The European Banking Authority has launched a public consultation on new Implementing Technical Standards on supervisory reporting under the Capital Requirements Regulation.
Under Article 430 of ‘CRR’, the ‘EBA’ is mandated to develop uniform reporting requirements for firms governed by the ‘CRR’ and are proposing the introduction of revised ‘ITS’, in order to maintain reporting requirements in line with regulatory changes to the ‘CRR’.
In particular, in 2019, two amendments have been made to the ‘CRR’, affecting supervisory reporting:
- ‘CRR2’: Implements key measures in the European Union for firms, covering topics including liquidity, leverage and large exposure
- ‘Backstop Regulation’: Sets out uniform minimum levels of coverage to ensure that firms have sufficient loss coverage for future non-performing loans (NPLs)
The ‘EBA’ aims to revise a number of reporting modules to be in line with the above amendments.
The ‘EBA’ recognises the intersecting nature of regulatory reporting under ‘CRR’ and public disclosures in the interest of investors and external stakeholders and thus want to drive consistency and integration between the two frameworks. The ‘EBA; hopes to facilitate the integration by standardising formats and definitions, allowing firms to use the same data to fulfil both their reporting and disclosure obligations.
The ‘EBA’ continues to enhance its ‘proportionality’ measures by introducing definitions from ‘CRR2’ for ‘small and non-complex institutions’ and ‘large institutions’. These provisions would reduce reporting requirements for small and non-complex institutions and trigger additional reporting requirements for large institutions, where appropriate.
The Consultation Paper also proposes changes to areas of reporting such as own funds, credit risk, counter party credit risk, large exposures, leverage ratio, net stable funding ratio and ‘FINREP’.
The EBA expects to submit the revised draft ‘ITS’ to the European Commission in June 2020, which will apply from 30 June 2021.
All firms governed under the ‘CRR; should read the Consultation Paper. The deadline for firms to provide feedback to the Consultation Paper is 16 January 2020.
Firms are advised to consider these developments and discuss them internally, including Senior Management and Board Briefing, as appropriate. Firms should also consider whether an update to reporting procedures is required after considering the proposed changes in the Consultation Paper, as new regulatory reporting obligations may arise.
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