Hanfa Council Meeting: extension of sustainability reporting deadlines and Strategic Framework for Capital Market Development
At today's meeting, members of the Council of the Croatian Financial Services Supervisory Agency (Hanfa) were introduced to the upcoming simplification package in the field of sustainability reporting, the Strategic Framework for Capital Market Development 2025 - 2030 and the corresponding action plan. They also heard the announcement of the stress test in the insurance sector that Hanfa will carry out this year, as well as comments on current capital market developments and market impact on the operation of pension funds.
A representative of the Ministry of Finance presented to the Council members the Omnibus simplification package in the field of sustainability reporting. At the end of February, the European Commission proposed two pieces of legislation postponing the application of sustainability reporting requirements: the “stop-the-clock” and the “content” proposals.
The first proposal was already adopted in early April and is expected to be published in the Official Journal; once it fully enters into force, the prescribed deadlines for sustainability reporting will be postponed: to 2027 (first reports in 2028) for large enterprises, and to 2028 (first reports in 2029) for small and medium-sized enterprises listed on the stock exchange. This proposal will also affect Croatian legislation, requiring changes in the deadlines in the Accounting Act and the Capital Market Act, by the end of this year at the latest.
The second, “content” proposal should ultimately bring about a change in the scope of reporting entities, i.e. exempt small enterprises listed on the stock exchange from this obligation, and define other categories of obliged entities more precisely. This will reduce the number of obliged entities in Croatia from the current 500 to about 100.
The members of the Council were also introduced to the Strategic Framework for Capital Market Development 2025 - 2030 and the corresponding Action Plan 2025 - 2026, adopted by the Government of the Republic of Croatia at the end of March. These documents represent the basis for a safer, more liquid and competitive capital market in Croatia. Hanfa actively participated in their preparation with the aim of improving the regulatory framework and creating a more stimulating environment for investors and issuers. The implementation of these measures and activities should stimulate and revive the Croatian capital market, attracting international investments and capital.
The Council meeting also included a discussion on the public consultation launched by Hanfa with the aim of reducing the regulatory burden on the investment funds market. Comments on the document “Eliminating gold plating from the legislative framework for alternative investment funds and UCITS in the Republic of Croatia” may be submitted by 2 May 2025.
The document contains proposals to alleviate the burden, supported by explanations, analyses, references to EU rules and legal provisions, and a comparison with the practices of other Member States. The public consultation is to be followed by the preparation of a report and a draft act to be sent as a proposal to the Ministry of Finance.
The participants were also presented with the latest EU activities with regard to the introduction of a shorter T+1 settlement cycle, aimed at boosting the competitiveness of EU capital markets at global level and moving towards the Savings and Investments Union. The planned deadline for moving to the shorter settlement cycle in the EU is 11 October 2027.
A stress test for individual insurance companies and groups has been announced and will be carried out by Hanfa during this year. It is an important tool for assessing the resilience of the insurance sector to potential economic and financial shocks.
During the meeting, members of the Council also discussed the developments on the Zagreb Stock Exchange (ZSE) and the impact of Trump's policy and world capital markets on the operation of Croatian pension funds. Given their relatively low exposure to foreign shares, this impact has not been significant so far.
In the first quarter of the year, the Zagreb Stock Exchange recorded an increase in turnover, as well as several new admissions, namely shares of ING-GRAD d.d., bonds of Jadran-galenski laboratorij d.d. and four treasury bills of the Republic of Croatia. The discussion also covered changes to the rules for calculating indices, to be subject to public consultation soon, as well as the amendments to the Benchmark Regulation, which will enter into force at the beginning of next year.
Experiences related to the beginning of the application of the Act on the Implementation of the Regulation on Digital Operational Resilience for the Financial Sector (DORA) were also discussed: four significant incidents in the field of information and communication technologies (ICT) have been reported to Hanfa so far. At the beginning of April, Hanfa organised a webinar for representatives of entities subject to DORA on how to prepare data for the Service Provider Information Register, clarifying open questions relating to this issue. The analysis of the data from the Register will help draw up a list of the most important, critical ICT service providers.
Hanfa Council is Hanfa’s advisory body that meets regularly and provides opinions and expert and scientific advice to develop and improve supervisory practice. It consists of nine members: President of the Hanfa Board (ex officio), five members elected by the representatives of supervised entities’ associations at the Croatian Chamber of Economy and three members appointed by the Government of the Republic of Croatia.
