The finalisation and publication of the EBA draft Implementing Technical Standards (ITS) on supervisory reporting requirements for institutions has been pushed back pending the adoption by the EU legislators of the Capital Requirements Regulation (CRR).
As currently foreseen, 1 January 2013 is expected to be the date of application of the CRR. Therefore, financial institutions may face challenges to immediately comply with all the reporting requirements included in the ITS. To address those challenges, some flexibility will need to be given through phase-in provisions or on the implementation date of the new requirements.
Similar practical provisions for phase-in arrangements or elements of flexibility may be considered in the implementation of other technical standards on a case-by-case basis and depending on the final date of entry into force of the CRD IV/CRR package.
Timeline of implementation for the ITS on Reporting
Most respondents to the EBA’s consultation on the reporting ITS (Consultation paper CP50 published on 20 December 2011) – in particular those located in jurisdictions where COREP and FINREP guidelines have not been implemented - stressed that the time to implement the full ITS requirements would not be sufficient as relevant IT systems would need to be changed before the first submission of data to competent authorities.
As competent authorities have the obligation to check institutions’ compliance with the new regulatory framework as of the date of application of the CRR, the submission of relevant data needs to be aligned with the Regulation requirements. Therefore institutions will need to comply with CRR requirements as of its application date (currently foreseen 1 January 2013) and will need to adapt their systems beforehand.
However, a phase-in of data items not directly used to assess compliance with specific CRR requirements is seen as a solution for easing the implementation burden while safeguarding tasks to be performed by competent authorities.
Areas identified as being the most burdensome for financial institutions are among those which could apply at a later stage. In particular, the EBA acknowledges that a longer time period may be needed, after the entry into force of the CRR currently foreseen 1 January 2013, to prepare some of the reporting systems. Therefore, the implementation date of the full ITS requirements related to financial information (FINREP) should be set to 1 January 2014, providing sufficient time for implementation. Decisions regarding the phase-in of other data requirements may be taken once final CRR provisions are available.
As soon as the final CRR text is available, the EBA will finalise the draft ITS, taking into account possible changes in the scope of the CRR reporting requirements, and submit it to the Commission for endorsement.
A workshop for technical experts working on the implementation of the new reporting requirements will be organised by the EBA on 13 September 2012 with a view to receive additional feedback on revised data definitions. Information and registration form.
Notes to the editors
- Draft ITS on supervisory reporting requirements: the CRR contains in a number of articles specific mandates for the EBA to develop draft Implementing Technical Standards (ITS) related to supervisory reporting requirements. These standards will cover reporting of capital adequacy, financial information, liquidity, large exposures and leverage ratio and they will specify uniform data elements, frequencies and remittance dates as well as the IT solutions to be applied by credit institutions and investment firms in Europe. They are mainly based on the common reporting frameworks COREP and FINREP developed by CEBS, the EBA’s predecessor. These ITS will be part of the single rulebook enhancing regulatory harmonisation in Europe.
- CRD IV/CRR package: The CRR/CRD IV proposals (the so-called Capital Requirements Regulation - ‘CRR’- and the so-called Capital Requirements Directive – ‘CRD’) set out prudential requirements which translate the proposals from the Basel Committee on Banking Supervision (Basel III) into EU law.