Circular 1/2017 of the Bank of Spain Modifying Circular 1/2013 on the Risk Information Central (AnaCredit)

MAIN CONTENT SKIP.

VIEW OF THE REGULATION

Index

Full Regulation

Regulation at a Date

Current Regulation

Circular 1/2017, of June 30, of the Bank of Spain, modifying Circular 1/2013, of May 24, on the Risk Information Central. (BOE of July 8, 2017)

Regulation (EU) No 867/2016 of the European Central Bank, of May 18, on the collection of granular credit and credit risk data (ECB/2016/13) [hereinafter, Regulation (EU) 867/2016], establishes a long-term framework (known as “AnaCredit”) for the collection of granular credit data by the European System of Central Banks (ESCB). The obligations established in Regulation (EU) 867/2016 aim to set a common set of granular information that will complement and improve the ECB's harmonized statistics. For the first phase of AnaCredit, Regulation (EU) 867/2016 establishes the obligation for credit entities resident in a euro area country and for branches in the euro area of foreign credit entities – reporting entities for the purposes of Regulation (EU) 867/2016 – to send to the ECB, through the corresponding national central banks, information regarding loans they have with their clients or manage on behalf of third parties, provided that the debtor (or at least one of them) is a legal entity with which the entity has assumed an accumulated risk equal to or greater than 25,000 euros.

The main objective of this circular is to collect through the Risk Information Central (CIR) the information that the Bank of Spain must request from reporting entities to communicate it to the European Central Bank in accordance with the provisions of the aforementioned regulation.

Thus, it has been decided to use the power provided for in Article 8.4 of Regulation (EU) 867/2016, which contemplates the possibility that national central banks comply with its provisions as part of a broader national information framework, and the requirements of Regulation (EU) 867/2016 have been integrated into Circular 1/2013. The Bank of Spain has the authority to determine the information that entities must declare to the Risk Information Central and, therefore, to modify the relevant aspects of Circular 1/2013 pursuant to Article 60.4 of Law 44/2002, of November 22, reforming the financial system, and Article 3 of Order ECO/697/2004, of March 11, on the Risk Information Central.

The regulation is necessary to obtain granular information on credit and credit risk incurred by reporting entities for the purposes of AnaCredit (credit entities and branches in Spain of foreign credit entities), as a prior step to its transmission to the ECB and its subsequent integration with the rest of the information transmitted by other national central banks into a credit database centralized within the Eurosystem.

The integration of the requirements of Regulation (EU) 867/2016 into Circular 1/2013 has been possible due to the similarities in both information transmission systems. The declaration in both systems occurs operation by operation, and the information blocks on persons, operations, guarantees, and their interrelationships contain similar information and are structured in a similar manner.

Notwithstanding the above, the implementation of AnaCredit involves the introduction of information requirements not contemplated in Circular 1/2013. Specifically, new information is requested regarding persons and declared operations, financial data, received guarantees, as well as interest rates and the accounting status of operations. Additionally, in some cases, it has been necessary to homogenize the set of attributes, concepts, and definitions of Circular 1/2013 with those of Regulation (EU) 867/2016.

The regulation confines the new information requirements to the scope defined by Regulation (EU) 867/2016 (credit entities and branches of foreign credit entities in Spain, legal persons, and loans), except in the case of interest rates, which will be requested for loans from both natural and legal persons.

On the other hand, the integration of the requirements of Regulation (EU) 867/2016 into Circular 1/2013 allows both entities and the Bank of Spain to treat this information comprehensively, avoiding the implementation of a new declaration system. In this way, it avoids imposing new obligations on entities, which must present a single declaration to comply with both requirements, and facilitates information quality management processes, as well as the transmission of information to AnaCredit. All of this entails a reduction in the information burden posed by the implementation of the reform introduced by this circular and promotes efficiency gains in the information management process, both for reporting entities and for the Bank of Spain itself.

Finally, outside the scope of the requirements of the aforementioned regulation, whose integration into the CIR constitutes the main objective of this circular, and with the aim of clarifying and updating the regulation, some changes have been introduced in Circular 1/2013, among which the simplification of the reasons for declaring persons to the CIR can be mentioned, flexibilizing the assignment of values.

