Regulatory Update: the focus areas for Q3 2022

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With the help of compliance software Ruler, Charco & Dique closely monitors the developments in financial laws and regulations. Then, we determine the impact of the changes and translate the developments into the daily practice of our clients.

Which developments should you take into account? Every quarter, we provide a structured overview of the regulatory changes and their consequences for financial institutions in our Regulatory Updates. In this blog, we list a number of focus areas for Q3 2022.



What laws and regulations have recently come into effect?

  • On May 18, 2022, the Delegated Regulations related to the benchmark transition entered into force.
  • On June 1, 2022, the EBA Guidelines on payment instruments with restricted use under PSD2 entered into force.
  • On June 13, 2022, the MAR Guidelines on delaying disclosure of inside information entered into force.

Integration of sustainability risks and factors into MiFID II

On August 2, 2021, Delegated Regulation 2021/1253 on the integration of sustainability risks and factors into MiFID II was published in the EU Official Journal. This Delegated Regulation entails the following adjustments:

  • Investment firms that manage assets and/or provide investment advice must assess their clients’ ESG preferences and must include these preferences in the selection process of the investment products they include in asset management and/or investment advice. Ex-post reporting must also be provided to the client explaining how the management or advice provided aligns with (among other things) the client’s ESG preferences;
  • Investment firms must integrate ESG considerations into their processes, systems and controls;
  • Investment firms must integrate sustainability risks into their risk management; and
  • ESG considerations should be included in the identification of conflicts of interest, the integration of ESG considerations should not lead to “mis-selling”.


The Delegated Regulation is directly applicable in the Netherlands on August 2, 2022.

Amendment to RTS to increase clearing threshold for commodity derivatives under EMIR

On 3 June 2022, ESMA published draft Regulatory Technical Standards (RTS) that propose to increase the clearing threshold for commodity derivatives under EMIR from €3 billion to €4 billion. In fact, the proposal made by ESMA in June 2022 involves no more than amending Article 11(e) of Delegated Regulation 149/2013. The EC now needs to convert the draft RTS into a delegated regulation. It is expected that the regulation will enter into force in the second half of 2022.

Adaptation of delegated regulation to PRIIPS regulation

Delegated Regulation 2021/2268 makes amendments to Delegated Regulation 2017/653, which addresses the content of the Essential Information Document (EID) under the PRIIPS Regulation. The amendment addresses issues identified by stakeholders and regulators since the implementation of the EID in 2018. In addition, the amendments should ensure that the rules can be applied to UCITS and AIFMD investment vehicles offered to retail investors, as an EID will be required for these products from January 1, 2023.

The regulation was originally scheduled to come into force on July 1, 2022, but has been postponed to January 1, 2023 via Delegated Regulation 2022/975. Financial organizations that offer products for which an EID is or will become mandatory must have an EID that meets all (new) requirements by January 1, 2023.

Changes to delegated regulation strong customer authentication under PSD II

On April 5, 2022, the European Banking Authority (EBA) published a draft RTS on the application of strong customer authentication (SCA). Payment service providers must apply an SCA under Article 97 PSD II if the customer wants to access his payment account (directly or through an information service provider). Delegated Regulation 2018/389 allows payment institutions to use exceptions to the principle.

The EBA believes that the use of the exception should be harmonized. For this reason, it has proposed the following changes:

  • introduce a new mandatory exemption for SCA, in case access to the data is provided through an information service provider (AISP) and only if certain conditions are met;
  • limit the scope of the voluntary exemption in Article 10 RTS to cases where the customer directly accesses the account information; and
  • at the moment,  the customer must re-identify through SCA after 90 days, this timeline will be extended to 180 days.


Payment institutions will need to notify their service providers (who have access to consumers’ account information) of the changes to the APIs in time for them to be tested. The changes are expected to take effect in mid-2023.

Proposal ITS standardized disclosure requirements related to non-performing loans (NPLs)

On May 16, EBA launched a consultation that is open until August 31, 2022, on standardized information requirements to support the sale of non-performing loans (NPLs). The consultation concerns a proposal to draft implementing technical standards (ITS) establishing requirements for the information that sellers of non-performing loans (NPLs) must provide to potential buyers. It involves providing information on a loan-by-loan basis on the counterparties related to NPL, the contractual characteristics of the loan itself, any collateral and guarantees provided with the associated enforcement procedures, and the historical collection and repayment schedule of the loan. This information should be provided in templates.

