Guidelines on the Assessment of Compliance with Disclosure Requirements under Section 26a KWG and Part 8 of the CRR

[20170626 Guidelines BBk-BaFin clean.doc] Page 1 of 3 Guidelines on the Assessment of Compliance with Disclosure Requirements under
Section 26a KWG and Part 8 of the CRR
Status: June 2017

General

1. A complete waiver of disclosure under Section 26a KWG and Part 8 of the CRR on grounds of materiality is to be objected to by banking supervisory authorities (see BaFin Circular 05/2015).
2. If important, fundamentally disclosable information is not disclosed or not disclosed comprehensively, this is to be objected to by banking supervisory authorities, unless the institution can plausibly and comprehensibly justify the non-disclosure of this information. In the interest of clarity in disclosure, institutions should explicitly state "No" (i.e., that the requirement does not apply) in case of doubt if disclosure requirements are not relevant (see BaFin Circular 05/2015).
3. Identified errors in the disclosure report must be rectified.

Reference to Section 26a Paragraph 2 KWG
4. When relying on the principles of materiality and confidentiality to avoid disclosure, plausible and objectively comprehensible reasons must be provided (see BaFin Circular 05/2015). Unsubstantiated justifications include:

• The reference to the commercial law possibility of cross-compensation under Section 340f Paragraphs 3 and 4 of the German Commercial Code (HGB);
• The reference to a hierarchy of norms, e.g., in connection with Section 340f HGB;
• The sole reference to the exceptions from the disclosure obligation under Article 432 CRR; or
• The blanket reference to a possible weakening of the competitive position.

[20170626 Guidelines BBk-BaFin clean.doc] Page 2 of 3 Publication
5. The publication of information in the sense of Article 431 CRR must take place no later than 4 weeks after the publication of the annual financial statements (see Protocol of the meeting of the Pillar 3 Working Group on November 27, 2014).
6. The disclosure report must be accessible until the publication of the next disclosure report.
7. If an institution makes use of the option to refer to other disclosure media to fulfill disclosure requirements (Article 434 CRR), these references must contain and ensure clear access to the relevant information.
8. Electronic access to the information under Part 8 of the CRR must not be hindered by a prior required name-based registration.
9. It must be ensured that an electronically accessible disclosure report can be printed.

Specifics
10. Central definitions such as "in default" and "in arrears" (Article 178 CRR) must be requested.
11. A complete waiver of the disclosure of information regarding the terms and conditions of the most significant features of own funds instruments under Article 437 CRR in conjunction with Implementing Regulation (EU) No 1423/2013 is to be objected to by banking supervisory authorities. In particular, with regard to hybrid core capital instruments, the corresponding information must be provided.
12. For regionally active institutions, the geographical breakdown of the loan volume into "Germany," "EU," and "Other" is generally sufficient to fulfill the disclosure requirements under Article 442d CRR (geographical breakdown of the loan volume).
13. Regarding the disclosure of credit granting required under Article 442e CRR, broken down by industry or debtor groups, an industry breakdown is generally expected; a debtor group breakdown into "Private" and "Companies" is insufficient.
14. No waiver may be made regarding information on risk provisions under Article 442h CRR.

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15. If the disclosure of equity instruments in the trading book under Article 447 CRR is done only with their book value, the non-disclosure of time or stock exchange values must be plausibly and objectively justified.