Regulation on Periodic Regulatory Consolidated Reporting

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Date of creation: 2022-12-28

Approved

by the Resolution of the Board of Directors of the National Bank of the Kyrgyz Republic of June 28, 2019 No. 2019-P-12/34-4-(NPA)

REGULATION

"On Periodic Regulatory Consolidated Reporting"

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of March 23, 2022 No. 2022-P-12/17-4-(NPA), December 14, 2022 No. 2022-P-12/78-9-(NPA))

CHAPTER 1. General Provisions

1. This Regulation defines the forms, procedures for preparation and submission of periodic regulatory consolidated reporting (hereinafter referred to as PRCR) to the National Bank of the Kyrgyz Republic (hereinafter referred to as the National Bank).

2. The basic concepts used in this Regulation are defined in the Regulation "On Consolidated Supervision".

3. PRCR is prepared to determine the nature of the influence of one participant of a banking group on the financial condition of the banking group, their investments in the capital of other legal entities, operations and transactions with these legal entities, the ability to manage their activities, as well as for the purpose of determining the aggregate volume of risks and own funds (net assets) of the banking group.

PRCR represents reporting on the activities of a banking group, prepared in a prescribed form for a specific period for the purpose of analysis and assessment of:

a) the financial condition of the banking group; b) the risks of the banking group.

4. PRCR is submitted to the National Bank by banks at the head of a banking group, a banking holding company, or a parent/managing company, which are part of a group with Structure No. 1, including participants of the banking group whose share of assets constitutes 5 percent or more of the assets of the parent company.

Exceptions regarding the submission of PRCR apply to state bodies of the Kyrgyz Republic participating in commercial banks with 100% state share, including the National Bank.

Within the framework of this Regulation, the aforementioned legal entities are hereinafter referred to as the parent/managing company.

5. PRCR is prepared based on data from accounting and off-system accounting of the parent/managing company and participants of the banking group.

Banks at the head of a banking group, or a banking holding company, including a parent/managing company-resident of the Kyrgyz Republic, must develop rules and procedures for the preparation of PRCR.

CHAPTER 2. Procedure for Preparation and Content of PRCR

6. For the purpose of preparing PRCR, participants of the banking group are obliged to submit to the parent/managing company reporting on their activities and information necessary for preparing PRCR forms within the deadlines established by the parent/managing company.

7. Consolidated reporting of a banking group is prepared based on reporting and information on the activities of participants as of the same reporting date.

Based on the reporting and information on the activities of participants of the banking group, the parent/managing company calculates the values of economic standards and requirements mandatory for compliance by the banking group. The calculation of economic standards for the banking group is carried out in the manner established by the Regulation "On Consolidated Supervision".

8. When preparing Section 1 "Regulatory Report on the Financial Condition of the Banking Group" according to the form of Appendix 2 to this Regulation, assets and liabilities of the balance sheets of the parent/managing company and participants of the banking group are summed up item by item. To the reporting items of the parent/managing company, fully corresponding items of each participant of the banking group are added, in whose capital the share of ownership of the parent/managing company constitutes 50 percent or more. If the share of ownership of the parent/managing company in the capital of a participant of the banking group constitutes more than 5, but not more than 50 percent, then the financial data of such a participant are included item by item in proportion directly proportional to the share of participation of the parent/managing company in the capital of the participant.

Data of a participant of the banking group are not included in PRCR if the value of the balance sheet currency of this participant constitutes less than 5 percent of the value of the balance sheet currency of the parent/managing company.

At the same time:

a) investments of the parent/managing company in the charter capitals of participants of the banking group and, accordingly, the charter capitals of participants of the banking group in the part belonging to the parent/managing company are excluded, as well as investments of participants in the charter capital of the parent/managing company; b) indicators reflecting the difference in the cost of acquiring capital shares (goodwill) are included in assets and/or liabilities. These indicators are calculated at the time of acquisition by the banking group of shares (stakes) of a participant of the banking group and represent the difference between the cost of shares (stakes) reflected in the balance sheet reports of the parent/managing company and participants of the banking group owning these shares (stakes), and the value of own funds (net assets) of the participant of the banking group multiplied by the share of control of the parent/managing company in the capital of the participant of the banking group.

A negative value of the specified difference is reflected in liabilities under the item "Difference in the cost of acquiring capital shares (goodwill)".

A positive value is reflected in assets under the item "Difference in the cost of acquiring capital shares (goodwill)".

A negative value of the difference in the cost of acquiring capital shares (goodwill) represents a reserve of the banking group, which can be directed to reduce group losses, in an amount not exceeding the sum of losses of a participant of the banking group, for which this difference was determined.

