Question ID:
2016_3032
Legal Act:
Regulation (EU) No 575/2013 as amended by Regulation (EU) 2019/876 – CRR2
Topic:
Supervisory reporting
Article:
99
COM Delegated or Implementing Acts/RTS/ITS/GLs:
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)
Article/Paragraph:
Annex V (Art 120 Related parties)
Name of institution / submitter:
All Funds Bank International S.A
Country of incorporation / residence:
Luxembourg
Type of submitter:
Credit institution
Subject Matter:
Template F 31.00 Related parties column 010 and column 020.
Question:

How should be performed the split between column 010– “Parent and entities with joint control or significant influence”- and column 20 “Subsidiaries and other entities of the same group”? In column 010 – “Parent and entities with joint control or significant influence”, should be reported only the balances with our Head Office or also should be included the upper hierarchy level of our shareholder and their related group entities? In column 020 – “Subsidiaries and other entities of the same group”, should be reported only our affiliates or also should be included the upper hierarchy level of our shareholders and their related group entities?

Background on the question:

Information required for FINREP mapping. After reviewing IAS 24.19(a),(b), mentioned in template F31, our doubt comes from the interpretation of the below point (a): Related party- A party is related to an entity if: (a) directly, or indirectly through one or more intermediaries, the party: (i) controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries); (ii) has an interest in the entity that gives it significant influence over the entity; or (iii) has joint control over the entity; (b) the party is an associate (as defined in IAS 28 Investments in Associates) of the entity;

Date of submission:
05/12/2016
Published as Final Q&A:
04/10/2019
EBA Answer:

In template F. 31 of Annexes III and IV of Regulation (EU) No 680/2014 (ITS on Supervisory Reporting), institutions shall report amounts and/or transactions related to the balance sheet and the off-balance sheet exposures where the counterparty is a related party in accordance with IAS 24.

Under IAS 24 (paragraph 9) a related party is a person or entity that is related to the entity that is preparing its financial statements (in this Standard referred to as the ‘reporting entity’).

A person or an entity is related to a reporting entity if any of the conditions provided by IAS 24 (par. 9) are met.

Furthermore, in the definition of a related party under IAS 24, an associate includes subsidiaries of the associate and a joint venture includes subsidiaries of the joint venture.

In column 010 (“Parent and entities with joint control or significant influence”) of template F 31.00, the balances for:

  • the parent of the entity;
  • the entities with joint control of, or significant influence over, the entity

shall be reported.

For the purposes of column 010 of F 31.00, ‘parent’ shall mean the direct parent of the entity which is related party in accordance with IAS 24.9.

In column 020 (“Subsidiaries and other entities of the same group”) of F 31.00, the balances for subsidiaries of the reporting entity as well as all the subsidiaries of the ultimate parent of the group (excluding the parents of the reporting entity itself) and the ultimate parent (in case this is different from the immediate parent, shall be reported.

The columns include only the balances with related parties which have not been eliminated in the prudential consolidation.

In particular, under in the Annex V. Part 2, paragraph. 289 (paragraph 120 in the version 2.6 of the reporting framework), institutions shall include balances and transactions with subsidiaries that have not been eliminated either because the subsidiaries are not fully consolidated with the prudential scope of consolidation or because, in accordance with Article 19 of CRR, the subsidiaries are excluded from the scope of prudential consolidation for being immaterial or because, for institutions that are part of a wider group, the subsidiaries are of the ultimate parent, not of the institution.

The terms “subsidiaries”, “joint control” and “significant influence” are defined in IFRS 10, IFRS 11 Joint Arrangements and IAS 28 Investments in Associates and Joint Ventures respectively and are used in this template with the meanings specified in those IFRSs.

Status:
Final Q&A