Instruction No. 13/2022

BO No. 7/2022 2nd Supplement • 2022/08/04 ..................................................................................................................................................................................................

Topics

Statistics :: Securities Statistics Mod. 99999911/T – 01/14

Index

Text of the Instruction Annex to the Instruction

Text of the Instruction

Subject: Revoking Instruction No. 31/2005

The Bank of Portugal, as an integral part of the European System of Central Banks (ESCB) and the National Statistical System (SNS), has the competence to collect and compile monetary, financial, exchange rate, and balance of payments statistics, in accordance with Article 5 of the Statutes of the ESCB/ECB and Article 13 of the Organic Law of the Bank of Portugal (Law No. 5/98, of January 31), and therefore requires, among other things, information relating to securities portfolios.

The ESCB, in fulfillment of its assigned duties and to monitor financial markets and financial activities across the euro area, requires information on securities holders on a security-by-security and investor-by-investor basis. The reporting of this information to the European Central Bank by National Central Banks is provided for in European Central Bank Regulation (EU) No. 1011/2012 of October 17, 2012 (ECB/2012/24), with subsequent amendments, and in European Central Bank Guideline (EU) No. 2013/215 of March 22, 2013 (ECB/2013/7), with subsequent amendments.

The information needs of the Bank of Portugal and the ESCB do not require investor-by-investor detail in the case of natural persons. Therefore, natural persons are not covered by this Instruction, and information relating to them must be sent by reporters in an aggregated and anonymized manner.

In 2015, the International Monetary Fund, together with the Bank for International Settlements and the European Central Bank, published the Handbook on Securities Statistics, which defines concepts and methodologies aimed at increasing the quality and harmonization of securities statistics internationally, which are taken into account in this Instruction.

The reporting to the Bank of Portugal of granular information relating to transactions and positions in securities portfolios, on an investor-by-investor and security-by-security basis, is regulated by Instruction No. 31/2005 of November 15, which had revoked Instruction No. 15/99 of June 15. This information has allowed the Bank of Portugal to obtain the necessary information for compilation, namely securities portfolios, and has essentially satisfied the obligation to report to the European Central Bank, as well as other needs within the scope of supervision and financial stability.

After several years, it is appropriate to review this Instruction with the aim of incorporating improvements that meet the needs identified in the statistical compilation process, as well as those raised by users of the collected and produced information.

This Instruction aims to introduce the following changes: the reporting of additional details for securities that do not have an ISIN (International Securities Identification Number) code and for non-resident investors, with preference for the reporting of the Legal Entity Identifier (LEI) whenever it exists, with a view to the unique identification of securities and investors; the reformulation of the format of the simplified reporting regime, making it consistent with the general regime; the change in the deadline for sending information, as well as the periodicity of the simplified regime, applicable to credit institutions, aligning them with the provisions of Instruction No. 14/2021 of November 18 (which regulates the reporting of information on balance sheet statistics and interest rates of the monetary financial institutions sector and balance sheet items of credit institutions); the introduction of net book value as an additional valuation method that may be used for reporting end-of-period positions; and the elimination of the reporting of information relating to commissions, allowing for a rationalization of costs for reporters.

This Instruction was subject to public consultation, in accordance with Article 101 of the Administrative Procedure Code.

In the exercise of the powers attributed by the following instruments: a) Organic Law of the Bank of Portugal (approved by Law No. 5/98, of January 31, with subsequent amendments), notably Article 13; b) Law of the National Statistical System (approved by Law No. 22/2008, of May 13), notably Articles 4 and 19; c) Council Regulation (EC) No. 2533/98 of November 23, 1998, with subsequent amendments, concerning the collection of statistical information by the ECB, from which results the competence of the Bank of Portugal, within the scope of its participation in the European System of Central Banks (ESCB); d) European Central Bank Regulation (EU) No. 1011/2012 of October 17, 2012 (ECB/2012/24), with subsequent amendments, concerning statistics on securities holdings; e) European Central Bank Guideline No. 2013/215/UE of March 22, 2013 (ECB/2013/7), with subsequent amendments, concerning statistics on securities holdings.

The Bank of Portugal, through this Instruction, establishes the following:

Article 1.

Object

1. This Instruction regulates the reporting of statistical information to the Bank of Portugal for the compilation of securities statistics, in the aspect of securities portfolios.

