Circular 1/2020 of 28 January from the Bank of Spain, amending Circular 1/2013 of 24 May on the Risk Information Central

OFFICIAL STATE GAZETTE
No. 31 Wednesday, 5 February 2020 Sec. I. Page 10819
I. GENERAL PROVISIONS
BANK OF SPAIN
1653 Circular 1/2020, of 28 January, from the Bank of Spain, amending Circular 1/2013, of 24 May, from the Bank of Spain, on the Risk Information Central.

On 15 March, Law 5/2019 of 15 March, regulating real estate credit contracts, entered into force, transposing into Spanish law Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property. The aforementioned law modifies, in its final provision seventh, Law 44/2002 of 22 November, on Measures for the Reform of the Financial System, with the aim of granting access to the Risk Information Central (CIR) of the Bank of Spain to all real estate credit lenders. As a result of that modification, the perimeter of reporting entities is expanded to include real estate lenders and credit institutions operating under the freedom to provide services regime, and real estate credit intermediaries are enabled to access reports on the risks of natural and legal persons registered in the CIR on equal terms with reporting entities. Regarding information on declared data, the Bank of Spain is empowered to temporarily deny a reporting entity access to CIR data when it fails to comply with its information obligations with the necessary quality and accuracy. Additionally, Royal Decree 309/2019 of 26 April, which partially develops Law 5/2019 of 15 March, regulating real estate credit contracts, and adopts other measures in the financial field, in its additional provision third, empowers the Bank of Spain to establish technical regulations governing the form of access to the CIR, which must be public, non-discriminatory, and proportionate.

The main objective of this circular is to adapt Circular 1/2013 of 24 May 2013 of the Bank of Spain, on the Risk Information Central and amending Circular No. 4/2004 of 22 December of the Bank of Spain, on rules for public and reserved financial information and models of financial statements for credit institutions, to what is established by Law 5/2019. Additionally, having passed a certain period since the entry into force of Regulation (EU) No 867/2016 of the European Central Bank of 18 May on the collection of granular credit and credit risk data (ECB/2016/13) (hereinafter, Regulation (EU) 867/2016), and of the modification of Circular 1/2013 to collect through the CIR the information that the Bank of Spain must request from reporting entities to communicate to the European Central Bank in accordance with the provisions of the aforementioned regulation, it has been considered necessary to introduce certain modifications to Circular 1/2013 to improve the coherence of the information collected through the CIR compared to that established under the framework of Regulation (EU) 867/2016.

Finally, with the aim of updating the rule, some changes have been introduced in Circular 1/2013 to clarify the information to be submitted regarding certain operations, reorganize the way information is presented in some modules, and introduce some additional dimensions. Furthermore, some clarifications are introduced regarding the submission of claims to the CIR.

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 1 October, on the common administrative procedure of Public Administrations, since it achieves the pursued ends without imposing unnecessary or ancillary burdens, regulating in a coherent manner with the rest of the legal system exclusively the essential aspects.

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

Single Rule. Modification of Circular 1/2013 of 24 May of the Bank of Spain, on the Risk Information Central.

The following modifications are introduced in Circular 1/2013 of 24 May:

a) In the first rule, on "Reporting entities", paragraphs 1 and 2 are modified, which shall read as follows:

"1. The obligation to report to the CIR public service extends to the following entities and to real estate lenders (hereinafter, reporting entities):
a) Credit institutions (Official Credit Institute, banks, savings banks, and credit cooperatives), financial credit establishments, and branches in Spain of foreign credit institutions. b) Mutual guarantee societies and reinsurance societies. c) Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria, SA (Sareb). d) Bank of Spain. e) Deposit Guarantee Fund of Credit Institutions. f) Sociedad Anónima Estatal de Caución Agraria (SAECA). g) Credit institutions operating under the freedom to provide services regime. h) Real estate lenders, referred to in Law 5/2019 of 15 March, regulating real estate credit contracts, not included in the preceding categories.

2. The obligation set out in paragraph 1 extends, in the case of Spanish entities, to their entire business, including that carried out by their branches abroad, and to that of instrumental companies integrated in their consolidatable group when they are residents in Spain, and their business, as an extension of the group's activity.

Branches in Spain of foreign credit institutions shall only report to the CIR the operations of their offices in Spain.

Credit institutions operating under the freedom to provide services regime shall only report to the CIR the operations carried out with residents in Spain.

When reporting entities cannot individually provide all or part of the data that must be reported for operations registered in a branch abroad due to being located in a country whose legislation prevents it, they must send a sworn declaration to the Bank of Spain sufficiently justifying this circumstance, specifically detailing which data the legal impossibility of transmission to the CIR affects and the legislation on which it is based, a copy of which shall be sent together with the aforementioned sworn declaration. The sworn declaration must be updated at least every two years if the legal impediment to provide data individually persists. If the cause preventing the sending of data ceases, reporting entities must communicate this to the Bank of Spain and, from that moment on, begin reporting them individually."

cve: BOE-A-2020-1653
Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE
No. 31 Wednesday, 5 February 2020 Sec. I. Page 10820

b) In the third rule, on "Holders and other reportable persons", paragraphs 3, 5, and 6 are modified, which shall read as follows:

"3. Reporting entities must assign to each holder exclusively the direct or indirect risk corresponding to them in the operations in which they participate. Consequently:
a) Subsidized operations and those with joint direct risk holders shall be divided and reported to the CIR with as many different operation codes as necessary to assign to each holder, or group of joint holders acting solidarily among themselves, the amount corresponding to them. b) Operations with multiple indirect risk holders shall be reported monthly, as many times as necessary, in module C.2, Dynamic data on indirect risks, to attribute to each holder the amount corresponding to them.

