Decree No. 392 / 2017 Coll.
Decree amending Decree No. 163 / 2014 Coll., on the performance of the activities of banks, savings and credit cooperatives and securities dealers
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Effective from 01.01.2018
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392
DECLARATION
of 14 November 2017
amending Decree No. 163 / 2014 Coll., on the performance of the activities of banks, savings and credit cooperatives and securities dealers
The Czech National Bank provides pursuant to § 8b (7), § 12a (4), § 12m (6), § 13 (2), § 14 (3), § 15 (2), § 22 (2) of Act No. 21 / 1992 Coll., as amended by Act No. 120 / 2007 Coll. and Act No. 135 / 2014 Coll., pursuant to § 7a Paragraph 7, § 7ab § 3, § 7ad § 3, § 8aj § 6, § 8b § 8b § 1 of Act No. 87 / 1995 Coll., Act No. 227 / 2013 Coll., and to the Act No. 135 / 2014 Coll., and to implement § 199 § 7ad § 6, § 12f (a), § 12f (e), § 12b., § 12b., § 16 (1) of Act No. 3 of the Act No. 250 / 2007 Coll.
Decree No. 163 / 2014 Coll., on the performance of the activities of banks, savings and credit cooperatives and securities dealers, is amended as follows:
1. In Section 2, the words "investment intermediaries' are deleted.
2.
Paragraph 116a applies only to a bank that has a licensed activity under Section 1 (3) (h) of the Banking Act and to a securities trader under Section 8a (1) or (2) of the Capital Market Business Act. '
3. in Article 7 (1) (i), the words "and the client of the investment intermediary" shall be deleted;
4. In Article 7 (1) (m), the word "manager 'shall be inserted after the word" other'.
5. in Article 7 (2) (d), the word "manager" shall be inserted after the word "member."
6. In Article 7 (2) (j), the word "manager 'shall be inserted after the word" subordinate' and the word "manager 'shall be inserted after the word" member'.
7. In Article 7 (3) (c), the words "investment intermediary," are deleted.
8. In Article 7 (3) (j), the word "manager 'shall be inserted after the word" other'.
9. In Article 7 (4) (m), the word "manager 'shall be inserted after the word" member'.
10. In Part Two, Title I, the text under the heading "REQUIREMENTS FOR THE MANAGEMENT AND CONTROL SYSTEM 'reads:
"[K § 8b (7), § 8c (3) and § 10a (3) of the Bank Act, § 7a (7), § 7ab (3) and § 7ad (3) of the Savings and Credit Cooperatives Act, and § 12f (a) and (e) and § 12i (3) of the Capital Market Enterprise Act] '.
11. the following Section 25a is inserted after Section 25:
(1) The obliged entity shall ensure, in connection with the provision of investment services, that clients are informed of the nature or source of the conflict of interest, provided that, despite the measures taken pursuant to Article 12a (1) (h) of the Capital Market Act, the adverse impact of the conflict of interest on the interests of the client cannot be reliably avoided.
(2) The information referred to in paragraph 1 shall be provided by the obliged entity to the client before the provision of the investment service on a durable medium of information pursuant to Article 15e of the Capital Market Act in a manner and to the extent that:
(a) take into account the nature of the client with regard to the provision of investment services; and
(b) allow the client to take due account of conflicts of interest related to the investment service or other business activities of the obliged entity under Section 6a of the Capital Market Act. ';
12. In Paragraph 38 (3), the third sentence is replaced by "Interest rate shock is calculated only on interest-rate sensitive items which cannot be classified as equity items."
13. in Paragraph 61 (1) (e):
"(e) the minutes of the management of the branch of the bank from a Member State other than that of a Member State, the minutes of the management and control body's meetings and the minutes of the deliberations of the advisory bodies, committees or other departments of the foreign bank on the field in question; and ';
14. In Part Three, Title II, the text under the heading "CAPITAL RESERVES 'shall read:
"(K § 12m (6) of the Banking Act, § 8aj (6) of the Savings and Credit Cooperatives Act and § 9aj (6) of the Capital Market Enterprise Act) '.
