CIRCULAR 8/2015, OF DECEMBER 18, OF THE BANK OF SPAIN, TO THE ENTITIES AND BRANCHES AFFILIATED TO THE DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS, ON INFORMATION TO DETERMINE THE CALCULATION BASES FOR CONTRIBUTIONS TO THE DEPOSIT GUARANTEE FUND OF CREDIT INSTITUTIONS. (BOE of December 24) (Correction of errors, BOE of January 8, 2016)

Royal Decree 2606/1996, of December 20, on deposit guarantee funds in credit institutions, with the new wording given by Royal Decree 1012/2015, of November 6, which develops Law 11/2015, of June 18, on the recovery and resolution of credit institutions and investment firms, and which modifies Royal Decree 2606/1996, of December 20, on deposit guarantee funds of credit institutions, develops the legal regime of the Deposit Guarantee Fund of Credit Institutions (hereinafter, FGD).

Royal Decree 1012/2015, of November 6, modified, among other norms, Article 4 of Royal Decree 2606/1996, which determines the deposits, as well as the securities and other financial instruments, that have the status of being guaranteed by the FGD, and Article 7.1 to extend the guarantee of deposits to accrued interest.

Additionally, the final tenth provision of Law 11/2015, of June 18, on the recovery and resolution of credit institutions and investment firms, modified Article 10.1 of Royal Decree-Law 16/2011, of October 14, by which the Deposit Guarantee Fund of Credit Institutions is created, to consider deposits that meet certain conditions as guaranteed regardless of their amount for three months counting from the moment the amount has been paid or from the moment such deposits have become legally transferable.

Furthermore, the formats and presentation rules of the statements of Bank of Spain Circular 4/2004, of December 22, to credit institutions, on public and reserved financial information rules, and models of financial statements, which serve as a reference for the preparation of the statement "Base for the calculation of contributions to the Deposit Guarantee Fund and amount of guaranteed balances," have been modified by Bank of Spain Circular 5/2014, of November 28.

Royal Decree 2606/1996, in its first final provision, authorizes the Bank of Spain to develop the technical-accounting issues related to the concepts of guaranteed deposits and securities, and the third final provision of Royal Decree 948/2001, of August 3, on investor compensation systems (hereinafter, Royal Decree 948/2001), empowers the Bank of Spain to determine the valuation criteria that must be applied to the different types of securities and non-listed financial instruments that must be integrated into the calculation base for annual contributions to the FGD of Credit Institutions. For its part, the Ministerial Order of March 31, 1989, of the Ministry of Economy and Finance, by which the Bank of Spain is authorized to establish and modify the accounting rules of credit institutions, authorizes the Bank of Spain to prepare statements of a reserved nature, to fulfill its control and inspection functions and the elaboration of monetary, financial, and economic statistics. Based on these authorizations, the Bank of Spain approved Circular 4/2001, of September 24, to entities affiliated to a deposit guarantee fund, on information about the balances that make up the calculation base for contributions to deposit guarantee funds, and the scope of guaranteed amounts.

Circular 4/2001, in addition to addressing the technical-accounting issues referred to in Royal Decree 2606/1996 and Royal Decree 948/2001, establishes the information that entities and branches affiliated to the FGD must send annually to the Bank of Spain for the purpose of calculating contributions.

As the modifications made to current legislation by Law 11/2015, Royal Decree 1012/2015, and Circular 5/2014 affect all norms and annexes of Circular 4/2001, the Bank of Spain has decided to replace said circular with a new one.

Consequently, in exercise of the powers granted, the Governing Council of the Bank of Spain, upon proposal of the Executive Committee, has approved this circular, which contains the following norms:

First Rule.

Scope of application.

The provisions of this circular shall apply to entities and branches affiliated to the FGD, in accordance with Article 5 of Royal Decree 2606/1996, of December 20, on deposit guarantee funds of credit institutions.

Second Rule.

Information to be provided.

1. Entities and branches affiliated to the FGD must send quarterly to the Bank of Spain, to the Financial Information Department and CIR, the statement "Information to determine the calculation bases for contributions to the Deposit Guarantee Fund" which is collected as Annex 1 of this circular, with data relating to the end of the respective quarter. The data corresponding to December must be sent no later than the 20th day of the following month, and those of the remaining quarters, no later than the 10th day of the second month following the one to which the data refer.

2. The Bank of Spain will send, quarterly, to the Deposit Guarantee Fund of Credit Institutions the information from the statements received from each of the entities and branches affiliated to the FGD that is necessary for the fulfillment of its obligations, as well as the aggregated data.

