Regulatory developments in the Czech Republic

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EU Banking and Finance Regulatory Newsletter - May/June 2021
Regulatory developments in the Czech Republic

Regulatory developments in the Czech Republic

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July 9, 2021

Source/Date	Brief description
Czech National Bank (CNB) 10/06/2021	Inflation in line with the CNB’s forecast and just below the upper boundary of the tolerance band in May 2021 According to figures released today, the price level increased by 2.9% year on year in May 2021. Inflation was thus lower than in April, just below the upper boundary of the tolerance band around the CNB’s target. Consumer price inflation adjusted for the first-round effects of changes to indirect taxes reached 2.6% year on year in May. The May annual consumer price inflation figure was in line with the CNB’s current forecast. Core inflation rose slightly faster than forecasted. A somewhat stronger increase in fuel prices acted in the same direction, linked with higher-than-expected oil prices. This deviation was offset by lower-than-forecasted food price inflation, which has been highly volatile in recent months. The first-round effects of the increase in excise duty on cigarettes were slightly lower than predicted. In line with the forecast, administered prices were flat year-on-year. For further information in English click here.
Chamber of Deputies of Parliament of the Czech Republic 09/06/2021	Amendment to the Act on CNB approved by the Czech Parliament and published in the Collection of Laws The Chamber of Deputies definitively approved the amendment to the Act on CNB (the Amendment). The Amendment is already published in the Collection of Laws and will become enforceable on August 1, 2021. The Amendment, among other things, expands the range of monetary policy operations carried out by the CNB so that it has a power to set macro-prudential limits in the area of mortgage lending in a legally binding form. Furthermore, the Amendment provides in section 32 for a broader range of entities, assets and types of transactions (e.g. repo operations, foreign exchange trading or precious metals) that the CNB may use or enter into in order to meet its main goal, being the safeguarding of financial stability. The amendment under section 219 in the Collection of Laws is available in Czech here.
Czech National Bank (CNB) 11/05/2021	Inflation comes in slightly above the forecast and just above the upper boundary of the CNB’s tolerance band in April 2021 According to newly published data, in April 2021 the price level rose by 3.1% year on year. Compared to March, inflation thus rose markedly and was slightly above the upper limit of the tolerance band of the CNB's target. After adjusting for the primary effects of changes in indirect taxes, consumer prices rose by 3% year on year in April. According to the CNB, the overall inflation pressures will start to ease in the autumn as the current elevated growth of import prices subsides. Conversely, domestic price pressures will rise slightly owing to a reopening of the domestic economy and a gradual pick-up in wage growth. Inflation will return close to the CNB’s 2% target next year, aided by a gradual tightening of the monetary conditions from roughly the middle of this year onwards. For further information in English click here.
CNB 03/05/2021	The CNB publishes an opinion on the possibility of an exception from strong customer authentication The opinion is related to the Article 17 of Commission Delegated Regulation (EU) 2018/389, supplementing Directive (EU) 2015/2366 of the European Parliament and of the Council with regard to regulatory technical standards for strong customer authentication and common and secure open standards of communication ("RTS SCA"). It sets out the conditions under which payment service providers may use the exemption from strong customer authentication in cases of secure corporate payment processes and corporate protocols. The Article 17 of the RTS SCA allows payment services providers to use the exemption from strong customer authentication with respect to legal entities that initiate electronic payment transactions using special payment processes or protocols that are made available only to non-consumer payers, if the competent authorities are satisfied that those processes or protocols guarantee levels of security which are at least equivalent to those of provided for in Directive (EU) 2015/2366. The CNB states that in the event that the payment service providers decide to use the exemption, it is necessary that the payment services provider: For specific payment processes or protocols intended for non-consumer payers, ensures a level of security at least equivalent to that provided for in Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal; and Submits documents and information to the CNB for assessment whether the conditions for the possibility of using the exemption pursuant to Article 17 of the RTS SCA are met. For submission of the required documents and information, the CNB has prepared a unified form available in Czech here. To access the opinion in Czech click here.
Financial Analytic Office (FAO) 23/04/2021	The FAO will no longer update the list of sanctioned countries on their websites The FAO has informed that they will no longer update list of countries, against which international sanctions are applied in some form within the meaning of section 2 of Act No. 69/2006 Coll., on carrying out international sanctions. The list of sanctioning regimes, including those that are not limited to a specific state or territory (so-called horizontal sanctioning regimes), can be newly found in the EU Sanctions Map application. To access the EU Sanctions Map application click here.

