Communication of 22 June 2016 – Revision of the management, representation and transmission methods for supervisory reports

Communication of 22 June 2016 – Revision of the management, representation and transmission methods for supervisory reports.

Since 2014, European Union regulations (1) have introduced a harmonized system for statistical content supervisory reporting (so-called FINREP) or prudential content supervisory reporting (so-called COREP), defining their data representation model (so-called Data Point Model, DPM) and transmission format (XBRL) to national authorities (so-called primary reporting) and from these to the European Banking Authority (EBA) (so-called secondary reporting); the legislation also establishes methodologies for verifying the quality of information (so-called validation rules, VR). The XBRL transmission format is also used in the Single Supervisory Mechanism (SSM) for forwarding data to the European Central Bank (ECB).

In Italy, to maintain continuity with the proven pre-existing reporting system and contain transition costs, European rules were applied, through the exercise of an option provided for in Community legislation, regulating primary reporting with the Bank of Italy's Circulars on reporting, whose approach was kept firm on national data collection criteria (so-called "matrix system"). To this end, the provisions were restructured into a "harmonized" part, with content coinciding with European standards, and a "non-harmonized" part, including other supervisory information.

This choice, initially made for reasons of continuity and economy, is proving burdensome for intermediaries and for this Institute: i) the maintenance methods for harmonized schemes by Community institutions may leave insufficient time for the Bank of Italy and reporting entities to carry out their respective application and control activities with physiological levels of operational and legal risk; ii) banks are nevertheless required to refer to the European DPM and VR (2); iii) given the predominant adoption in Europe of harmonized schemes and formats for primary reporting, the Italian choice to base it on national rules determines additional costs for intermediaries belonging to cross-border banking groups (for example, Italian banks controlled by a European parent company prepare reports also according to the ITS to contribute to the consolidated reporting of their group parent).

To overcome these critical issues, new reporting modules for which the dissemination of a DPM by the EBA is foreseen will no longer be included in the Bank's Circulars; regarding these, therefore, intermediaries will carry out primary reporting using harmonized methods. These modules are summarized in the following tables together with their official (Table 1.1) or presumed (Table 1.2) entry into force date.

TABLE 1.1
Module Name | Regulatory References | Reporting Intermediaries | Reference Date for First Report | Deadline for First Report LCR (individual and consolidated) | Regulation (EU) 2016/322 (3) | Banks and banking groups | September 2016 | October 2016 Funding plans | EBA Guidelines 2014/04 | Significant banking groups | December 2016 | March 2017 Benchmarking | ITS ex art. 78.8 CRD | Banks | December 2016 | April 2017

(1) Regulation no. 680/2014, subsequently integrated and modified by Regulations no. 79, 227 and 1278 of 2015 and no. 101, 313, 322 and 428 of 2016. The primary regulatory basis is EU Regulation 575/2013 "CRR" (see articles 99.5.4, 99.6.4, 101.4.3, 394.4.3, 415.3.4 and 430.2.3). (2) For example, regarding the criteria for filling in the various information. (3) OJEU L 64-10/3/2016.

TABLE 1.2
Module Name | Reference | Reporting Intermediaries | Presumed Reference Date for First Report | Presumed Deadline for First Report Prudent valuation | Regulation (EU) 2016/101 (4) | Banks, banking groups, SIVs, SIV groups | June 2017 | August 2017 Resolution plans | ITS ex art. 11.3 BRRD; EBA consultation 7/7/2015 | Banks | March 2018 | May 2018 New FINREP for IFRS 9 (5) | | Banks, banking groups, listed SIV groups, financial groups | March 2018 | May 2018

Simultaneously, the harmonized reporting provisions present in Circulars no. 115, 272, 286 and 154 will be gradually repealed, making way, also for primary reporting, for the reporting of information according to European provisions (see Table 2 for the presumed dates of transition to the new system). During the transition to the new primary reporting method, any modifications made to these harmonized reporting provisions will be managed using the matrix format; furthermore, collections already transmitted in this format will remain active for a considerable period of time after the migration, to handle any corrections by reporting entities.

TABLE 2
Module EBA/ECB | Current Information Base | Reporting Intermediaries | Presumed Reference Date for First Report DPM/XBRL | Presumed Deadline for First Report DPM/XBRL ae_ind – Asset Encumbrance only | EY | Banks, SIVs | September 2017 | November 2017 ae_con – Asset Encumbrance cons | E1 | Banking groups, SIV groups | September 2017 | November 2017 corep_alm_ind - Additional Liquidity Monitoring (6) – COREP only | YT | Banks | December 2017 | January 2018 corep_alm_con - Additional Liquidity Monitoring (7) – COREP cons (prudential scope) | 1T | Banking groups | December 2017 | January 2018 corep_lcr_ind – Liquidity only | LY | SIVs | December 2017 | January 2018

(4) OJEU L 21-28/1/2016.
(5) This will entail the suppression of information bases M1, 3F, W1 and WN and the corresponding parts of Circulars 115, 272 and 154.
(6) RTS (EU) 2016/313 (OJEU L 60-5/3/2016).
(7) RTS (EU) 2016/313 (OJEU L 60-5/3/2016).

Module EBA/ECB | Current Information Base | Reporting Intermediaries | Presumed Reference Date for First Report DPM/XBRL | Presumed Deadline for First Report DPM/XBRL corep_lcr_con – Liquidity cons | L1 | SIV groups | December 2017 | January 2018 corep_nsfr_ind – NSFR indicator only | Y | Banks, SIVs | March 2018 | May 2018 corep_nsfr_con - NSFR indicator cons | 1 | Banking groups, SIV groups | March 2018 | May 2018 corep_ind – Prudential only (8) | Y-YF | Banks, SIVs, financial intermediaries | June 2018 | August 2018 corep_con – Prudential cons (9) | 1-1F | Banking groups, SIV groups, financial groups | June 2018 | August 2018 corep_le_ind – Large Exposure only | Y-YF | Banks, SIVs, financial intermediaries | June 2018 | August 2018 corep_le_con – Large Exposure cons | 1-1F | Banking groups, SIV groups, financial groups | June 2018 | August 2018

The proposed planning takes into account the analysis conducted by the PUMA2 interbank group regarding the time necessary for carrying out software functionality tests and for data collection and management.

Also in the new reporting architecture, the Bank of Italy will continue to assist intermediaries in the correct completion of supervisory reports, without prejudice, where necessary, to the need for intermediaries and/or the Bank of Italy itself to involve Community institutions.

(8) Including financial leverage.
(9) Including financial leverage.