Response to consultation on draft Implementing Technical Standards overhauling the EBA resolution planning reporting framework

Question 1: Are the instructions and templates clear to the respondents?

The instructions and templates provided in the draft ITS appear to be mostly clear, particularly in the breakdown by entity type—Resolution Entity, Liquidation Entity, and Relevant Legal Entity (RLE). This clarity aligns well with the goal of fostering harmonization and reducing reporting burdens where applicable. Similar approaches in jurisdictions like the United States emphasize clarity in reporting frameworks through the FDIC’s resolution planning instructions, which are distinctively tailored by institution size and complexity, helping to ensure applicability across varied entities. However, a few areas, such as the granularity required in liability and intragroup data, may benefit from further detail to avoid ambiguities during implementation.

Question 2: Do the respondents need further clarification to understand which of the minimum reporting obligations would apply to their specific profile (Resolution entity, Liquidation entity, RLE, non-institution…?

Yes, respondents could benefit from additional clarification on the minimum reporting obligations specific to their profile. The categorization into Resolution Entity, Liquidation Entity, and RLEs is helpful but would benefit from further examples of different profiles. The UK's PRA (Prudential Regulation Authority) also provides tailored guidance for categories within its resolution reporting, helping institutions better understand their roles. Additional clarification within the ITS on RLE thresholds and obligations specific to smaller entities or non-institutional profiles would further alleviate potential confusion for diverse reporting entities.

Question 3: Do the respondents identify any discrepancies between these templates and instructions and the determination of the requirements set out in the underlying regulation?

No major discrepancies are immediately evident, but potential inconsistencies could arise in the context of overlapping reporting requirements, particularly where existing data points intersect with MREL, TLAC, CoRep, and FinRep obligations. The proposal's effort to eliminate such overlaps is commendable and consistent with practices seen in the EU’s CRR2 (Capital Requirements Regulation) revisions, which similarly sought to avoid duplicate data submissions. Careful cross-referencing during implementation will be essential to ensure institutions do not face redundant reporting requirements that could lead to compliance inefficiencies.

▪ specify which element(s) of the proposal trigger(s) that particularly high cost of compliance

1. High-cost elements: Granular reporting requirements, particularly regarding liability data and intergroup financial connections, are likely to be the most cost-intensive. Institutions will need to report data at a highly detailed level (e.g., contract level, ISIN-level, counterparty granularity). This aligns with requirements seen in the EU's Single Resolution Board (SRB) standards, where granular reporting has been shown to incur substantial compliance costs.

▪ explain the nature/source of the cost (i.e. explain what makes it costly to comply with this particular element of the proposal) and specify whether the cost arises as part of the implementation, or as part of the on-going compliance with the reporting requirements

Source of costs: These costs primarily arise from the need for increased data processing, upgrades to internal data systems, and potentially added personnel for data validation. The ongoing compliance costs would be high due to recurring data collection and reporting processes.

▪ offer suggestions on alternative ways to achieve the same/a similar result with lower cost of compliance for you

Alternative suggestions: A phased or tiered approach could reduce compliance burdens, allowing smaller institutions more time to adapt. For instance, Japan’s Financial Services Agency (FSA) implements phased compliance, gradually scaling reporting requirements according to the size and complexity of the institution.

i. How does this change impact your organisation’s ability to report resolution data in a timely manner while still retaining data quality?

The shift to March 31 aligns more closely with the SRB’s existing reporting standards, which should support data quality through earlier assessments by regulatory authorities. However, this may impose challenges on institutions conducting fiscal-year-end audits, as data readiness could be affected by the shortened timeline. Similar challenges were observed in the US when the FDIC moved forward certain submission deadlines, prompting phased-in flexibility periods for institutions.

i. Do you have any comment on the changes in the definition of the RLE threshold, including the absolute threshold of 5 billion EUR?

Reducing the RLE threshold from 5% to 2% will broaden the scope of reporting entities, aligning with SRB standards. This approach enhances authorities' ability to assess interconnected risks and is mirrored in Japan’s FSA standards, which use similar size and impact metrics. Nonetheless, the threshold reduction could impose undue burdens on smaller entities, and implementing a proportional approach to certain reporting requirements within this broader scope might reduce this impact.

i. Do you identify any issues with expanding the scope of Z01.01 to all entities in the group, bearing in mind that this report would only be requested at the level of the Group?

Expanding the scope of Z01.01 will provide a more holistic view of the legal structure, aiding in the identification of resolution groups. However, complexities may arise for entities operating in diverse jurisdictions with multiple subsidiaries. To manage these challenges, a centralized approach to entity identification—similar to the Legal Entity Identifier (LEI) system in the EU—could be adopted, ensuring each entity’s resolution group is identified accurately.

ii. Do you see an issue in the ability of the group to identify the resolution group to which each entity reported in the organizational structure belongs?

