Capital Requirements Directive IV / Capital Requirements Regulation Professional (CRDIV/CRR/Pro), distance learning and online certification program

Overview

The European Commission cannot simply copy Basel III into its legislative proposal. There are two reasons for that:

First, Basel III is not a law. It is the latest configuration of an evolving set of internationally agreed standards developed by supervisors and central banks.

That has to go through a process of democratic control as it is transposed into EU (and national) law. It needs to fit with existing EU (and national) laws or arrangements. As EU law takes precedence over national law, the Commission's proposal launches that process.

Furthermore, while the Basel capital adequacy agreements apply to internationally active banks, in the EU it has always applied to all banks (more than 8,300) as well as investment firms.

This wide scope is necessary in the EU where banks authorised in one Member State can provide their services across the EU's single market and as such are more than likely to engage in cross-border business.

Also, applying the internationally agreed rules only to a subset of European banks would create competitive distortions and potential for regulatory arbitrage.

The Commission has had to take these particular circumstances into account when transposing Basel III into EU law.

The CRD IV Package is divided into two legislative instruments:

1. A directive - the Capital Requirements Directive (CRD), governing the access to deposit-taking activities.

2. A regulation - the Capital Requirements Regulation (CRR), establishing the prudential requirements institutions need to respect.

While Member States will have to transpose the directive into national law, the regulation is directly applicable, which means that it creates law that takes immediate effect in all Member States in the same way as a national instrument, without any further action on the part of the national authorities.

This removes the major sources of national divergences (different interpretations, gold-plating).

It also makes the regulatory process faster and makes it easier to react to changed market conditions.

It increases transparency, as one rule as written in the regulation will apply across the single market.

Before the CRD IV Package, European banking legislation was based on a Directive which leaved room for significant divergences in national rules.

This has created a regulatory patchwork, leading to legal uncertainty, enabling institutions to exploit regulatory loopholes, distorting competition, and making it burdensome for firms to operate across the Single Market.

In addition to Basel III implementation, the CRD/CRR introduces a number of important changes to the banking regulatory framework.

In the Directive
  •  -  Better risk management
  •  -  Enhanced corporate governance
  •  -  All supervisors can apply sanctions if EU rules are breached
  •  -  Enhanced supervision
  •  -  Less reliance by credit institutions on external credit ratings
In the Regulation

A “single rule book” (for the first time, a single set of harmonised prudential rules which banks throughout the EU must respect. This will ensure uniform application of Basel III in all Member States, it will close regulatory loopholes and will contribute to a more effective functioning of the Internal Market).

Target Audience

This course is intended for decision makers, managers, professionals and consultants that:

A. Work in Banks and Investment Firms of EEA countries.

B. Work in Groups - Financial Conglomerates (FC), Financial Holding Companies (FHC), Mixed Financial Holding Companies (MFHC), Banking Holding Companies (IHC), Systemically Important Financial Institutions (SIFIs) - providing services in the EEA.