The draft ITS also take into account the principle of proportionality. By establishing different information requirements depending on the size of the NPL, by specifying mandatory and non-mandatory data fields, and by considering a different scope of data fields in relation to the nature of the borrower (individual or company) and of the loan (secured or unsecured).

The purpose of this ITS is to improve the functioning of the secondary markets for NPL.

After the consultation period, the draft ITS will be finalized and submitted to the EC by the end of 2022. It is expected that the implementing regulation will enter into force during 2023.

Directive on corporate sustainability due diligence (CSDDD)

On February 23, 2022, the European Commission (EC) published its Directive on corporate sustainability due diligence (CSDD). The rules will apply to:

  • Group 1: all EU companies with more than 500 employees and €150m turnover or more;
  • Group 2: other EU companies in the high impact sector that are not in Group 1 but have more than 250 employees and a global turnover of €40m or more. For this group, the rules will apply two years later than for Group 1; and
  • Group 3: non-EU companies that meet the above thresholds within the EU in terms of turnover achieved in the EU.


The proposal aims to promote sustainable and responsible corporate behavior in global value chains. By doing so, the EC wants to create a transparent and predictable framework that helps companies assess and manage sustainability risks and impacts related to fundamental human rights and environmental risks in their value chains. Furthermore, it includes a link between the company’s sustainable strategy and the variable remuneration of directors on corporate sustainability due diligence.

The proposal is now under review by the European Parliament and the Council and will not enter into force until 2023.

Standardization of client profile for non-professional investors

A consultation was held from February 21 to March 21, 2022 on the standardization of client profiles for non-professional investors. With these new regulations, the EC is considering standardizing the collection of client profile information and its translation into an asset allocation. In short, the EC wants to ensure that a legal framework for retail investments is well aligned with the profile and needs of consumers.

It is expected that any new rules will not come into force before 2024.

Regulation of lending by non-bank entities

In February 2021, the EC asked for advice (call for advice) on lending by non-bank entities. On May 6, 2022, the EBA provided advice and made a number of proposals via a report. Subsequently, the EC must determine whether it will convert the advice into legislative proposals. Whether and when this will happen is still unknown.

The EBA’s advice focuses on addressing risks arising from lending by non-bank entities in the areas of supervision, consumer protection, anti-money laundering and counter-terrorist financing (AML/CFT), macro and micro prudential risks. It indicates that regulations should be further harmonized.

EBA has identified the risks associated with lending by non-bank lenders and made some proposals to address them. The EBA proposes to:

  • ensure that consumers are also protected when they receive credit from innovative financial participants. EBA proposes to:
    • strengthen disclosure requirements and ensure they are fair, effective and appropriate for new forms of lending; and
    • strengthen creditworthiness assessment requirements to ensure that they are carried out in the best interests of consumers.
  • strengthen the provisions for licensing;
  • clarify the identification of prudential requirements and supervisory responsibilities when providing cross-border services;
  • bring all non-bank lenders under the EU-wide AML/CTF framework;
  • improve monitoring and reporting frameworks.


The potential regulations are not expected to enter into force before mid-2024.


What other upcoming laws and regulations should you be aware of?

In our next Regulatory update article, we will explain the following developments in more detail:

  • Proposal ITS and RTS for conducting cross-border marketing and management activities
  • The integration of environmental risks into the prudential framework (IFR)
  • EBA Guidance on the role of AML/CFT for compliance officers

Tailor-made Regulatory Update

We hope this article has given you an idea of the regulatory changes in Q2 2022. Do you want to make sure not to overlook any developments? Then you can request a tailor-made Regulatory Update (available in Dutch and English). Each quarter you will receive a comprehensive report with current developments, legislative changes, publications by regulators and consultations. This report will be fully tailored to your organization and activities. This way, you will remain up to date with upcoming legislative changes and you will never be unpleasantly surprised.

Our specialists will discuss with you the possible impact on your organization and think along about possible next steps and their practical implementation. They can also help you draw up an action plan for the adaptation of your policies and procedures, so that you remain in control at all times. For more information, please feel free to get in touch.