Reporting of customer portfolios managed on a discretionary basis

According to Annex V, Part 2, paragraph 285 (a) of Commission Implementing Regulation (EU) 2021/451 (ITS): '‘'Asset management’ shall refer to assets belonging directly to the customers, for which the institution is providing management.” Since these assets belong to the customers, they are generally not recognized in the balance sheet of the credit institution. It is not clear however if the cash deposited by customers that the institution manages on a discretionary basis should be recognized as a liability. Additionally, if this account would have a negative balance, an asset might be recognized.

Commission de Surveillance du Secteur Financier (CSSF) offers additional details related to the FinRep reporting for the institutions in Luxembourg where it is stated: “cash deposited by customers that the institution manages on a discretionary basis is registered in the balance sheet liabilities (table F 1.2: Financial liabilities measured at amortised cost: deposits).” (document  “Additional guidance for Credit Institutions related to specific reporting aspects”, https://www.cssf.lu/en/Document/additional-guidance-for-credit-institutions-related-to-specific-reporting-aspects/)  It is not clear if this requirement is country specific or if according to IFRS and EBA requirements, these items must be recognized in the balance sheet of the credit institution which manages the customer portfolios on a discretionary basis.