15. in Paragraph 68 (3):
"(3) Multiplication factor The following shall be provided:
(a) in the first (lowest) interval of the required combined buffer, or higher than its lower limit and not higher than its upper limit, F = 0,
(b) in the second interval of the required combined buffer, or higher than its lower limit and not higher than its upper limit, F = 0,2,
(c) in the third interval of the required combined buffer, or higher than its lower limit and not higher than its upper limit, F = 0,4,
(d) in the fourth interval of the required combined buffer, or higher than its lower limit, F = 0,6. ';
16. Paragraph 79 to 82, including the headings, read:
Subject of categorisation
The obligor categorises the exposures listed in the Annex In Part Two, paragraph 217 of Commission Implementing Regulation (EU) No 680 / 2014 of 16 April 2014 laying down implementing technical standards with regard to the reporting of institutions for supervisory purposes under Regulation (EU) No 575 / 2013 of the European Parliament and of the Council, as amended, ("Implementing Regulation 680 / 2014 ').
Basic categories
The obligor shall classify the exposures in accordance with Section 79 in the following categories:
(a) non-performing exposures;
(b) executive exposure.
Non-performing exposures
The obligor classifies exposures under Section 79 as non-performance exposures under the rules set out in the Annex In Part Two, paragraphs 213 to 216 and 219 to 239 of Implementing Regulation (EU) No 680 / 2014.
Current exposures
The obligor classifies exposures under Section 79 as non-performing exposures under Section 81. ';
17. Paragraph 83 shall be deleted, including the title.
18. Paragraph 84 to 86, including the headings, read:
Expected credit losses
(1) The obligor determines expected credit losses for exposures under Paragraph 79 other than measured at fair value through profit or loss.
(2) The obliged entity shall proceed to determine expected credit losses under International Accounting Standard IFRS 9 Financial Instruments, as set out in the Annex to Commission Regulation (EC) No 1126 / 2008 of 3 November 2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606 / 2002 of the European Parliament and of the Council, as amended. In doing so, it may apply the practical simplifications set out in this Standard, taking into account its size, its business model or the scale and complexity of the activities it carries out.
Adjustments and provisions
(1) The obligor covers expected credit losses in accordance with § 84 of the Directive and provisions.
(2) At least once a quarter, the obliged person shall assess the adequacy and rationality of the adjustments and provisions established pursuant to paragraph 1 and shall adjust their amount.
(3) The obliged entity shall at any time demonstrate to the Czech National Bank the adequacy and justification of the adjustment appropriations and provisions referred to in paragraph 1.
Taking into account collateral
The obligor may take into account collateral when determining the amount of the adjustment items and provisions under Paragraph 85 if:
(a) the collateral and associated policies and procedures used to mitigate the credit risk are based on claims that are legally effective and enforceable in all legal systems that are relevant to the claims arising from the collateral;
(b) adequately manage the risks to which it is or may be exposed in relation to the collateral it takes into account; where the security is a immovable property, such immovable property is adequately insured against damage;
(c) notwithstanding the collateral taken into account, it continues to carry out a full assessment of the credit risk associated with the exposure concerned;
(d) the collateral shall, within a reasonable period of time, be negotiable at least at the value at which it is taken into account in the calculation of the adjustment item and the provision; where the collateral has been traded over the past 3 years, it may be taken into account at the most in the price of the last transaction when determining the amount of the adjustment and provisions;
(e) in the event of default of the debtor or, where applicable, the person who has taken over the collateral for safekeeping, storage or administration, in particular where a decision on the insolvency of one of those persons has been taken, or where another specified credit event has occurred, is entitled to satisfy his claim within a reasonable period of time from the operative event;
(f) the degree of correlation between the value of collateral and the credit quality of the obligor is insignificant;
(g) the personal collateral provider is sufficiently trusted to ensure that the level of credit risk reduction achieved corresponds to the level taken into account in the calculation of the amount of the adjustment and the provision;
(h) has and applies clear criteria for assessing the eligibility of personal collateral providers; and
(i) the scope of the collateral is clear and undisputed, the collateral contract does not contain any provision which would be met beyond the direct control of the obligor and the collateral obligation is properly documented. ';
19. Sections 87 to 90 are deleted, including the headings.
20.