C. Want to understand the challenges and the opportunities after the CRD IV Package (CRD/CRR).

Course Synopsis

Introduction
  • The European Union’s Legislative Process
  • Directives and Regulations
  • From the Financial Services Action Plan (FSAP) to the CRD 4 Package
  • CRD 1, 2 and 3 – An overview
  • Extraterritorial Application of European Law and Equivalence
  • The Lamfalussy Process
  • The Treaty of Lisbon and the changes in the delegation of implementing powers to the European Commission
  • Delegated and Implementing Acts
From Basel III to the CRD IV Package
  • The Basel III papers
  • Main differences between the Basel III and the CRD IV Package
  • Different Basel III implementations around the world: From the USA to the European countries, to the G-20 members, to the Offshore Financial Centers.
  • New powers for the European Banking Authority (EBA)
The Capital Requirements Directive (CRD)
  • Subject matter, scope and definitions
  • Competent authorities
  • Cooperation within the European System of Financial Supervision
  • Requirements for access to the activity of credit institutions
  • Authorisation
  • Refusal of authorisation
  • Withdrawal of authorisation
  • Provisions concerning the freedom of establishment and the freedom to provide services
  • Notification requirement and interaction between competent authorities
  • Powers of the competent authorities of the host Member State
  • Relations with third countries
  • Cooperation with supervisory authorities of third countries regarding supervision on a consolidated basis
  • Prudential supervision
  • Significant branches
  • Professional secrecy
  • Duty of persons responsible for the legal control of annual and consolidated accounts
  • Supervisory powers and powers to impose penalties
  • Review Processes
  • Internal Capital
  • Internal governance and recovery and resolution plans
  • Treatment of risks
  • Internal Approaches for calculating own funds requirements
  • Credit and counterparty risk
  • Residual risk
  • Concentration risk
  • Securitisation risk
  • Market risk
  • Interest risk arising from non-trading book activities
  • Operational risk
  • Liquidity risk
  • Risk of excessive leverage
  • Governance arrangements
  • Management body
  • Remuneration policies
  • Institutions that benefit from government intervention
  • Variable elements of remuneration
  • Remuneration Committee
  • Maintenance of a website on corporate governance and remuneration
  • Supervisory review and evaluation
  • Supervisory stress testing
  • Ongoing review of the permission to use internal approaches
  • Supervisory measures
  • Internal Capital Adequacy Assessment Process (ICAAP)
  • Institutions' arrangements, processes and mechanisms
  • Review and evaluation and supervisory measures
  • Supervision on a consolidated basis
  • Determination of the consolidating supervisor
  • Coordination of supervisory activities by the consolidating supervisor
  • Joint decisions on institution-specific prudential requirements
  • Information requirements in emergency situations
  • Coordination and cooperation arrangements
  • Colleges of supervisors
  • Cooperation obligations
  • Inclusion of holding companies in consolidated supervision
  • Supervision of mixed financial holding companies
  • Qualification of directors
  • Requests for information and inspections
  • Assessment of equivalence of third countries' consolidated supervision
  • Capital Buffers
  • Requirement to maintain a capital conservation buffer
  • Requirement to maintain an institution-specific countercyclical capital buffer
  • Global and other systemically important institutions
  • Reporting
  • Requirement to maintain a systemic risk buffer
  • Recognition of a systemic risk buffer rate
  • ESRB guidance on setting countercyclical buffer rates
  • Setting countercyclical buffer rates
  • Recognition of countercyclical buffer rates in excess of 2,5 %
  • ESRB recommendation on third country countercyclical buffer rates
  • Decision by designated authorities on third country countercyclical buffer rates
  • Calculation of institution-specific countercyclical capital buffer rates
  • Restrictions on distributions
  • Capital Conservation Plan
  • Disclosure by competent authorities
  • Delegated and implementing acts
  • Transitional and final provisions
  • Transposition
The Capital Requirements Regulation (CRR)
  • Subject matter, scope and definitions
  • Application of stricter requirements by institutions
  • Prudential consolidation
  • Financial holding company or mixed financial holding company with both a subsidiary credit institution and a subsidiary investment firm
  • Application of disclosure requirements on a consolidated basis
  • Methods for prudential consolidation
  • Entities excluded from the scope of prudential consolidation
  • Undertakings in third countries
  • Valuation of assets and off-balance sheet items
  • Elements of own funds
  • Tier 1 capital
  • Common Equity Tier 1 capital
  • Capital instruments of mutuals, cooperative societies, savings institutions or similar institutions in Common Equity Tier 1 items
  • Common Equity Tier 1 instruments
  • Consequences of the conditions for Common Equity Tier 1 instruments ceasing to be met
  • Capital instruments subscribed by public authorities in emergency situations
  • Securitised assets
