EBA · 2017_3263 Final Q&A

Validation rules v2815_m, v2821_m vs. FINREP / AE instructions

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
99, 100
Topic
Supervisory reporting - Asset Encumbrance
Submitted by
Credit institution
Submitted
2017-04-07
Answered
2017-07-28
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

Validation rules v2815_m and v2821_m imply that customer loans on demand are reported in different rows in the Asset Encumbrance template F 32.01. Our understanding of FINREP and AE instructions differs as follows: In Asset Encumbrance template F 32.01, all loans on demand are reported in row 020 ‘Loans on demand’, whether they are due from credit institutions or customers. In French accounting (PCEC), credit institution loans on demand are classified in class of accounts 1, and customer loans on demand in class of accounts 2. In FINREP template F 01.01, class 1 loans on demand are reported in row 030 ‘Cash balances at central banks’ and class 2 loans on demand in row 200 ‘Loans and advances’. We believe validation rules v2815_m and v2821_m are inconsistent with FINREP and AE instructions on customer loans on demand.

Background

In France, credit institution loans and customer loans are reported in separate accounts (resp. ‘Classe 1’ and ‘Classe 2’). The FINREP template F 01.01 is filled accordingly: loans on demand due from credit institutions in row 030 and loans on demand due from customers in row 200. Instructions for Asset Encumbrance template F 32.02 do not separate credit institutions loans from customer loans. All loans on demand are reported in row 020. We believe v2815_m and v2821_m validation rules are thus inconsistent with FINREP and AE instructions.

Answer

The definition of loans on demand reported in the row 020 of template F 32.01 of Annex XVI to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting) mentions the balances receivable at central banks and other institutions, i.e. credit institutions and investment firms pursuant to the CRR definition. On the other hand, row 040 of template F 01.01 of Annexes III and IV of Regulation (EU) No 680/2014 includes only balances receivable on demand with credit institutions. In template F 01.01, balances receivable on demand with investment firms are reported in their respective accounting portfolios, in rows ‘loans and advances’. Consequently, validation rules v2815_m and v2821_m may not hold under these circumstances and will be amended.

Original source: European Banking Authority, Q&A ID 2017_3263

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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