For all the above, this circular complies with the principles of necessity, effectiveness, proportionality, legal certainty, transparency, and efficiency regulated in Article 129 of Law 39/2015, of October 1, on the common administrative procedure of Public Administrations, insofar as it achieves the pursued ends without imposing unnecessary or accessory burdens, regulating coherently with the rest of the legal order only the essential aspects.

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

Single Provision.

The following modifications are introduced in Circular 1/2013, of May 24, on the Risk Information Central [1]:

1. In the first provision:

– Paragraph 1, letter a), is replaced by the following text:

“a) Credit entities (Official Credit Institute, banks, savings banks, and credit cooperatives), financial credit establishments, and branches in Spain of foreign credit entities.”

– Paragraph 3 is added, with the following content:

“3. For the purposes of this circular, the definition of observed agent shall be that established in Article 1.9 of Regulation (EU) No 867/2016 of the European Central Bank, of May 18, on the collection of granular credit and credit risk data (ECB/2016/13) [hereinafter, Regulation (EU) 867/2016]. To this effect, an observed agent shall be understood as:

a) The domestic part of the credit entity resident in a reporting Member State (businesses in the country of residence of its head office) and, where applicable, each of its branches abroad.

b) Branches in a reporting Member State of a credit entity that is not resident in one of those States.

A reporting Member State is understood to be that which reports to the European Central Bank in accordance with the provisions of Regulation (EU) 867/2016.”

2. In the second provision:

– Paragraph 1 bis) is added, with the following content:

“1 bis) Credit entities and branches in Spain of foreign credit entities shall also declare to the CIR:

a) Loans granted by the head office to their branches abroad, as well as those they have with the head office or other branches of the entity.

b) Loans not originated by the entity that are administered by any of its observed agents resident in a reporting Member State, provided that: i) at least one debtor is a legal person or an entity without legal personality, and ii) the creditor is a legal person other than an observed agent resident in a reporting Member State.

c) Fiduciary loans managed by observed agents, provided that at least one debtor is a legal person. For these purposes, fiduciary loans are those in which the observed agent acts in its own name but on behalf and at the risk of a third party other than an observed agent resident in a reporting Member State.”

– The first paragraph of paragraph 3 is replaced by the following text:

“3. Declared risks must be declared individually to the CIR, that is, operation by operation. To this end, reporting entities shall assign to each operation – or to each part into which it must be divided in accordance with the provisions of the third provision, paragraph 3 – a unique code, which must remain unchanged during its life. This code cannot be reused in the future to declare other operations. When, for internal management reasons, it is strictly necessary, the Bank of Spain may allow a change of code. In this case, entities shall adhere to the provisions of the eleventh provision, letter A).”

– Paragraph 3, letter a), is replaced by the following text:

“a) belong to the institutional sector of households or non-financial corporations, or non-profit institutions serving households, in which entities considered as the Spanish public sector do not participate, in their capital or via voting rights, in accordance with the provisions of Article 2 of Organic Law 2/2012, of April 27, on budget stability and financial sustainability;”

3. The third provision is replaced by the following text:

“Third Provision. Holders and other declared persons.

1. The persons declared to the CIR, with the clarifications indicated in the following paragraphs, are:

a) Holders of direct and indirect risks, regardless of their nature, legal form, institutional sector, or country of residence.

b) Persons related to the holders or to the operations in which they intervene.

The declaration of holders and other declared persons shall be carried out in accordance with the provisions of the fifth provision.

2. Risk holders, in general, are natural or legal persons. Nevertheless, entities without legal personality that have been assigned a tax identification number, such as securitization funds, parishes, and owners' communities, may also be declared holders. However, in the cases of other joint ownerships, temporary business unions, and civil companies without legal personality, the declared holders shall exclusively be the natural or legal persons that integrate them, who shall be declared as joint or solidary holders in accordance with the risk they assume in the operation.

When an operation has several holders, all must be declared to the CIR, indicating the nature of their intervention and, where applicable, whether they are joint or solidary holders.

In risks with general partnerships or limited partnerships, economic interest groups (EIGs), and European economic interest groups (EEIGs), in addition to the companies and groups, each of the general partners of the companies and the members of the groups are also declared as collective holders, in accordance with the provisions of the fifth provision, letter A), paragraph 2.b).