2. The statistical information compiled based on this Instruction is intended to satisfy the information needs of the Bank of Portugal for the compilation of statistics and for reporting to the European Central Bank, arising from the participation of the Bank of Portugal in the European System of Central Banks, notably in the field of securities portfolio statistics.

3. The compilation of statistical information on securities portfolios also aims to satisfy other needs of the Bank of Portugal, notably in the fields of supervision and financial stability.

Article 2.

Financial instruments covered

1. This Instruction applies to information relating to debt securities, shares, participation units, and other participations.

2. For the purposes of the preceding paragraph, and in accordance with the European System of National and Regional Accounts in the European Union (Regulation No. 549/2013 of the European Parliament and of the Council of May 21, 2013), it is understood by: a) "Debt securities": negotiable financial instruments that attest to the existence of a debt; b) "Shares, participation units, and other participations": residual claims on the assets of institutional units that issued the shares or participation units.

3. This Instruction does not apply to financial derivatives.

Article 3.

Entities covered

1. The following are covered by this Instruction: a) Credit institutions, brokerage financial companies, and brokerage companies that have their headquarters in Portugal and branches in Portugal of institutions headquartered in third countries; b) Entities that are holders of securities that are not deposited in the institutions referred to in the previous letter.

Article 4.

Responsibility for communicating information

1. The entities referred to in letter a) of paragraph 1 of Article 3 must communicate information relating to transactions and positions in securities (regardless of the entity where they are deposited): a) Of their own portfolio; b) Of the portfolios of their clients, for which they assume custody or management.

2. The entities referred to in letter b) of paragraph 1 of Article 3 must communicate statistical information directly to the Bank of Portugal, except when a resident entity assumes this responsibility.

Article 5.

Information to be reported

1. This Instruction covers all securities, issued by residents and non-residents, including: a) Treasury bills; b) Commercial paper; c) Bonds; d) Other debt securities; e) Shares; f) Participation units; g) Other participations.

2. The information is communicated to the Bank of Portugal in the following manner: a) Information relating to transactions occurring in the reference period, according to the reporting periodicity defined in this Instruction, and to positions at the end of that period; b) Security by security, identified by the ISIN (International Securities Identification Number) code defined by ISO 6166, whenever this code exists for the security in question; c) Investor by investor, except when the holder of the securities is a natural person, in which case the information must be communicated in an aggregated manner by country of residence of the holders of the securities.

3. The reporting format and the content of the reporting file are detailed in the Annex to this Instruction and in the Procedures Manual for the Reporting of Securities Portfolio Statistics, made available by the Bank of Portugal as provided for in paragraph 6 of Article 14.

4. The Bank of Portugal makes available a computer application, optional to use, which allows the processing of data entered manually or via file and the generation of reporting files.

Article 6.

Periodicity of information communication

1. The information must be communicated with a monthly periodicity, without prejudice to the application of the simplified reporting regime provided for in Article 9.

Article 7.

Reporting deadline and information quality

1. The information must be sent to the Bank of Portugal: a) By the entities referred to in letter a) of paragraph 1 of Article 3, by the 11th working day after the end of the reference period to which the data relate, according to the reporting periodicity defined in this Instruction; b) By the remaining entities, by the 12th working day after the end of the reference period, according to the reporting periodicity defined in this Instruction, to which the data relate.

2. Information that does not present an acceptable level of quality, in accordance with the following paragraph, will be qualified as invalid.

3. Reported information is considered not to present an acceptable level of quality whenever at least one of the following conditions occurs: a) it does not respect the compatibility rule between flows and positions; b) it is not coherent with the rest of the information sent to the Bank of Portugal, notably with the statistics of operations and positions with the outside world (regulated by Instruction No. 27/2012 of September 17, 2012) and with the balance sheet and interest rate statistics of the monetary financial institutions sector and balance sheet items of credit institutions (regulated by Instruction No. 14/2021 of November 18, 2021).

4. If the information is qualified as invalid, in accordance with the preceding paragraphs, it is considered as not sent, for the purposes of paragraph 1.

5. The Bank of Portugal may, at any time, request clarification on the reported data.

Article 8.

Revisions in information

1. In case revisions occur in the already reported information, the reporting entity must: a) resend the information according to the procedures established in the Procedures Manual for the Reporting of Securities Portfolio Statistics; b) explain the reason for the revisions, whenever they involve total amounts greater than 10 million euros.

2. The explanation referred to in the preceding number must be sent by email to the address available in the Procedures Manual.

