Regulatory Alerts2011-03-16 | CBFA 2011_11Added · Updated
CBFA Communication 2011_11: Periodic Reporting Scheme
The CBFA clarifies the accounting treatment for operations involving deposit, financial instrument, and life insurance protection funds. Contributions paid to these funds must be recorded under 'Other administrative expenses' (item 40.7201), while reimbursements are recorded under 'Other operating income' (item 41.400). Any receivables or payables related to these funds are to be reported under 'Other receivables' (item 70.030) or 'Other payables' (item 20.400). These instructions apply to entities subject to the protection fund regime, including stockbroking companies, portfolio management companies, and OPC management companies.
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CBFA Communication 2011_11 of March 16, 2011 Periodic Reporting Scheme
Scope: Stockbroking companies, portfolio management and investment advisory companies, branches of investment firms, OPC management companies, and branches of OPC management companies.
Summary/Objectives: This communication aims to clarify the accounting treatment of operations involving deposit protection systems, financial instruments, and life insurance.
Dear Madam, Dear Sir,
Following the new framework for deposit protection systems, financial instruments, and life insurance (Program Law of December 23, 2009 amending the Royal Decree of November 14, 2008), we wish to specify and clarify the accounting treatment of transactions carried out with the Deposit and Financial Instruments Protection Fund as well as the Special Deposit Protection Fund and Life Insurance Protection Fund. The following instructions apply provided that the institutions are subject to the protection system regime.
Firstly, contributions paid within the framework of deposit protection systems (both vis- à-vis the Deposit and Financial Instruments Protection Fund and the Special Deposit Protection Fund and Life Insurance Protection Fund) are recorded under 'Other administrative expenses' in the income statement (i.e., item 40.7201). Reimbursements of contributions paid by the institutions within this same framework are included in the 'Other operating income' item (i.e., item 41.400).
Regarding any receivables or payables towards the Deposit and Financial Instruments Protection Fund or the Special Deposit Protection Fund and Life Insurance Protection Fund, these will be recorded either under item 70.030 'Other receivables' (an item detailing item 10.400 of the asset side) or under item 20.400 'Other payables'.
A copy of this communication is sent to the auditor(s), approved reviewer(s) of your institution.
We ask you to accept, Madam, Sir, the expression of our distinguished consideration.
The President, Jean-Paul SERVAIS
1 The item numbers refer to the reporting defined by the CBFA circular of April 14, 2010 (CBFA_2010_10).
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