A positive value of the difference in the cost of acquiring capital shares is subject to amortization over the useful life and from the date of acquisition by the parent/managing company of shares (stakes) of a participant of the banking group in equal parts quarterly to group expenses. At the same time, the value of the item "Difference in the cost of acquiring capital shares (goodwill)" of assets of the consolidated balance sheet report is reduced quarterly by the amount of amortization.

Accounting for negative and positive values of the difference in the cost of acquiring capital shares (goodwill) is carried out for each participant of the banking group separately.

Positive and negative values of these indicators are not offset and are reflected under the corresponding items of assets and liabilities separately.

9. When preparing the consolidated income statement according to the form of Appendix 2 to this Regulation, all income and expenses of the parent/managing company and participants of the banking group are summed up item by item.

At the same time:

a) income and expenses from mutual operations of participants of the banking group (consolidated) with the parent/managing company and other participants are excluded; b) dividends received by participants of the banking group (consolidated) from other participants of the banking group (consolidated) are excluded. Only dividends received from a legal entity not included in the banking group are reflected in the consolidated income statement.

Income and expenses of participants of non-bank credit organizations are included in the corresponding items of the consolidated income statement.

In the event that a banking group acquired shares (stakes) of a consolidated participant during the reporting period, the financial results obtained by the consolidated participant are included in the financial results of the banking group only for the period from the moment of acquisition of shares (stakes) of this participant by the group (first inclusion in the consolidated reporting).

10. In the event that the parent/managing company or a participant of the banking group transferred funds during the reporting period, and these funds were not received by another participant of the banking group during the reporting period, such funds should be considered received in the reporting period.

11. Within the framework of filling out Section 8 "Information on the Activities of Participants of the Banking Group" (Appendix 2), the share of participation of the parent/managing company in the capital of each participant is determined as the sum of the following values:

a) the specific weight of shares (stakes) of the participant owned by the parent/managing company; b) the specific weight of shares (stakes) of other group participants in the capital of the participant, multiplied by the specific weight of shares (stakes) of the parent/managing company in the capital of these participants.

In this section of PRCR, a list and information on the activities of participants of the banking group (name of the participant, its actual location and place of establishment) are also provided, indicating the specific weight of assets and income of each participant in the assets and income of the banking group.

12. A bank at the head of a banking group, or a banking holding company, including a parent/managing company, submits to the National Bank information on the structure of the banking group according to the form specified in Appendix 3 to this Regulation. The structure of the banking group must reflect the relationships between the parent/managing company and participants of the banking group, and their affiliated persons, as well as the relationships between participants of the banking group among themselves, with mandatory indication of belonging to a particular country (resident/non-resident of the Kyrgyz Republic).

If there is a possibility of another person exerting significant influence on decisions made by the management bodies of a participant of the banking group, the parent/managing company must notify the National Bank of this fact and reflect such influence in the scheme with a dashed line.

In the event of changes in the information specified in the previously submitted information, the updated list of persons capable of influencing decisions made by the management bodies of participants of the banking group and affiliated persons is submitted according to the form specified in Appendix 3 to this Regulation within a period not later than 30 days from the moment of change of the corresponding information.

13. The composition of reporting in summary form, brief content, and deadlines for submission of reports are provided in Appendix 1 to this Regulation.

14. PRCR consists of 14 sections.

Chapter 3 Periodicity and Procedure for Submission of PRCR

15. In a bank at the head of a banking group or a banking holding company, including a parent/managing company, an employee responsible for the completeness of content, submission deadlines, and correct filling of PRCR must be appointed. This employee is also responsible for interaction with the National Bank on all issues concerning the information contained in PRCR.

16. PRCR is submitted to the National Bank according to the forms specified in Appendices 2 and 3 to this Regulation, within the deadlines established for each report, on paper media and via the electronic communication system (electronic media).

17. Quarterly PRCR is submitted to the National Bank within

12 calendar days from the end of the reporting period, annual PRCR – no later than

February 15 of the year following the reporting year.

18. In addition to PRCR, the National Bank has the right to require the submission of other reports and information from the banking group and its participants if necessary, to assess the financial condition, risk management system, quality of corporate governance, and other supervisory purposes. At the same time, such reports must be certified by the signature of the head of the executive body of the parent/managing company in part confirming the identity of the information presented in the individual reporting forms of participants of the banking group and the information included by the parent/managing company in the PRCR forms.