  • Cash flow hedges and changes in the value of own liabilities
  • Unrealised gains and losses measured at fair value
  • Deductions from Common Equity Tier 1 items
  • Deduction of intangible assets
  • Deduction of deferred tax assets that rely on future profitability
  • Tax overpayments, tax loss carry backs and deferred tax assets that do not rely on future profitability
  • Deduction of defined benefit pension fund assets
  • Deduction of holdings of own Common Equity Tier 1 instruments
  • Significant investment in a financial sector entity
  • Deduction of holdings of Common Equity Tier 1 instruments of financial sector entities and where an institution has a reciprocal cross holding designed artificially to inflate own funds
  • Deduction of holdings of Common Equity Tier 1 instruments of financial sector entities
  • Deduction of holdings of Common Equity Tier 1 instruments where an institution does not have a significant investment in a financial sector entity
  • Deduction of holdings of Common Equity Tier 1 instruments where an institution has a significant investment in a financial sector entity
  • Threshold exemptions from deduction from Common Equity Tier 1 items
  • Requirement for deduction where consolidation, supplementary supervision or institutional protection schemes are applied
  • Additional Tier 1 items
  • Additional Tier 1 instruments
  • Restrictions on the cancellation of distributions on Additional Tier 1 instruments and features that could hinder the recapitalisation of the institution
  • Write down or conversion of Additional Tier 1 instruments
  • Deductions from Additional Tier 1 items
  • Deductions of holdings of own Additional Tier 1 instruments
  • Deduction of holdings of Additional Tier 1 instruments of financial sector entities and where an institution has a reciprocal cross holding designed artificially to inflate own funds
  • Deduction of holdings of Additional Tier 1 instruments of financial sector entities
  • Deduction of holdings of Additional Tier 1 instruments where an institution does not have a significant investment in a financial sector entity
  • Tier 2 capital
  • Consequences of the conditions for Tier 2 instruments ceasing to be met
  • Deductions from Tier 2 items
  • Deductions of holdings of own Tier 2 instruments
  • Deduction of holdings of Tier 2 instruments of financial sector entities and where an institution has a reciprocal cross holding designed artificially to inflate own funds
  • Deduction of holdings of Tier 2 instruments of financial sector entities
  • Deduction of Tier 2 instruments where an institution does not have a significant investment in a relevant entity
  • Own funds
  • Continuing review of quality of own funds
  • Minority interest and Additional Tier 1 and Tier 2 instruments issued by subsidiaries
  • Qualifying holdings outside the financial sector
  • Required level of own funds
  • Calculation and reporting requirements
  • Capital requirements for credit risk
  • Standardised Approach
  • Calculation of risk weighted exposure amounts
  • Exposures to central governments or central banks
  • Exposures to regional governments or local authorities
  • Exposures to public sector entities
  • Exposures to corporates
  • Use of credit assessments by ECAIs
  • Mapping of ECAI's credit assessments
  • Internal Ratings Based Approach
  • Permission to use the IRB Approach
  • Conditions to revert to the use of less sophisticated approaches
  • Credit risk mitigation
  • Securitisation
  • Traditional securitisation
  • Synthetic securitisation
  • Counterparty credit risk
  • Permission to use the Internal Model Method
  • Integrity of the modelling process
  • Validation requirements
  • Own funds requirements for operational risk
  • Reverting to the use of less sophisticated approaches
  • Basic indicator approach
  • Standardised approach
  • Principles for business line mapping
  • Alternative standardised spproach
  • Advanced measurement approaches
  • Own funds requirements for credit valuation adjustment risk
  • Liquidity coverage requirement
  • Stable Funding
  • Compliance with liquidity requirements
  • Liquidity reporting
  • Reporting on stable funding
  • Items requiring stable funding
  • Calculation of the leverage ratio
  • Reporting requirement
  • Disclosure requirements
  • Non-material, proprietary or confidential information
  • Frequency of disclosure
  • Technical criteria on transparency and disclosure
  • Delegated acts
  • Technical adjustments and corrections
  • Macroprudential or systemic risk identified at the level of a Member State
  • Transitional provisions
Closing
  • Supervisory authorities around the world: What they have done, what they will do, why they choose to do so.
  • Regulatory differences, regulatory arbitrage, challenges and opportunities.
  • They all implement Basel iii - Supervisory differences: The range of practices around the world.
The Impact of Basel III / CRDIV Package
  • Investment Banking, Corporate Banking, Retail Banking
  • Investment banks are primarily affected, particularly in trading and securitization businesses
  • The new capital rules have a substantial impact on profitability
  • Banks with insurance subsidiaries
  • Minority investments after Basel III / CRD IV
  • Basel III and the competition among countries
  • Examples and Case Studies
  • Closing remarks

