Company Law Directive The European Union’s Sarbanes-Oxley Act (E-SOX) Non-European companies listed in any country of the EEA have to comply with the 8th company law directive Which are the extremely important extraterritorial consequences How and why several Offshore Financial Centers enact legislation to prove that they have an “equivalent level of regulation” Auditors that audit offshore companies with EU listings The Offshore Financial Centers and the importance of Articles 45 and 46 The role of the board of directors and executive management From the US Public Company Accounting Oversight Board (PCAOB) to the European Group of Auditors’ Oversight Bodies (EGAOB) Similarities and differences with the US Sarbanes-Oxley Act The Market Abuse Directive The Transparency Directive Undertakings for Collective Investment in Transferable Securities Directive (UCITS III) UCITS III and funds sold across the EU member states Funds designed for pan-European distribution to retail investors A passport to operate and market freely within the EEA that is easier to obtain (and cheaper) Establishing a fund in one EEA member state like Ireland or Luxembourg Permitted Activities of Management Companies EU Passport for Management Companies Tax implications of UCITS III Expanded permissible asset classes and broader scope of investment possibilities Although not directly applicable outside the EEA, jurisdictions (like Switzerland and Hong Kong) recognize UCITS – the reasons Funds of Funds Opportunities and Challenges The Capital Requirements Directive Basel ii will be implementation in the European Economic Area via the Capital Requirements Directive (CRD) – differences from what is happening at the Offshore Financial Centers The freedom of establishment and the freedom to provide services in the EEA Relations with third countries Powers of the authorities of the home and host Member State Hedge Funds, Alternative investments and the CRD Structured products, Securitization after Basel II and the CRD Traditional and Synthetic Securitisation Regulatory arbitrage The national discretions and the options in the EEA Countries and banks use Basel II and especially the Capital Requirements Directive as a competitive advantage The Financial Conglomerates Directive The “supplementary” supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate The supervision of financial conglomerates and financial groups involved in cross-sectoral activities The “coordinating supervisor” or how to avoid a new BCCI Risk concentration Intra-group transactions Firms that are headquartered outside the EU, and are operating in EU markets The Joint Forum on Financial Conglomerates What is important for the Offshore Financial Centers Exchange of information with the EEA Tomorrow New directives and regulations – what is developing Indirect and direct regulation of Hedge Funds Know your customer – next step Solvency II is for insurance firms what the Basel ii and the Capital Requirements Directive is for banks Insurers holding capital according to new rules Replacing many existing Insurance Directives (like the Life, Non-life, Reinsurance, Insurance Groups and Winding-up Directives) The Internal market for financial services in the European Union: The banking, the securities and the insurance sectors in EU – what is next To learn more you may visit: www.european-client.com --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
|
|
