to the point: financial regulation | 06/2025

·    EFAMA has published new recommendations for the SFDR review, which focus on making sustainability disclosures more investor-friendly, practical, and aligned with corporate reporting under CSRD. EFAMA calls for clear categorization of products into sustainable, transition, or ESG collection categories, each requiring tailored disclosures based on measurable sustainability outcomes and binding investment commitments. SFDR reporting must be based on actual company data from CSRD, ensuring consistency and reducing confusion. Disclosure obligations should remain simple and proportional, with no extra requirements beyond existing baseline transparency for non-sustainability products. The recommendations also emphasize streamlining entity-level reporting across SFDR, CSRD, and MiFID/IDD to avoid duplication and minimize compliance costs. Overall, rather than a full overhaul, the guidance advocates for targeted refinements to the current framework to improve investor clarity, promote innovation, and maintain regulatory stability without causing unnecessary disruption to obliged entities.

ESMA has published or updated the following Q&As:

·         Prospectus Regulation

o    Historical financial information (2454)

·         MiCA

o    Custody agreements in the exercise of rights attached to crypto-assets (2290)

o    Commingling clients’ crypto-assets with crypto-assets from other entities of the group when acting as custodian (2578)

o    Shared order book model (2579)

·         UCITS

o    Updates of notification letters for the cross-border marketing of UCITS (2575)

·   The European Commission is proposing targeted reforms to the EU Securitisation Framework to improve market efficiency, support green investment, enhance supervisory coordination, and ensure more risk-sensitive prudential treatment for banks and insurers. The new Q&As are available here. In supervision, the Joint Committee’s Securitisation Committee will refocus on supervisory matters, with EBA taking a lead role and providing the secretariat. This aims to improve coordination, ensure convergence in supervision, and simplify cooperation among authorities. Members will be selected for relevant expertise, and the committee will work to establish common supervisory practices. For STS (Simple, Transparent and Standardised) securitisations, the proposal relaxes the homogeneity requirement: a pool will qualify as homogeneous if at least 70% of exposures are SME loans, making cross-border SME securitisations easier. The framework will also allow insurance and reinsurance firms to participate more easily in synthetic STS securitisations, provided they meet strict prudential standards. Technical adjustments will simplify compliance without altering core rules. On capital requirements, the proposals make the framework more risk sensitive. Lower-risk securitisations, particularly senior tranches in robust structures, will face reduced capital charges. The significant risk transfer (SRT) framework will also be clarified to ensure consistent application across Member States. These changes remain in line with Basel III while adapting to EU market needs. To support market liquidity, securitisations will become more eligible for inclusion in banks’ liquidity buffers under the Liquidity Coverage Ratio (LCR) rules. This should enhance market depth and encourage portfolio diversification. Finally, upcoming changes to the Solvency II Delegated Regulation will lower capital requirements for senior tranches in both STS and non-STS securitisations, aligning the treatment of senior STS tranches more closely with covered and corporate bonds. This will make securitisation more attractive to insurers while maintaining strong prudential safeguards.

·    ESMA has published a set of non-binding principles  on third-party risk supervision aimed at strengthening the EU-wide supervisory approach to outsourcing, delegation, and other third-party service arrangements used by firms in the securities markets. For obliged persons and entities, this means they must be prepared for closer scrutiny by supervisors regarding how they identify, assess, and manage risks associated with third-party services, especially those deemed critical to their operations. While these principles do not introduce new legal obligations, they serve as a supervisory benchmark and clarify expectations in areas where existing rules are high-level or fragmented. The principles apply to all third-party arrangements regardless of the provider's location or group affiliation, and they emphasize a proportionate, risk-based approach. Entities must therefore ensure that their outsourcing frameworks, particularly for critical services, are robust, well-documented, and transparent to supervisors. Although ICT-related third-party risks are covered under DORA and are excluded here, ESMA's principles are aligned with DORA to ensure consistency.

·    ESMA has published final reports (Final report on Prospectus Regulation and Final report on civil prospectus liability) with advice and recommendations aimed at simplifying and improving the EU prospectus framework to reduce regulatory burdens and facilitate capital market activity. For obliged persons and entities, the new rules mean clearer guidance on the content, format, and approval process of prospectuses, including specific proposals for disclosures related to non-equity securities with ESG features. They will also need to comply with updated data reporting requirements aligned with recent legislative changes such as the Listing Act and the implementation of ESAP. Regarding civil prospectus liability, ESMA’s findings suggest that the current regime is generally well-balanced, and no immediate reforms are proposed, but the issue will be reviewed further by the European Commission. Overall, obliged entities should expect enhanced clarity and some procedural updates in prospectus preparation and reporting, helping streamline capital raising while maintaining investor protection.