19. Reports on paper media are submitted in sealed envelopes to the National Bank within the established deadlines.

20. Electronic versions of PRCR are transferred to the Financial Statistics and Review Department of the National Bank.

21. In the event of any discrepancies, errors, incomplete submission, or incorrect filling of PRCR forms, the corresponding structural subdivision of the National Bank sends a letter to the bank at the head of the banking group or banking holding company, including the parent/managing company, requiring correction of the report and its submission to the National Bank with the corresponding changes to the reporting forms within the following deadlines:

• for a quarterly report – within 10 working days;
• for an annual report – within 30 working days.

22. In the absence of comments from the National Bank on PRCR or after correction of the report according to the comments of the National Bank and confirmation by letter of the parent/managing company, PRCR is considered accepted by the National Bank.

23. PRCR must include and be submitted within the established deadlines information for weekends and holidays declared and recommended as working days for the National Bank and commercial banks by the Cabinet of Ministers of the Kyrgyz Republic, regardless of whether the parent/managing company worked during this period or not. At the same time, reports containing information in foreign currency must contain information in som equivalent, using the official exchange rate of the National Bank on the date of preparation of the report.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 14, 2022 No. 2022-P-12/78-9-(NPA))

24. PRCR must be submitted in the prescribed form: bound, numbered with the indication of the number of pages of PRCR sections, sealed with a seal, and signed by an employee of the parent/managing company responsible for the preparation and submission of PRCR.

25. PRCR must contain reliable information on the state of activities of the banking group as of the reporting date. The correctness of reflecting the state of the banking group in the quarterly and annual PRCR is certified by the chairman of the supervisory body of the parent/managing company or a member of the supervisory body replacing the chairman in his absence, as well as by the chairman of the executive body of the parent/managing company, the chief accountant of the parent/managing company, and a member of the executive body of the parent/managing company overseeing the work on report preparation.

CHAPTER 4. Final Provisions

26. For untimely and/or inaccurate submission of information, as well as incorrect filling of PRCR, the parent/managing company bears responsibility in accordance with the legislation of the Kyrgyz Republic.

Appendix 1

to the Regulation "On Periodic Regulatory Consolidated Reporting"

COMPOSITION

of periodic regulatory consolidated reporting

No.

Section

Name

Periodicity

Reference to NPA

Deadlines

1

Title Page

Quarterly and once a year

Appendix (attached only to the first 8 sections)

Quarterly PRCR – within 12 calendar days from the end of the reporting period. Annual PRCR – no later than

February 15 of the year following the reporting year

2

Information on members of the Supervisory and Executive bodies of the parent/managing company

Once a year and upon changes

3

Information on certain officials of the parent/managing company

Once a year and upon changes

4

Basic information on the parent/managing company

Once a year and upon changes

5

Section 1

Regulatory Report on the Financial Condition of the Banking Group

Quarterly and annually

Appendix 2

6

Section 2

Income Statement

Quarterly and annually

7

Section 3

Consolidated Regulatory Report on the Financial Condition of the Banking Group

Annually

8

Section 4

Consolidated Income Statement

Annually

9

Section 5

Information on the Largest Credit Risks

Quarterly and annually

10

Section 6

Information on Transactions with Persons Affiliated with the Banking Group

Quarterly and annually

11

Section 7

Information on Transactions with Persons Related to the Banking Group

Quarterly and annually

12

Section 8

Information on Compliance with Economic Standards

Quarterly and annually

Appendix 2. Calculation of economic standards and capital adequacy of the banking group is carried out in accordance with the Regulation "On Consolidated Supervision"

13

Section 9

Calculation of Capital Adequacy of the Banking Group

Quarterly and annually

14

Section 10

Calculation of Capital of the Banking Group:

1. Assets.

2. Securities Portfolio.

3. Loans and Leasing.

4. Loans and Leasing (other assets.)

5. Off-balance sheet liabilities.

6. Subordinated debt.

7. Capital Structure Report.

Quarterly and annually

Regulation "On Consolidated Supervision" and Instruction on Determining Standards (Sufficiency) of Capital Adequacy of Commercial Banks of the Kyrgyz Republic

15

Section 11.

Report on Open Currency Positions of the Banking – Consolidated Group

at the end of the business day

Quarterly and annually

Appendix 2

16

Section 12.

Report on Transactions Between Participants of the Banking Group

Quarterly and annually

Appendix 2

17

Section 13

Report on the Structure/Composition of Participants of the Banking Group

Quarterly, annually and upon changes

Appendix 2

18

Section 14

Information on the Activities of Participants of the Banking Group

Quarterly and annually

Appendix 2

19

Information on the Structure of the Banking Group according to the sample

Quarterly, annually and upon changes

Appendix 3

Appendix 2

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Appendix 3

to the Regulation

"On Periodic Regulatory Consolidated Reporting"

INFORMATION

on the structure of the banking group

---

(name of the parent/managing company)

as of "_____" __________ 20____g.

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