Instruction No. 2010-05 of February 15, 2010 on Own Funds Requirements for Payment Institutions (Repealed)

Instruction No. 2010-05 on Own Funds Requirements

The Banking Commission,

Having regard to the Monetary and Financial Code, particularly Articles L. 522-1, L. 522-3, L. 522-14 and following, and L. 613-8;

Having regard to the Decree of February 20, 2007, as amended, on own funds requirements applicable to credit institutions and investment firms;

Having regard to the Decree of October 29, 2009, concerning the prudential regulation of payment institutions;

Having regard to the Regulation of the Banking Regulation Committee No. 90-02 of February 23, 1990, as amended, on own funds;

Having regard to the Regulation of the Accounting Standards Committee (CRC) No. 2009-08 of December 3, 2009, on the methods for preparing the accounts of payment institutions;

Having regard to the Banking Commission Instruction No. 2007-02 of March 26, 2007, on own funds requirements applicable to credit institutions and investment firms, as amended by Instruction No. 2008-01 of January 10, 2008;

Decides:

Article 1

• The term "subject institutions" hereinafter refers to payment institutions as defined in Articles L. 522-1 and following of the Monetary and Financial Code;
• The term "hybrid payment institutions" hereinafter refers to those subject institutions that habitually exercise an activity other than the provision of payment services or ancillary services, in accordance with Article L. 522-3 of the Monetary and Financial Code.

Article 2

Subject institutions shall submit elements relating to their own funds requirements on the statements listed below, in accordance with the approach and calculation methods to which they are subject pursuant to the Decree of October 29, 2009:

1. Lines 1 to 1.8.3 of the CA statement, a summary statement of the solvency ratio, as defined by the aforementioned amended Instruction 2007-02;

2. Statements relating to credit risk:

   • CR SA Total statement: credit, counterparty, and delivery-versus-payment risk under the standard approach, as defined by the aforementioned amended Instruction No. 2007-02;
   • CR SEC SA Total statement: securitizations under the standard approach, as defined by the aforementioned amended Instruction No. 2007-02;
   • CR SEC Details statement: detailed information on securitizations, as defined by the aforementioned amended Instruction No. 2007-02;
   • CRM Details statement: detailed information on protection providers and credit risk mitigation techniques, as defined by the aforementioned amended Instruction 2007-02.

3. A statement relating to the methods for calculating specific own funds requirements: the CA EP statement as defined in Annex 1 to this Instruction.

Article 3.1

The statements referred to in Article 2 of this Instruction shall be submitted at the following frequencies:

• annually for the CR SEC Details statement and the CRM Details statement;
• semi-annually for the other statements.

Article 3.2

Semi-annual statements shall be prepared based on figures as of June 30 and December 31. Annual statements shall be prepared based on figures as of December 31.

Article 4

The aforementioned statements shall be submitted via electronic transmission within two months following their closing date, with the exception of statements closed on June 30, which shall be submitted within three months following their closing date. The statements shall be transmitted in XML-XBRL format according to the technical specifications necessary for their processing by the General Secretariat of the Banking Commission. They shall bear an electronic signature.

However, as an exception to the preceding paragraph, subject institutions may declare the information listed in Article 2 of this Instruction on authenticated paper support signed by an authorized signatory, and in this case, complete this paper submission by electronically transmitting the data in "xls" file format until the deadline of December 31, 2010.

Article 5

Hybrid payment institutions shall submit the aforementioned tables based on the scope of the payment service provision activity. This scope must be identical to that retained in the annex of the accounts published by the hybrid payment institution in accordance with Article 3 of CRC Regulation No. 2009-08.

Article 6

This Instruction shall enter into force upon its publication.

Paris, February 15, 2010

The President of the Banking Commission,

Jean-Paul REDOUIN

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Annex 1 to Instruction No. 2010-05

Presentation and Regulatory References of the Reporting Statement

Subject institutions apply the following sign convention: any amount that increases own funds or own funds requirements is recorded as a positive figure. Conversely, any amount that reduces own funds or own funds requirements is recorded as a negative figure. When the label of a cell is preceded by a negative sign (-), only a negative amount may be declared.

CA EP Statement (Statement relating to the methods for calculating own funds requirements for payment institutions)

Subject institutions report on line 1 the total amount of their own funds defined in accordance with the aforementioned Regulation No. 90-02 and declared on the CA statement defined in the aforementioned amended Instruction No. 2007-02.

Subject institutions calculate the minimum own funds requirement, using one of the three methods provided for in Articles 29 to 31 of the Decree of October 29, 2009:

a) Method A: the amount of own funds is, at all times, greater than or equal to 10% of the fixed overheads of the previous year under the conditions provided for in Article [29] of the Decree of October 29, 2009;

b) Method B: the amount of own funds is, at all times, greater than or equal to the sum of the payment volume tranches calculated under the conditions provided for in Article 30 of the Decree of October 29, 2009 and multiplied by the scale factor k as defined by the same article;

c) Method C: the amount of own funds is, at all times, greater than or equal to the indicator defined in point a) multiplied by the factor p determined in point b) of Article 31, and by the factor k defined in Article 30 of the Decree of October 29, 2009.

Subject institutions using the standard credit risk approach have an amount of own funds as determined for the standard credit risk approach in the Decree of February 20, 2007 on own funds requirements applicable to credit institutions and investment firms, with regard to the total amount of credits granted.

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Annex 2 to Instruction No. 2010-05

CA_EP Statement: Specific Own Funds Requirements for Payment Institutions

ID	Denomination	Declared Amounts	Regulatory References	Formulas
1	Total Own Funds		Calculation in accordance with Regulation No. 90-02	OFs report line 1 of the CA statement defined by Instruction 2007-02
2	Total Own Funds Requirements			7
3	Specific Own Funds Requirements			= 3.1 or 3.2 or 3.3
3.1	Own Funds Requirements based on Fixed Overheads (FO)		Calculation in accordance with Article 29 of the Decree of October 29, 2009	=10% x 3.1.1
3.1.1	Fixed Overheads of the Previous Year
3.2	Own Funds Requirements based on Payment Volume (PV)		Calculation in accordance with Article 30 of the Decree of October 29, 2009	is equal to one-twelfth of the total amount of payment operations executed in n-1
3.2.1	Payment Volume
3.2.2	OFR before Scale Factor
3.2.3	Applied Scale Factor			=0.5 or 0.8 or 1
3.2.4	OFR resulting from the application of scale factor k		Calculation in accordance with Article 31 of the Decree of October 29, 2009
3.3	Own Funds Requirements based on an Indicator			=3.3.1.1+3.3.1.2+3.3.1.3+3.3.1.4
3.3.1	Indicator
3.3.1.1	Interest Income
3.3.1.2	(-) Interest Expenses			These data are negative when fees received exceed commissions received
3.3.1.3	Commissions and Fees Received
3.3.1.4	Other Operating Income
3.3.2	OFR before Scale Factor
3.3.3	Multiplication Factor P
3.3.4	OFR resulting from the application of factor k
4	Own Funds Requirements under the Standard Credit Risk Approach		Article 33 of the Decree of October 29, 2009	Subject institutions granting credits mentioned in II of Article L. 522-2 of the Monetary and Financial Code report the sum of own funds requirements declared in column 22 of the CR SA Total statement and in column 33 of the CR SEC SA Total statement, as well as the sum of assets referred to in Articles 27a), 27b), and 7.7 of the Decree of February 20, 2007
5	Coverage Ratio			0.5