3. The submission to the Bank of Spain of the statement "Information to determine the calculation bases for contributions to the Deposit Guarantee Fund" must be made by electronic transmission, in accordance with the technical specifications that the Bank of Spain communicates to the entities for this purpose.

Regardless of the responsibility of the entity and the members of its board of directors or equivalent body with respect to all statements sent to the Bank of Spain, the statement "Information to determine the calculation bases for contributions to the Deposit Guarantee Fund" must be electronically signed by the president or chief executive officer, or by the general manager or equivalent position within the meaning of Article 6.6 of Law 10/2014, of June 26, on the regulation, supervision, and solvency of credit institutions, provided that the board of directors or equivalent body has expressly designated them as responsible for such purposes. The persons who electronically sign this statement must prove to the Bank of Spain the delegation or power granted by the board of directors or equivalent body to send it, and each entity may designate more than one person to, interchangeably, electronically sign the aforementioned information. The statement must be sent, in any case, within the maximum deadline established for this purpose in the respective regulations. However, and without prejudice to that obligation of submission, the electronic signature of the statements may be carried out within the ten natural days following the expiration of said maximum deadline.

Second Bis Rule.

Additional information to be provided by credit institutions that are part of an institutional protection system provided for in Article 113.7 of Regulation (EU) No. 575/2013 that has constituted an ex ante fund. [1]

1. Credit institutions that are part of an institutional protection system provided for in Article 113.7 of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, of June 26, 2013, on prudential requirements for credit institutions and investment firms, and amending Regulation (EU) No. 648/2012, which has constituted an ex ante fund that guarantees that the institutional protection system has funds directly at its disposal for the purposes set forth in letter e) of Article 6.3 of Royal Decree-Law 16/2011, must send to the Bank of Spain the information set out in Part A of Annex 1 bis of this circular.

2. The provisions of the previous paragraph shall not apply in the case where the credit institutions that are part of an institutional protection system provided for in the previous paragraph have designated one of them as the subject obliged to send the information, although this will not discharge the other credit institutions belonging to the institutional protection system, nor their management bodies and other responsible persons. In this case, the designated entity will send to the Bank of Spain the information set out in Part B of Annex 1 bis.

3. The information referred to in this rule must be sent to the Bank of Spain on a quarterly basis and no later than the last day of the second month following the one to which the data sent refer.

[1] Incorporated by Circular 1/2018, of January 31, second rule

Third Rule.

Valuation criteria.

For the purpose of calculating the base to determine contributions to the FGD referred to in Article 3 of Royal Decree 2606/1996, the valuation criteria that entities must apply are as follows:

a) Monetary deposits shall be valued at their nominal or principal amount plus accrued interest as of the date to which the data refer, as these valuation criteria are defined in Bank of Spain Circular 4/2017, of November 27, [2] to credit institutions, on public and reserved financial information rules, and models of financial statements. In hybrid or structured deposits, the principal shall be the amount disbursed by counterparties before segregating implicit derivatives.

b) Guaranteed securities and other financial instruments, including those temporarily transferred in repurchase agreements that remain recorded or registered in the transferring entity, shall be valued at their market value on the last trading day of the quarter to which the data refer. When they are securities or financial instruments not traded on a secondary market, they shall be valued at their fair value, unless this cannot be estimated reliably, in which case they shall be valued at their nominal value or redemption value, whichever is most appropriate for the type of instrument in question, as these valuation criteria are defined in Bank of Spain Circular 4/2017. [2]

[2] Reference to Circular drafted according to Circular 2/2021, of January 28, single rule.

Fourth Rule.

Information on monetary deposits. [3]

1. Entities and branches affiliated to the FGD must have available to the Bank of Spain, at all times, the "Detailed Register of Deposits Received" established in Annex 2, with the specifications contained therein.

2. The information regarding deposits in the "Detailed Register of Deposits Received" must be permanently updated, except for that corresponding to balances held by investment firms in instrumental and transitional cash accounts opened in the entity or branch affiliated to the FGD in the name of the investment firm on behalf of its clients, which shall be updated at least quarterly or when requested by the Bank of Spain.

3. In addition to what is stated in the previous paragraph, the individualized information of each of the clients comprising the balance held by investment firms in instrumental and transitional cash accounts opened in the entity or branch affiliated to the FGD, in the name of the investment firm on behalf of its clients, must be available to all entities at the moment any of the payment events referred to in Article 8.1 of Royal Decree-Law 16/2011, of October 14, by which the Deposit Guarantee Fund of Credit Institutions is created, occurs.

