Basel III Parallel Test Run: Reporting Requirements for Amended Regulatory BA Forms

South African Reserve Bank
From the Office of
the Registrar of Banks

G6/2012
2012-07-06

To: All banks, controlling companies, branches of foreign institutions, eligible institutions and auditors of banks or controlling companies

Guidance Note 6/2012 issued in terms of section 6(5) of the Banks Act, 1990

Basel III parallel test run: Reporting requirements in terms of the amended regulatory BA forms

## Executive summary

The Office of the Registrar of Banks (this Office) is currently in the process of amending the Regulations relating to Banks (the Regulations) in accordance with the requirements of Basel III. The proposed amended Regulations relating to Banks (proposed amended Regulations) will be implemented on 1 January 2013.

The regulatory BA forms have accordingly been amended, and it is essential for this Office and banks alike to prepare for the implementation thereof. This Office has therefore identified steps for a parallel test run of the regulatory BA forms to prepare banks for the official submission of validated data as from 1 January 2013.

This guidance note serves to inform all parties of the target dates relating to the parallel test run and some other additional key dates regarding the implementation of Basel III.

### 1. Introduction

#### 1.1
In June 2011, the Basel Committee on Banking Supervision (BCBS) released its final reform package to strengthen global capital and liquidity rules with the objective of promoting a more resilient banking sector, commonly referred to as the Basel III framework.¹ Basel III will be implemented in South Africa with effect from 1 January 2013.

¹ Documents released by the BCBS in respect of the Basel III framework include Basel III: A global regulatory framework for more resilient banks and banking systems (June 2011) and Basel III: International framework for liquidity risk measurement, standards and monitoring (December 2010).

PO Box 8432 Pretoria 0001 · 370 Church Street Pretoria 0002 · South Africa · Tel +27 12 3133911/0861 12 7272 · Fax +27 12 3133758 · www.reservebank.co.za

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#### 1.2
Amendments to the Regulations that incorporate changes introduced as part of the Basel III framework will become effective on 1 January 2013. A parallel test run in respect of the regulatory BA forms specified in Table 1 below is necessary in order for this Office and banks to verify their readiness for accurate reporting using the amended regulatory BA forms.

#### 1.3
Parallel data submissions are only necessary for the amended regulatory BA forms. The submissions will take place via the SARBDEX interface.

### 2. Data submission schedules

#### 2.1
This Office envisages that draft 2 of the proposed amended Regulations will be issued for public comment towards the end of July 2012 and will contain the amended regulatory BA forms pertaining to Basel III.

#### 2.2
It is envisaged that the final draft version of the proposed amended Regulations will be presented to the Minister of Finance during October 2012 for his consideration and approval.

#### 2.3
The following will be provided to banks and regulatory service providers by means of electronic media as from 20 July 2012:
- proposed amended regulatory BA forms;
- validation rules;
- naming conventions of the required submission sets; and
- specific forms to be included in each submission set.

#### 2.4
Banks will have until the end of September 2012 to prepare and test their systems for reporting using the proposed amended regulatory BA forms. The first submission to this Office will be on September 2012 data, and is to be submitted to this Office by 12 November 2012.

#### 2.5
Banks will be able to make trial submissions to test validation rules at any time prior to 12 November 2012, but only in consultation with this Office.

#### 2.6
All banks registered in the Republic of South Africa are required to continue to submit comprehensive data pertaining to the reporting months of September 2012 through to December 2012 as required in the Regulations.

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#### 2.7
In addition to the dates specified in Table 1 below, all banks are required to report data for five consecutive business days in the amended form BA 325 as follows:
- 21 and 25 to 28 September 2012; and
- 22 to 26 October 2012.

The above data shall be submitted to this Office on the second business day immediately following the day to which the form BA 325 relates.

**Table 1 – Final submission dates for the proposed amended regulatory BA forms (other than the daily return)**

| Proposed amended form | Reporting month | | | |
| :--- | :--- | :--- | :--- | :--- |
| | **September 2012** | **October 2012** | **November 2012** | **December 2012** |
| BA 100 | | 10 December 2012 | | |
| BA 110 | | 10 December 2012 | | |
| BA 120 | | 10 December 2012 | | |
| BA 125 | | No submission required. | | |
| BA 130 | | | | |
| BA 200 | 12 November 2012 | 10 December 2012 | | |
| BA 210 | 12 November 2012 | | | |
| BA 220 | | No submission required. | | |
| BA 300 | 12 November 2012 | 10 December 2012 | | |
| BA 310 | | | 14 January 2013 | |
| BA 320 | | No submission required. | | |
| BA 325 | See paragraph 2.7 above | See paragraph 2.7 above | | |
| BA 330 | | | | |
| BA 340 | | No submission required. | | |
| BA 350 | | | | |
| BA 400 | | | | 5 February 2013 |
| BA 410 | | No submission required. | | |
| BA 500 | | | | 5 February 2013 |
| BA 600 | Controlling company consolidated on 22 November 2012 | | | Controlling company consolidated on 20 February 2013 |
| BA 610 | | | | 5 February 2013 |
| BA 700 | Bank in the Republic on 12 November 2012<br>Controlling company consolidated on 22 November 2012 | Bank in the Republic on 10 December 2012 | | Controlling company consolidated on 20 February 2013 |
| BA 900 series | | No submission required. | | |

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### 3. General

#### 3.1
This Office will conduct a training session on the completion of the amended regulatory BA forms in October 2012 at the South African Reserve Bank Conference Centre in Pretoria. It should be noted that this training intervention will focus on how to populate the amended regulatory BA forms and will not take the form of a Basel III technical training session. Detailed arrangements on this training session will be disclosed at a later date.

### 4. Acknowledgement of receipt

#### 4.1
Two additional copies of this guidance note are enclosed for use by your institution's independent auditors. The attached acknowledgement of receipt, duly completed and signed by both the chief executive officer of the institution and the said auditors, should be returned to this Office at the earliest convenience of the aforementioned signatories.

R H Urry
Deputy Registrar of Banks

The previous guidance note issued was Guidance Note 5/2012, dated 10 May 2012.