Rules for assessing the assets of a branch of a bank from a non-Member State
The branch of a bank other than a Member State shall apply the rules for the assessment of assets under Sections 79 to 82 and Sections 84 to 86. '
21. in Article 92, the words "Articles 411 and 412 of the Regulation" are replaced by the words "Part Six of the Regulation, to the extent that these requirements apply to the bank."
22. in Paragraph 96 (2):
"(2) A mandatory person who publishes information under Part Eight of the Regulation shall also publish quarterly data under:
(a) Article 437 (1) (a) of the Regulation, except for the full reconciliation of items, filters and deductions into balance sheet in the audited accounts;
(b) Article 438 (c) to (f) of the Regulation; and
(c) Article 451 (1) (a) of the Regulation, with the exception of the way in which the debtor applies Article 499 (2) and (3) of the Regulation. "
23. in Paragraph 97 (1):
"(1) The mandatory person shall publish the data at the date of:
(a) 31 March to 13 May;
(b) 30 June to 12 August;
(c) 30 September to 12 November;
(d) 31 December within 4 months of the end of the calendar year concerned. "
24th Paragraph 97 (3) reads:
"(3) At the same time as the data referred to in paragraphs 1 and 2, the obliged entity shall publish the date of their publication. This shall also apply to the addition or correction of data already published. ';
25. in Paragraph 97, paragraph 4 is deleted;
26. in Paragraph 98 (1):
"(1) The branch of a bank other than a Member State shall publish the data on:
(a) 31 March to 13 May;
(b) 30 June to 12 August;
(c) 30 September to 12 November;
(d) 31 December within 4 months of the end of the calendar year concerned. "
27. In Part Six, under the heading "CERTAIN INFORMATION AND BASIS PRESENTED BY THE CZECH NATIONAL BANK ':
"[Paragraph 24 (1) and (2) of the Banking Act, Section 27 (1) of the Act on savings and credit cooperatives and Section 12f (c) and Section 16 (7) of the Capital Market Enterprise Act] '.
28. Paragraph 104, including the title and footnote 13, reads as follows:
Information on the internal capital system
(1) Information on the internal capital system is submitted to the Czech National Bank by a compulsory person who, under the Bank Act, the Savings and Credit Cooperatives Act or the Capital Market Enterprise Act, fulfils the obligations relating to the internally determined capital (13).
(2) The compulsory person referred to in paragraph 1 shall inform the Czech National Bank of:
(a) a system which has been established and maintained under its management and control system for:
1. the determination and ongoing assessment of the internal capital requirement; and
2. planning and continuing maintenance of internal capital resources at an amount, structure and distribution sufficient to cover the risks to which it is or might be exposed; and
(b) the management and organisational assumptions and arrangements, procedures, outputs and their use and control mechanisms of the system referred to in (a).
(3) The extent and degree of detail of the information is consistent with the scope and complexity of the internal capital system of the obliged entity referred to in paragraph 1. Where information on this system is provided on a consolidated basis, the obliged entity referred to in paragraph 1 shall also provide the data broken down by person belonging to the same consolidation unit and included in its internal capital system.
(4) The compulsory person referred to in paragraph 1 shall inform the Czech National Bank of the internal capital system for the previous financial year by 30 April at the latest, unless otherwise agreed with the Czech National Bank. The information on the internal capital system shall include information on the plan and facts for the financial year and the plan for the continued maintenance of the internal capital ratios.
(5) The obliged entity referred to in paragraph 1 shall submit information on its internal capital system in electronic form. The data format shall be agreed by the obliged entity in accordance with paragraph 1 with the Czech National Bank individually.
13) § 12c of Act No. 21 / 1992 Coll., on Banks. § 8a of Act No. 87 / 1995 Coll., on savings and credit cooperatives and certain measures related thereto and on the addition of Act No. 586 / 1992 Coll., on Income Taxes, as amended, Act No. 230 / 2009 Coll., Act No. 188 / 2011 Coll., Act No. 135 / 2011 Coll., Act No. 160 / 2010 Coll., Act No. 41 / 2011 Coll., Act No. 139 / 2011 Coll., Act No. 230 / 2009 Coll., Act No. 160 / 2010 Coll., Act No. 135 / 2014 Coll., Act No. 9a Act No. 256 / 2004 Coll.
