Circulaire BCL 2013/233 of 20 June 2013 — Security-by-Security Reporting: Holding of Securities for Non-Resident Third Parties

Luxembourg, 20 June 2013
To all credit institutions
CIRCULAR BCL 2013/233
Security-by-Security Reporting
Holding of Securities for Non-Resident Third Parties

Dear Sirs, Madams,

On 17 October 2012, the Governing Council of the European Central Bank (ECB) adopted Regulation ECB/2012/24 concerning statistics on securities holdings. This regulation complements the existing framework for statistical activities related to the collection of information on securities issuances and holdings.

The main innovation introduced by Regulation ECB/2012/24 concerns the introduction of a census of information, on a security-by-security basis, of securities held by credit institutions for their non-resident clients in Luxembourg.

The aforementioned regulation provides for the collection of data, security by security, relating to end-of-quarter or end-of-month positions as well as those relating to financial transactions during the reference month or quarter, or the census of statistical information necessary for the establishment of data relating to such transactions. In this context, the Banque Centrale du Luxembourg (BCL) has adopted the approach already implemented for the collection of information relating to holdings for own account, namely the collection of monthly balances which allow the BCL to derive valuation effects as well as financial transactions on securities.

Furthermore, the aforementioned regulation allows the BCL to partially or fully exempt credit institutions from reporting obligations if they hold a total amount of securities less than 10 billion euros for all their non-resident clients. The BCL has decided to apply this principle and exempt credit institutions in accordance with the aforementioned provisions. It is important to mention, however, that exempted credit institutions will be required to report holdings held for non-resident clients on an annual basis and in an aggregated manner.

It is the responsibility of each credit institution to submit monthly reporting as soon as the total amount of securities held for non-resident clients exceeds the amount of 10 billion euros for three consecutive months.

1 Monthly Reporting

From the reference period of December 2013, credit institutions subject to the collection must submit the report "Credit Institutions Security Reporting - Information on Holdings Held for Non-Resident Third Parties – BNR" with a monthly frequency. The transmission deadline is 25 working days after the end of the reference period.

The instructions regarding the transmission of monthly data are detailed in the following documents:

• "Credit Institutions Security Reporting - Information on Holdings Held for Non-Resident Third Parties – BNR"
• "Manual for Electronic Transmission of Security-by-Security Reporting by Credit Institutions - Information on Holdings Held for Non-Resident Clients - BNR"
• "Collection of Verification Rules for Security-by-Security Reporting by Credit Institutions - Information on Holdings Held for Non-Resident Clients - BNR"

These documents are available on the BCL website and can therefore be downloaded from the link:
http://www.bcl.lu/fr/reporting/Etablissements_de_credit/Reporting_TPT/index.html

2 Annual Reporting

Credit institutions benefiting from an exemption for monthly reporting must report the aggregated amounts of holdings held for non-resident third parties on an annual basis.

The transmission of this information must be carried out using an MS Excel file which can be downloaded from the BCL website via the link:
http://www.bcl.lu/fr/reporting/Etablissements_de_credit/Lettres_circulaires/index.html

Regarding the records to be entered in this file, we draw the attention of declarants to the following elements:

• The securities positions to be reported by declarants refer to the accounting situation at the end of December.
• Declarants must report debt and equity securities held for non-resident clients. Non-resident clients must be identified with the country code of their country of residence and the BCL sector code used in the context of statistical reporting.
• Declarants must report aggregated information by:
  • type of security
    The codes provided in the document "Security-by-Security Reporting by Credit Institutions - Balance Sheet Data - BBS" must be used.
  • country code of the issuer and holder of the security
    ISO country codes must be used. However, the use of aggregation codes X1, X2, X3, X3, X4, X5 and X6 used by the BCL as well as the unallocated code XX is prohibited.
  • sector code of the issuer and holder of the security
    The BCL sector codes provided in the document "Definitions and Preliminary Comments for Statistical Reporting by Credit Institutions" must be used. However, the use of the unallocated code 90000 is prohibited.
  • amount reported
    The unit of account for the transmission of the requested information is the currency of the balance sheet of the reporting institution.

Regarding the submission of the file to the BCL, it is necessary to submit:

• the duly completed file to the BCL no later than 2 months after the end of the reference period
• the file to the BCL using the secure electronic transmission made available by Sofie (OTX channel) or E-file (Various Correspondences).

In this context, it is necessary to strictly respect the structure of the OTXREPB0nnn-TPTBNR_20131231_B0nnn_yyyymmdd_001.xls file name, where nnn corresponds to the identification number assigned by the CSSF to the reporting credit institution.

3 Entities Subject to Reporting

Since some credit institutions are exempt from submitting the report "Credit Institutions Security Reporting - Information on Holdings Held for Non-Resident Third Parties – BNR", the BCL will inform all credit institutions required to submit this report to the BCL by separate letter.

The selection of credit institutions subject to monthly reporting will be subject to annual revision based on information from the annual reporting.

However, in order to be able to select the credit institutions subject to monthly reporting during 2014, all credit institutions must transmit the holdings held for non-resident clients as of June 2013. This information must reach the BCL by 31 July at the latest, using the aforementioned Excel file.

Based on this situation, the BCL will designate the declarants subject to monthly collection, all others being subject to annual collection.

The following table presents, in a synthetic manner, the new obligations:

Situation as of 30 June 2013	Situation as of 31 December of each year	Situation at end of month
All credit institutions	Via Excel file	Via Excel file
Holdings less than 10 billion euros (or equivalent)	Via Excel file	Via XML report
Holdings greater than or equal to 10 billion euros (or equivalent)	Via Excel file	Via XML report

4 Quality of Transmitted Data

It is important to emphasize the quality of data transmitted to the BCL and the necessity to submit this data to the verification rules detailed in the technical documentation before transmission. Only rigorous control, performed as soon as the data is produced, can meet both quality requirements and imposed deadlines. This point is all the more important as the data thus collected is controlled by the ECB services before being aggregated with data from other Member States. Any error or negligence would have damaging repercussions on the reputation of the entire Luxembourgish financial community.

5 Respect of Reporting Deadlines

The BCL will establish and publish on its website a table listing the precise dates by which quarterly statistical tables must be submitted.

It is reminded to credit institutions that the BCL must transmit monthly statistical reports to the European Central Bank within a period of 70 calendar days following the period to which they relate. It is therefore essential that credit institutions strictly respect the delivery deadlines defined in this circular so that the BCL can meet its commitments within the ESCB.

6 Implementation of the New Collection

The communication of this information is mandatory from the deadline of December 2013.

Thus, the first declaration in application of the statistical reporting obligations begins with the data of December 2013 according to the following schedule:

• the first monthly data relating to end-of-December 2013 positions must be transmitted to the BCL no later than 5 February 2014.
• the annual data relating to end-of-December 2013 positions must be transmitted by 27 February 2014 at the latest.

The BCL will establish and publish on its website a table listing the deadlines by which the two reports must be submitted.

For all information concerning the application of this circular, please contact the External Statistics section directly (email reporting.bop@bcl.lu).

Please accept, Sirs, Madams, the assurance of our very distinguished sentiments.

BANQUE CENTRALE DU LUXEMBOURG
The Management

Pierre Beck
Director
Serge Kolb
Director
Gaston Reinesch
General Director