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Summary of Feedback on Responses Received During the Public Consultation on Proposed Amendments to the Guidelines on COREP (CP04rev2)

Core Content

The document outlines the feedback received during the public consultation on the proposed amendments to the COREP guidelines (CP04rev2), with a focus on the challenges and concerns raised by industry stakeholders regarding the harmonization, implementation timeline, proportionality, and clarity of reporting requirements.

The consultation period, which ran from June to September 2010, resulted in 14 responses, 13 of which were published. The feedback is organized into sections, each addressing specific topics such as timeline, uniform reporting, proportionality, investment firms, reporting frequency, and remittance dates. CEBS aims to streamline reporting across the European Union and introduce a single reporting format by 1 January 2012, with the final application date set for 31 December 2012.

Main Points and Concerns

1. Harmonization and Implementation

• Industry Support: Respondents generally welcomed the harmonization effort, anticipating efficiency gains and a level playing field.
• Need for Clarity: There was a strong call for the publication of FAQs and examples to ensure uniform implementation of the new reporting templates.
• Validation Rules: Errors in the consultation draft were noted, and CEBS committed to revisiting and correcting these.
• Implementation Timeline: Concerns were raised about the ambitious timeline, with some suggesting a postponement of the first submission to the end of the first quarter of 2013 to avoid disruption to year-end processes.
• IT Burden: The significant increase in reporting burden and the proposed reduction in remittance dates were seen as potential bottlenecks, with calls to involve software companies in the process.

2. Uniform Reporting and Implementation

• Ad-hoc Requests: There was a concern that unclear ad-hoc reporting options could lead to increased complexity rather than harmonization.
• National Discretions: The persistence of national discretions was identified as a major obstacle to harmonization, with suggestions to catalog and eliminate them where possible.
• Template Structure: Some respondents found the current template structure burdensome and suggested improvements to ensure proportionality and reduce unnecessary data entry.

3. Proportionality

• Tailored Reporting: There was a demand for proportionate reporting, especially for smaller and less complex domestic institutions.
• Investment Firms: Article 20(2) firms were questioned about the necessity of certain templates, as they do not have significant credit or market risk exposure.
• Adjustment Criteria: There was a call for common criteria (e.g., RWA, depositions, domestic market share) to determine adjusted reporting frequencies, rather than leaving this to national discretion.

4. Reporting Frequency

• Quarterly Reporting: Some respondents argued for quarterly reporting of large exposures, while others suggested a more flexible approach, with some templates being submitted half-yearly or annually.
• Consistency: There was a concern about the proposed doubling of reporting frequencies in some countries, which could increase the burden on institutions.

5. Remittance Dates

• Timeline Concerns: A 20-day timeline for individual reporting was considered too short, leading to risks of data quality and correction.
• Consolidated Reporting: A longer remittance period was suggested for year-end reporting, especially for consolidated data.
• Second Consultation: CEBS confirmed that a second public consultation on remittance dates is planned for mid-2011.

Key Amendments and Actions

• Timeline: CEBS plans to publish the revised COREP framework one year before its application date, aligning with the CRD requirement.
• Template Adjustments: CEBS will review and amend certain sections of the CA and GSD templates, including the renumbering of IDs and the deletion of specific rows that are deemed redundant or incorrect.
• Guidelines Improvements: CEBS will enhance the clarity of the guidelines, particularly regarding the treatment of national discretions, the structure of templates, and the scope of reporting for group solvency.
• Group Solvency Reporting: CEBS will provide more specific instructions on the treatment of subsidiaries and sub-groups, and will consider introducing thresholds to limit reporting burden.
• Pillar III and GS Template: The GS template is considered necessary for collecting detailed information on group risk and own funds, even though it may overlap with Pillar III disclosures.

Transition to EBA

• CEBS to EBA: The transition of CEBS to the EBA will require the revision of existing guidelines, especially in areas where the CRD refers to technical standards.
• Consultation Practices: CEBS stakeholders will continue to provide input on the future prudential reporting framework in 2011, with consultation practices expected to remain similar under the EBA.

Conclusion

The consultation highlighted the importance of clarity, proportionality, and practical implementation in the harmonization of prudential reporting. CEBS has committed to addressing these concerns through further consultations, amendments to the guidelines, and the development of a more streamlined and efficient reporting framework.