RegAlert2024-12-19
Added · Updated
Guideline for Preparing Own Funds and Liquidity Reports under Art. 54 IFR - Reports for Small Investment Firms
The German Federal Bank issued this guideline to assist small investment firms in preparing annual own funds and liquidity reports under Article 54 of the Investment Firm Ordinance (IFR). It mandates submission by February 11th of the following year and specifies detailed calculation methods for capital requirements, fixed overheads, and liquidity buffers across six standardized templates. The document also clarifies rules for combined group values, defines threshold checks for business scope, and warns that failure to submit accurate reports constitutes an administrative offense.
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Guideline for Preparing Own Funds and Liquidity Reports under Art. 54 IFR
Reports for Small Investment Firms
Status: 19.12.2024
Change History
| Version | Chapter | Change Note | Date | Name and Reference Number |
|---|---|---|---|---|
| 0.1 | All | Created | 24.01.2023 | Deutsche Bundesbank |
| 1.0 | All | New layout and minor corrections | 06.03.2023 | Deutsche Bundesbank |
| 1.1 | Foreword and 1 | Change note on "combined values" and insertion of note on line 290 | 06.07.2023 | Deutsche Bundesbank |
| 1.2 | 3 + 4 | Adjustment of capital ratio calculations and fluctuation of fixed overheads | 01.03.2024 | Deutsche Bundesbank |
| 1.3 | Foreword, 4, 5 + 6 | Supplements to general explanations and filling instructions for templates | 19.12.2024 | Deutsche Bundesbank |
Table of Contents
- Change History.....................................................................................................2
- Foreword.......................................................................................................................4
- 1 Template I 01.01 - COMPOSITION OF OWN FUNDS...................5
- 2 Template I 02.03 – OWN FUNDS REQUIREMENTS................................8
- 3 Template I 02.04 – CAPITAL RATIOS ..........................................................9
- 4 Template I 03.01 – CALCULATION OF REQUIREMENTS FOR FIXED OVERHEADS..........................................................................................10
- 5 Template I 05.00 – SCOPE OF ACTIVITY – CHECKING THRESHOLDS...................................................................................12
- 6 Template I 09.01 – LIQUIDITY REQUIREMENTS ...............................17
Foreword
This guideline provides small investment firms with assistance regarding the reports under Article 54 IFR and should be seen as a supplement to Annex IV of the Implementing Regulation (EU) 2284/2021 (EUR-Lex - 32021R2284 - EN - EUR-Lex (europa.eu)).
The submission of the annual report is required for all small investment firms – regardless of the balance sheet date – by the reporting deadline of 31.12. until 11.02. of the following year.
We would like to point out that failure to submit or the erroneous submission of reports under Article 54 IFR constitutes an administrative offense under Section 83 (4) No. 4 of the Securities Trading Act (WpIG).
Correction reports are required:
- if at least one "Error" occurs during validation,
- if necessary in the case of a "Warning",
- for correction postings in the context of the audit of the annual financial statements, and
- if necessary upon determination of the annual financial statements.
Note on Form I 05.00 – SCOPE OF ACTIVITY – CHECKING THRESHOLDS (I5) (cf. Art. 12 (2) IFR) "Combined" values are to be reported in lines 0010, 0020, 0030, 0100, and 0110 under the following conditions:
The investment firm is part of a group within the meaning of Article 2 No. 11 of Directive 2013/34/EU ("broad" group definition). See also the following relevant definitions of this article:
9. "Parent undertaking" an undertaking which controls one or more subsidiary undertakings;
10. "Subsidiary undertaking" an undertaking controlled by a parent undertaking including any subsidiary undertaking of a parent undertaking which is controlled indirectly;
11. "Group" a parent undertaking and all its subsidiary undertakings.
Furthermore, at least one other investment firm¹ must be located within this group.
The reporting of combined values is independent of any possible obligation to submit reports on a consolidated basis pursuant to Article 7 in conjunction with Article 54 IFR. "Combination" means the addition of the values mentioned in Article 12 (2) sentence 1 IFR. The values of all investment firms belonging to the group are to be added. In their individual reports, the investment firms of such a group are to report the combined thresholds of their group in the same amount. When determining the combined annual gross total income, it should be noted that any double counting of gross income generated within the group may be disregarded. ______________ ¹ The investment firms to be taken into account include both investment firms with their seat within the EU and those with their seat in third countries.