3. Reporting entities must assign to each holder exclusively the risk, direct or indirect, that corresponds to them from the operations in which they intervene. Consequently:

a) Subsidized operations and those with joint direct risk holders shall be divided and declared to the CIR with as many different operation codes as necessary to assign to each holder, or group of joint holders acting solidarily with each other, the amount corresponding to them.

b) Operations with several indirect risk holders shall be declared monthly, as many times as necessary, in module C.2, Dynamic Data of Indirect Risks, to attribute to each holder the amount corresponding to them.

4. Direct risk holders are:

a) In commercial credit with recourse, the assignor of the collection rights. Persons whose signature is committed on the instruments are indirect risk holders.

b) In commercial credit without recourse, the parties obligated to pay the collection rights.

c) In financial leases, the lessees, for the amounts they have committed to pay. Persons other than the lessees who have committed to acquire the assigned assets, in case the lessee does not do so, will be indirect risk holders for the amounts they have committed to pay.

d) In reverse repurchase loans, the assignors of the assets, regardless of the assigned asset.

e) In advances of pensions and salaries on behalf of Public Administrations, the persons to whom the funds are advanced.

f) In remaining loans, the parties obligated to pay the operations.

g) In debt securities, the issuers of the securities.

h) In financial guarantees, non-financial sureties and guarantees provided, and irrevocable documentary credits, the persons for whom the entity is liable before the beneficiaries of the operations.

i) In the rest of commitments, the persons who have the right to make dispositions.

j) In securities lending, the counterparties to whom the securities are lent.

k) In subsidized operations, the persons who subsidize the principal or interest, for the amount subsidized.

5. Direct and indirect risk holders shall be declared individually to the CIR, regardless of the amount of their risk in the reporting entity, except when their operations are not declared, in accordance with the provisions of the second provision, paragraph 3. Exceptionally, the effects in which their signature has been committed may be excluded from the declaration of indirect risk in the name of a holder, provided that their amount is less than 6,000 euros and they are part of a commercial credit operation with recourse.

The data of the holders, including their operations, whose accumulated risk in the reporting entity is less than 9,000 euros, are declared exclusively for the purpose provided for in Article 60, fourth paragraph, letter a), of Law 44/2002. For these purposes, accumulated risk is the amount of operations in which the person intervenes as a risk holder, direct or indirect, with the following clarifications:

a) The amounts of operations declared as financial guarantees instrumented as credit derivatives or operating leases for the lessee are not included in the calculation of accumulated risk.

b) The amount of direct risk assumed in operations is the sum of the amounts disbursed (principal, accrued interest and commissions, late payment interest, and exigible expenses) pending collection plus the available amounts (with immediate and conditional availability).

c) The amount of indirect risk that counts as accumulated risk is the maximum risk guaranteed by the holder of the operations in which they intervene exclusively as a guarantor or because they have committed their signature in commercial portfolio operations or financial instruments. When the holder has committed their signature on instruments that are part of commercial portfolio operations with recourse that are not declared to the CIR in accordance with the first paragraph of this paragraph, the risk not declared for this reason will not be counted for these purposes.

d) In syndicated loans and other loans in which several lenders participate jointly, each reporting entity shall count as accumulated risk exclusively the amount of risk it assumes from the operations. In the different modules, only the amount of risk the entity assumes in these loans shall be declared, without prejudice to the specific treatment for guarantees that they may have, which shall be declared in accordance with the provisions of the eighth provision, paragraphs 3, 8, and 11.

e) In financial guarantees and non-financial sureties and guarantees provided solidarily by several entities, each reporting entity shall count as accumulated risk the total amount of the operation.

f) In accumulated risk, in addition to the amounts directly assumed by the reporting entity with the holder, those transferred to third parties from operations in which it continues to manage against the holder, even if they have been written off from the asset, as well as those registered in the books of its instrumental companies resident in Spain, shall be included.

g) In the accumulated risk of entities that have acquired operations that continue to be declared to the CIR by another entity, the amounts they have assumed in said operations are also included, even if, in accordance with the provisions of the fourteenth provision, letter B), they do not declare them to the CIR as dynamic data of direct and indirect risks.

h) In accumulated risk, the amounts of the operations referred to in the second provision, paragraph 1 bis, shall not be included.

