EIOPA · 1073
1073
- Regulation
- (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
- Article
- 35
- Submitted
- 2017-03-06
- Answered
- 2019-09-23
Question
Cash Collateral
For our derivative contracts we provide/receive collateral in the form of cash, securities or both. In line with IFRS cash collateral is recorded as an asset in the balance sheet (with a corresponding liability).
Cash collaterals held:Although this template is called ‘Off-balance sheet items’ we have made a working assumption that we should report the value of collaterals received in the form of cash as well as securities. Although collateral received in the form of cash is an on-balance sheet item, exclusion of cash collaterals from this template is likely to convey an incorrect message to the regulator regarding the adequacy/availability of collaterals to safeguard the group’s assets.
Does EIOPA agree with our working assumption?
Answer
Collateral received in the form of cash should not be reported as an off-balance sheet item in S.03.01 but as an asset in the balance sheet. Further information about such assets kept in the undertaking's balance-sheet that are pledged as collateral is to be disclosed in S.06.02 in C0100 "Asset pledged as collateral" selecting option 1 from the following closed list:
1 - Assets in the balance sheet that are collateral pledged
2 - Collateral for reinsurance accepted
3 - Collateral for securities borrowed
4 - Repos
9 - Not collateral
This Q&A is published by European Insurance and Occupational Pensions Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.
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