29. The following Section 104a is inserted after Section 104, including the title and footnote 18:
Information on the liquidity adequacy and funding assessment system
(1) Information on the system and procedures for assessing liquidity adequacy and financing is submitted to the Czech National Bank by a mandatory person who, under the Bank Act, the Bank's Savings and Credit Cooperatives Act or the Capital Market Enterprise Act, fulfils the obligations relating to liquidity risk management18).
(2) The compulsory person referred to in paragraph 1 shall inform the Czech National Bank of:
(a) a system which has been established and maintained under its management and control system for:
1. the determination and ongoing assessment of internal liquidity and financing requirements; and
2. planning and continuing maintenance of internal liquidity and funding sources at an amount, structure and distribution sufficient to cover the risks to which it is or might be exposed; and
(b) the management and organisational assumptions and arrangements, procedures, outputs and their use and control mechanisms of the system referred to in (a).
(3) The scope and level of detail of the information are consistent with the scope and complexity of the system for assessing liquidity adequacy and the financing of the obligor referred to in paragraph 1.
(4) The compulsory person referred to in paragraph 1 shall inform the Czech National Bank of the system and procedures for assessing liquidity adequacy and financing over the previous financial year by 30 April at the latest, unless otherwise agreed with the Czech National Bank. Information on the system and procedures for assessing liquidity and financing adequacy shall include information on the plan and facts for the financial year and on the plan for continuing to maintain the internal liquidity and financing adequacy.
(5) The obliged entity referred to in paragraph 1 shall provide information on its internal liquidity and financing adequacy system in electronic form. The data format shall be agreed by the obliged entity in accordance with paragraph 1 with the Czech National Bank individually.
18) § 8b of Act No. 21 / 1992 Coll., on Banks. § 7a of Act No. 87 / 1995 Coll., on savings and credit cooperatives and certain measures related thereto and on supplementing the Act of the Czech National Council No. 586 / 1992 Coll., on Income Tax, as amended. Section 12a of Act No. 256 / 2004 Coll., on Capital Market Business. Paragraph 41 of this Decree. '
30. Paragraph 108 (2) reads as follows:
"(2) A mandatory person who uses an internal approach to calculate risk-weighted exposure amounts or to calculate own funds requirements other than capital requirements for operational risk shall inform the Czech National Bank of the results of calculations of its internal approaches for its exposures or positions in the comparative portfolios, together with an explanation of the methodologies used in accordance with Commission Implementing Regulation (EU) 2016 / 2070 of 14 September 2016 laying down implementing technical standards on templates, definitions and solutions in the field of information technology to be used by institutions in reporting to the European Banking Authority and competent authorities pursuant to Article 78 (2) of Directive 2013 / 36 / EU of the European Parliament and of the Council. ';
footnote 14 is deleted.
31. in Article 113 (1), the sentence "This obligation is also fulfilled by the obligation to publish the information in accordance with Article 450 of the Regulation within that period shall be inserted after the first sentence."
32. § 114, including the title reads:
Information on change of person
(1) If the obliged entity makes a change in the management of the key function, it shall inform the Czech National Bank without undue delay. The information shall include a precise designation of the function in question,
(a) specifying the reason for the change; This does not apply in respect of a change made solely at the initiative of the person leaving the post,
(b) basic identification details of the two persons concerned;
(c) the date of the change;
(d) the report of the obliged entity on the results of the assessment of the suitability of the person to carry out the function to which he / she is taking up, with regard to compliance with the requirements of credibility, competence and experience of that person; and
(e) any other relevant information concerning the notified change.
(2) The obliged person shall inform the Czech National Bank of the results of the assessment of suitability whenever he proposes a change of the member of the management body. Part of the information is the result
(a) an assessment as to whether, in the proper performance of his duties, he or she is prevented from pursuing a professional, business or other similar activity, such as that of a person with a similar business;
(b) an assessment of compliance with the requirements of credibility, competence and experience of the person evaluated for the performance of the function; and
(c) an assessment of compliance with the requirements of credibility, competence and experience of the management body as a whole, taking into account changes in its composition.
