The Committee of European Banking Supervisors (CEBS) today publishes its revised consultation paper (CP35rev) on its draft guidelines on the management of operational risk in market-related activities. The consultation is open to all interested parties, including supervised institutions and other market participants.
In December 2009, CEBS published its draft principles (CP35) for a public consultation that ended on 31 March 2010. CEBS received written contributions from a broad range of market participants, most of which were supportive of the guidelines objective to achieve greater convergence of supervisory practices and enhance the operational risk management in market related activities by strengthening the internal governance, the internal controls and reporting systems of institutions.
Addressing the comments received led to a significant number of changes in the draft principles. In particular, improvements and adjustments have been applied to the requirements regarding the detection and prevention of fraudulent behaviour (Principle 5), the audit trail requirements (Principle 9), the confirmation, settlement and reconciliation processes of the executed transactions (Principle 11), the monitoring of nominal values of the transactions (Principle 14) and, more in general, the interfaces between operational risk and market risk management. Thus, CEBS sees a benefit in a second consultation period so as to ensure that the principles and explanatory note are sufficiently clear.
CEBS submits its revised consultation paper for a second public consultation in line with CEBS consultation practices (published 5 August 2008) which starts today and runs until 23 July 2010. Comments received will be published on CEBS’s website unless respondents request otherwise. Please send your comments to the following email address: email@example.com.
As the publication of the final guidelines would be later than originally planned, CEBS now expects its members to implement the guidelines till June 2011. An implementation study will be done by CEBS secretariat in the fourth quarter 2011.