Financial Crime World

Title: New Financial Compliance Regulations Reshape Croatian Banking Sector

Introduction

The Croatian banking and financial sector is undergoing a significant transformation due to new regulations aimed at enhancing financial oversight. This article provides an overview of the key regulations shaping the sector, including the Credit Institutions Act, European Union (EU) Regulation 575/2013, and other acts.

Regulatory Landscape

  • Credit Institutions Act and EU Regulation 575/2013: These regulations form the cornerstone of the new financial compliance framework. The Croatian National Bank (CNB) sets the rules and guidelines for credit institutions and credit unions based on these regulations.
  • Financial Conglomerates Act and Credit Unions Act**: These acts also contribute to the regulatory landscape.

CNB Decisions and Implementations

The CNB adopts various decisions and instructions as per its mandate under the Act on the Croatian National Bank. All regulations and the implementation of EU Regulation 575/2013 (CRR) and its implementing regulations and European Banking Authority (EBA) guidelines are available on the CNB’s webpage.

CRD IV Regulations

  • CRD IV Regulation: An EU legislative package, CRD IV incorporates the Basel III rules into European law. It comprises a regulation and a directive, effective from 1st January 2014.
  • Phased-in rules: Some new rules will be implemented between 2014 and 2019.
  • Legally binding: CRD IV regulations are directly applicable across European Union (EU) Member States.

European Banking Authority Technical Standards

The EBA issues various regulatory products:

  1. Binding Technical Standards: These are incorporated into the CRD IV package and apply across the EU.
  2. Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS): These are binding for financial institutions and must be transposed into national laws.

Directives and Guidelines

  • Directives: These are legislative acts setting goals that EU Member States must achieve. Croatia transposed Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms into the Credit Institutions Act and subordinate legislation.
  • Guidelines: The Croatian National Bank makes application decisions under the ‘comply or explain’ principle, notifying the European Banking Authority within the prescribed timeframe. Guidelines explain legal norms and provide guidance to subjects of supervision, recommending good practices.

Conclusion

These new regulations aim to ensure a robust and stable financial sector, maintaining market integrity and investor protection. Interested parties can access all the regulations, directives, and guidelines on the European Union (EUR-lex) website.