CRD IV / CRR - ITS on supervisory reporting - 07/08/2013
One month after the publication of the “Capital Requirements Directive IV (“CRD IV”) package”, the European Banking Authority (“EBA”) published on 26 July 2013 its final draft Implementing Technical Standards (“ITS”) on Supervisory Reporting. They set out reporting requirements related to own funds, financial information, losses stemming from lending collateralised by immovable property, large exposures, leverage ratio and liquidity ratios.
Scope of application
Change do not only impact Common Reporting (“COREP”), but also Financial Reporting (“FINREP”) as the following elements are in the scope of the final draft ITS on Supervisory Reporting under Regulation (EU) No 575/2013 of 26 June 2013 on prudential requirements for credit institutions and investment firms (“CRR”):
- “COREP expanded” to be submitted on an individual basis and on a consolidated basis (respectively sub-consolidated):
- Reporting on own funds, own funds requirements (Article 99 of CRR);
- Reporting on losses stemming from lending collateralized by immovable property (Article 101 of CRR);
- Reporting on large exposures (Article 394 of CRR);
- Reporting on the leverage ratio (Article 430 of CRR);
- Reporting on liquidity and on stable funding (Article 415 of CRR).
- New FINREP to be submitted on an individual basis and on a consolidated basis (respectively sub-consolidated):
- Reporting on financial information on a consolidated basis (Article 99 of CRR).
As soon as they will be adopted by the European Commission as a European Regulation ITS on Supervisory Reporting will be directly applicable in all Member states, without any transposition into national law. Consequently, Luxembourg institutions are required to comply with new CRR requirements as of 1 January 2014.
The date of implementation of the new prudential reporting as defined in Appendix of CSSF Circular 13/570 will be 1 January 2014, except for FINREP to be reported on a consolidated basis (respectively sub-consolidated). For the latter, the application date will be 1 July 2014. Therefore, the first reporting reference date will be 31 March 2014.
As regards the monthly reporting requirements on the Liquidity Coverage Ratio, the first reporting reference date has been delayed and set to 31 March 2014.
Future updates of the draft ITS on Supervisory Reporting
During the second half of 2013 the current draft ITS on Supervisory Reporting will be completed by reporting requirements on:
- Repos, securities and any form of encumbered assets;
- Forbearance and non-performing loans.
Other key points
|IFRS as Reporting GAAP||Reporting will be produced in full IFRS which causes that AGDL and lump sum provisions should be reversed.|
The reporting will be transmitted to CSSF through the Data Point Model developed by EBA, including validation formulae.
The EBA will develop and maintain a formal data model as well as XBRL taxonomies that incorporate the requirements of the ITS; the XBRL taxonomies are not yet available; they will not be mandatory for institutions.
|Proportionality||Proportionality is an integral part of the ITS with certain reporting requirements being applicable only to institutions using complex approaches to measure own funds requirements: for example, an institution that uses the standardised approach to calculate its credit risk will have to report much less data as it will not have to report information on internal ratings-based (IRB) exposures. Regarding the Leverage ratio, it was decided that the optimum approach in terms of incorporating proportionality into the ITS would be to require institutions to provide detailed data on derivatives only if certain thresholds are exceeded.|
Please do not hesitate to contact our experts for further information.
Page Last Updated