EBA proposes corrections to the adopted technical standards on non-delta risk options and identified staff
The European Banking Authority (EBA) issued amendments to the adopted Regulatory Technical Standards (RTS) on the treatment of non-delta risk of options in the standardised market risk approach and on the criteria to identify categories of staff whose professional activities have a material impact on an institution’s risk profile.
These RTS were published by the Commission on 20 May 2014 and 6 June 2014, respectively.
During the legal adoption process of these two RTS, The European Commission introduced changes, which have inadvertently altered their meaning. The EBA is, therefore, proposing to amend the text of these two Delegated Acts to ensure they reflect the intention of the text originally submitted to the European Commission in December 2013.
The redraft ensures that the simplified approach can only be used by institutions that exclusively purchase options and warrants, without obliging them to use that approach.
The redraft ensures that for any staff whose total remuneration takes them into the same remuneration bracket as senior management and risk takers the refutable presumption exist that they constitute staff whose professional activities have a material impact on the institution’s risk profile (‘identified staff’).