1 Template I 01.01 - COMPOSITION OF OWN FUNDS
| Lines | Position | Amount | Notes | ||
|---|---|---|---|---|---|
| 0010 | OWN FUNDS = I 01.01 | Line 0020 + I 01.01 | Line 420 | ||
| 0020 | CORE CAPITAL (T1) = I 01.01 | Line 0030 + I 01.01 | Line 0300 | ||
| 0030 | COMMON EQUITY TIER 1 CAPITAL (CET1) = I 01.01 | Line 0040 to 0060 + Line 0090 to 0140 + Line 0290 | |||
| 0040 | Fully paid-up capital instruments | ||||
| 0050 | Share premium | ||||
| 0060 | Retained earnings = I 01.01 | Line 0070 + I 01.01 | Line 0080 | ||
| 0070 | Retained earnings of prior years | Corresponds to the brought forward profit from the last approved annual financial statement (after profit distribution). | |||
| 0080 | Creditable profit | Only profits recognized by an audited interim statement (requirements pursuant to Article 26 (2) CRR must be met). | |||
| 0090 | Cumulative other comprehensive income | ||||
| 0100 | Other reserves | ||||
| 0110 | Minority interests included in Common Equity Tier 1 Capital | ||||
| 0120 | Deduction and adjustment items due to adjustments of Common Equity Tier 1 Capital (Prudential Filters) | ||||
| 0130 | Other funds | For sole proprietors, this includes paid-in capital (fixed capital). | |||
| 0140 | (-) TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1 CAPITAL (pay attention to sign!) = I 01.01 | Line 0190 to 0285 | Lines 0140 to 0285 require a negative sign. | ||
| 0190 | (-) Losses of the current financial year | ||||
| 0200 | (-) Goodwill | ||||
| 0210 | (-) Other intangible assets | ||||
| 0220 | (-) Deferred tax assets dependent on future profitability not arising from temporary differences, net of related tax liabilities | ||||
| 0230 | (-) Qualified holdings outside the financial sector, the amount of which exceeds 15% of own funds | ||||
| 0240 | (-) Total amount of qualified holdings in undertakings other than financial sector undertakings, exceeding 60% of own funds | ||||
| 0285 | (-) Other deductions | ||||
| 0290 | Common Equity Tier 1 Capital: Other components of capital, deductions and adjustments | A negative balance of the variable capital account of a sole proprietor must also be shown here. | |||
| 0300 | ADDITIONAL CORE CAPITAL = I 01.01 | Line 0310 to 0410 | |||
| 0310 | Fully paid-up, immediately issued capital instruments | ||||
| 0320 | Share premium | ||||
| 0330 | (-) TOTAL DEDUCTIONS FROM ADDITIONAL CORE CAPITAL (pay attention to sign!) | ||||
| 0410 | Additional Core Capital: Other components of capital, deductions and adjustments | ||||
| 0420 | ADDITIONAL CAPITAL = I 01.01 | Line 0430 to 0520 | |||
| 0430 | Fully paid-up, immediately issued capital instruments | ||||
| 0440 | Share premium | ||||
| 0450 | (-) TOTAL DEDUCTIONS FROM ADDITIONAL CAPITAL (pay attention to sign!) | A negative sign is mandatory here. | |||
| 0520 | Additional Capital: Other components of capital, deductions and adjustments |
2 Template I 02.03 – OWN FUNDS REQUIREMENTS
| Lines | Position | Amount | Notes | ||
|---|---|---|---|---|---|
| 0010 | Own funds requirement = higher sum from I 02.03 | Line 0020 or I 02.03 | Line 0030 | Reporting of the own funds requirement without taking into account any transitional provisions. | |
| 0020 | Permanent minimum capital requirement | 75,000.00, 150,000.00 or 750,000.00 | Depending on the scope of permission of the institution at the reporting date (Art. 17 WpIG) | ||
| 0030 | Requirement for fixed overheads = I 03.01 | Line 0010 | |||
| Transitional own funds requirements | Lines 0050 to 0090 are only to be filled out if at least one transitional provision is actually utilized. | ||||
| 0050 | Transitional requirement based on own funds requirements of the CRR | ||||
| 0060 | Transitional requirement based on requirements for fixed overheads | ||||
| 0070 | Transitional requirements for investment firms that previously fell only under a initial capital requirement | ||||
| 0080 | Transitional requirements based on initial capital requirements upon admission | ||||
| 0090 | Transitional requirements for investment firms not authorized to provide certain services | ||||
| Additional information | |||||
| 0110 | Additional own funds requirement | ||||
| 0130 | Total own funds requirements = I 02.03 | Line 0010 + I 02.03 | Line 0110 |
