Response to consultation on draft RTS on criteria for the identification of shadow banking entities

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Question 1: Do you agree with the conditions of Article 1 paragraph 2 for identifying an entity as a non-shadow banking entity? Please provide reasons if you do not agree with any of the conditions or have comments with regard to any of them.

1. Shadow banking entities are mentioned in the Article 1 as entities offering banking services or performing banking activities, unless they are considered regulated entities or unless they are subject to exemption or exclusion - is a general term. We propose to try to introduce additional criteria, e.g. an activity classification code (NACE).

Question 2: Have you got any comments regarding the list of entities that, being exempted or optionally excluded from those four legal acts in Annex I, should not be considered as shadow banking entities?

2. Money market funds (MMFs) operating in Poland (as one of the forms of investment funds) are subject to limitations set out in the Act on Investment Funds (Act on Investment Funds and Alternative Investment Fund Management). The operation of an investment fund is supervised by financial supervision (in Poland: the Polish Financial Supervision Authority, Urząd Komisji Nadzoru Finansowego).
3. Investing in securities issued by the central bank in Poland (National Bank of Poland, Narodowy Bank Polski), ie. treasury bills and treasury bonds, is the subject of the investment policy of many funds, especially MMFs. Similarly, investing in bank deposits. These investments make up a significant part of the money market funds portfolio. In our opinion, both investment items are safe and stable.
4. In the recent period, we have not noticed a significant imbalance in the liquidity of investments funds, including MMFs. There was a noticeable outflow of assets at the beginning of the Covid-19 pandemic, but this resulted from the general situation on the financial markets in the initial stage of the pandemic, including, for example, also on the interbank deposit market. After this period, the situation stabilized and investors are now returning to investment funds.
5. In our opinion, it is not justified to include MMFs in the group of shadow banking entities. We propose:
1) to delete the Article 1 clause 4 of the draft EU Commission Delegated Regulation, or
2) to modify the Article 1 clause 4 in such a way that the words: "excluding investment funds operating in the Republic of Poland and supervised by The Polish Financial Supervision Authority (UKNF)" will be added.
" Undertakings for the Collective Investment in Transferable Securities as defined in Directive 2009/65 / EC shall be regarded as shadow banking entities where they are money market funds falling under Regulation (EU) No 2017/1131, excluding entities operating in Republic of Poland and supervised by The Polish Financial Supervision Authority (UKNF).”.

Question 7: What are your views with regard to the consideration of money market funds as shadow banking entities?

As in the answer to question 2.

Question 13: Do you agree with the list of legal acts included in Annex I?

6. We propose to include the EC's implementing decision in Annex I, i.e.: „Commission Implementing Decision (EU) No 2021/1753 on the equivalence of the supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures according to Regulation (EU) No 575 / 2013 of the European Parliament and of the Council”.
7. In addition, in the context of the last revision of the decision (EU) No 2021/1753, we propose to assess the United Kingdom of Great Britain and Northern Ireland (hereinafter: the UK) for with those applicable in the European Union and consider the inclusion of the UK on that list in the proposed regulation or in Commission Implementing Decision (EU) 2021/1753.

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