The provisions of this paragraph do not apply to credit institutions operating under the freedom to provide services regime nor to real estate lenders, whose reporting shall comply with the criteria established for the declaration of module I, Data on the activity of credit institutions operating under the freedom to provide services regime and real estate lenders."

"5. Risk holders, direct and indirect, shall be reported individually to the CIR, regardless of the amount of their risk in the reporting entity, except when their operations are not reportable, as provided in the second rule, paragraph 3. Exceptionally, indirect risk effects on which their signature has been pledged may be excluded from the indirect risk declaration in the name of a holder, provided their amount is less than 6,000 euros and they form part of a commercial credit operation with recourse. Likewise, credit institutions operating under the freedom to provide services regime and real estate lenders shall not report to indirect risk holders who participate in the operation as a counterparty to a purchased credit derivative, as a guarantor without the holder's knowledge, or as a third party committed to paying amounts in a financial leasing operation.

Data on holders, including their operations, whose accumulated risk in the reporting entity is less than 9,000 euros shall be reported exclusively for the purpose provided 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 participates as a risk holder, direct or indirect, with the following clarifications:
a) The amounts of operations declared as the following are not included in the calculation of accumulated risk:

1. Financial guarantees instrumented as credit derivatives or credit risk commitments of financial leases for the lessor.
2. Other credit risk commitments instrumented as credit risk commitments of operational leases for the lessor.
3. Other leases, according to the definition of other leases established in the "Product Type" dimension of module B.2 of Annex 2.
   b) The amount of direct risk assumed in operations is the sum of the amounts disbursed (principal, accrued interest and commissions, default interest, and enforceable expenses) pending collection plus available amounts (immediately available and conditional). 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 participate exclusively as a guarantor or because they have pledged their signature in commercial portfolio or financial instrument operations. When the holder has pledged their signature on instruments that form part of commercial portfolio operations with recourse that are not reported to the CIR in accordance with the provisions of the first paragraph of this paragraph, the risk not declared for this reason shall not be counted for these purposes. d) In syndicated loans and other loans in which multiple 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 reported, without prejudice to the specific treatment for guarantees, if any, which shall be reported in accordance with the eighth rule, paragraphs 3, 8, and 11. e) In financial guarantees and non-financial sureties and bonds granted solidarily by multiple entities, each reporting entity shall count as accumulated risk the total amount of the operation. f) In the accumulated risk, in addition to the amounts directly assumed by the reporting entity with the holder, those transferred to third parties of operations in which it maintains management against the holder, even if they have been written off from the asset, shall be included, as well as those registered in the books of its instrumental companies resident in Spain. g) In the accumulated risk of entities that have acquired operations that continue to be reported 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 rule, letter B), they do not report them to the CIR as dynamic data on direct and indirect risks.

The amounts of operations referred to in the second rule, paragraph 1 bis, shall not be included in the accumulated risk."

"6. Notwithstanding the above, the Bank of Spain, the Deposit Guarantee Fund of Credit Institutions, the Sociedad Anónima Estatal de Caución Agraria (SAECA), credit institutions operating under the freedom to provide services regime, and real estate lenders shall only report 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."

cve: BOE-A-2020-1653
Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE
No. 31 Wednesday, 5 February 2020 Sec. I. Page 10821

c) In the fourth rule, on "Data modules and general provisions", paragraphs 1 and 2 are modified, which shall read as follows:

