Response to discussion on a possible Delegated Act specifying the method for the determination of fees for to be paid by financial and non-financial counterparties requiring the validation of pro forma models
1. Do you have any comments on the scope of the new tasks expected from the new role of EBA as central validator of pro forma models?
It should be made clear which advantages result from the role of the EBA, e.g. no own validation of the model necessary, recognition of the central validation by internal and external auditors, especially auditors of the Bundesbank, ECB and EBA.
2. Could you confirm that 3 months is appropriate to compute ANAPF for the purposes of submitting the information for fee calculation by the reporting deadline?
With reference to the answer to question 4, I will refrain from making a statement here.
3. Do you have any comment with respect to the calculation of ANAPF? Please highlight any expected issue linked with the estimation of ANAPF (including accuracy of such estimation).
The calculation of the ANAPF will certainly require one-off costs of EUR 10 thousand per bank for a technically supported reporting solution + EUR 5 thousand per year for its up-to-dateness and maintenance. The accuracy depends on the most precise definition possible, especially of the nominal amounts to be aggregated.
4. Do you have any comments/relevant input to the proposed calculation methods for the fees? Please elaborate. Please elaborate, in particular if you raised issues linked with the estimation of ANAPF as part of Question 3, on how the calculation methods for the fee could be adjusted to address those issues (e.g. bucketing of counterparties according to ANAPF levels).
With costs of EUR 1.5 - 2 million for the above-mentioned tasks, the question arises as to what proportion of this is accounted for by the collection of data from ANAPF, the necessary support from a calculation programme and the ongoing system maintenance for data collection, calculation and the invoicing based on this. It is estimated that the calculation and invoicing will certainly cost EUR 200 thousand per year. In addition, there are the necessary queries and reports in each bank to calculate, check, update and transmit the ANAPF on time. Here too, one-off costs of EUR 10 thousand per bank and ongoing costs of around EUR 5 thousand are certainly realistic. If one compares the low costs with an even distribution of the costs of approx. EUR 15 thousand for 100 banks and the expenses for calculating fees and invoicing on the part of the banks and the supervisory authority, it becomes clear that the calculation of the ANAPF and the fee calculation based on this are not economically proportionate to the resulting costs. The costs should therefore be distributed according to the key: individual costs are the total costs divided by the number of participating banks, which should lead to a much simpler and more economical solution. In addition to the above-mentioned costs of EUR 200 thousand on the part of the EBA, this would also include the approx. EUR 1 million costs on the part of the banks and additional running costs of EUR 500 thousand per year. With these costs, which are low in absolute terms, an extensive calculation and pseudo-fair cost allocation should be dispensed with in favour of a simple, efficient and lean solution.
5. Do you have any comments on the proposed timing of invoicing? Please elaborate.
We refer to the answer to question 4, which states that a simple model would make invoicing significantly faster and more efficient.
6. Do you have any comments on the proposed list of information to be communicated to EBA for the calculation of fees? Do you have any comments on the proposed timeline to submit this list of information to EBA (i.e. by the reporting deadline each year)? Please elaborate.
A simple per capita distribution per model used would make the overall process significantly faster, as only preliminary information on the model used would have to be provided.
7. Do you have any other comment on the proposals made in this discussion paper?
The proposed model, including the calculation of the ANAPF, assumes a fair distribution of costs and at the same time raises several questions regarding the calculation of the ANAPF, the transmission of the necessary data to the EBA, the technical infrastructure on the part of the EBA for calculating the costs per participating bank and the schedule for transmitting data and invoicing. Our proposed model would simplify all of these points and, with the obligation to notify the supervisory authority of a new model other than the ISDA SIMM model currently used by all banks at the beginning of the year, the fees would also be calculable in advance, as the EBA would already budget its unit in advance and the total budget amounts could simply be divided by the number of participating banks. If more banks were added, it would become more favourable for everyone and even small institutions, which would otherwise have to set up their own validation, would already have a clear cost perspective with the simple model without having to accept further administrative expenses.