EBA · 2015_1758 Final Q&A

FINREP Counterparty Breakdown (ESA 2010)

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
99
Topic
Supervisory reporting - FINREP (incl. FB&NPE)
Submitted by
Competent authority
Submitted
2015-01-27
Answered
2016-04-15
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

Annex V, Part 1, Reference 6.34 (b) 'general governments': Please confirm that public companies and private companies controlled by central governments, state or regional governments, local governments (including administrative bodies and non-commercial undertakings), that are market producer has to be reported in accordance with ESA 2010 (which may either lead to a classification as "non-financial corporation" or "financial corporation"). Annex V, Part 1, Reference 6.34 (d) 'other financial corporations': Please confirm that 'captive financial institutions' according to ESA 2010 has to be reported under 'other financial corporations'.

Background

As the FINREP counterparty breakdown strongly relies on the ESA-classification [e.g. see the reference in Annex V, Part 1, Reference 6.34 (e) of 'non-financial corporations' to the ECB BSI Regulation which itself refers to the ESA-Regulation] which has to be amended from ESA 1995 to ESA 2010 (applicable as from 31.12.2014), instructions in Annex V of the ITS should be amended accordingly.

Answer

The European system of national and regional accounts (ESA) is the system of national accounts and regional accounts, published by Eurostat and used by members of the European Union. It was most recently updated in 2010 and is enforceable by Regulation (EU) 549/2013 as from 1 September 2014. The ESA has been used as a basis on which to report counterparty sector information in certain FINREP templates like F 04.01, F 04.02, F 04.03, F 04.04, F 04.06, F 04.07, F 04.08, F 04.09, F 04.10, F 05.00, F 07.00, F 08.01 F 09.01, F 09.02, F 10.00 F 11.01, F 11.02, F 12.00, F 13.01, F 16.01, F 18.00, F 19.00, F 20.04 and F 20.06 of Annex III and IV of Regulation (EU) No 680/2014 - ITS on Supervisory Reporting of institutions (ITS on reporting).  ESA 2010 has amended the criteria to be applied to determine whether a counterparty (referred to as an institutional unit in ESA) should be classified to the government sector.  Once a counterparty has been determined as to being government controlled a further "market test" is applied.  If it is determined that the counterparty is a market producer, this will lead to it being classified as a non- financial corporation or a financial corporation under ESA 2010. This is similarly addressed in EBA Q&A 2013_184, which discusses the specific case for hospitals, schools, social secretaries. In addition, to further reflect ESA 2010, Captive financial institutions shall be reported under "other financial corporations".

Original source: European Banking Authority, Q&A ID 2015_1758

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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