·    EBA has published new rules on operational risk capital requirements and related supervisory reporting (RTS concerning the calculation and adjustments of the Business Indicator (BI) and ITS on operational risk reporting), which will significantly impact obliged banks and financial institutions by providing clearer and more detailed guidance on how to calculate and report operational risk. Institutions will need to follow updated methods for calculating the Business Indicator (BI), which is key to determining operational risk capital, including refined components aligned with current accounting standards and clearer rules on how to handle mergers, acquisitions, and disposals in their calculations. Reporting will become more standardized and streamlined through updated mappings to FINREP templates, reducing administrative burdens and ensuring consistent data submissions. Additionally, institutions will have to provide more detailed operational risk data in their supervisory reports, enabling authorities to better assess compliance with capital requirements.

·   The Council's agreement on new payment services rules marks a major update to the EU's regulatory framework, with important implications for obliged persons and entities such as payment service providers, banks, and fintech companies. These new rules (regulation proposal and directive proposal) aim to strengthen fraud prevention, enhance consumer protection, and increase fee transparency. Obliged entities will now be required to share fraud-related information, implement systems to verify that IBAN numbers match account names before executing transfers, and ensure their practices align with EU data protection standards. The regulation also expands the scope of anti-fraud obligations to include electronic communication services like internet and messaging platforms. For payment providers, this means higher compliance standards and more responsibility in safeguarding consumer transactions. They must also disclose all ATM-related fees and exchange rates upfront, and provide clearer information on payment card scheme fees, ensuring greater transparency. At the same time, the rules support innovation by giving regulated third-party providers improved access to necessary bank account data, allowing them to offer more modern and user-friendly services. However, this access will be balanced with additional safeguards to protect data and consumer interests.

·    The Czech National Bank (CNB) implemented (Czech version only) a major deregulation package aimed at reducing bureaucracy and easing the administrative burden for obliged persons and entities operating in the financial market. This reform involves the abolition of dozens of unnecessary or excessive regulatory requirements across 19 decrees, many of which stemmed from so-called goldplating, where national rules exceeded the scope of EU legislation without delivering proportional benefits. Financial institutions will no longer be required to submit various reports and declarations that ČNB can obtain from other sources or that lack real regulatory value. Examples include the removal of reports on credit concentration and profit distribution for banks, elimination of national-level risk management and disclosure requirements now covered by EU rules or IFRS standards, and simplification of reporting obligations for entities distributing pan-European personal pension products (PEPP). Additionally, certain licensing documents, such as declarations of legal capacity, will only be required if the information cannot be verified through public registers.

·    The Government is now discussing the Draft Decree (Czech version only) is a response to the Draft Act (Czech version only) amending certain financial market laws in relation to the regulation of the activities of branches of foreign banks from non-member states, the regulation of certain offences and the strengthening of the powers of the supervisory authority and its independence. The Act implements Directive (EU) 2024/1619 and is currently in the legislative process.

·   The Government is currently debating an Amendment (Czech version only) to the Investment Companies and Investment Funds Act. In particular, the Amendment transposes Directive (EU) 2024/927 of the European Parliament and of the Council of 13 March 2024 amending Directives 2011/61/EU and 2009/65/EC as regards the authorisation, liquidity risk management, reporting for supervisory purposes, provision of depositary and custody services and lending by alternative investment funds. In addition, amendments are proposed to address shortcomings in the current legislation identified in practice and to remove unnecessary administrative burdens.

·    The Court of Justice of the EU delivered a landmark judgment in Polish case C-396/24, strengthening consumer protection in foreign currency loan disputes. The CJEU explicitly questioned the compliance of the so-called "theory of two conditions" – commonly applied in Polish jurisprudence – with European Union law. According to it, each of the parties to an invalid contract could separately claim the return of the fulfilled payment, regardless of the other party's calculations. It also found that automatically granting immediate enforceability to bank claims – when courts lack discretion to mitigate harm to the consumer – is similarly contrary to EU law. The ruling challenges long-standing interpretations in Polish case law and supports the approach taken by the Ministry of Justice in its draft legislation on consolidated FX loan proceedings. The Ministry is now adjusting the bill to reflect the consumer protection standards confirmed by the CJEU, aiming to streamline litigation, maintain efficiency and ensure compliance with EU law. 

·    The Office of Competition and Consumer Protection (UOKIK) has developed a template for fixed-rate mortgage contracts for at least five years to eliminate unfavourable provisions and prohibit tying. Banks are to compete only on price parameters – the amount, margin and term of the loan. The project is expected to start after the summer season, and the regulations could take effect in the middle of 2026. The UOKIK is also preparing to implement the EU directives CCD II and DMFSD II, which, among other things, prohibit advertisements implying that a loan will improve the borrower's financial situation and introduce mandatory warnings about the cost of liabilities.