    Become a Capital Requirements Directive IV / Capital Requirements Regulation Professional (CRDIV/CRR/Pro)

    For secure payment we work with PayPal, the faster and safer way to make online payments. With PayPal we minimize the cost of administration and compliance with national and international laws, so we can keep the cost of our programs and services so low.

    Only PayPal receives your credit card number and your financial information. We receive your full name, your email, and your mail address. According to the PayPal rules, you have the option to ask for a full refund up to 60 days after the payment. If you do not want one of our programs or services for any reason, all you must do is to send us an email and we will refund the payment, no questions asked.

    When you click "Buy Now" below, you will be redirected to the PayPal web site. Your payment will be received by our strategic partner and service provider, Cyber Risk GmbH (Rebackerstrasse 7, 8810 Horgen, Switzerland, Handelsregister des Kantons Zürich, Firmennummer: CHE-244.099.341). Cyber Risk GmbH may also send certificates to all members.

    The all-inclusive cost is $297.

    What is included in the price:

    A. The official presentations (1,792 main slides, 998 additional slides)

    The presentations are effective and appropriate to study online or offline. Busy professionals have full control over their own learning and are able to study at their own speed. They are able to move faster through areas of the course they feel comfortable with, but slower through those that they need a little more time on.

    B. Up to 3 online exam attempts per year

    Candidates must pass only one exam to become Capital Requirements Directive IV / Capital Requirements Regulation Professionals. If they fail, they must study the official presentations and retake the exam. Candidates are entitled to 3 exam attempts every year.

    If candidates do not achieve a passing score on the exam the first time, they can retake the exam a second time.

    If they do not achieve a passing score the second time, they can retake the exam a third time.

    If candidates do not achieve a passing score the third time, they must wait at least one year before retaking the exam. There is no additional cost for any additional exam attempts.

    C. The certificate

    Processing and posting to your office or home via registered mail.


    Frequently Asked Questions

    1. I want to know more about the Basel iii Compliance Professionals Association (BiiiCPA).

    The Basel iii Compliance Professionals Association (BiiiCPA) is the largest association of Basel iii Professionals in the world. It is a business unit of the Basel ii Compliance Professionals Association (BCPA), the largest association of Basel ii Professionals in the world.

    Both associations are wholly owned by Compliance LLC, a company incorporated in Wilmington NC and offices in Washington DC, a provider of risk and compliance training and executive coaching in 36 countries.

    Several business units of Compliance LLC are very successful associations that offer standard, premium, and lifetime membership, weekly or monthly updates, training, certification, Authorized Certified Trainer (ACT) programs, advocacy, and other services to their members.

    2. Does the association offer training?

    The association offers distance learning and online certification programs in all countries, and in-house instructor-led training in companies and organizations in many countries.

    A. Distance learning and online certification programs.

    A1. Certified Basel iii Professional (CBiiiPro), distance learning and online certification program. To learn more, you may visit: www.basel-iii-association.com/Basel_III_Distance_Learning_Online_Certification.html

    A2. Certified Pillar 3 Expert - Basel 3 (CP3E-B3), distance learning and online certification program. To learn more, you may visit: www.basel-iii-association.com/CP3E_B3_Distance_Learning_Online_Certification.html

    A3. Certified Stress Testing Expert - Basel 3 (CSTE-B3), distance learning and online certification program. To learn more, you may visit: www.basel-iii-association.com/CSTE_B3_Distance_Learning_Online_Certification.html

    A4. Capital Requirements Directive IV / Capital Requirements Regulation Professional (CRDIV/CRR/Pro), distance learning and online certification program. To learn more, you may visit: www.basel-iii-association.com/CRD_IV_Distance_Learning_Online_Certification.html

    B. Instructor-led training.

    The association develops and maintains several certification programs and tailor made training programs for directors, executive managers, risk and compliance managers, internal and external auditors, data owners, process owners, consultants, suppliers, and service providers. For instructor-led training, you may contact Lyn Spooner.

    3. Is there any discount available for the distance learning programs?

    Unfortunately, we do not offer any discount for the first program. We want to keep the cost of the programs so low for all members.

    You have a $100 discount only after you purchase your first program, and it applies to all the other programs of the Basel iii Compliance Professionals Association (BiiiCPA), and to each one of the programs that follow:

    a. Certified Risk and Compliance Management Professional (CRCMP).

    b. Certified Information Systems Risk and Compliance Professional (CISRCP).

    c. Certified Cyber (Governance Risk and Compliance) Professional - CC(GRC)P.

    d. Certified Risk and Compliance Management Professional in Insurance and Reinsurance - CRCMP(Re)I.

    There are programs offered by the International Association of Risk and Compliance Professionals (IARCP, https://www.risk-compliance-association.com). The SOXCPA and the IARCP are both wholly owned by Compliance LLC.

    For example, you can purchase the CBiiiPro program for $297, and then purchase the CRCMP program for $197 (instead of $297), and/or the CSTE-B3 program for $197 (instead of $297).

    The CRCMP has become one of the most recognized programs in risk management and compliance. There are CRCMPs in 32 countries. Companies and organizations like Accenture, American Express, USAA etc. consider the CRCMP a preferred certificate. You can find more at: https://www.risk-compliance-association.com/CRCMP_Jobs_Careers.pdf

    4. Why do you accept payments via PayPal only, for the distance learning programs?

    There are important threats to data security in today's IT landscape. On top of that, new data protection regulations around the world put tough requirements on organisations that store “personally identifiable data”, including credit card information. These two factors could increase the cost of our programs dramatically.