Article 9.

Regime and thresholds for simplified reporting

1. An entity that, regarding the information covered by this Instruction, does not exceed 500 million euros in total position amount may request that the simplified reporting regime be applied to it.

2. The request referred to in the preceding number must be presented by the end of November of each year and applies from the month of January of the following year, when approved by the Bank of Portugal.

3. An entity that exceeds the threshold defined in paragraph 1 must immediately communicate the situation to the Bank of Portugal, starting the reporting of information under the general regime from the month in which that threshold was exceeded.

4. Entities subject to the simplified reporting regime must send to the Bank of Portugal the information provided for in this Instruction, with the same format and content defined in Article 5: a) with quarterly periodicity, in the case of entities covered by Instruction No. 14/2021; b) with annual periodicity, in the case of the remaining entities.

Article 10.

Transmission of information

1. The reporting of the information referred to in Article 5 and in the Annex to this Instruction is carried out through the BPnet electronic communication system, according to the technical specifications contained in the Procedures Manual of this Instruction.

2. If the reporting entity is not a subscriber to the BPnet system, an alternative form of communication is provided, as defined in the Procedures Manual.

Article 11.

Interlocutors in reporting entities and in the Bank of Portugal

1. All reporting entities must appoint an effective interlocutor and, at least, one substitute interlocutor, qualified to respond to clarification requests requested by the Bank of Portugal.

2. In order to guarantee a prompt response to questions posed by the Bank of Portugal, the reporting entity identifies the email address and telephone number and ensures the availability of at least one of the designated interlocutors, obligatorily proceeding to the appointment of a substitute, definitive or temporary, when it is not possible to ensure such availability.

3. The Bank of Portugal indicates its interlocutors for the clarification of doubts arising from the application of this Instruction.

Article 12.

Reporting by new entities

1. Entities constituted after the entry into force of this Instruction will have a period of 2 months to start reporting with retrospective information from the beginning of their activity.

Article 13.

Sanctioning regime

1. In case of non-compliance with the provisions of this Instruction, the legally established sanctioning regime is applicable.

Article 14.

Final provisions

1. This Instruction enters into force on February 1, 2023.

2. The communication of information to the Bank of Portugal under this Instruction begins on February 1, 2023, with reference to January 2023.

3. This Instruction revokes and replaces Instruction No. 31/2005 of the Bank of Portugal from January 31, 2023.

4. The reporting of information relating to December 2022, to be carried out during the month of January 2023, is the last one carried out in accordance with the provisions of Instruction No. 31/2005.

5. Institutions that currently report under the simplified reporting regime defined in Instruction No. 31/2005 will report under the simplified reporting regime defined in Article 9 of this Instruction.

6. The Bank of Portugal makes available on BPnet, or by email, a Procedures Manual for the Reporting of Securities Portfolio Statistics that describes the operational aspects relating to the reporting requirements contained in this Instruction and to the transmission of data and their quality control.

7. Within the scope of this Instruction, contacts with the Bank of Portugal are made to: Bank of Portugal Statistics Department Avenida Almirante Reis, 71 1150-012 LISBON Electronic address: siet@bportugal.pt

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Annex to Instruction No. 13/2022

BO No. 7/2022 2nd Supplement • 2022/08/04 Topics Statistics :: Securities Statistics .................................................................................................................................................................................................. Mod. 99999911/T – 01/14

Annex to the Instruction

CHARACTERISTICS OF THE INFORMATION TO BE REPORTED

1. Information to be reported 1.1. The entities covered by this Instruction must send to the Bank of Portugal the information relating to transactions occurring in each reporting period and to positions at the end of the reporting period with the following characterization:

1.1.1. In the case of securities with ISIN: 1.1.1.1. ISIN; 1.1.1.2. Investor identification (in the case of resident investors, the NIPC, CMVM code, or ASF code; in the case of individual investors, the country of residence; in the case of non-resident investors, their country of residence, institutional sector, name, and LEI code, or, if the latter does not exist, another code that allows their unique identification); 1.1.1.3. In the case of transactions that do not involve any payment and receipt, additional information that allows identifying their origin; 1.1.1.4. Information on whether the relationship between investor and issuer is classified as Direct Investment, according to the Balance of Payments and International Investment Position Manual (BPM6); 1.1.1.5. Quantity (in the case of equity securities) or nominal value (in the case of debt securities) transacted or held; 1.1.1.6. Value of the transaction or position, following the valuation criteria described in point 2.1 of this Annex; 1.1.1.7. Book value of positions, for securities in the own portfolio of financial institutions, according to point 2.2 of this Annex; 1.1.1.8. Income associated with securities, namely interest and dividends.