3 Template I 02.04 – CAPITAL RATIOS
| Lines | Position | Amount | |
|---|---|---|---|
| 0010 | Common Equity Tier 1 ratio = I 01.01 | Line 0030 / I 02.03 | Line 0130 |
| 0020 | Surplus (+) or deficit (-) of Common Equity Tier 1 capital = I 01.01 | Line 0030 – (I 02.03 | Line 0130 * 0.56) |
| 0030 | Core capital ratio = I 01.01 | Line 0020 / I 02.03 | Line 0130 |
| 0040 | Surplus (+) or deficit (-) of core capital = I 01.01 | Line 0020 - (I 02.03 | Line 0130 * 0.75) |
| 0050 | Own funds ratio = I 01.01 | Line 0010 / I 02.03 | Line 0130 |
| 0060 | Surplus (+) or deficit (-) of total own funds = I 01.01 | Line 0010 - I 02.03 | Line 0130 |
4 Template I 03.01 – CALCULATION OF REQUIREMENTS FOR FIXED OVERHEADS
| Lines | Position | Amount | Notes | ||
|---|---|---|---|---|---|
| 0010 | Requirement for fixed overheads = ¼ * I 03.01 | Line 0020 | |||
| 0020 | Annual fixed overheads of the prior year after profit distribution = I 03.01 | Line 0030 + I 03.01 | Line 0050 | ||
| 0030 | Total costs of the prior year after profit distribution | Sum of ALL expenses from the most recent audited prior year financial statement at the reporting date (for short financial years, extrapolated to 12 months) or the planned values pursuant to Art. 13 (3) IFR for newly licensed institutions. Expenses each after profit distribution, WITHOUT deductions. Negative interest expenses and tax refunds do NOT reduce the costs. | |||
| 0040 | Of which: Fixed expenses by third parties on behalf of the investment firm | ||||
| 0050 | (-) Total deductions (pay attention to sign!) = I 03.01 | Line 0060 to 0190 | Lines 0050 to 0190 require a negative sign. | ||
| 0060 | (-) Premiums for employees and other remuneration | No claim to these payments may exist. | |||
| 0070 | (-) Employee, management, and shareholder participations in net profits | ||||
| 0080 | (-) Other discretionary profit distributions and other variable remuneration | ||||
| 0090 | (-) Shared commissions and fees to be paid | ||||
| 0100 | (-) Fees, brokerage fees, and other fees paid to central counterparties that are billed to customers | ||||
| 0110 | (-) Fees to contractually bound intermediaries | ||||
| 0130 | (-) One-off expenses from unusual activities | ||||
| 0140 | (-) Expenses from taxes | ||||
| 0150 | (-) Losses from proprietary trading with financial instruments | ||||
| 0160 | (-) Contractual profit transfer and loss absorption agreements | ||||
| 0170 | (-) Raw material expenses | ||||
| 0180 | (-) Payments into a general banking risk fund | ||||
| 0190 | (-) Expenses related to items already deducted from own funds | ||||
| 0200 | Anticipated fixed overheads of the current year | Extrapolation for the year in which the reporting date falls. | |||
| 0210 | Fluctuation of fixed overheads (%) = (I 03.01 | Line 0200 – I 03.01 | Line 0020) / I 03.01 | Line 0020 | The fluctuation is always to be reported with a positive value. |
5 Template I 05.00 – SCOPE OF ACTIVITY – CHECKING THRESHOLDS
| Lines | Position | Thresholds per Art. 12 IFR | Amount | Notes | |
|---|---|---|---|---|---|
| 0010 | (Combined) Assets Under Management (AUM) | AUM < 1.2 bn € (End-of-day value) | AUM = Assets Under Management ("assets under management")<br>WP Services:<br>- Portfolio management<br>- Ongoing investment advice<br>For definition "combined" see Foreword. | ||
| 0020 | (Combined) Client Orders Handled – Cash transactions | COH < 100 mn €/Day (End-of-day value) | COH = Client Orders Handled ("processed client orders")<br>WP Services:<br>- Investment intermediation<br>- Insurance intermediation<br>- Financial commission business<br>- Placement business<br>For definition "combined" see Foreword. | ||
| 0030 | (Combined) Client Orders Handled – Derivatives transactions | COH < 1 bn €/Day (End-of-day value) | COH = Client Orders Handled ("processed client orders")<br>WP Services:<br>- Investment intermediation<br>- Insurance intermediation<br>- Financial commission business<br>- Placement business<br>For definition "combined" see Foreword. | ||
| 0040 | Custodied and administered assets | ASA = 0 € (End-of-day value) | ASA = Assets Safeguarded and Administered ("custodied and administered assets")<br>WP Services:<br>- Custody and administration of financial instruments, including depot custody | ||