    We accept payments via PayPal for the distance learning programs, to minimize the cost of compliance and administration. PayPal keeps and protects your financial information, not us, so we can keep the cost of the program so low.

    With PayPal you have some additional benefits. You can keep the program for 59 days to evaluate it, and if you do not like it, you can simply send us an email and ask for a full refund, no questions asked. We will refund your payment in less than 24 hours.

    PayPal offers this escrow service (an escrow generally refers to money held by a third-party, PayPal, on behalf of the transacting parties). In this way, there is absolutely no risk for you.

    If you do not have a PayPal account and you do not want to create one, somebody else with a PayPal account can also pay for you. After the payment, just let us know, and we will update the record.

    5. Are your training and certification programs vendor neutral?

    Yes. We do not promote any products or services, and we are 100% independent.

    6. I want to learn more about the exam.

    You can take the exam online in the comfort of your home or office, in all countries. You will be given 90 minutes to complete a 35-question multiple-choice exam. You must score 70% or higher.

    We do not send sample questions. If you study the presentations, you can score 100%.

    When you are ready to take the CBiiiPro exam, you must follow the steps: https://www.basel-iii-association.com/Certification_Steps_CBiiiPro.pdf

    When you are ready to take the CP3E-B3 exam, you must the steps: https://www.basel-iii-association.com/Certification_Steps_CP3E_B3.pdf

    When you are ready to take the CSTE-B3 exam, you must follow the steps: https://www.basel-iii-association.com/Certification_Steps_CSTE_B3.pdf

    7. How comprehensive are the presentations? Are they just bullet points?

    The presentations are not bullet points. They are effective and appropriate to study online or offline.

    8. Do I need to buy books to pass the exam?

    No. If you study the presentations, you can pass the exam. All the exam questions are clearly answered in the presentations. If you fail the first time, you must study more. Print the presentations and use Post-it to attach notes, like "operational risk", "board" etc., to know where to find the answer of a question.

    9. Is it an open book exam? Why?

    Yes, it is an open book exam. Risk and compliance management is something you must understand and learn, not memorize. You must acquire knowledge and skills, not commit something to memory.

    10. Do I have to sit for the exam soon after receiving the presentations?

    No. You can sit for the exam from your office or home, any time in the future. Your account never expires and there is no restriction of any kind.

    11. Do I have to spend more money in the future to remain certified?

    No. Your certificates never expire. They will be valid, without the need to spend money or to sit for another exam in the future.

    12. Ok, the certificates never expire, but things change.

    Recertification would be a great recurring revenue stream for the association, but it would also be a recurring expense for our members. We resisted the temptation to "introduce multiple recurring revenue streams to keep business flowing", as we were consulted. No recertification is needed for our programs.

    Things change, and this is the reason you need to become (at no cost) a member of the association. Every month you can visit the "Reading Room" of the association and read our newsletter with updates, alerts and opportunities, to stay current.

    13. How many hours do I need to study to pass the exam?

    You must study the presentations at least twice, to ensure you have learned the details. The average time needed is about 42 hours for the CBiiiPro program, 17 hours for the CP3E-B3 program, and 33 hours for the CSTE-B3 program, but there are important differences.

    14. Why should I get certified?

    Firms and organizations hire and promote "fit and proper" professionals who can provide evidence that they are qualified. Employers need assurance that employees have the knowledge and skills needed to mitigate risks and accept responsibility.

    Supervisors and auditors ask for independent evidence that the process owners are qualified, and that the controls can operate as designed, because the persons responsible for these controls have the necessary knowledge and experience.

    The marketplace is clearly demanding qualified professionals in risk and compliance management. Certified professionals enjoy industry recognition and have more and better job opportunities. It is important to get certified and to belong to professional associations. You prove that you are somebody who cares, learns, and belongs to a global community of professionals.

    15. Why should I choose your certification programs?

    We strongly believe that we offer the best value for money compared to all other Basel III training and certification programs:

    a. The Basel iii Compliance Professionals Association (BiiiCPA) is the largest association of Basel iii Professionals in the world. It is a business unit of the Basel ii Compliance Professionals Association (BCPA), which is the largest association of Basel ii Professionals in the world.

    b. The all-inclusive cost of each program ($297) is very low. There is no additional cost for this program, now or in the future, for any reason.

    c. If you purchase a second program, you have a $100 discount. The all-inclusive cost for your second (and each additional) program is $197.

    d. There are 3 exam attempts per year that are included in the cost of each program, so you do not have to spend money again if you fail.

    e. No recertification is required. Your certificates never expire.

    Privacy and Compliance