Source/Date

Brief description

Czech National Bank (CNB)

10/06/2021

Inflation in line with the CNB’s forecast and just below the upper boundary of the tolerance band in May 2021

According to figures released today, the price level increased by 2.9% year on year in May 2021. Inflation was thus lower than in April, just below the upper boundary of the tolerance band around the CNB’s target. Consumer price inflation adjusted for the first-round effects of changes to indirect taxes reached 2.6% year on year in May.

The May annual consumer price inflation figure was in line with the CNB’s current forecast. Core inflation rose slightly faster than forecasted. A somewhat stronger increase in fuel prices acted in the same direction, linked with higher-than-expected oil prices. This deviation was offset by lower-than-forecasted food price inflation, which has been highly volatile in recent months. The first-round effects of the increase in excise duty on cigarettes were slightly lower than predicted. In line with the forecast, administered prices were flat year-on-year.

For further information in English click here.

Chamber of Deputies of Parliament of the Czech Republic

09/06/2021

Amendment to the Act on CNB approved by the Czech Parliament and published in the Collection of Laws

The Chamber of Deputies definitively approved the amendment to the Act on CNB (the Amendment). The Amendment is already published in the Collection of Laws and will become enforceable on August 1, 2021.

The Amendment, among other things, expands the range of monetary policy operations carried out by the CNB so that it has a power to set macro-prudential limits in the area of mortgage lending in a legally binding form.

Furthermore, the Amendment provides in section 32 for a broader range of entities, assets and types of transactions (e.g. repo operations, foreign exchange trading or precious metals) that the CNB may use or enter into in order to meet its main goal, being the safeguarding of financial stability.

The amendment under section 219 in the Collection of Laws is available in Czech here.

Czech National Bank (CNB)

11/05/2021

Inflation comes in slightly above the forecast and just above the upper boundary of the CNB’s tolerance band in April 2021

According to newly published data, in April 2021 the price level rose by 3.1% year on year. Compared to March, inflation thus rose markedly and was slightly above the upper limit of the tolerance band of the CNB's target. After adjusting for the primary effects of changes in indirect taxes, consumer prices rose by 3% year on year in April.

According to the CNB, the overall inflation pressures will start to ease in the autumn as the current elevated growth of import prices subsides. Conversely, domestic price pressures will rise slightly owing to a reopening of the domestic economy and a gradual pick-up in wage growth. Inflation will return close to the CNB’s 2% target next year, aided by a gradual tightening of the monetary conditions from roughly the middle of this year onwards.

For further information in English click here.

CNB

03/05/2021

The CNB publishes an opinion on the possibility of an exception from strong customer authentication

The opinion is related to the Article 17 of Commission Delegated Regulation (EU) 2018/389, supplementing Directive (EU) 2015/2366 of the European Parliament and of the Council with regard to regulatory technical standards for strong customer authentication and common and secure open standards of communication ("RTS SCA"). It sets out the conditions under which payment service providers may use the exemption from strong customer authentication in cases of secure corporate payment processes and corporate protocols.

The Article 17 of the RTS SCA allows payment services providers to use the exemption from strong customer authentication with respect to legal entities that initiate electronic payment transactions using special payment processes or protocols that are made available only to non-consumer payers, if the competent authorities are satisfied that those processes or protocols guarantee levels of security which are at least equivalent to those of provided for in Directive (EU) 2015/2366.

The CNB states that in the event that the payment service providers decide to use the exemption, it is necessary that the payment services provider:

For specific payment processes or protocols intended for non-consumer payers, ensures a level of security at least equivalent to that provided for in Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal; and
Submits documents and information to the CNB for assessment whether the conditions for the possibility of using the exemption pursuant to Article 17 of the RTS SCA are met.

For submission of the required documents and information, the CNB has prepared a unified form available in Czech here.

To access the opinion in Czech click here.

Financial Analytic Office (FAO)

23/04/2021

The FAO will no longer update the list of sanctioned countries on their websites

The FAO has informed that they will no longer update list of countries, against which international sanctions are applied in some form within the meaning of section 2 of Act No. 69/2006 Coll., on carrying out international sanctions. The list of sanctioning regimes, including those that are not limited to a specific state or territory (so-called horizontal sanctioning regimes), can be newly found in the EU Sanctions Map application.

To access the EU Sanctions Map application click here.