Regulation on Periodic Regulatory Consolidated Reporting

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Date of creation: 2023-02-09

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 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 main terms 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 to determine 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/management 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/management company.

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

Banks at the head of a banking group, or a banking holding company, including the parent/management 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/management company reporting on their activities and information necessary for the preparation of PRCR forms within the timeframes established by the parent/management 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/management company calculates the values of economic norms and requirements mandatory for compliance by the banking group. The calculation of economic norms of 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/management company and participants of the banking group are summed up line by line. To the reporting items of the parent/management company are added fully corresponding items of each participant of the banking group, in the capital of which the ownership share of the parent/management company constitutes 50 percent or more. If the ownership share of the parent/management company in the capital of a participant of the banking group constitutes more than 5 percent but not more than 50 percent, the financial data of such a participant are included line by line in proportion to the share of participation of the parent/management company in the capital of the participant.

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

In this case:

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

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

A negative value of the difference in the cost of acquisition of capital shares (goodwill) represents a reserve of the banking group, which may 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 acquisition of capital shares is subject to amortization over the useful life and from the date of acquisition of shares (stakes) of a participant of the banking group by the parent/management company, in equal quarterly portions to group expenses. In this case, the value of the item "Difference in the cost of acquisition of 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 acquisition of capital shares (goodwill) is carried out for each participant of the banking group separately.

Positive and negative values of these indicators are not netted 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/management company and participants of the banking group are summed up line by line.

In this case:

a) income and expenses from mutual operations of participants of the banking group (consolidated) with the parent/management 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 the 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 such a participant by the group (first inclusion in the consolidated reporting).

10. In the event that the parent/management company or a participant of the banking group transferred funds during the reporting period, but such funds were not received by another participant of the banking group during the reporting period, these funds should be considered received during 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/management company in the capital of each participant is determined as the sum of the following values:

a) the weight of shares (stakes) of the participant owned by the parent/management company; b) the weight of shares (stakes) of other group participants in the capital of the participant, multiplied by the weight of shares (stakes) of the parent/management 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 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 the parent/management 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 connections between the parent/management company and participants of the banking group, and their affiliated persons, as well as the connections 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/management 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, a brief description, and submission deadlines 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 the parent/management 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, for the purpose of assessing the financial condition, risk management system, quality of corporate governance, and other supervisory purposes. In this case, such reports must be certified by the signature of the head of the executive body of the parent/management 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/management 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 transmitted 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/management 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 based on the comments of the National Bank and confirmation by letter from the parent/management company, PRCR is considered accepted by the National Bank.

23. PRCR must include and present 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/management company worked during this period or not. In this case, 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 indication of the number of pages of PRCR sections, sealed with a seal, and signed by an employee of the parent/management 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/management 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/management company, the chief accountant of the parent/management company, and a member of the executive body of the parent/management company overseeing the work on report preparation.

CHAPTER 4. Final Provisions

26. For untimely and/or unreliable submission of information, as well as incorrect filling of PRCR, the parent/management 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

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

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

Once a year and upon changes

Information on certain officials of the parent/management company

Once a year and upon changes

Basic information on the parent/management company

Once a year and upon changes

Section 1

Regulatory Report on the Financial Condition of the Banking Group

Quarterly and annually

Appendix 2

Section 2

Income Statement

Quarterly and annually

Section 3

Consolidated Regulatory Report on the Financial Condition of the Banking Group

Annually

Section 4

Consolidated Income Statement

Annually

Section 5

Information on the Largest Credit Risks

Quarterly and annually

Section 6

Information on Transactions with Persons Affiliated with the Banking Group

Quarterly and annually

Section 7

Information on Transactions with Persons Related to the Banking Group

Quarterly and annually

Section 8

Information on Compliance with Economic Norms

Quarterly and annually

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

Section 9

Calculation of Capital Adequacy of the Banking Group

Quarterly and annually

Section 10

Calculation of Capital of the Banking Group:

1. Assets.
2. Securities Portfolio.
3. Loans and Leases.
4. Loans and Leases (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

Section 11.

Report on Open Currency Positions of the Banking – Consolidated Group

at the end of the business day

Quarterly and annually

Appendix 2

Section 12.

Report on Transactions Between Participants of the Banking Group

Quarterly and annually

Appendix 2

Section 13

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

Quarterly, annually and upon changes

Appendix 2

Section 14

Information on the Activities of Participants of the Banking Group

Quarterly and annually

Appendix 2

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/management company)

as of "_____" __________ 20____g.

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