1.1.2. In the case of securities without ISIN, the attributes referred to for securities with ISIN (with the exception of this code) and also: 1.1.2.1. Characterization of the security:

• Type of security;
• Contractual term classification;
• Currency of issuance;
• Date of issuance;
• Maturity date. 1.1.2.2. Characterization of the issuer:
• Name;
• Country;
• Institutional sector;
• In the case of resident issuers, the NIPC, CMVM code, or ASF code; in the case of non-resident issuers, the LEI code, or if this does not exist, another code that allows their unique identification.

1.2. The technical specifications of the reporting file follow the requirements described in the Procedures Manual for the Reporting of Securities Portfolio Statistics.

1.3. In addition to the characteristics mentioned above, attributes that allow identifying the reporter and the reporting period must also be included, as well as automatic validations of the file and its content.

1.4. The concept of residence to be used within the scope of points 1.1.1.2. and 1.1.2.2. is the one defined in the European System of National and Regional Accounts in the European Union.

2. Valuation criteria 2.1. Transaction value / position field (VAL) The valuation of securities is governed by the following rules:

2.1.1. In transactions, the value actually paid or received in the operation is recorded (accrued interest is excluded, which is reported in the field intended for this purpose).

2.1.2. In positions, the market value is recorded, obtained from the market quote of the security at the end of the period (excluding accrued interest, which is reported in the field intended for this purpose) or, if there is no market quote, an alternative value according to the hierarchy presented below.

2.1.2.1. Market price Value obtained from the price (quote) prevailing in the market relative to the date to which the communication of information refers, normally, the market closing price (does not incorporate accrued interest). When a security is quoted on more than one stock exchange, the reported market value must follow one of the following hypotheses: a) the quote of the most representative stock exchange for the security/investor/custodian combination; b) the average quote observed in all stock exchanges where the security is quoted.

2.1.2.2. Net book value If there is no market value, the net book value of the securities should be reported, recorded in the accounting of their holder, net of impairment losses possibly recognized.

2.1.2.3. Acquisition value

Annex to Instruction No. 13/2022 Official Gazette No. 7/2022 2nd Supplement • 2022/08/04 Statistical Topics :: Title Statistics .................................................................................................................................................................................................. Mod. 99999911/T – 01/14

If there is no market value and the net book value less impairments is not known, the settled value at the time the title was acquired shall be reported, excluding income, commissions, and taxes.

2.1.2.4. Nominal value If there is no market value and neither the net book value less impairments nor the acquisition value of the titles is available, the nominal or face value of the titles shall be reported.

2.2. Field for book value (VALC) For the field relating to the book value, the rules presented in Instruction No. 14/2021 of the Bank of Portugal on Balance Sheet and Interest Rate Statistics for the monetary financial institutions sector and balance sheet items of credit institutions shall be followed.

3. Relevant date for the recording of operations The relevant date for the recording of operations is: 3.1. in the case of primary market operations, the date of the effective issuance of the title, which usually coincides with the date of financial settlement; 3.2. in the case of secondary market operations, the date of the realization of the transaction and not the date of financial settlement of the operation, unless it results from express contractual stipulation or from an applicable legal or regulatory regime whereby the rights and obligations inherent in the negotiated values are transferred on a different date, in which case the latter shall be the relevant date (by way of example, a purchase in the secondary market of a certain title on December 31 of year N, whose financial settlement only occurs in January of N+1, should, in principle, be communicated as a transaction carried out in the month of December of N).

4. Operations in foreign currency 4.1. Transactions or positions in foreign currency are always reported by their equivalent in euros, without prejudice to the provisions of the Procedures Manual for Reporting Title Portfolio Statistics regarding the nominal value thereof. 4.2. Transactions and positions are converted according to reference or indicative values for exchange rates, published by the Bank of Portugal for the date on which the transaction was carried out or for the date to which the position refers.

5. Specific characteristics of the information to be reported The characterization of titles, issuers, and investors, namely the type of title, contractual term, currency, country of the issuer and investor, identification of the issuer and investor, institutional sector of the issuer and investor, must follow the specifications and coding presented in the Procedures Manual for Reporting Title Portfolio Statistics.