(3) Paragraphs 1 and 2 shall apply mutatis mutandis to a branch of a bank other than a Member State. ';
33. The following Section 116a is inserted after Section 116, including the title and footnote 19:
Report on the adequacy of the measures taken to protect the customer's assets
(1) A report on the adequacy of the measures taken to protect the client's assets under Section 12e (3) of the Capital Market Act is submitted
(a) in the case of annual information, within 4 months of the end of the relevant accounting year; and
(b) without undue delay after finding deficiencies at any time during the year.
(2) The report referred to in paragraph 1 (a) shall include an evaluation of the functionality and effectiveness of the measures taken to protect the customer's assets and identify the control mechanisms in place, at least:
(a) information on the material and time scale of the areas verified by the auditor;
(b) an assessment of the compliance of the accounting principles and accounting procedures of the client's funds and investment instruments with the legislation;
(c) assessing the conformity of the management of the customer's assets in the internal registration system with the legislation;
(d) an assessment of whether the recovery of the customer's property is carried out reasonably frequently, in a conclusive manner and in accordance with the legislation and internal legislation of the obliged entity;
(e) verification of the correctness of the system and functional setting of the process for the reclassification of all customer assets by the obliged entity and verification of the results of at least one reclassification of all customer assets in each month during the calendar year for which the report is being processed;
(f) the result of the verification of compliance of investment vehicles and funds with the legislation of third parties;
(g) the result of verification of compliance of the use of investment vehicles with the legislation and internal rules of the obliged entity;
(h) the specification of the missing control mechanisms, the description of the deficiencies identified and the evaluation of their severity;
(i) other relevant information relating to the protection of the customer's property by a mandatory person.
(3) The report referred to in paragraph 1 shall be submitted in electronic form, signed in a manner with which another legislation links the effects of the handwritten signature 19), or in paper form to the address of the Czech National Bank.
19) Paragraph 18 (2) of Act No. 300 / 2008 Coll., on Electronic Acts and Authorised Conversion of Documents. Article 6 (1) of Act No. 297 / 2016 Coll., on Trust Services for Electronic Transactions. '
34. In Annex 1 (1) (b):
"(b) the specific principles and remuneration procedures for the selected areas of the overall remuneration scheme of the obliged entity and at least for the remuneration of personnel whose activities have a significant impact on the overall risk profile of the obliged entity, determined in accordance with the procedure laid down in Commission Delegated Regulation (EU) No 604 / 2014 of 4 March 2014 supplementing Directive 2013 / 36 / EU of the European Parliament and of the Council with regard to regulatory technical standards on qualitative and appropriate quantitative criteria for determining the categories of staff whose activities have a significant impact on the risk profile of the institution, as amended (" the selected worker "), unless the application of the procedures under points 13 to 20 would not be proportionate to the influence of the selected worker or group of selected workers on the overall risk profile of the obliged person; the provisions of point (c) are without prejudice to the responsibility of the obliged person for the establishment, maintenance and application of appropriate criteria for the identification of the selected staff; and ';
35. In Annex 1, point 2, the words "points 2 and 4 'are deleted.
36. in Annex 1 (9) (a):
"(a) the overall remuneration shall be based on a combination of an assessment of the individual performance and performance of the department concerned with an assessment of the overall performance of the obliged entity; the results of the group or the person controlling the person responsible may be taken into account only exceptionally, in particular as regards the exercise of activities which can be demonstrated to have a more significant effect on the performance of the group or on the performance of the person controlling the person responsible and their share of the overall activities evaluated is not negligible and in a way that is duly justified, ';
37. In Annex 1, point 10, including the title above, reads:
"Form and structure of remuneration
10. The fixed and mobile component of the total remuneration of the selected worker is appropriately balanced; The fixed remuneration component shall constitute a sufficient proportion of the total remuneration in order to apply a fully flexible approach to the variable remuneration component, including the possibility of a variable remuneration component. ';
38. In Annex 1, point 11 reads as follows:
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Regulation Information
| Citation | Decree No. 392 / 2017 Coll., amending Decree No. 163 / 2014 Coll., on the pursuit of the activities of banks, savings and credit cooperatives and securities dealers |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 29.11.2017 |
|---|---|
| Effective from | 01.01.2018 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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