| 0050 | Client money held | CMH = 0 € | CMH = Client Money Held ("held client funds") | ||
| 0060 | Daily trading flow – Cash and derivatives transactions | DTF = 0 € (End-of-day value) | DTF = Daily Trading Flow ("daily trading flow")<br>WP Services:<br>- Insurance intermediation<br>- Proprietary trading<br>- Financial commission business | ||
| 0070 | Net position risk | NPR = 0 € (End-of-day value) | NPR = Net Position Risk ("net position risk")<br>WP Services:<br>- Proprietary trading<br>- Underwriting | ||
| 0080 | Clearing margin given | CMG = 0 € (End-of-day value) | CMG = Clearing Margin Given ("paid clearing margin")<br>WP Services:<br>- Proprietary trading | ||
| 0090 | Trading counterparty default | TCD = 0 € (End-of-day value) | TCD = Trading Counterparty Default ("trading counterparty default risk")<br>WP Services:<br>- Proprietary trading<br>- Underwriting | ||
| 0100 | (Combined) total balance sheet and off-balance sheet sum | Balance sheet total < 100 mn € | Balance sheet total (and possibly additional off-balance sheet balance sheet positions) of the last approved annual financial statement².<br>For definition "combined" see Foreword. | ||
| 0110 | Combined annual gross total income | < 30 mn € = I 05.00 | Line 0140 to 0290 | Corresponds to the average of the gross total income (exclusively from securities services and investment activities) from the last approved¹ and the preceding financial year. For individual institutions, this position corresponds to the value stated in line 0120.<br>For definition "combined" see Foreword. | |
| 0120 | Annual gross total income = I 05.00 | Line 0110 + I 05.00 | Line 0130 | ||
| 0130 | (-) Group-internal portion of annual gross income (pay attention to sign!) | A negative sign is required here. | |||
| 0140 | Of which: Income from acceptance and transmission of orders | These and the following positions refer to I 05.00 Line 0110. These are positive values. Line 0110 must at least correspond to the sum of lines 0140 to 0290. |
² If the financial statement has not been created and approved after six months from the end of the last financial year, the investment firm uses a provisional financial statement (Art. 12 (1) IFR).
| Lines | Position | Threshold per Art. 12 IFR | Amount | Notes |
|---|---|---|---|---|
| 0150 | Of which: Income from execution of orders | |||
| 0160 | Of which: Income from proprietary trading | |||
| 0170 | Of which: Income from portfolio management | |||
| 0180 | Of which: Income from investment advice | |||
| 0190 | Of which: Income from underwriting of financial instruments/placement with firm commitment | |||
| 0200 | Of which: Income from placement without firm commitment | |||
| 0210 | Of which: Income from operation of MTF | |||
| 0220 | Of which: Income from operation of OTF | |||
| 0230 | Of which: Income from custody and administration of financial instruments | |||
| 0240 | Of which: Income from granting loans or advances to investors | |||
| 0250 | Of which: Income from advising companies on capital structuring, industry-specific strategy and related questions as well as advice and services in connection with corporate mergers and acquisitions | |||
| 0260 | Of which: Income from foreign exchange transactions | |||
| 0270 | Of which: Securities and financial analysis | |||
| 0280 | Of which: Income from services in connection with the underwriting of emissions | |||
| 0290 | Of which: Securities services and ancillary services in connection with underlying derivatives transactions |
6 Template I 09.01 – LIQUIDITY REQUIREMENTS
| Lines | Position | Amount | Notes | |
|---|---|---|---|---|
| 0010 | Liquidity requirement = I 03.01 | Line 0010 / 3 1/3 of the requirement for fixed overheads. | ||
| 0020 | Client guarantees | Max. 1.6% of client guarantees per Art. 45 IFR | ||
| 0030 | Total value of liquid assets | Liquidity stock at the respective reporting date. Liquid assets are calculated in accordance with Article 43 (1) of the IFR, where short-term deposits at a credit institution are understood as demand deposits and time deposits with a maturity of up to one month. |
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