EBA欧洲银行-Consultation-Paper-onDraft-ITS-on-IGT-and-RC-reporting-for-Financial-Conglomerates_21页_1mb

Summary of Consultation Paper: Draft Implementing Technical Standards on Reporting of Intra-Group Transactions and Risk Concentration

Core Content

This consultation paper outlines the draft implementing technical standards (ITS) developed by the Joint Committee of the European Supervisory Authorities (ESAs) under Article 21a(2b) and (2c) of Directive 2002/87/EC (FICOD). The aim is to establish uniform reporting requirements for intra-group transactions and risk concentration within financial conglomerates, enhancing supervisory oversight, comparability, and regulatory consistency across the EU.

The proposed standards are intended to be directly applicable in all EU Member States once endorsed by the European Commission as a delegated regulation. The consultation period closed on 15 August 2019, and responses were to be submitted via an EU Survey.

Main Views and Key Information

1. Purpose and Rationale

• Uniform reporting is crucial to improve supervisory overview, particularly regarding contagion risk and group-wide risk monitoring.
• Harmonization of reporting templates aims to enhance comparability and reduce regulatory complexity, especially for cross-border financial conglomerates.
• It supports the consolidation of the single market by ensuring a level playing field and fair competition.

2. Scope of Reporting

• Regulated entities include: credit institutions, insurance undertakings, reinsurance undertakings, investment firms, asset management companies, and alternative investment fund managers.
• A financial conglomerate is defined as a group of undertakings, including parent and subsidiary entities, and entities with close links within the group.
• Intra-group transactions include:
  • Transactions between regulated entities of different sectors.
  • Transactions between regulated entities of the same sector.
  • Transactions between a regulated entity and a non-regulated entity within the group.
  • Transactions with natural or legal persons linked to the group by close links.

3. Structural Features of Reporting

• The intra-group transaction templates are based on Solvency II templates and include:

  • S.00 – Summary sheet.
  • S.01 – Equity-type transactions, debt and asset transfer.
  • S.02 – Derivatives.
  • S.03 – Off-balance sheet items.
  • S.04 – Insurance-reinsurance.
  • S.05 – Profit and Loss (P&L).

• Key reporting elements:

  • Single economic operations should be reported on a single line basis.
  • Indirect transactions must be reported to allow supervisory analysis of contagion risks.
  • Arm's length transactions must be monitored and reported, with non-arm's length transactions requiring a specific comment.

4. Threshold for Significance

• A transaction is presumed significant if it exceeds 5% of the total capital adequacy requirements of the financial conglomerate.
• Thresholds may be adjusted by the coordinator, after consultation with relevant authorities.

5. Risk Concentration Reporting

• Risk concentration refers to exposures that could threaten solvency or financial position of entities within a financial conglomerate.
• The scope includes both regulated and unregulated entities, including mixed financial holding companies (MFHCs).
• Reporting elements:
  • Types of risk concentration.
  • Counterparty details, including interconnected counterparties.
  • Economic sector, geographical area, and currency.
  • Total gross and net amounts of exposures, after risk mitigation and rating considerations.

6. Structural Templates for Risk Concentration

• S.06 RC counterparties: An open template for granular data on exposures by counterparty.
• S.07 Currency sector country: A synthetic table for risk concentration by sector, country, and currency.
• S.08 Asset and class rating: A synthetic table for risk concentration by asset class and rating.

7. Submission and Communication

• Reporting frequency is determined by the coordinator and should be notified to financial conglomerates.
• Annual reporting is required, with a reference date of 31 December, unless otherwise specified.
• Electronic submission is mandated.

8. Confidentiality and Data Protection

• Confidentiality of responses can be requested in accordance with Regulation (EU) 2018/1725.
• Data protection is ensured through the ESAs' rules on public access to documents.

Next Steps

• The Joint Committee will revise the proposal based on stakeholder feedback.
• The final version will be submitted to the European Commission for endorsement as a delegated regulation.
• The first reference date for reporting under the revised standards is XX XXX XXXX.
• The expected implementation period is approximately 1 year.

Conclusion

This consultation paper represents a significant step towards harmonizing reporting requirements for financial conglomerates in the EU. By standardizing intra-group transaction and risk concentration templates, the ESAs aim to improve supervisory oversight, reduce compliance burdens, and foster a more integrated financial market across the EU. The finalization of these standards will depend on stakeholder input, which is critical for ensuring practicality, effectiveness, and legal consistency.