6. Notwithstanding the above, the Bank of Spain, the Deposit Guarantee Fund of Credit Entities, and the State Anonymous Company for Agricultural Surety (SAECA) will only declare operations whose holders belong to the institutional sectors of households, non-financial corporations, or non-profit institutions serving households whose accumulated risk is equal to or greater than 9,000 euros.

7. Persons who, not being holders of direct or indirect risks, must be declared to the CIR because they are related to the holders of the risks or to the operations in which they intervene are:

a) Creditors and administrators of loans.

b) Originators of loans in the case of securitizations and providers of real guarantees of loans that are legal persons.

c) Dominant, immediate, and ultimate entities of direct or indirect risk holders and providers of real guarantees.

d) Head offices of groups of related clients to which direct or indirect risk holders may belong.

e) Entities that, having the status of Spanish public sector, possess voting rights or participate in the capital of companies or non-profit institutions serving households that do not have the status of public sector.

f) Entities to which the declared branches belong whose registered office is in another country.

g) Instrumental companies resident in Spain integrated into the consolidatable group of the reporting entity, in which the declared operations are accounted for.

h) Assignees of operations transferred to third parties.

i) Entities acting as agents in syndicated loans.

j) Reporting entities to the CIR with which operations with linked codes are held.

k) Issuing entities of financial instruments temporarily acquired, received as guarantee for operations, or lent to third parties.

l) Management companies of investment funds that, being holders of risks or providers of real guarantees, reside in a reporting Member State.”

4. The fourth provision is replaced by the following text:

“Fourth Provision. Data modules and general provisions

1. Reporting entities shall be obliged to remit to the Bank of Spain the following data modules, insofar as they are applicable to them, in accordance with the provisions of this chapter:

The data modules are included as Annex 1, and the instructions for their preparation, in Annex 2. Additionally, the Bank of Spain may develop technical applications to facilitate the preparation of the different modules. In any case, the declaration of the dimensions of the CIR that coincide with those in Regulation (EU) 867/2016, in what is not expressly contemplated in this circular or in the technical applications, shall be made applying the criteria that, where applicable, the European Central Bank publishes.

When the day of the maximum deadline for submission of the modules is a holiday in Madrid, the data may be sent on the first business day in that locality following the maximum submission day.

Dynamic data (that is, those with monthly or quarterly frequency) shall correspond to the situation on the last day of the natural month or quarter to which the declaration refers.

Amounts shall be declared in units of euros. Amounts denominated in currencies other than the euro shall be declared by their equivalent in euros, using for basic data the exchange rate applicable on the date of formalization of the operations and for dynamic data the closing exchange rate corresponding to the date to which the data refer, which will coincide with the rate used for the preparation of financial statements.

2. The following reporting entities shall not declare the modules indicated below, even if they have data susceptible to declaration in them:

a) Branches in Spain of foreign credit entities whose registered office is located in another reporting Member State shall not declare modules D and H.

b) Branches in Spain of foreign credit entities whose registered office is located in another country of the European Economic Area that is not a reporting Member State shall not declare module D.5.

c) Mutual guarantee societies shall not declare modules B.3, C.3, C.4, D.6, E, F, G.2, G.3, and H.

d) The Bank of Spain, the Deposit Guarantee Fund of Credit Entities, reinsurance companies, and the State Anonymous Company for Agricultural Surety (SAECA) shall not declare modules B.3, C.3, C.4, D, E, F, G, and H.

e) The Asset Management Company for Assets from Banking Restructuring, SA (Sareb) and financial credit establishments shall not declare modules B.3, C.3, C.4, D.6, and H.

3. Without prejudice to what is provided in the previous paragraph 2, reporting entities other than credit entities and branches in Spain of foreign credit entities shall only send modules D, Data on Guarantees, corresponding to them in accordance with the provisions of the previous paragraph, when at the end of the month to which the data refer, the accumulated amount (disbursed plus available) of their operations with real guarantee is equal to or greater than 10 million euros. Nevertheless, the Bank of Spain may require entities that do not exceed the aforementioned threshold to declare all or some of modules D, with the periodicity and maximum submission deadline established generally. The requirement shall be made in writing, with a minimum advance of three months before the first submission, taking into account the particular circumstances of the entities, especially their risk profile and the amount represented by the activity to be reported in relation to their size.

Entities that have been declaring all or some of modules D to the CIR shall continue to remit them when the accumulated amount of their operations decreases