Groups with complex structures may face difficulties identifying the resolution group for each subsidiary accurately. This is especially challenging for entities operating across multiple jurisdictions. Ensuring that standardized identification codes, like LEIs, are universally applied would streamline the process and align with international practices, such as the Basel Committee’s guidelines on entity identification in global conglomerates.

i. Are the data-point definitions provided for reporting of the Carrying Amount sufficiently clear?

The “Carrying Amount” definition appears adequately detailed, but there could be room for additional clarifications, particularly on how this amount should be calculated in cases of intragroup transactions or unique financial instruments. Clearer examples would ensure uniform application across institutions.

ii. Do the revised data points for the reporting of Own Funds by Investment Firms better correspond to the reporting obligations for these types of Institutions? If not, please elaborate what changes you deem appropriate.

The revised data points for Own Funds better align with the obligations for Investment Firms by focusing on MREL (Minimum Requirement for Own Funds and Eligible Liabilities) eligibility, which narrows the data to what is most relevant for resolution authorities. This aligns with international standards seen in the European Capital Requirements Regulation (CRR).

iii. Do you anticipate any difficulties in providing the additional data required for the reporting of intragroup financial connections (for liabilities excluded from bail-in)?

Intragroup data reporting could present difficulties, especially for groups with extensive cross-border operations, as it requires integrating data from multiple systems. A phased approach, similar to Canada’s OSFI (Office of the Superintendent of Financial Institutions) phased compliance based on institution size, could alleviate initial implementation difficulties

iv. Do you see merit in providing additional clarification about any data-point definition existing in the previous version of the CIR on Resolution Reporting? If so, for which specific data points?

Additional clarification on data points within “Own Funds” and intergroup financial connections would be beneficial, particularly for complex financial instruments or liabilities excluded from bail-in. Similar clarifications were found useful in the SRB’s guidelines on bail-inable liabilities.

i. Do you have questions on how the new instructions on Onboarding Capacity should be interpreted for your organization?

The instructions on Onboarding Capacity are clear but would benefit from illustrative examples specific to Deposits and Payments functions. For example, guidelines for calculating onboarding volume over different timeframes (1, 7, 14 days) would provide clarity.

ii. Do you find the availability of a comments section useful to explain your assessment of the critical functions? Would you suggest another means of doing this, and if so, what?

The comments section is beneficial as it allows institutions to add qualitative context, helping resolution authorities understand the unique aspects of each entity's critical functions. This approach aligns with the UK’s PRA guidelines, which also encourage commentary on function assessments to mitigate potential misinterpretations.

i. Do you see any issue in identifying “relevant services” as defined in the revised ITS?

Defining "Relevant Services" is mostly clear, but operational complexity may arise in distinguishing these services, especially in large, multi-functional institutions. Adopting a reference to the operational continuity guidance provided by the SRB would enhance consistency.

ii. Do you think that that the data request on relevant services, as covered in the revised ITS, is sufficiently clear?

The data requests for relevant services are clear but could benefit from standardized definitions to ensure uniformity in reporting. In line with the EBA’s operational continuity guidance, ensuring that critical intra-group services are consistently defined across jurisdictions would enhance clarity.

iii. Do you see any overlap between this data request and related data requests on relevant/critical services raised by your Resolution Authority as part of the resolvability assessment?

There may be overlaps between this request and those for critical services under OCIR (Operational Continuity in Resolution) standards. Consolidating these requirements could reduce redundancies, similar to practices in Australia’s APRA, which integrates relevant services into a single comprehensive data request.

i. Is the definition of “substitutability” provided in the new reporting on Alternative CCP providers (Z09.04 c0030) sufficiently clear? If not, what clarifications do you think would be necessary?

The definition of “substitutability” is clear but could be enhanced by specifying how this concept applies across different financial infrastructures and regions. Including examples relevant to both EU and non-EU jurisdictions, as the Basel Committee does in its FMI assessments, would provide additional clarity.

ii. Are there additional or modified data points that you propose to include in Z09.03 to adequately capture the activity of the reporting entity with FMI service providers?

To better capture FMI activities, adding data points related to transaction volume and counterparty concentration would be helpful. This is similar to the enhanced data collection seen in Switzerland’s FINMA, which provides metrics for assessing FMI exposure.

iii. Are the instructions across Z09.01-Z09.04 sufficiently clear and detailed, and if not, what clarifications do you think are necessary and where?

The instructions are mostly sufficient; however, more granular guidance for institutions with non-standard FMI interactions could reduce uncertainties. Ensuring consistency with FMI definitions, as done by the European Market Infrastructure Regulation (EMIR), would further streamline understanding.

i. Are the data-point definitions provided for reporting of the Granular Liability Data sufficiently clear? If this is not the case, for which data points would you require additional clarifications?

The definitions for Granular Liability Data are mostly clear, but further clarification may be necessary for complex financial liabilities. Harmonizing these with existing CoRep and FinRep data definitions would reduce ambiguities and is consistent with EU-wide data harmonization objectives, as seen in the CRR2 guidelines.