[3] Drafted according to Circular 2/2021, of January 28, single rule.

Single Transitional Provision. Information relating to years 2014 and 2015.

Entities affiliated to the FGD must send to the Bank of Spain, to the Financial Information Department and CIR, the data of the items in section A) Deposit guarantee compartment of the statement "Information to determine the calculation bases for contributions to the Deposit Guarantee Fund" relating to the fourth quarter of the year 2014 and the first three quarters of the year 2015, with the format and valuation criteria established by this circular, no later than January 20, 2016. When the data for these statements cannot be obtained without incurring disproportionate costs, they shall be estimated as best as possible.

Repealing Provision.

Circular of the Bank of Spain 4/2001, of September 24, to entities affiliated to a deposit guarantee fund, on information about the balances that make up the calculation base for contributions to deposit guarantee funds, and the scope of guaranteed amounts, is repealed.

Single Final Provision. Entry into force.

This circular shall enter into force the day following its publication in the "Official State Gazette" (Boletín Oficial del Estado).

ANNEX 1

INFORMATION TO DETERMINE THE CALCULATION BASES FOR CONTRIBUTIONS TO THE DEPOSIT GUARANTEE FUND [4]

Part A: Information relating to deposit guarantee and securities compartments

Part B: Detail of admissible and guaranteed deposits by countries

a) Number of holders with deposits or securities and other financial instruments guaranteed in units.

To reflect the number of holders of guaranteed deposits, the provisions of Article 7, numbers 4 and 5, of Royal Decree 2606/1996 shall be taken into account. In the case of balances held by investment firms in instrumental and transitional cash accounts opened in the declaring entity or branch affiliated to the FGD, in the name of the investment firm on behalf of its clients, the number of holders shall be counted as the number of clients of the investment firm, as specified in the general characteristics of the register of deposits received in Annex 2.

To reflect the number of holders of guaranteed securities and other financial instruments, the provisions of Article 7 bis, numbers 3 and 4, of Royal Decree 2606/1996 shall be taken into account.

b) The amount shall be the result of applying the valuation criteria of the third rule of the circular regulating this statement. The amount shall be expressed in euro units.

c) The terms "deposits," "non-financial corporations," "households," "SMEs," "large enterprises," "businesses in Spain," and "businesses abroad" coincide with those included in Bank of Spain Circular 4/2017. The term "businesses in branches in other EU Member States" refers to deposits recorded in the books of the entity's branches located in other Member States of the European Union.

d) Repurchase agreements (or temporary asset transfers) as defined in Bank of Spain Circular 4/2017, valued in accordance with letter (b) above.

e) Deposits –hybrid or structured– that, due to potentially having negative yields, do not have the status of deposits, for the purposes of Royal Decree 2606/1996, because their principal is not repayable at nominal value or only with a guarantee or special agreement of the entity or a third party (Article 4.1 of Royal Decree 2606/1996).

f) Bearer deposit certificates issued since July 2, 2014, as well as deposits other than those mentioned in the previous notes that must be entirely excluded from FGD coverage in accordance with Article 4 of Royal Decree 2606/1996.

g) Funds, not registered as deposits, arising from transitional situations due to trading operations in accordance with Article 4.1 of Royal Decree 2606/1996, in the name of holders whose deposits are not excluded from FGD coverage pursuant to paragraph 4 of Article 4 of Royal Decree 2606/1996, corresponding to businesses in Spain and in branches in other EU Member States. It includes, in any case, monetary resources that have been entrusted to the entity for the provision of some investment service, in accordance with the consolidated text of the Securities Market Law, or that come from the provision by the entity of these investment services to said clients.

h) Deposits constituted by Local Administrations with an annual budget equal to or less than 500,000 euros, unless they are not admissible for meeting any of the criteria indicated in the previous letters.

i) Total amount of admissible deposits that is especially protected. For the purposes of this circular, "especially protected amount" means the amount that, being included in the positive balance of the account or deposit in question, is guaranteed, regardless of its amount, for three months counting from the moment the amount has been paid or from the moment it has become legally transferable, in accordance with Article 10.1, second paragraph, of Royal Decree-Law 16/2011, of October 14, by which the Deposit Guarantee Fund of Credit Institutions is created.

