Unregistered Partnerships and Sole Traders classification in accordance with the Counterparty Breakdown outlined in FINREP Reporting

Against the indicated background we would like to request feedback on whether all counterparty breakdowns in FINREP may refer to the BSI Regulation, or whether such reference is only for non-financial corporations. Moreover, we would like to query whether ‘Unregistered Partnerships’ and ‘Sole-Traders’  whether in this case the purpose of loan has any impact on the selected FINREP counterparty classification?

The FINREP’s Counterparty Classifications for Non-Financial Corporations in Annex 5 of Regulation (EU) 2021/251 refers to the BSI Regulation (Regulation (EU) 2021/379). On the other hand, the Household breakdown in Part 1, paragraph (42)(f) of the afore mentioned instructions does not refer to the BSI Regulation. Following this, it is being debated whether Unregistered Partnerships (unincorporated partnerships/partnerships without a legal status) and Sole Traders (sole proprietors) are to be classified as ‘Households’ or ‘Non-Financial Corporations’. Moreover, there are different scenarios when it comes to this type of ‘Partnerships’ and/or ‘Sole Traders’, which may potentially lead to different counterparty classification in FINREP Reporting, as per below instances. Lending provided to unregistered partnerships/sole traders for personal use such as the purchase of residential home or buying a personal vehicle.   Lending provided to unregistered partnerships/sole traders for a commercial purpose such as working capital lending/overdrafts or buying a commercial vehicle. The above argument is also mentioned in the EBA Q&A 2016_2793,  where the final answer states that ECB Regulation 2013/33 is used in FINREP, as far as counterparty sector is concerneded only to define the ‘non-financial corporations’ which itself refers to ESA.