Informe_Anual_Cecabank_2016_ENG

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Overview 2013-2016
The main regulatory landmark that took place between 2013 and 2016, was
the creation of the Banking Union, leading to the move of key supervision du-
ties to Frankfurt, and the creation of a single supervisory mechanism and a
European resolution authority. This change is still in progress and has already
had a serious impact on companies, with the effects felt at both a quantitative
(stress test, SREP Decision, MREL requirement) and qualitative level (with chan-
ges in corporate governance, the role of the council, and in risk management
methods, with more clear and better documented procedures).
2016 Milestones
Solvency
Basel IV
The Basel Committee on Banking Supervision is carrying out a wide-rea-
ching review of the Basel III capital framework (known as “Basel IV”) which
aims to reduce complexity, improve comparability, and tackle excessive
variability in capital requirements between banks and jurisdictions.
Resolution:
MREL (Minimum Requirement of Eligible Liabilities)
Within the framework of Resolution Directive measures to prevent the use
of public funds in future crises, is one known as MREL, or minimum require-
ment for own funds and eligible liabilities. It aims to ensure the institution’s
shareholders and creditors absorb any losses produced, as a preliminary step
taken before the potential use of a settlement fund.
Securities market
Depositary obligations
Over the last few years, many new measures have been introduced (and con-
tinue to be introduced) on the stock market (EMIR, PRIIPS, MIFID 2 etc.) which
are significantly changing both the functioning of the markets and ways of
creating new financial products and communicating with customers.
On 24 March the Delegated Regulation (EU) 2016/438 of the Committee
of 17 December 2015 was published in the DOUE completing Directive
2009/65/EC of the European Parliament and Council with respect to deposi-
tary obligations. It is applicable from 13 October 2016.
The Delegated Regulation establishes the minimum elements a contract
must contain for the appointment of a depositary and develops conditions a
depositary must meet to carry out its operations.
Implications of the new regulations for the depositary market
The new standards involve a significant shift in the depositary market in
Spain, with the following implications being the most notable:
Significant increase in costs:
• More requirements for delegating custody.
• New requirements for monitoring.
• New obligations with regard to non-custodial assets involving invest-
ment in infrastructure.
Responsibility of the depositary: is increased due to greater operational risks.
Corporate changes and changes in governance: deriving from the separa-
tion of depositaries and managers.
“Basel IV, the
requirement of the
MREL resolution
directive, and the
change in obligations
for depositaries
resulting from stock
market reform are three
of the landmark events
most likely to affect
Cecabank’s business.”
Arantzazu Rodríguez
Regulation
Cecabank 2016 Annual Report Page 61
05 OUR BUSINESS MODEL
5.1
5.2