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

Module	Name	Frequency	Maximum Submission Deadline
A	Data on persons and code request.
A.1	Data identifying persons.	Non-periodic.	5th day of the following month.
A.2	Request for identification code for persons not resident in Spain.	Non-periodic.
B	Basic data on operations and relations with persons.
B.1	Basic data linking persons with operations.	Non-periodic.	5th day of the following month.
B.2	Basic data on operations.	Non-periodic.	5th day of the following month.
B.3	Complementary basic data on loans to legal persons.	Non-periodic.	5th day of the following month.
C	Dynamic data on operations.
C.1	Dynamic data on direct risks.	Monthly.	10th day of the following month.
C.2	Dynamic data on indirect risks.	Monthly.	10th day of the following month.
C.3	Dynamic financial data on loans to legal persons.	Monthly.	10th day of the following month.
C.4	Data on loans to legal persons regarding joint liabilities.	Monthly.	10th day of the following month.
D	Data on guarantees.
D.1	Basic data linking operations with received guarantees.	Non-periodic.	10th day of the following month.
D.1.1	Basic data on received guarantees.	Non-periodic.	10th day of the following month.
D.2	Basic data on immovable property received as collateral.	Non-periodic.	10th day of the following month.
D.3	Basic data on financial assets received as collateral.	Non-periodic.	10th day of the following month.
D.4	Dynamic data linking operations with received guarantees.	Monthly.	10th day of the following month.
D.5	Dynamic data on buildings under construction and real estate developments received as collateral.	Quarterly.	10th day of the following month.
E	Data on loan interest rates.	Non-periodic.	10th day of the following month.
F	Data on transfers and synthetic securitizations of financial assets.	Non-periodic.	10th day of the following month.
G	Code linking.
G.1	Basic data linking codes.	Non-periodic.	10th day of the following month.
G.2	Basic data on operations to be communicated to other entities.	Non-periodic.	5th day of the following month.
G.3	Dynamic data on operations to be communicated to other entities.	Monthly.	5th day of the following month.
H	Complementary prudential information.
H.1	Accounting data on loans to legal persons.	Quarterly.	15th day of the second following month.
H.2	Data on the risk of holders of loans that are legal persons.	Quarterly.	10th day of the following month.
H.3	Data on the default status of risk holders of loans that are legal persons.	Monthly.	10th day of the following month.
I	Data on the activity of credit institutions operating under the freedom to provide services regime and real estate lenders.	Monthly.	10th day of the following month.

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 CIR dimensions that coincide with those in Regulation (EU) 867/2016, in matters not expressly contemplated in this circular or in the technical applications, shall be made applying the criteria that, if any, the European Central Bank publishes.

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

Dynamic data (i.e., 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 reported in euros. Amounts denominated in currencies other than the euro shall be reported by their euro equivalent, 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 shall coincide with the rate used for the preparation of financial statements.

2. The following reporting entities shall not have to report the modules indicated below, even if they have data susceptible to reporting in them:
   a) Spanish credit institutions and branches in Spain of foreign credit institutions whose registered office is not located in another country of the European Economic Area shall not report module I. b) Branches in Spain of foreign credit institutions whose registered office is located in another reporting Member State shall not report modules D, H, and I. However, the Bank of Spain may require the submission of modules D and H when the information from these modules is necessary to comply with the obligations established by Regulation (EU) 867/2016. In this case, the information to be sent regarding module D shall be the same as that required for branches in Spain of foreign credit institutions whose registered office is located in another country of the European Economic Area that is not a reporting Member State. The requirement shall be made in writing, with a minimum advance of three months before the first submission. c) Branches in Spain of foreign credit institutions whose registered office is located in another country of the European Economic Area that is not a reporting Member State shall not report module D.3, D.5, and I. d) Mutual guarantee societies shall not report modules B.3, C.3, C.4, E, F, G.2, G.3, H, and I. e) The Bank of Spain, the Deposit Guarantee Fund of Credit Institutions, reinsurance societies, and the Sociedad Anónima Estatal de Caución Agraria (SAECA) shall not report modules B.3, C.3, C.4, D, E, F, G, H, and I. f) Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria, SA (Sareb) and financial credit establishments shall not report modules B.3, C.3, C.4, H, and I. g) Credit institutions operating under the freedom to provide services regime and real estate lenders shall not report modules B, C, D, E, F, G, and H."

cve: BOE-A-2020-1653
Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE
No. 31 Wednesday, 5 February 2020 Sec. I. Page 10822

d) In the fifth rule, on "Data on persons and code request", paragraph 3 is modified and paragraph 4 is added, which shall read as follows:

"3. When the reporting entity is aware that the declared person has another or other personal identification codes by which they may be declared to the Bank of Spain, it shall use the code valid on the date of their declaration. Additionally, it shall inform of the previous codes that the person may have of which it has documentary evidence.

4. Credit institutions operating under the freedom to provide services regime and real estate lenders shall not declare parts 3 and 4 of this module."

e) In the sixth rule, on "Basic data on operations and relations with persons", the second paragraph of paragraph 7 is modified, which shall read as follows:

"If, due to collection management, there is a possibility of having to redeclare dynamic data of a cancelled operation, the reporting entity shall defer the cancellation of the operation in the CIR until the moment when, in accordance with payment services regulations, such circumstance is no longer possible. The cancellation of loans with failed amounts registered in which any of the holders is a legal person and that have been fully transferred without retaining management by the reporting entity, or have been forgiven or written off due to prescription, shall also be deferred. In these cases, the cancellation shall be deferred until the end of the quarter in which the transfer, forgiveness, or prescription occurred. In any case, the cancellation of operations may also be deferred whenever the entity considers that operational reasons so advise."

f) The eighth rule, on "Data on received guarantees", is replaced by the following:

"A) Basic data linking operations with received guarantees:

1. Module D.1, Basic data linking operations with received guarantees, shall be sent to link operations reported to the CIR with assets received as collateral and with financial guarantees received, provided the latter secure loans to legal persons. Financial leases shall also be linked in this module with the assets transferred."

cve: BOE-A-2020-1653
Verifiable at https://www.boe.es