j) Part of the amount of admissible deposits, excluding the especially protected amount, that exceeds the guaranteed limit, in accordance with Articles 10.1 of Royal Decree-Law 16/2011 and 7 of Royal Decree 2606/1996. In the case of balances held by investment firms in instrumental and transitional cash accounts opened in the declaring entity or branch affiliated to the FGD, in the name of the investment firm on behalf of its clients, the classification by sectors shall be carried out based on the nature of the client.

k) Amount of negotiable securities and other financial instruments provided for in Article 2 of the Securities Market Law, which, in accordance with Article 4.2 of Royal Decree 2606/1996, have been entrusted to the entity for deposit or registration, or for the provision of some investment service, by non-financial corporations and households, as well as by local entities with an annual budget equal to or less than 500,000 euros, corresponding to businesses in Spain and in third countries admissible for these purposes (as these latter are defined in the following letter). Securities and financial instruments will include, in any case, those acquired in their own name on behalf of third parties, those entrusted by third parties, and securities received on loan, as well as those that have been subject to a repurchase agreement (temporary transfer) and remain recorded or registered in the transferring entity.

l) Businesses registered in the books of the entity's branches abroad, unless, in accordance with Article 4.2 of Royal Decree 2606/1996: a) they are located in territories defined as tax havens by current legislation or in a country or territory that lacks a supervisory authority for securities markets, or when, even if it exists, it refuses to exchange information with the National Securities Market Commission, or b) they are located in non-EU countries that have national investor compensation systems equivalent to the Spanish one.

m) Part of the amount of admissible securities and other financial instruments that exceeds the coverage level established in Article 7 bis of Royal Decree 2606/1996.

n) Guaranteed securities and other financial instruments shall be distributed depending on whether they trade or not on a secondary market.

o) Deposits constituted by investment firms in instrumental and transitional cash accounts opened in the declaring entity or branch affiliated to the FGD, in the name of the investment firm on behalf of its clients whose deposits are not excluded from FGD coverage pursuant to paragraph 4 of Article 4 of Royal Decree 2606/1996.

p) A sheet shall be prepared for each of the EU countries, except Spain, in which the declaring entity has established a branch, and another for the total sum of declared countries.

[4] Drafted according to Circular 2/2021, of January 28, single rule.

ANNEX 1 bis

Additional information to be provided by entities that are part of an IPS provided for in Article 113.7 of Regulation (EU) No. 575/2013 with an "ex ante" fund [5]

Part A: Information to be sent by entities belonging to the IPS in accordance with paragraph 1 of the Second Bis Rule

Table 1. Information on the ex ante fund and the entity belonging to the IPS.

Part B: Information to be sent by the designated entity, in case the designation provided for in paragraph 2 of the Second Bis Rule is opted for

Table 1. Information on the ex ante fund

Table 2. Information on entities belonging to the IPS

[5] Incorporated by Circular 1/2018, of January 31, second rule

ANNEX 2

Detailed Register of Deposits Received [6]

The file shall have the following general characteristics:

• Text file with printable ASCII characters (from ASCII 32 to ASCII 126, both inclusive). Extended ASCII characters are not allowed, except in fields where expressly indicated.
• Admitted characters: lowercase and uppercase letters, numbers, signs "+" and "-". Special characters may be used when expressly indicated in each of the fields.
• For each account or deposit, including funds arising from transitional situations due to trading operations in accordance with Article 4.1 of Royal Decree 2606/1996 and those arising from balances held by investment firms in instrumental and transitional cash accounts opened in the declaring entity or branch affiliated to the FGD, in the name of the investment firm on behalf of its clients, as established in Article 30 quater of Royal Decree 217/2008 (hereinafter, "deposits"), a record shall be included for each holder and deposit, with the following exceptions:
  • In the case of multi-currency deposits, one record shall be reported per holder, deposit, and currency.
  • In the case of deposits that have maturities with different due dates, one record shall be reported per holder, deposit, and maturity date of the deposit.
  • In the case of balances held by investment firms in instrumental and transitional cash accounts opened in the declaring entity or branch affiliated to the FGD, in the name of the investment firm on behalf of its clients whose deposits are not excluded from FGD coverage pursuant to paragraph 4 of Article 4 of Royal Decree 2606/1996, an individualized record shall be included for each of these clients with their corresponding balance.

Consequently, there must be a unique record for "Type of identification document" (field 1), "Identification document number" (field 2), "Maturity date" (field 14), and "Code of the deposit registered in Spain or in a branch of another EU country" (field 15). These fields form the unique key.